1 AIT Asian Institute of Technology

The informal sector in the urban economy of Guangzhou City : internal dynamism, external environment, and growth prospects

AuthorChen, Yafang
Call NumberAIT Thesis no.HS-92-07
NoteA thesis submitted in partial fulfillment of the requirement for the degree of Master of Science, School of Engineering and Technology
PublisherAsian Institute of Technology
Series StatementThesis ; no. HS-92-07
AbstractAfter two decades of researches and studies, the role of the i n forma l sector in the developme nt process is now widely recognized. However, there is still t he dispute about t h e capability of this sector to grow evolutionarily. Previous researches are l im ited wi th respect to t he nature a nd mech anism of informa l sector growth . Especially literatures are almost non existent regarding the informal sector and its growth in Ch ina. This study aimed to analyze the internal and external mechanism and to assess the f ut ure prospects of the informal sector growth. Data of this study were collected t h rough a sampling survey in Guangzhou City, the largest metropol is in southern China. Th e preva l e n ce of remarkab l e i ntern al dynamism i s found in t h e informal sector in terms of entrepren eursh ip and innovation . The compiled and analyzed empirical data strongly suggest a positive relationship between the expansion of informal sector enterprise and the extent of entrepreneurship and innovation. Externally, the relationship between the formal and informal sector is found to be complementary in nature. With the prevalence of t h is relationship, t he more t he i n forma l e n terprise is i ntegrated with the rest of the economy, t he more it expands in b u siness. It is also found that the market competition for the informal enterprises is strong but not excessive and the general socia l and policy environment is favourable. The future prospect of the informal sector growth is also found optimistic on t h e basis of anticipation of the informal enterprise operators. Th e encouraging finding is that the informal sector i n Guangzhou displ ays an evol utionary pattern of growth as observed i n t heir ability to accumu late capital. In order to maximize social gains from the operation of this sector in t he urban economy, the study proposes several policy recommendations to incorporate the informal sector in the urban economic deve l opment and physical planning. This would require pol icy makers to recognize the effects of its growth on the pu blic sector , on the rura l sector, a nd on urban land use pattern. According to t h e constrain ts, identified in this study, suggestions are made to the pol icy makers to facilitate a nd stimu late the growth of t h e informal sector in China. The provision of capital and training, elimination of restrictions on location and scale of operation, and stimu l ation of subcontracting linkages are some specific examples of potentially beneficial policy measures that desire governme nt attenti on. In add iti on to the impl ementation of recommended policies, f urth er research es should be encouraged to determine t he macro effects of t h e growth of the informal sector on migration a nd urbanization and the structural c h anges in t h e composition of this sector.
Year1992
Corresponding Series Added EntryAsian Institute of Technology. Thesis ; no. HS-92-07
TypeThesis
SchoolSchool of Engineering and Technology (SET)
DepartmentDepartment of Civil and Infrastucture Engineering (DCIE)
Academic Program/FoSHuman Settlement (HS)
Chairperson(s)Amin, A.T.M. Nurul;
Examination Committee(s)Weber, Karl E. ;Wickramanayake, B.W.E. ;Igel, Barbara;
Scholarship Donor(s)State Education Comm ission of People ' s Republic of China;
DegreeThesis (M.Sc.) - Asian Institute of Technology


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