Guangzhou City: Aeronautic and Heavy Industry Analysis - Case Study Example

Guangzhou City: Aeronautic and Heavy Industry Analysis SUBJECT NAME: SUBJECT NO.: LECTURER: TUTORIAL: TUTOR: STUDENT NAME: STUDENT ID: Introduction The current world is becoming increasingly competitive and some regions are tending to control major trends in various industries. They are becoming hubs for industries across the world and individuals are looking forwards to their next moves because they control markets. Moreover, some cities are significant in the world map because of their significance in being instrumental about market trends and innovations. They influence economies and their practices, policies and strategies influence individuals globally (Fujimoto & Shiozawa, 2012). Hence, paying attention and learning from them becomes inevitable and important to increasing market relevance and gaining competitive advantage among competitors. Understanding what gives these cities an edge in the world map is remarkable in transforming industries for sustained growth and development. Therefore, governments, businesses and organizations need to research on cities and regions that are significantly causing ripples within their industries so that they may understand how to approach issue with a wider perspective. Globalization has helped determine how business and operations are performed in the local and global market (Manning et al., 2011). Aeronautic and Heavy Industry Analysis Aerospace industry is a significant industry locally and globally due to the role it plays in navigation. It involves the art of human effort to conduct researches, design, produce navigate as well as maintaining aircrafts. Aeronautics is a field in the aerospace industry that is incorporates the science, engineering and the art of manufacturing spacecraft and airlift-capacitated machines like rockets that tour the atmosphere (Foster et al., 2010, p.9). On the other hand, heavy industry can be defined as the industry that deals with production of heavy machineries and equipment that involve complex processes and procedures. They require heavy capital investment and it is usually associated with steelmaking, automotive, machinery building, mining and weaponry. Hence, combining aeronautics and heavy industry together points to the art of manufacturing aircrafts and space machines in additional to looking into how they navigate the atmosphere (Johnson, 1999, p.29). Moreover, it is worth noting that this industry aid the navigation and transportation of people, products and services around the world. It has helped connect cities, countries and continents easily as well as promoting the idea of globalization in the current world. Without this industry it would be hard to import, export, tour and share facilities, products and services that various part of the world are privileged to have. Besides, transport is a necessity in daily living and it improves the standards of living in a diverse world like the one we are living in. Aerospace makes transportation easier, fast and effective, reducing many factors that may inconvenience business, interaction, governance and other important aspects of life. Therefore, aeronautics and heavy industry plays a critical role in global platform that cannot be ignored in a highly networked world (Foster et al., 2010, p.15). The contribution of the industry to the economic growth is remarkable given that it provides many job opportunities to the population in the region it operates. The production process requires skilled and creative workforce that is extensive to facilitate the complex operations. Likewise, navigation and maintenance of spacecraft and airlifts machines requires individuals, creating more job opportunities. Many heavy industries are located in East Asia countries like Japan, China and Korea that creates many jobs t their population. This positively stimulates growth and development of economies. Moreover, the air transport earns considerable income to an economy through transportation of people, products and services. This opens up local markets to international markets, enhancing international trade between countries (Foster et al., 2010, p.21). In China Guangzhou city is among the locations where heavy industry is common and this provides job opportunities to the vast population of the economy. Haizhu and Nansha are among the districts of Guangzhou City with heavy industries that perform extensive manufacturing, earning the city a notable influence in the region. Moreover, the aeronautic industry China is a key player and it poses significant challenge in the region as well as in the international platform. It hosts a competitive maintenance repair and overhaul industry (MRO) that draws influence and significance in the global aeronautic market. Guangzhou City comprises of several districts as seen in the map below: Guangzhou – a fast growing city in an emerging economy It is also referred as Canton is a Southern China Cite which is the largest in Guangdong Province and the third in China after Shanghai and Beijing. It is located 90 miles from Macau in its north most region and 145 kilometres from Hong Kong on its northwest part. The city is a transportation hub as well as a trading port; this promotes its aeronautic industry and increases business transactions (Kohn, 2008, p.17). Moreover, it is among the 5 National Central Cities, boosting its status in the global platform. Its measures 7434.4km2 and has a population of approximately 12.78 million people in its administrative area according to 2010 census. The city rests on the Pearl River and its tropical weather conditions makes it prime in the region. Research dated 2013 states that Guangzhou has a GDP of 248 billion US dollars and its per capita stands at 19,459 US