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          How To Leverage Emerging Industrial Clusters In US And China

          How To Leverage Emerging Industrial Clusters In US And China

          The United States and China, as the world’s largest and second-largest economies respectively, enjoy long-standing economic and trade relations. In 2015, the US trade in goods with China amounted to roughly $116 billion in exports and $483 billion in imports. These numbers highlight the opportunities for the ocean freight industries of the two countries. We look at the possibilities of taking advantage of the exchanges between the two economies based on their emerging clusters.

          China holds a strong lead among the seven emerging economies, which analysts expect to contribute roughly 45% of global GDP in the coming decade. The other six include India, Brazil, Mexico, Russia, Turkey and Indonesia. Experts forecast China to create more than half of all GDP growth among these.

          The US and international companies have moved to realize opportunities in China and accelerate growth in the country. Increasingly, the appropriate strategic approach focuses on emerging clusters instead of individual cities or adopting a country-level strategy. A cluster is a regional, geographic concentration of related industries or interconnected businesses. Clusters can increase productivity and competitiveness on a national and global level. Taking advantage of emerging clusters can help you stay ahead of the competition by boosting the effectiveness of distribution, supply, sales, and marketing strategies.

          US And China: A Brief Emerging Clusters Overview

          A traditional and well-known cluster example is the auto industry in Michigan in the US, with over 50% of US auto companies there. In China, clustering is certainly nothing new, with a long history of regional specializations. Cixi near Ningbo has been known for skilled textile manufacturing for centuries and the area is still a major center today.

          As the world’s largest furniture exporter, China has competitive furniture products with an important position on the world market. The country’s furniture industry has developed cluster in three areas: the Eastern Pearl River Delta, the Yangtze River Delta, and the Bohai Rim region. Chinese furniture exports account for roughly 30 percent of the world total, with wood furniture amounting to more than 10 billion US dollars. The US is the largest importer of Chinese furniture products.

          Advanced Clusters

          Advanced industrial clusters are more recent, of course, such as electronics clusters in Shenzhen and Foshan. The emergence of clusters is changing Chinese supply chains as goods need fewer stops before final assembly. China is more and more producing parts for finished goods itself, resulting in a decrease in imported components. This is boosting China’s competitiveness and the country sees an upmarket trend and the large number of industrial clusters lead to a pursuit of higher value-added products, though more traditional and labor-intensive industries such as textiles and woodworking still see rising exports.

          Automotive Detroit Changsha, Chongqing, Guangzhou, Wenzhou, Ningbo, Hangzhou, Shanghai, Yangzhou, Tianjin, Beijing
          Banking and finance Boston, New York City, Silicon Valley Wuhan, Guangzhou, Macau, Hong Kong, Shenzhen, Shanghai
          Biotechnology Silicon Valley, Boston Zhuhai, Shenzhen, Shanghai
          Chemical and pharmaceutical Western Massachusetts, Pennsylvania, New Jersey, Southeastern Texas, Louisiana Wenzhou, Shaoxing, Suzhou, Beijing,
          Communications Silicon Valley Hong Kong, Shenzhen, Ningbo, Tianjin
          Electronics and electrical equipment Silicon Valley, Phoenix, Colorado, Oregon Zhuhai, Hong Kong, Shenzhen, Wenzhou, Ningbo, Yangzhou, Nanjing, Dalian
          Industrial machinery and parts Detroit Changsha, Chengdu, Dongguan, Jiangmen, Shaoxing, Ningbo, Suzhou, Shenyang
          IT Silicon Valley Wuhan, Chengdu, Zhuhai, Hong Kong, Shenzhen, Hangzhou, Shanghai, Suzhou, Dalian, Tianjin, Beijing, Southern Florida
          Manufacturing Detroit Zhenghzou, Chongqing, Guangzhou, Foshan, Jiangmen, Zhuhai, Shenzhen, Wenzhou, Ningbo, Hangzhou, Shenyang
          Metals Seattle Foshan, Wenzhou, Shaoxing, Ningbo, Nanjing, Tianjin
          Petrochemical Colorado Zhuhai, Shaoxing, Ningbo
          Services Omaha, Colorado Hong Kong, Nanjing, - Macau
          Textile Georgia, Louisiana, North Carolina, South Carolina, Tennessee, Virginia Zhenghzou, Jiangmen, Shenzhen, Wenzhou, Shaoxing, Ningbo, Hangzhou, Yangzhou

          Taking Advantage Of US And Chinese Emerging Clusters

          In the first four months of 2016, US trade in goods with China amounted to nearly $33.9 billion in exports and $136.13 billion in imports. These numbers show the imbalance in trade between the two economies. This can only increase as Chinese exports grow and the US economy further recovers from recession. But that does not mean importers and exporters cannot take advantage of industrial clusters both ways.

