The Geography of Contemporary China: The Impact of Deng Xiaopings Decade

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Regional industrial specialisation was to be encouraged, and this has been linked with a consistent policy to promote the more rapid development of the coastal region, which is seen to have an initial advantage and lower production costs see Chapter two. This has not been accepted without dispute by other parts of the country. This and other problems of the urban reforms are discussed in the final section of this chapter. This was designed to improve business confidence among potential traders and investors, and began the process in which reduced tax liabilities and other concessions have been used to entice investment from outside sources.

The rationale for breaking with the previously defined socialist policy was that if the Four Modernisations were to succeed, then new technology had to be brought into the country. Initially, the idea was to focus developments in the four Special Economic Zones SEZ on the south coast, partly to isolate the decadence of capitalist influences. But, in fact, over the reform decade many more coastal cities and areas have been opened up to encourage foreign investment, and there is acceptance of such involvement virtually anywhere see Chapter nine.

Some could be introduced by foreign firms locating in the SEZs and being taken over by Chinese at the end of the contract. But this route has not been very successful, and the SEZ policy has been criticised for this shortcoming. The sort of costs-versus-benefits analysis that is entailed in this cannot be simply economic. Considerable political opposition has arisen, for example, over the massive exports of oil to Japan used to pay for technology from that country; given the severe energy shortages in China it is fairly easy to guess the arguments.

It has been difficult for the government, given the increased autonomy of enterprises and local authorities, to control the level of imports. While the manufacture of goods for export has increased enormously in the s as have invisible trade earnings such as tourism , the total value of all exports has often failed to keep up with imports, resulting in very large balance of payments deficits in some years.

Instead of earning money through exports in order to buy technology, China has also broken with one of the strictest aspects of Maoist policy and borrowed money from foreign banks and governments. Moreover, in the early s it confirmed its new role in the international economy by joining the World Bank and other institutions previously regarded as tools of the imperialist system. It was easy for the post leadership to set out a critique of Maoist policies but far harder for it to implement new ones to replace them. As the various reforms in the Soviet bloc have demonstrated, it is difficult to find a structure that both retains elements of central planning so as to pursue socialist goals which it is felt will be smothered without it , and to introduce market forces to improve economic performance, higher income and growth.

The reforms seemed popular with most sections of society, though early attempts by some to encourage political democracy in the Democracy Movement of —9 were repressed. Many urban dwellers felt the improvement of more choice of foodstuffs, and the increased output of light industry meant there were more consumer goods available. Policy conflicts and the reforms There is no single event which clearly marks the downturn in the fortune of the reforms; a combination of factors has been involved. Some seem inherent in the reforms themselves; others are products of political obstruction by some leaders of the proper implementation of the reforms, leading only to their partial or imperfect implementation.

In addition, the fact that political reform has not accompanied changes in economic policy has made co-operation with the government much less attractive to some crucial groups of people. The party and its reforms has become discredited as local and national leaders and their relatives cashed in on the commercial opportunities arising under the new policies, in which they had a head start. It wanted political changes to restore certain aspects of the egalitarian elements of 17 Geography of contemporary China the past which were seen as having been eroded by the reform policies, though retaining the higher levels of wealth generated by them.

The difficulties of the reforms result partly from the compromises forced by this conflict. These have contributed to the severe inflation in prices of food and other daily necessities, which in the second half of the s has rarely been below 20 per cent per annum, and which has, in several years, been 30 per cent or more. The problems outlined just now are also the basis of much of the corruption complained of by the people in the s, which was a target of the protesters.

While the reforms were in many ways popular, the party is not trusted to implement them fairly or with equality of opportunity. After the massacres: The events of May and June , involving the violent crushing of popular demands that the party end the corruption which the reforms of the s engendered, throw into doubt the continuation of the reform policies in their existing form.

The political instability which the reforms generated led to conflict in the party leadership over how to deal with it. After several weeks of confusion in May, supporters of Deng Xiaoping and Premier Li Peng in the army and party came together to crush the demonstrations and remove from the leadership those who would have granted some probably very limited political reforms. In his place Jiang Zemin has been installed.

