Demandas del trabajo.

Focusing on smaller units below the city-government level in China tells us more about the correlative relationship between local economic growth and foreign investment. Table 3.10 shows the inter-township differentiation of economic growth in Dongguan. Changan is a leading sub-municipal district in terms o f the number of foreign firms, accumulated FDI, GDP and the value o f exports. In terms o f GDP, the combined GDP of Changan, Tangxia, Qingxi and Humen accounted for 33.8% of Dongguan's total GDP in 1999. The accumulated FDI in these four sub-municipal districts was equivalent to 32% of the total accumulated FDI in Dongguan. Also, in terms of the number of firms, these four sub-municipal districts accounted for 31.7% in 1999. Changan’s GDP was almost 22 times that of Hongmei Town. In terms of exports, Changan’s export value was 28 times that of Hongmei. Hongmei is ranked lowest in terms of exports, accumulated FDI and the number of foreign firms (Table 3.10). Thus, the pattern of export value at sub-municipal level is similar to the foreign investment pattern. The aggregate analysis on smaller units beneath the sub-provincial level reveals a strong pattern of micro-regionalisation, which highlights the impact of foreign investment on economic growth through export-oriented strategies.

Table 3.10 Foreign Firms, GDP and Exports in Dongguan's Sub-Municipal Districts. 1999 No of foreign firms in 1999 Accumulated FDI by 1999 ($US million) GDP in 1998 (10,000 RMB) Value o f Export ($US million) in 1998 Changan 1,389 1,121.8 1,118,873 1,992.1 Changping 613 531.8 515,342 765.1 Chashan 274 349,8 102,698 190.0 Dalang 439 311 8 163,746 2894 Dalingshan 280 410.5 252,240 471.2 Daohao 155 180.7 116,357 172.2 Dongkeng 186 196.8 210,399 240.7 Fenggang 954 657.6 299,665 699.1 Fucheng 489 408 5 396,795 729 8 Gaobu 111 96 3 67,246 208.7 Guangcheng 78 183 3 121,932 112.8 Hengli 236 119 5 83,326 144.3 Hongmei 38 68.3 50,962 71 0 Houjie 662 601.0 510,618 1,354.8 Huangcun 197 369.3 255,576 4798 Humen 1,118 1,056.5 758,587 1,202.0 Liaobu 341 252.5 362,701 687 64 Mayong 67 102 7 75,844 209.5 Qiaotou 330 242.7 127,660 265.6 Qingxi 653 788 1 757,665 1,332.7 Qishi 205 1196 61,488 141.3 Shatian 126 169 8 132,439 266 0 Shijie 403 361.2 499,310 809 5 Shilong 88 102.3 129,224 359.0 Shipai 315 118.4 83,295 156.9 Tangxia 757 854.9 903,676 1,193.5 Wangniudun 84 116 9 59,647 92.5 Wangjiang 144 81.7 49,204 171.3 Xiegang 190 112 8 60,364 83 6 Zhangmutou 317 278 3 269,415 286.2 Zhongtang 104 184.0 76,742 100.1 Huangjiang 408 226 2 134,435 219.5 City Total 12,356 11,899.05 10,480,208 147,744 Note: Data on the number o f foreign firms and accumulated FDI relate to the end of June 1999

Source IJongguanshi Waishang louzi Qiye j i Ouanbu Gongye ZHiao Huibicm 2000.

3.6 Conclusion

This chapter has sought to demonstrate the contested debates over globalisation and régionalisation, and has examined the pattern of China’s micro-regional integration with

the world economy. The dual processes of globalisation and régionalisation are complex, uneven and contradictory. In various domains we see the development of strategic horizontal actions (mostly taken by the state). At the same time, at the sub-national and firm levels, the significance o f extensive cross-border capital movement is evident. The states, SNGs and MNCs have become facilitators for promoting régionalisation. East Asian régionalisation is continually evolving and its forms of governance are increasingly multi-level in nature. The development of various forms o f MLG in East Asia (Section 3.2) reflects the trend away from a purely state-centred approach to governing a complex, globalising world.