dollars. Data for this city can be seen in the table below: The city hosts annual event called Canton Fair that is also known as China Import and Export Fair. This helps discuss international trade that invilves transportation; contributing to strengthening the aeronautic industry in China. Moreover, in the district of Nansha the city has Export Processing Zone that support biotechnology, heavy industry nd machinery assembly. This is a favourable atmosphere that prromotes the citys’s development of aeronautic and heavy industry (Zafar, 2007, p.108). Some of the leading industries in the city can be seen in the table below: Furthermore, it worth stating that from mid-19th century Guangzhou was renowned trading port and among the 3 top cities in the global markets. It is among the wealthiest cities in China and this supports the heavy investment of aeronautic and heavy industry. Furthermore, the city has Guangzhou Baiyun International Airport that hosts many routes connecting different parts of the world. This creates an opportunity to intensify aerospace activities in the region. It also hosts a number of institutes and colleges offering aviation and aeronautic courses. These schools include Civil Aviation University of China, Civil Aviation Management Institute of China, Guangzhou Civil Aviation College and Civil Aviation Flight University of China. Additionally, the city is known as a manufacturing hub and heavy industrial works that deals with complex engineering. This creates good atmosphere for aeronautic and heavy industry. With all these favourable conditions the city has bright future for the aerospace industry and Chinas prominence in the global market as one of the strongest economies increases Guangzhou’s global ranking. Additionally, the Western countries outsource its aeronautical services from China for its Boeing and Airbus fleet. This increases China’s prominence in the market. Heavy investments in Guangzhou City are being done by companies like St Aerospace. Besides, starting 2010 Singapore also started investing in the City to create a heavy maintenance facility for commercial aircrafts. The Philistines Airlines starting 2013 launched operations in the city; this strengthens the connection and ties of the city and Philippines. Future expansion plans are underway that are aimed at creating more and bigger aeronautical bases in Guangzhou. A graph demonstration investments in the region is shown below: Aeronautic and Heavy Industry is Guangzhou, China is a competitive industry In the aeronautic industry China is a key player and it poses significant challenge in the region and in the international platform. It has a competitive maintenance repair and overhaul industry (MRO) that the global aeronautic market regard highly. However, competition from India is continuously increasing to compete for the lucrative position as the leading player in the global platform. China has a global fleet of approximately 8% and this gives India a great task to match this competition with its 1.5 global fleet possession. It is estimated that in the future Indian MRO industry will grow rapidly than Chinese; by 2023 its global fleet will shift from 1.5% to 3.1%. However, China’s global fleet will shoot to 12% from its current 8%. This shows that India will be the greatest competitor in Asian region (Foster, 2013, p.33). Moreover, in 10years time there will be need for 16,500 jets and turboprops and China is expected to provide 15% of them as well as building competitive fleet that rivals Asian Pacific. Research shows that in a span of 5 years China plans to increase its fleet from 1858 aircrafts to 2877 which is predicted to be 9.1% increase annually. Likewise, in the next 5 years it predicts to increase it by 6.2% to 3888 aircrafts. Hence, by 2023 the Chinese aerospace industry will note an annual growth of 7.7%; this will see the industry double its size. The MRO industry value will grow it that timeframe from 3.6 billion US dollars to 7.2 billion US dollars. This will pose great competition in the region given that Asian-Pacific will have grown by 4.3% (Fujimoto & Shiozawa, 2012, p.217). Additionally, the Western countries outsource its aeronautical services from China for its Boeing and Airbus fleet; increasing China’s prominence in the market. The drivers for the competition are competency of service delivery, robustness of the industry, availability of resources and governmental support. China through the rapid growth in technology has been able to be at the edge in technology advancement and integration in daily operations. This gives is a competitive edge over India that is gradually incorporating technology in its production processes. Availability of iron and steel industries in the nearby region of Zhanjiang contributes positively to the production of body parts in the heavy industry (Umbach, 2007, p.47). In the next 5 years aeronautic industry in China will grow by 6.2% The plans to grow the aeronautic and heavy industry China from its current fleet of f 1858 aircrafts to 2877 aircrafts shows that the future of the industry is promising. This will see increased business in the Guangzhou City in this period with the aim to achieve the set targets as well as improve the industry standards. The increased transportation need and desire to conveniently perform tasks raises the use of aerospace services. The current world has shifted to performing personal and business operations with the shortest time possible, this creates demands for air transport. Hence, the heavy industry is heavily engaged in production of effective and efficient aircrafts that can be able to solve the existing challenges of air transport (Zafar, 2007, p.121). Moreover, it is predicted that if the demand rise continuously there will be shortage of