Choice for Leading Industry in Guangdong Industry

Regional leading industry is the core power to impel development of regional economy; to push forward development of regional leading industry is a necessary channel for realizing efficient allocation of regional resources, and is the key to boosting rationalization and high-level of regional industrial structure. In this article, the authors establish index system of choice for industrial leading industry, apply factor analysis, and comprehensively assess and select leading industries in Guangdong Province according to factor analysis model.


Establishment of choice of index system for leading industries
Currently, there still exist differences between choice and assessment studies in regional leading industries, but there is also some commonness.This article establishes the six index systems for assessing and choosing regional leading industries (See Table 1).These index systems mainly refer to the model in "Model of Choice for Regional Leading Industry and Its Empirical Study" by Zhang, Xiaoping, and make some corrections based on this model.

Application and comprehensive evaluation of the model
This article applies factor analysis to comprehensively assess and select leading industries in Guangdong Province.

Application of the model
We can calculate the factor scores and comprehensive scores of all industries in Guangdong Province (See Table 2), according to factor score computation module (1-1) and the comprehensive score computation module (1-2), the variance contribution rate of all major factors, and loading factors of primary indices within all factors; F ji = A j1 X 1i + A j2 X 2i + A j3 X 3i +…+ A jp X pi (1-1) In formula 1-1, X 1i , X 2i ,X 3i ,…,X pi are respectively the value of the original variable for the sample of No. I, A j1 , A j2 , A j3 , …, A jp represent respectively the factor value coefficient between the factor of No. j and the original viriable of No. 1, 2, 3, …, p.

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We can calculate the industries with the comprehensive score ranking the first twelve according to the overall conditions of factor score of all industries in Guangdong (See Table 2).As for choice for leading industries in Guangdong, we should avoid too high comprehensive socre caused by too high factor score of all industries, and should not determine those as leading industries with a simply high comprehensive score.

Comprehensive assessment of candidate industries in leading industries in Guangdong
Based on the above analysis results, we make a sequencing on available data.We classify alternative industries into five levels according to a simple statistic method, namely, the frequency of industries ranking the first twelve in all indices: the first level is a frequency above 5 times, the second level 4 times, the third level 3 times, the fourth level 2 times, and the fifth level 1 times.Industries at the fifth level just stand out in part of indices, so they are temporarily excluded from analysis of leading industries.Frequency of industries ranking the first twelve in the six factors is seen as Table 4.