          Exporting To China

          China continues to be a top market for US goods and an important contributor to US economic growth. It’s the third-largest export market for the US, behind Canada and Mexico, with exports growing nearly 13% in the past decade. From 2005 to 2014, US exports to China increased 198 percent, with growth exceeding that for any of the top 10 US export markets. As China moves towards a more consumer-driven economy, US companies expect broader opportunities to export goods and services to target China’s growing middle class.

          Current exports span a wide range of industries, including equipment for transportation, crop production, electronics, computers, and chemicals. Since 2005, 42 states have experienced export growth in the triple digits. In 2014, China was among the top three export markets for 39 states. Those include New York, Alabama, Ohio, South Carolina, Minnesota, and Michigan. In terms of growth, California and Texas experienced significant rise, but smaller states like Delaware, Kentucky and West Virginia as well.

          Top US Clusters Exporting To China 

          1. Washington: Transportation Equipment, Forestry Products, Computers & Electronics, Primary Metal Manufacturing, Mineral & Ores

          2. California: Computers & Electronics, Machinery (except Electrical), Waste & Scrap, Transportation Equipment, Chemicals

          3. Texas: Chemicals, Machinery (except Electrical), Computers & Electronics, Crop Production, Waste & Scrap

          4. Illinois: Crop Production, Transportation Equipment, Machinery (except Electrical), Beverages & Tobacco , Waste & Scrap

          5. South Carolina: Transportation Equipment, Chemicals, Computers & Electronics, Machinery (except Electrical), Waste & Scrap

          Importing From China

          The industrial clusters in Zhejiang Province and Guangdong Province are the two most developed provinces in China. Hence, both play rather important roles in Chinese exports.


          Guangdong includes cities such as Guangzhou, Shenzhen, and Foshan, which are very familiar to many foreign importers. The coastal province is located in the south of China’s mainland. Important industries with strong production and processing capacities and large manufacturing bases include garment and textile, food and beverage, construction material, electronics and IT, electrical appliances, machinery and specialized equipment, petrochemicals, forestry and papermaking, pharmaceuticals, and automobiles. These are joined by the emerging hi-tech industries for IT, biotechnology, optical electronics and machinery integration, and new materials.

          The three exporting ports in Guangdong are in Guangzhou, Shenzhen, and Hong Kong, each with its own advantages. Guangzhou Port, the largest port for foreign trade in South China, traditionally focuses on domestic trade. But it’s opening up for international lines. Shenzhen Port mainly works for international lanes in export, most of them full container shipping. Shenzhen is able to offer more efficient shipping dates than Guangzhou. Hong Kong Port is the main international transshipment port. Hong Kong has been surpassed by Shenzhen and Guangzhou, shipping fees are usually higher. However, it specializes in shipping hazardous articles.


          Zhejiang Province, located in the south of Shanghai, manufactures a lot of Chinese products. Industrial Clusters in Zhejiang include the cities Ningbo, Yiwu, Wenzhou, Taizhou, and Shaoxing.

          The Ningbo area is home to trading companies and clusters for electric appliances and plastic products. Trading companies use the area’s port superiority. Industrial clusters include petrochemicals, automobile manufacturing, high and new technology, biotechnology, textile and garment, and metal. Cixi is an important city and produces many electric appliances and hardware, such as washing machines, air condition, or bearings. Yuyao City produces plastic products.

          Yiwu City is the world’s largest wholesale center with a focus on low-value and daily-use products. Dubbed China’s capital of hardware and door, Yongkang City has emerging clusters for automobile parts, cups, electronic tools and appliances. Wenzhou produces electrical machinery, shoes, and packaging. Taizhou is home to plastic and rubber products clusters. Textile and umbrella clusters call Shaoxing home.

          Ningbo Port and Shanghai Port belong to the top three largest ports in China. They are used for most products from Zhejiang. Ningbo Port is slightly closer to most industrial clusters than Shanghai and therefore offers a small price advantage per container. It is also your choice of port if you’re packing many different products in one shipment. That’s due to the stricter Shanghai customs and the possibility of longer delays should officials select you for inspection.


          The US and China have great potential to expand their global cooperation and leverage the economic growths of their emerging clusters. Despite the import and export imbalance, US exports to China are expected to grow, but only proportionally to China’s rapidly expanding exports, which are moving towards higher-end goods. Shippers between the two countries can use the complementary goals and opportunities of both economies to their advantage and establish international shipments and trade relations. While the US has still a technological advantage, there is also an opportunity to export Chinese electronics and new technology to the US, while China’s growing middle class has a rising demand for international consumer goods.

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