Industrial Agglomeration in China: Case studies of the Chinese Silicon Valley and the coastal SEZ

This paper verifies the policy impacts of introducing foreign capital to promote industrial development from the perspective of industrial agglomeration in China. There are two analyses; the first is on the high-tech industry in Zhongguancun, called the Chinese Silicon Valley, and the second focuses on the coastal special economic zone (SEZ) in China. From the results, the effects of industrial agglomeration policy are limited. Although these policies succeeded in attracting firms with high productivity to Zhongguancun and the coastal SEZ, the analyses show no significant effects of building the firms' networks and generating spillover effects to local firms.