China’s micro-regional integration with the world economy has not been spread evenly across the entire economy. Consequently no single approach can offer a sufficient explanation. Though the state is still the key actor in the process of régionalisation in many respects, the sub-units of the state and firms have emerged as critically important actors in their own right. The huge inflow o f foreign investment since economic reform has played a substantial role in China’s rapid economic growth. It has greatly assisted China’s reform process and also developed a distinct pattern of China’s foreign economic relations on the basis of the East Asian regional economic structure. One of the most notable results is the development of PTAs in Guangdong, which is contingent on wider processes of globalisation and régionalisation. China’s abudant supply of low-cost labour comprises the core part of the structure of PTAs. The combinations of regional and global processes of production are most clearly visible in the case o f industrial agglomeration in the Pearl River Delta in Guangdong (especially in Shenzhen and Dongguan), particularly in the electronics industry. The structure of the East Asian regional economy, in particular the role of Taiwan and Japan as major sources of imports, is of great importance. At the same time, the US and the EU are major destinations for exports of finished products. The emerging transnational economic space of Shenzhen and Dongguan is built upon the wider processes of East Asian régionalisation.

The organisation of production in China and the regional division of labour between China

and the world economy have resulted in de facto processes of micro-regionalisation linked

to the globalisation o f CPNs. With the rise of global competition, firms have revised their

production systems and relocated to achieve more efficient production and procurement. An international division of labour based largely on national economies is partly being replaced by a division of labour rooted in regional intra- and inter-firm networks which induce the industrial transformation of particular areas. Firms have become more important actors in deciding the location of production and leading the pattern of development of micro-regionalisation. The in-depth investigation of Shenzhen’s and Dongguan's patterns of inward FD1 and foreign trade reveals that both cities are heavily integrated with the world economy through PTAs practices and export-oriented strategies.

Although this micro-regionalisation has undoubtedly accelerated China's integration processes, it is also associated with increasing regional differentiation among regions. Further disaggregate analysis beneath the provincial level (i.e. at the sub-provincial and sub-municipal levels) illustrates the considerable differentiation of economic development and correlates with the direct impact of FDI on the local economy. The best example is the huge gap o f GDP (22:1 in 1998) between a successful sub-municipality (Changan) and a less developed sub-municipality (Hongmei) in Dongguan. The success and/or failure of economic development at local level is largely due to the degree of engagement of foreign firms. China's pattern o f micro-regionalisation thus highlights the uneven engagement of sub-national territories with the world economy. The challenge for the government is to build new frameworks for effective cross-border economic governance. In the processes of China’s micro-regionalsiation, the relationships between SNGs and MNCs at the local levels provide China’s national politics with further complex multi-layered economic dynamism. It is thus important to understand the relationship between emerging cross-border economic space and the restructuring o f China’s domestic governance.

1 The term ‘micro-regional integration' is used by Breslin (2000) to apply to China He stresses the role o f local government and the structure of the East Asian regional economy in micro-regional integration in the cases of north East Asian integration and Southern China-Hong Kong links

2 (A) regards globalisation as a specific period of history rather than as a sociological phenomenon or a theoretical framework (B) characterises globalisation more functionally and considers related series of economic phenomena including the liberalisation and deregulation o f markets, the privatisation of assets, the retreat of state (unctions, the diffusion o f technology, the cross-national distribution o f manufacturing production (foreign direct investment), and the integration of capital markets (C) sees globalisation as the hegemony o f American values characterised by the triumph o f modernisation and democracy. (D) views

globalisation as a new form of activity in which a decisive shift from industrial capitalism to a post-industrial conception o f economic relations is taking place See Higgott and Reich (1998)

3 Higgot and Reich (1998: 11)

4 Palmer (1991) distinguishes two waves of regionalism by lime: ‘old regionalism' in the 1950s and 1960s,

and 'new regionalism' from the late 1970s Bhagwati (1993) uses second wave’ in order to distinguish later period from the regional integration movement in the 1950s and 1960s in Europe, and to stress its spread to Latin America and Africa. According to Hettne and Soderbaum (2000), the 'new regionalism’ began to rise in the mid-1980s in the context of the comprehensive structural transformation o f the global system

6 Yamazawa (2001: 3).

6 There is no clear distinction between MNCs and TNCs in this figure 7 On the transformation o f Japan’s ASEAN policy, see Yamakage (2001).

