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GEOGRAPHICAL RESEARCH >

2014 , Vol. 33 >Issue 4: 698 - 709

DOI: https://doi.org/10.11821/dlyj201404010

The development of informal sectors in the external-oriented manufacturing sector in PRD, China：A case study of leather industry in Shiling Town, Guangzhou

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  • 1. School of Geography and Planning, Sun Yat-sen University, Guangzhou 510275, China;
    2. Department of Geography, Hong Kong Baptist University, Hong Kong 999077, China

Received date: 2013-07-22

  Revised date: 2014-01-23

  Online published: 2014-04-10

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Abstract

The informal sector has been a prevailing phenomenon in the dynamics of the economic development all over the world since 1972. There has been much debate on the question about what drive the persistence and development of informal sectors in cities. Dualism argues that the informal sector is separated from the formal sector, and its emergence is due to the unemployment and poverty. That is, the surplus labor forces enter the informal sectors because they cannot find jobs in formal sectors. However, this viewpoint has been questioned by neo-Marxism, according to which the informal sector is structurally linked with the formal sector and its emergence is a product of the flexible capital accumulation regime in the late capitalist era. That the laborers enter the informal or self-employment sector is because they aim to escape from the over-exploited conditions in the formal sector, rather than lack of formal jobs. This paper aims to contribute to this academic debate by exploring the reasons for the existence and development of the informal sectors in Shiling leather industry of Guangzhou as one of the leading cities in PRD in China. Our research findings include: (1) the fundamental reason for the development of informal sectors arises from the sub-contracting strategy employed by the formal manufacturing enterprises that aim to respond unstable global market and reduce cost and risk; (2) both the lack of labor security in formal enterprises and the desire of the workers to have an autonomy and dignified life drive the workers to enter the informal factories and become the casual laborers; (3) loose regulatory environment enables the existence of informal sectors possible; (4) global financial crisis beginning in 2008 also contributes to the prosperity of informal sectors. We argue that the development of informal sectors in the Shiling leather industry should be recognized as the consequence of the interaction of enterprises, workers and the local government. Our findings support the neo-Marxist understanding of the dynamics of the informal economy. It is found that the functional linkage exists between the informal sectors and formal sectors. The informal sector plays a significant role in the development of the industry cluster and performs as an integral part of the global production system. Informality is not a survival strategy to respond unemployment and poverty as what dualism argues, but is a choice for the laborer to respond to the poor labor working in the formal sectors. Nevertheless, this alternative choice has put them into a newly poor livelihoods situation.

Key words： informal sector; informal factory; casual laborers; manufacturing industry; Pearl River Delta; Shiling Town; Guangzhou

Cite this article

XUE Desheng, LIN Tao, HUANG Gengzhi . The development of informal sectors in the external-oriented manufacturing sector in PRD, China：A case study of leather industry in Shiling Town, Guangzhou[J]. GEOGRAPHICAL RESEARCH, 2014 , 33(4) : 698 -709 . DOI: 10.11821/dlyj201404010

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