Jingbin Wang

This paper focuses on local heavy industry referred to as the "five small industries" that represent the peculiar industrialization process in China. Its inception during Maozedong's regime and its role within the strategy for "war preparation," is examined. Under this historical condition, the structure of Chinese industrial organization was extremely decentralized. Although, this decentralized industrial structure was once again concentrated after 1979, since 2000, the tendency to decentralize grew stronger again, owing to private capital making a new entry. Recently, this model is seen as an example of inefficient development and attempts are underway to correct it within the industrial structure upgrade policy. Market demand for local heavy industry products, however, are expanding along with the increase of nationalincome, and divisions between regions and the market progress, allowing one to conclude that decentralized industrial organization will exist for a considerably longer period of time.