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7.(1) Why do you think China is now a favored location for so much high-technology manufacturing activity?

For the Factor Endowments under Porter’s diamond, China maintains a huge floating supply of labor. As Joyce mentions before, there are 145 million migrant workers with non-technical production move to China in 2009, the foreign firms can lower the labor wage because of the non-technical workers. In China, there are also establish a lot of infrastructure, in order to help the development of trading, such as highways, ports and railways. Highways including 101 series, 201series and 301series, which provide diverse location of China and have a good coverage of China, which make China has the excellent transportation system, in order to trade more efficient. In China, there are ports in some essential zones like Shanghai, Guandzhou. Railways in north south, east west and inter cities like Pearl River Delta, foreign firm can specialize the product in that area because of the natural geographic advantage of nearby harbor.

Besides is the demand condition of China. As we know, China has a huge population and Chinese consumers mostly demand for the electronic products like computer component. Foreign firms know much about the large demand of Chinese consumers and specialize the certain kind of product for production in China. Thus, China is a potential market for companies in other countries to do their business.

Moreover is the existing relating and supporting industries in China.

Central government establishes the technological development zones in Suzhou. They are the export-oriented industrial zones with highly intensive land and modern manufacturers, in order to accelerate their development into multi-functional comprehensive industrial zones and export the product to the other countries.

Last but not lease is the firm strategy, structure and rivalry. Due to the rivalry in domestic market, more and more competitors come into China to do their...
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