Cities in Post-Mao China

Jae Ho Chung, Jae Ho Chung

• Publisher: Routledge
• Year: 2005
• ISBN:
  9781134621910
• Edition: 1
• Topic: Ciencias sociales
• Subtopic: Estudios étnicos

This volume, written by contributors from a number of different specialisms, suggests that different combinations of factors have contributed to the relative successes and failures in these cities. Endowment factors, preferential policies, and history have all proved to be important. Most importantly, Cities in Post-Mao China suggests that locally-generated strategies of development are crucial determinants. This ground-breaking volume reveals through close detail and broad coverage how exactly cities have been catalysts for Chinas economic development. It will provide much needed data for those working in the fields of comparative politics, development studies, economic development and Asian studies.

1

Recipes for development in post-Mao Chinese cities

Themes and variations

Jae Ho Chung

Precedents of industrialization suggest that different actors and institutions may get involved as key agents of development, which include factories, investment banks, entrepreneurial bourgeoisie, foreign capital, and the state. No monocausal explanation will suffice since, at different points in time and under different politico-economic circumstances, varying combinations of factors have led to high growth. When ‘telescoping’ the arduous process of development is a key imperative, however, the role of the state is deemed crucial in designing overall development strategies, governing the market by getting the prices wrong, and controlling the major sources for financing development. As a matter of fact, ‘taking the state seriously’ as the principal architect of development has already become a cliché.¹

It should be noted, however, that the state is a multi-layered structure of authority with its own complex intra-and inter-governmental dynamics. As the extensive literature on development in general, and on the East Asian Newly Industrializing Economies (NIEs) in particular, almost uniformly adopts the highly encompassing term of ‘state,’ it largely fails to differentiate the roles performed by the central and local governments in executing ‘developmental intervention.’² System reforms in many post-communist and reforming socialist countries, too, have involved a variety of measures of decentralization and marketization, the success of which has been highly contingent upon the responses of their local implementors. ‘Unpacking the state’ has indeed become a crucial approach to the study of development.³

The importance of regional and local governments in determining the path of development is nowhere more manifest than in continental states such as Russia and China.⁴ China’s path of development has quite closely resembled those of South Korea, Taiwan, and Singapore in that its accelerated growth was facilitated largely by the developmental state with sufficient autonomy from domestic social groups and coalitions as well as with a ‘strategic capacity’ to restructure the domestic market and manage external capital linkages.⁵ However, unlike these East Asian NIEs where the central government was de facto the only state with any substantial power of its own, China’s developmental reform was from the outset accompanied by the delegation of central authority and the promotion of local initiatives. One key consequence of such a difference is that, while the East Asian NIEs’ developmental trajectory was heavily geared toward sectoral target policies, China’s path to date has been predominantly regional in nature.⁶

Regional target policies refer to regionally discriminating measures of deregulation to promote the growth of some localities at the expense of others. The rationale behind this selective spatial deregulation is two-fold: (1) regional target policies were initially for experimental purposes to test whether a particular deregulation would work and possibly be worthy of replication in other areas; and (2) they were also for the purpose of saving scarce development capital, which could be utilized more effectively by being invested in select localities with better endowments. Such regional target policies, in combination with various measures of decentralization and marketization, have significantly contributed to the rise of local power in China. Furthermore, China’s local governments are performing an increasingly vital role in designing and shaping the developmental process by substituting for the shortage of bourgeois entrepreneurs and private business groups.⁷ Conceiving of government (or state) as a public entrepreneur is not a new concept, but dissecting it into territorially based entrepreneurial agents certainly is. In fact, the lower we go down along the administrative hierarchy, we may find that incentives for local governments to perform entrepreneurial functions also become more clearly defined since the boundaries of property rights are better delineated, collecting bottom-heavy information becomes easier, and the transaction costs of monitoring firms and markets are reduced.⁸

Local agents of development in China: why sub-provincial cities?

Studies of local government as entrepreneurial agents in China’s reform have largely been confined to those of provinces, and even they are primarily at an early stage.⁹ Provinces are still undoubtedly the most important sub-national level of administration, which interact directly with the central government. Not surprisingly, provinces were the first to benefit from a variety of decentralization measures in the areas of fiscal arrangements, investment decisions, and foreign economic relations.¹⁰ Since the intensification of China’s developmental reform of necessity presupposes the deepening of decentralization, marketization, and privatization, its resource and informational requirements will also become increasingly more bottom-heavy, further localizing the entire process of transitional management. Consequently, much developmental intervention may actually take place at the level of sub-provincial cities.¹¹

Some policy stipulations and statistics may further underscore the importance of sub-provincial cities in post-Mao Chinese reform. First, with the designation of fifteen ‘key economic cities’ (jingji zhongxin chengshi) in April 1981, the central government for the first time acknowledged the crucial role that sub-provincial cities could play in shaping the path of national economic development. Second, with the introduction of the ‘city in charge of county’ (shi guan xian) policy in 1983, more and more counties became subject to the direct supervision by prefecture-level municipal governments. As of 1991, for instance, one-quarter (696) of China’s counties were directly administered by 170 prefecture-level cities.¹² In accordance with the rapidly rising level of urbanization, many rural counties also became county-level cities with an enhanced degree of autonomy in economic management. As of 1994, China had 413 county-level cities, of which 355 (86 percent) were county-turned-cities (xiangaishi).¹³ During the reform era, the number of sub-provincial cities rose dramatically from 191 in 1978 to 321 in 1985, and to 663 in 1996, a fact which may indicate their increasing importance in managing local economic development.¹⁴