workforce in China of about 140 million people by 2030. This is a prediction of how industrialization will have developed significantly and Guangzhou City will have increased its operations that directly influences the aeronautic and heavy industry. Furthermore, Guangzhou City has attracted multinational investors from other parts of the world. It has signed 136 business contracts and 18 financing contracts that amount to approximately 120 billion US dollars to support growth and development in the regions. This shows that investors have high hopes in the future of Guangzhou City (Fujimoto & Shiozawa, 2012, p. 204). Guangzhou City is a unique place in terms of its Socio-Cultural Practices The region is known to be distinct from the rest of the Chinese region due to its food, western culture influence, liberal ideas, mountainous landscape and consumerism lifestyle. This helps it to attract many tourists who find it convenient for shopping and experiencing its exquisite cuisine. This promotes the aerospace industry due to the increased demand for flights and transportation services. Given that the city was exposed to western culture early than most of the Chinese region, it blends well with visitors and this makes tourists comfortable visit and stay. Moreover, the tropical climate is significant to attracting visitors from other parts of the world, increasing factors that promote the city on the global platform (Gavin, 2003, p.364). The climatic condition is demonstrated in the tale below: The Chinese government supports the aeronautic industry Government support is important in the pursuit of growth and development of a region. In the Guangzhou City the Chinese communist government supports operations in the region and is involved in organizing the largest investment and financing trade fair. This helps attract international business persons to interact and share ideas on how to grow sustainably and develop consistently. Furthermore, the government has supported implementation of Industrial Zones in the city namely Guangzhou Nansha Export Processing Zone. furthermore, the governemtn has ben involved in training Guangzhou Development District officials on matters related to intellectual property so that they may raise awareness to businesses to safeguard inventions from these busy region. There have been collaborations with other governments to borrow from their strategies, practices and policies on how to develop Chinese aeronautic and heavy industry (Fujimoto & Shiozawa, 2012, p. 197). Technology and Innovation in Guangzhou City Given that China is among the leading technologically advanced economies, technology has been integrated in the production process of aeronautics to improve the quality of products, increase efficiency, enhance effectiveness and reduce cost. The aeronautical products require to be manufactured with high standards so as to reduce probability of accidents occurrence, improve airspace transport and reduce costs associated with manual operations. The integration of technology makes China compete successfully with India and offer high level services to western countries that outsource their services and products (Foster, 2013, p.56). Moreover, the operations in the aerospace have been modernized to improve customer service and convenience. This has led to increased e-commerce transactions that have recorded an annual increase rate of 33%. Additionally, technology is being utilized to reduce the rate of pollution in this region as well as establishing modern ways to preserve environment like increased usage of renewable energy (Umbach, 2007, p.43). Conclusion The aeronautic and heavy industry in Guangzhou has brighter future and its influence in the East Asian region will continuously increase. Moreover, the business atmosphere of the city contributes remarkably to increased operations and improvements in the aerospace industry. The future predictions to double the aeronautical operations in the China promote business in this city and attract investors into the sector. Furthermore, the on-going improvements in Guangzhou Industrial zones promote future prominence of Chinese aeronautic and heavy industry. The issue of pollution in China especially this region that is highly industrialized continues to be a challenge that all the involved parties need to address to ensure that sustainable development is achieved. References Foster, P. R. (2013) American Motors Corporations: The Rise and Fall of American Last Independent Automaker, Minneapolis: Motorbooks Publishers, ISBN 978- 076344255. Foster, S. et al. (2010) Frommer's China, New York: John Wiley & Sons. Fujimoto, T & Shiozawa, Y. (2012) Inter and Intra Company Competition in the Age of Global Competition: A Micro and Macro Interpretation of Ricardian Trade Theory”, Evolutionary and Institutional Economics Review, vol. 8, no.2, pp. 193–231. Gavin, M. (2003) 1421: The Year China Discovered the World, London: Bantam Books, p. 364. Johnson, G. E. (1999) Historical Dictionary of Guangzhou (Canton) and Guangdong. Lanham, MD: The Scarecrow Press, ISBN 978-0-8108-3516-0. Kohn, G. C. (2008). Encyclopedia of plague and pestilence: from ancient times to the present. Infobase Publishing. p. 165. ISBN 0-8160-6935-2. Manning, S., Boons, F., Von Hagen, O., and Reinecke, J. (2011) National Contexts Matter: The Co-Evolution of Sustainability Standards in Global Value Chains: Ecological Economics Forthcoming. New York: Prentice Hall. Umbach, F. (2007) China’s Energy and Raw Material Diplomacy and the Implications for the EU-China-Relations, China aktuell, 1, pp. 39-56. Zafar, A. (2007) The Growing Relationship Between China and Sub-Saharan Africa: Macroeconomic, Trade, Investment, and Aid Links” The World Bank Research Observer, vol. 22, no. 1, pp. 103-130. Read More