It is not only firmly against political reform and democracy, but also includes elements who are opposed to the much more extensive role for market forces and commercialism which the reform leadership, especially Zhao Ziyang, had pushed. Ironically, this group of leaders is also much more likely to try to deal 18 Introduction with the issue of corruption and cleaning up the party, one of the demands of the mass demonstrations, because it is seen by them as a by-product of the over-commercialisation of the economy and reduction of central direction.

A strengthening of party direction of the economy is likely to try to deal with this, although the power of the Beijing leadership to control matters effectively in the provinces is more doubtful. Deng Xiaoping, an opponent of political reform, maintained his position after martial law and the massacres. Have those events brought into question the continuation of his economic reforms?

Did even he prefer the maintainance of party power to the continuation of the same type of economic change? A number of alternatives present themselves to us as we try to assess the short-term impact of the June events. One thing seems certain: This is no longer defined in terms of basic principles, but as whatever they themselves feel is appropriate at a given time, provided the CPC retains its power. They see themselves as the original revolutionaries who made socialism possible in the country for the benefit of all. Such a situation entails internal tensions that will make government difficult, with a populace unwilling and coerced.

But need this necessarily affect the path of the economic reforms? It could, he suggested, now be carried out even more effectively. In the same vein, Deng spoke to army troops who had been involved in the Tienanmen massacre, saying: If there is any inadequacy, then I should say our reforms and opening up have not proceeded adequately enough…. The leadership also seems keen to reassure foreign groups that the country is still open for business. In spite of some trade sanctions immediately after the massacres, it is unlikely given their past record with China and other repressive governments that Western and Japanese investors and governments will be put off for very long.

If they are, the 19 Geography of contemporary China delaying factor is likely to be concern about political stability affecting their investments rather than moral sensibilities. Problems for the old and new leadership Many of the basic questions about the running of the economy will remain to be dealt with, even if the post-massacre leadership makes party control its priority.

What form of ownership does the CPC encourage now, and with what mix of state, collective and private ownership? What proportion of state-controlled capital is to be invested in agriculture, heavy industry or light industry? How much does the party emphasise the goals of increased production and how much does it emphasise the goals of building a socialist society? The restoration of family and private farming, and with it the expansion of the market for labour, raises the question of what is socialism in an essentially peasant society?

Will gender issues ever be seen as equal to or more fundamental than those of class? What policy should the party adopt towards intellectuals, many of whom are now hostile to the regime but vital to modernisation? If the government decides against it and instead directs that capital and intellectual resource into something like improved water control, what does it do if threatened by a nuclear power? Should China obtain technology from the outside world and continue to risk the problem of debt and the export drive?

Should agricultural investment be directed at the most fertile productive lands, the poorer hilly areas, or at strategically sensitive border areas? What policy should be adopted on the relationship between population growth and limited fertile land? All these choices will continue to produce conflicts within the party. The traditional political culture of the country has been adapted by the CPC to its own needs. The power-broking balance and patronage held by party leaders at all levels is at its most significant and unstable level at the top.

As a result of investing so much importance in individual leaders the party is bound up in a potential crisis each time a major leader dies. The succession in the case of Deng Xiaoping is likely to be very difficult and painful, and is 20 Introduction made all the more difficult by the role he played in the repression in It is likely that the army or sections of it will claim a much more prominent role in the management of both the economic policies of the country and the power struggles which will undoubtedly be a feature of the country as Deng and the other elderly veterans die.

In few countries of the world does a governing party and its leader have such power to determine the nature and direction of social and economic change. As will be seen in this book, this has also had its effect on the geography of the country: Much of the rest of the book charts that situation over the last forty years, with particular emphasis on the period to A Basic Guide, London: The China Challenge, London: Two other journals, Modern China and Australian Journal of Chinese Affairs, are also useful, though less focused on recent events.

The quarterly magazine China Now is a lively means of keeping abreast of recent changes, and often has issues on particular themes. The book-review sections of all these periodicals inform about recently published books. The China Quarterly has a regular Books Received column which is very comprehensive on English-language books about China. Its regular weekly coverage usually has something of interest on China. The September issue of Current History annually is devoted to articles on recent developments in China. Articles on geography, and related areas of value like environment, economics and politics appear in a wide range of journals.

