An Analysis of the Capacity of Undertaking Industrial Transfer in the Western Minority Region in China

Industrial transfer to regions refers to a phenomenon in which developed areas,in conformance with the change of competitive advantage,transfer part of their industrial production to developing areas by means of interregional direct investment. The essentials of regional industrial transfer are the changes of the structure of the division of labor,a phenomenon of geo- industrial mobility,and the core problem to be solved is how to achieve the optimal allocation of resources as well as promote an optimum labor division. As a common economic phenomenon in the process of development,the need for industrial transfer has appeared in our country. On the one hand,as the in- depth development of the eastern developed areas continues,there is a need for part of these traditional industries to exit,and to seek a new development space. On the other hand,due to the interwoven nature of the of vast territory,rich resources and different requirements,like capital, technology and talents requirements,the western minority areas are crying out for undertaking industrial transfer from eastern China to optimize its industrial structure and achieve industrial upgrading. The feasibility to undertake such industry transfer is the key for seizing this opportunity for western minority regions. Nowadays, many economic scholars, when they undertake research on regional economic development,mainly focus on regional advantages, disadvantages,opportunities and challenges using the method of a SWOT analysis. Here we also use this method to analyze the capacity of undertaking industrial transfer to the western minority regions. The advantages of undertaking an industrial transfer come from things such as natural resource advantages,location advantages,and market advantages. The disadvantages are lack of performance with no niche superiority to attract foreign investment from developed countries,and a weak industrial base as well as faint industrial support ability, poor labor quality,and serious brain drain. An empirical analysis shows that the capacity for undertaking industrial transfers to the western minority areas is far behind other areas. However, this does not mean that there are no advantages to undertaking industrial transfers in these areas. We can make full use of the resource advantages and the relatively specialized geographical advantages in the western minority areas to develop industries with local characteristics,and in doing so finally realize a "leap- forward"development of the economy in western minority areas. First,we should increase investment in physical capital heavily. The reality is that there is a weak economic foundation,and a serious development lag in western minority areas which demands more capital input. These regions in particular should now step up investment in infrastructure. This will create a good environment for undertaking industry which will in turn attract more capital investment,and eventually form a positive cycle. Second,we should pay more attention to the accumulation of human capital. If we want to change fundamentally the environment of undertaking industrial transfers to the western minority areas,the most important link is to attach great importance to the accumulation of human capital. In the first place,the accumulation of human capital helps to enhance the overall level of the laborer,not just to increase laborers' working proficiency; it will accelerate the shift from manual laborers to mental laborers. By doing so,it will then save the input of physical capital and labor capital,and it can also make up for the inadequacy of physical capital in western minority areas to a certain extent. In the second place,the accumulation of labor capital can promote the progress of technology, while the technical progress may improve the rate of capital return. This could result in a kind of "increasing return effect",which will eventually promote the rapid development of the economy in western minority areas,and change the economic growth mode from an extensive mode to an intensive mode. In the third place,the accumulation of human capital might improve the adverse environment of undertaking industrial transfers in terms of attracting capital investment from different industries with different levels of labor. Although the western minority areas cover a vast territory with a sparse population,the majority of local laborers have a low level of technology,which means that the western minority areas cannot just rely on large- scale formal education to cultivate senior talent, and finally realize labor capital accumulation. Moreover,because of the undeveloped economy,it is difficult to attract top talent to the western minority areas. As a consequence,adjusting measures to local conditions,such as training primary and secondary talents by large- scale short- term training must be the best choice for western minority regions to achieve preliminary accumulation of human capital. The agglomeration of primary and mid- level talents,coupled with the government's preferential policies for investment,will certainly attract enterprises from eastern coastal areas to enter the area. Consequently,the ability for western minority regions to undertake industrial transfers must be improved. Third,we should reinforce the construction of a civilized environment. Poor environment,and a complex topography,coupled with the influence of human activity in western minority areas,will alllead to a deteriorating ecological environment which is fragile enough in itself. And now,there is nothing to do but to improve the ecological environment in the western minority areas. This in turn, can create better conditions for people ' s lives, and improve the quality of life and the standard of living. This may eventually enhance the ability of undertaking industrial transfers to the western minority areas.