Third, as of 1993, sub-provincial cities and urban districts accounted for three-quarters of China’s gross value of industrial output (GVIO) and fixed assets, as well as 61 percent of all foreign investments actually committed to China, despite the fact that their land area constituted a mere 15 percent of China’s total.¹⁵ Fourth, several measures of selective spatial deregulation—such as Beijing’s designation of ‘special economic zones’ (jingji tequ), ‘coastal open cities’ (yanhai kaifang chengshi), and ‘central economic cities’ (jihua danlie chengshi)—allowed more than two dozen sub-provincial cities to implement highly preferential policies and grow strong enough to compete with the provinces, further complicating central-local as well as intra-provincial dynamics of development management.¹⁶ Fifth, an increased number of county-turned-cities have actively joined ‘development communities,’ particularly in the coastal region, to get their due share of markets, capital and information.¹⁷

The importance of sub-provincial cities has been further highlighted by the media and Chinese publications concerning their roles as ‘windows’ (chuangkou) that connect domestic and foreign business networks and as ‘corridors’ (zoulang) through which developmental ideologies and reform experiences as well as products, capital, technologies and information are diffused into the neighboring localities.¹⁸ Yet, our current understanding of sub-provincial cities and their roles in post-Mao economic reform is highly limited and significantly skewed.¹⁹ First, the predominant focus of the field has been placed on the ‘special economic zones’ (SEZs) and Shenzhen in particular, which are undoubtedly important yet perhaps too unique to produce useful generalizations about the role of sub-provincial cities in China’s developmental reform as a whole.²⁰ Second, other than the SEZs, Wuhan is perhaps the only sub-provincial city that has received heavy scholarly attention in recent years.²¹ Third, while research on counties and county-level cities has recently been initiated, they are either single-case studies or static comparisons of output data devoid of procedural dynamics of development.²²

As a matter of fact, the most comprehensive comparative study of sub-provincial cities to date was conducted by a group of economic geographers who collectively sought to evaluate the developmental potentials of ten sub-provincial cities in the coastal region.²³ Yet, from a political-economy perspective, such questions as how economic development was actually pursued by sub-provincial cities—as opposed to what developmental potentials they might have possessed—and whether or not they have shared a common recipe of development, beg to be answered on a more systematic and comparative basis.

Recipes for development in sub-provincial cities: endowments, policies, and strategies

This book is based upon the assumption that sub-provincial cities are more than mere catalysts for development and that they are pivotal players of local economic development. Fundamentally, this volume is a collective research effort to identify what can be termed as the ‘recipe(s)’ for economic growth in sub-provincial cities in post-Mao China. A preceding question, of course, would be whether there is a significant common recipe for local economic development. The literature on late industrialization and NIEs suggests that variations, rather than uniformity, more aptly characterize the developmental paths taken in East Asia and Latin America. Different resource endowments, varied politico-social structures, and differing leadership qualities all seem to have contributed to such variations.²⁴ This book also presupposes a strong presence of variation among the developmental paths taken by sub-provincial cities in China.²⁵ In order to identify and gauge the extent of variation, however, we need a common hypothetical recipe for development, against which each contributor can test the experiences of his or her case cities.²⁶

In this volume, the common recipe is assumed to consist of three categories of factors that may shape the path of development in sub-provincial cities. The first category of factors is of a ‘given’ nature in that sub-provincial cities themselves are not able to change their specific configurations. The factors of location and history belong to this category. The location factor concerns whether a city is coastal or inland, whether it is located on or near a major river, whether or not it controls an international harbor, whether or not it borders on a foreign country, whether or not transportation is difficult due to topological conditions, and so on. A hypothesis derived from these is that if a city is coastal, located on a river, controls a harbor, or borders on a foreign country, it may develop faster than otherwise.²⁷ On the other hand, history refers to ethnic, cultural, political, and economic legacies that a city has inherited from the past. More specifically, the ethnic and cultural legacies are believed to be closely related to the level of local integration and communal solidarity. The political heritage may condition the city’s ideological and policy orientations as well as its responsiveness to the administrative superiors. The economic legacy is associated with how its current development is aided or constrained by past decisions regarding investments and industrial policies.²⁸

The second category of factors is concerned primarily with administrative arrangements and target policies granted by the central and provincial governments, which are deemed crucial in molding the overall environment of development in sub-provincial cities.²⁹ These factors are much more malleable than location and history. That is, while sub-provincial cities themselves cannot unilaterally produce central or provincial policies, sub-provincial cities can at least try to persuade and influence Beijing or their provincial superiors to adopt policy positions more favorable to their interests. For instance, revenue-sharing arrangements have fundamental bearings upon the extent to which sub-provincial cities are permitted to utilize local revenues in pursuing their own developmental priorities. While such arrange ments are usually formulated on the basis of the center’s (and the province’s) policy preferences, sub-provincial cities can and often do obtain favorable arrangements through intense negotiations and bargaining.

More specifically, these ‘semi-given’ factors are divided into two sub-categories. One refers to the provision of preferential policies that would allow sub-provincial cities to expand their bases of resources. Concrete measures include favorable revenue-sharing and taxation arrangements and the granting of special designations such as ‘special economic zones,’ ‘coastal open cities,’ ‘central economic cities,’ ‘economic and technological development zones,’ and ‘bonded zones,’ which have all been crucial to raising the ceilings for local foreign exchange retention, upgrading local authorit...