A good sense of the contrasting viewpoints and interpretations can be got from the following studies: A careful, analytic, factual survey of the Chinese economy. Essays on Chinese development largely from positions sympathetic to Maoism. Contains an excellent biblography on Chinese development up to about A basic guide to the reform decade aimed at students and lay readers, with each chapter summarising the new policies and their impact.

Translations of Chinese documents illustrating conflicts over ideology, industrial and agricultural policy, and population. The Readjustment in the Chinese Economy , London: Analytic essays on macro-economic policy, population, industry, and agriculture. This is a special theme issue of the journal for December , released as a book.

Chinese Socialism After Mao, London: Socialism and Reform —, Hong Kong and Oxford: A book which is both readable and extremely well-informed, and which helps understand the shifts in policies over the year period. A collection of essays on the political and financial issues underlying regional differences and conflicts, together with surveys of the problem sectors of energy and transport, and case studies of different regions. Essays on many aspects of Chinese economy, society and politics since Challenges and Choices, Armonk, New York: Reports by Chinese scholars of the extent of reforms as of and what directions policy should take.

World Bank China: Socialist Economic Development three volumes , Washington: John Hopkins University Press. Atlases and other books of interest to geographers Blunden, C. Superbly produced introduction to Chinese history and culture illustrated with maps. Very dated but worth reading critically for its sympathy for Maoist China, and a general geographical introduction to the country. The Land and the People second edition , London: A textbook aimed at upper secondary students but deserving more widespread use for its clear text and excellent maps and colour photographs.

The Geography of Development and Modernisation, London: A systematic textbook aimed at degree-level students.

The Geography of Contemporary China: The Impact of Deng Xiaoping's Decade

Includes historical and physical maps, maps of provinces and major cities. A Geographical Survey, London: Beware the publication date: Area maps plus short essays on the regions of China, life in town and country, religion.

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More an encyclopaedia than an atlas, but very useful for this. Land confiscated from landlords and rich peasants and distributed to poorer classes of peasants. Followed by various stages of collectivisation using co-operatives. Priority given to producer goods—i. Considerable Soviet technical assistance received. Little state investment went into agriculture, which was being grouped into co-operatives. Agriculture did not develop fast enough to raise rural living standards or provide sufficient surpluses of food and raw materials for the urban population and industry.

Slow growth of light industry meant fewer consumer goods to provide incentives for agricultural producers. The communes were formed from existing co-operatives to make up largerscale units. Sharp political and ideological struggles over policy directions in agriculture and industry result. Liu Shaoqi prominent in economic policy. During — 76, despite slow reassertion of influence by the pragmatists after , the struggle continues in its various spheres. New emphasis on Four Modernisations in agriculture, industry, science and technology, and defence, to raise the standard of living.

Increasing role of Deng Xiaoping. December After crucial struggles over the culpability of Mao Zedong in relation to the Cultural Revolution, the Communist Party holds the Third Plenum of its Eleventh Central Committee, making economic growth the priority. Deng Xiaoping becomes leading individual promoting the reform policies. Priorities in the economy altered; emphasis is now on light industry to provide consumer goods. Market principle is given greater sway and profits seen as a valid tool for assessing viability and progress in enterprises.

Joint ventures with foreign firms are permitted and the four Special Economic Zones established. In population control, the policy of limiting parents to a single child is introduced. Greater integration into international trade system, and less emphasis on self-reliance, as foreign technology is increasingly seen as the basis for modernisation. Communes abolished, family farming using the responsibility system introduced. July The first census to be conducted since shows China to have one billion people.

Increased priority to energy and transport sectors. Trade to be expanded and priority to established coastal areas that can benefit from export-orientated strategy. The immediate post-massacres leadership claims to be committed to continuing the reforms, but is known to include critics of the impact of the market philosophy and some who espouse more central direction of the economy.

For instance, even the average per capita consumption of Beijing city-dwellers is nearly five times higher than that of the peasants of Gansu, one of the poorest provinces. It is argued that only occasionally has the leadership shown concern to reduce certain forms of spatial inequality: It has therefore been more interested in determining where economic activity should be located, rather than addressing income or welfare differences.

This should not be surprising: Many geographical differences are not the result of exploitation, arising from natural conditions like climate , or from living in locations which enjoy an advantage for instance, in access to markets for the sale of produce. These have not often been a communist priority, since it can easily be assumed that they are not the result of one class enriching itself at the expense of another.

