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- It was still a raw material- and power-oriented industry.
- With the Communist liberation, the new central government adopted a planned economy and the role of government policy was great.
- Moved to the inland areas
- In two stages:
- In the North, it moved to Baotou and Taiyuan, then to Urumqi.
- In the South, it moved to Wuhan and Xi'an and later to Kunming, Panzhihua and Chongqing.
Favourable factor |
Explanation
|
Raw materials |
- Fukang provided iron ore for Urumqi; there was much iron ore in Sichuan (Panzhihua)+Chongqing and near Wuhan.
|
Power |
- Shanxi (Taiyuan) and Shaanxi (Xi'an) were great producers of coal, as was Yunnan (Kunming).
|
Transport, infrastructure and amenities |
- Transport network to the inland areas were improving with highways and railways built.
|
Government policy |
The government introduced the policy of industrial decentralisation to achieve these aims:
- Ensure a greater balance of income, wealth, technology level and economic development between the East and the West
- Prevent Japan and the US from bombing iron and steel plants in Eastern China
- Attract workers to migrate to the inland, easing population pressures in the East
|
Yet new problems arose:
Constraint |
Explanation
|
Land |
Harsh continental climate, rugged and uneven relief, steep slopes and difficult terrain in the West.
|
Labour |
Lower density of population and lower education level (unskilled labour) produced insufficient labour supply and quality
|
Raw material |
Iron ore of the interior was of inferior quality and scattered
|
Power |
Coal of the interior was of inferior quality
|
Market |
Markets were small as other industries were poorly developed
|
Transport |
The distance from the interior to the coastal areas was long. Transport networks were still poorly developed. Accessibility was low.
|
Capital |
Lack of capital
|