8 By 2000, the number of member countries was 24 See JI1A Newsletter (No. 102 December 2000). 9 On the processes of the institutional development of the PECC and the APEC, see Kikuchi (1995).

10 The figure is taken from Kuroda (2001: 21). 11 The figure is taken from Kuroda (2001: 21).

13 ‘Foreign firms in China’ refers to sanzi firms including equity joint ventures, contractual joint ventures

and wholly foreign owned firms

13 The figure is taken from Kuroda (2001:21).

14 According to the latest Chinese sources, by 2000 there were 364,345 foreign firms in China and the

accumulated inward FD1 (utilised base) was US$ 34 8624 billion. See

http://j-people nejp/2001/01/18/jp20010118-1660.html.

15 The figure is taken from Dai-Ichi Kangyo Bank (DKB), www dkb co jp/houjin/report/china/200007/ 16 See Yabuki and Hamer (1999).

17 The figure is calculated by the researcher using Mitsubishi (2001 496-7).

18 The figures are based on Chinese data (Guoji Shanghai), 14 January 2000)

19 The figures (%) for Japan, Taiwan, South Korea, Hong Kong, EU and the United States are based on Chugoku Tosha (July 2000)

20 The figure is taken from Hu (2001: 324).

21 In 1999, Guangdong’s industrial and commercial tax was 1,480 yi yuan (100 million yuan) DKB http://www dkb co jp/houjin/report/china/200002/

22 The figures are taken from Kuroda (2001: 91).

23 Guangdong’s share of photocopying machine production in China was 59.3% in 1998, and the share of camera production in 1998 was 83 9% in China See Kuroda (2001: 91).

24 The figure is calculated by the researcher by using Mitsubishi (2001) The exchange rate of RMB per US dollar in 1999 was 8 2783 RMB per dollar

25 The figure is taken from Mitsubishi (2001).

28 Purchasing Power Parity (PPP) compares international living standards by the prices o f goods and service rather than by market exchanges rates

27 The figure is the researcher’s calculation based on Mitsubishi (2001) The exchange rate of RMB per US dollar in 1999 was 8 2783 RMB per dollar

28 The figure is the researcher's calculation using Hu (2001: 292) The exchange rate o f RMB per US dollar in 1999 was 8.2783 RMB per dollar

29 The definition o f the area of the Pearl River Delta varies Here it refers to Guangzhou, Foshan, Zhaoqing, Qingyuan, Shenzhen, Dongguan, Huizhou, Zhuhai, Zhongshan and Jingmen

30 The figures are from Lu (2000) 31 The figures are from Lu (2000)

32 China’s total inward FDI between 1979 and 2000 was $US 346.63 billion Based on Mitsubishi (2001) 33 Shenzhen Tongji Xinxi Nianjian 1999

34 The figure is the researcher’s calculation based on Shenzhen Tongji Xinxi Nianjian ( 1999 and 2000) 35 Dongguan Guide by DFTEC

36 The figure is taken from Dongguan shi Waishang Z'ouzi Qiye Ji Quanhu Gongye Ziliao Huihian 2000.

37 DK.B, http://www.dkb co.jp/houjin/report/china/200003/200003-2.html

:18 The figure is the researcher's calculation using Mitsubishi (2001) and Dongguan Guide by DFTEC

39 The figures are from DKB, www.dkb.co.jp/houjin/report/china/200003/

40 The researcher’s calculation is based on DTN, (1999) and Mitsubishi (1999)

4> DFTEC

42 Dongguan shi Waishang Touzi Q iye.// Quanhu Gongye Ziliao Huihian 2000.

43 These problems are largely due to the lack o f inter-departmental communication in the Dongguan City Government. (The researcher’s interview with officials at DFTEC, 12 October 2001)

CHAPTER 4