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In the following, we are going to analyze the above industries at the four levels in details, and sort out leading industries that are adequate for the industrial development of Guangdong Province.
At the first level, Communication equipment, computer, and other electronic equipment manufacturing stands out respectively in output scale, and social benefit, especially ranking the second in geographic predominance and the third in social benefit predominance.Development of Communication equipment, computer, and other electronic equipment manufacturing has a strong external competitiveness, which accords with the export-oriented economy in Guangdong, and which, in addition, helps relieve the austere employment pressure in Guangdong.Therefore, Communication equipment, computer, and other electronic equipment manufacturing should be vigorously developed in the future in Guangdong.
At the second level, Electrical apparatus and equipment manufacturing not only has its predominance in output scale and economic benefit, but has its geographic competitiveness and technical driving predominance, which complies with requirements of the new industrialization path, and which should be defined as the leading industry to be prioritized in the future in Guangdong.Transport and communication Facilities manufacturing has also a good growth potential predominance in addition to its output scale predominance and economic benefit predominance.Furthermore, in terms of the industrialization progress, Transport and communication Facilities manufacturing is a significant symbol that a developed country has entered the high-level period of industrialization.Therefore, development of Transport and communication Facilities manufacturing is very important in propeling transformation of Guangdong from "Second, Third, First" to the industrialization anaphase of "Third, Second, First", and it should be regarded as the leading industry to be significantly supported.In addition to its predominance in output scale, Metal product industry is at an upper-middle level in other aspects, which indicates that Metal product industry belongs to the industry with better comprehensive level.What's more, Metal product industry is an advanced industry of real estate and mechanical equipment manufacturing, which has a great influence upon industry chain, and should be considered the leading industry in Guangdong.Although Ferrous metal mining & dressing has better comprehensive benefit, still it can't be the leading industry in Guangdong because it's a non-renewable resource, not in accordance with the principle of sustainable development.
At the third level, although Nonferrous metal mining & dressing has better industrial growth potential and technical driving predominance, still it can't be the leading industry in Guangdong because it doesn't comply with the principle of sustainable development.Fuel Gas production and supply has a strong social growth potential, geographic predominance and social benefit, but it is not fully developed in the industrial scale and economic benefit, and its capacity of technical driving is relatively weak, so it can't be the leading industry in Guangdong.Nonferrous metal mining & dressing has its technical driving predominance, but it doesn't accord with the principle of sustainable development, so it can't be the regarded as the leading industry in Guangdong.Nonferrous metal smelting and rolling processing has strong industrial growth potential and technical driving predominance, but its features of high consumption of energy and high pollution don't comply with requirements of the new industrialization path, so it can't be the leading industry in Guangdong.Chemical raw material and chemicals manufacturing has its industrial scale predominance and economic benefit, and, besides, it has a great growth potential predominance.With transfer of the international chemical engineering, status of the chemical industry seems more and more significant.Therefore, it should be the leading industry to be particularly supported in the future in Guangdong.Electricity and heat Production and supply has better industrial scale, economic benefit predominance and industrial growth potential predominance, but it ranks the lowest in the geographic predominance and technical progress within the 35 industries.Therefore, it can't be the leading industry in Guangdong.
At the fourth level, Exploitation of petroleum and natural gas has better economic benefit and social benefit, and its geographic predominance and growth potential belong to the upper-middle level.Petroleum and natural gas are universally recognized most important energy resources.And ocean contains most of petroleum and natural gas resources in the world.Development of ocean energy resource industry is helpful for sufficient use of resources and for mitigating status quo of energy shortage.Therefore, Guangdong Province should positively support petroleum and natural gas as the leading industry.Plastic product industry has better output scale and geographic predominance, but it causes serious environmental pollution, which does not comply with sustainable development principle, so it can't be regarded as the leading industry in Guangdong.Furniture Manufacturing has relatively good geographic predominance, but its industrial scale is weak, without good economic benefit and technically innovative ability, so it can't be classified as the leading industry in Guangdong.Stationery and sporting goods manufacturing has better geographic competitiveness predominance and economic benefit, but it's still impossible to form a scale merit.Its technically innovative ability is weak, and its contribution to the social benefit is not obvious, so it can also not be regarded as the leading industry in Guangdong.Textile clothing, shoe and cap manufacturing has its geographic predominance and social benefit, but it belongs a traditional industry, without good technically innovative ability and social benefit, so it can't be regarded as the leading industry in Guangdong.Mechanical manufacturing of instrument, cultural and office supplies has its geographic predominance and social benefit, but in general, its foundation of industrial scale is weak, with low technical progress ability and growth potential, so it can't be classified as the leading industry in Guangdong.Special hardware manufacturing and Universal equipment manufacturing both have good technically innovative ability and social benefits.From 2005 to 2007, the average growth speed of their output attain respectively 31% and 29%, with a powerful growth trend, so they should be the leading industries to be significantly supported in the future in Guangdong.Chemical fiber manufacturing has strong technically innovative ability and growth potential, and Chemical fiber manufacturing and Chemical raw material and chemicals manufacturing are collectively called Chemical Industry, because they have relatively strong association benefit.Therefore, Chemical fiber manufacturing should also be classified as the leading industry in Guangdong.Water production and supply has its growth potential predominance, but its output scale, technically innovative ability and social benefit can't embody characteristics of the new industrialization, so it can't become the leading industry.Ferrous metal smelting and rolling processing has relatively good output scale and growth potential predominance, but it causes serious environmental pollution, and great consumption of energy resources, which doesn't comply with status quo of energy shortage in Guangdong, so it can't become the leading industry in Guangdong.

Conclusions
From the above analysis, it is clear those leading industries that should be prioritized include: Communication equipment, computer, and other electronic equipment manufacturing, Electrical apparatus and equipment manufacturing, Transport and communication Facilities manufacturing, Metal product industry, Chemical raw material and chemicals manufacturing, Special hardware manufacturing, Universal equipment manufacturing, Chemical fiber manufacturing, and Exploitation of petroleum and natural gas.
an industry in a region/total value added in the region = value added of the industry in the country/total value added in the country Location quotient of total output Location quotient of total output output value of an industry in a region/total output value in the region = output value of the industry in the country/output value in the country Location quotient of employees Location quotient of employees employees in an industry in a region/total employees in the region = employees in the industry in the country/total employees in the country Market share Market share sales value of an industry in a region/total sales value in the region = sales value of the industry in the country/total sales value in the m e n t s p e e d o f o u tp u t v a lu e to ta l o u tp u t o f re p o rt p e rio d = 1 to ta l o u tp u t o f b a s e p e

Table 2 .
Factor score and comprehensive score of each industry in Guangdong in 2007

Table 3 .
Industries with the comprehensive score ranking the first twelve

Table 4 .
Frequency of industries ranking the first twelve in the six factors