Dealing with such differences has to await the greater affluence of fully developed communism, at which time society can share on the basis of need. In the meantime, limited programmes of aid to poorer districts have been used, as well as disaster aid after the effect of hazards. The predominant image of the country was one in which party policy could be implemented throughout the land, and of a society virtually homogeneous in its economic and social characteristics as a result of this all-pervading presence.

Independent travel was difficult, so foreigners went mainly in organised groups to a few places, and gained an impression or wanted to believe that things were much the same everywhere. Since much more and better information has become available, and from more sources than the government alone. This data is of production for the two main sectors of the economy, not of income, but is a useful measure of relative levels of wealth across the country. One thing which is apparent is the high level of variation, and the lack of any clear, simple regional pattern.

But such data provides only part of the picture: This is dealt with rather more in the chapters on rural China Chapter six and urbanisation Chapter eight , while here the main focus is on larger-scale regions. This chapter explores the economic, political and social processes in China and the world which have had a spatial impact in China. Unfortunately, despite the data available from the census, it is done in highly simplified macro-regional terms. In fact, for much of the discussion, reference is made to just three very large regions: This is far from adequate, given their high degree of internal differentiation, but it is necessary here for simplification, and more especially because it is by reference to these three that the Chinese themselves now debate regional issues and define regional objectives.

Before looking at them in more detail, there are a number of other spatial matters to mention. This gap between town and contryside, worker and peasant, was significant to the Maoists. They argued that in some respects it was a class division, based on the greater use of the surplus generated by the whole of society by a small privileged section in the cities. For them, it also represented a reversal of the history of the revolution, whose success had depended mainly on the help from the farming communities in poorer areas which were being left behind.

This spatial inequality was addressed in the Great Leap Forward —60 and Cultural Revolution —76 by policies which were supposedly pro poor peasant. These were really the only times when such special attention has been paid to peasant priorities for egalitarian reasons. As is now known, many who went then, and the older intellectuals who followed, were unwilling participants in this Cultural Revolution policy, and the value it had for the peasants is questionable. But other than during that period, spatial inequalities have not figured very high in CPC priorities.

The state as major determinant of spatial differences What is unusual about spatial inequalities in China is that the government, since , has had the ability to shape the country spatially much more than most. Because of its central control of the economy, and command over a large proportion of investment funds, it has the capability not always used to alter differences in welfare between places.

Yet this control is not universal or complete: The country is immense, communications are difficult, and there are political and administrative weaknesses in the CPC itself. During the Cultural Revolution, nearly two decades after the party came to power, a group of Red Guards arrived in a remote valley in the southwest, the first visitors from the political realm for a very long time. The peasants who received them had a question: The local people were aware that they lived in territory over which Chinese emperors supposedly ruled, yet the impact of this on their lives for decades had been practically non-existent.

Spatial variation is influenced by many factors, including natural conditions of climate and resource endowments, and the various sorts of economic system which people have come to operate in different places. These vary enormously, including cultivation in oases in the far west, slash-and-burn farming in the southwest, as well as the more familiar intensive farming and industrialism of the east.

To these factors must be added the actions or inaction of government. The inadequacy of simplified regions As a result of all these, China is an enormously intricate patchwork of social and economic variation, not easily subsumed into a few large regions. The use here of the three simplified regions designated by China is inadequate, and needs to be qualified so as not to assume too much similarity within them. For instance, income differences can vary greatly over quite short distances even between neighbouring villages.

It is evident from census data—see Figure 2. The ways that regions are conceived can vary enormously. An area of territory may be considered a region by virtue of its apparent internal sharing of chosen characteristics e. Alternatively, a region may be designated by the state for the purpose of generating certain shared characteristics or other policy objectives within a given area of territory, which if achieved would distinguish it from the surrounding areas.

The three macro-regions represent a type of region which both identifies certain crude, shared, internal characteristics and then links them to the setting of broad objectives in economic development. These were formally set out in the Seventh Five-Year Plan for —90, and are discussed in that context later. The legacy of tremendous destruction and disruption of the economy was 33 Geography of contemporary China overcome remarkably quickly, especially given the lack of experience of the CPC in managing large industry and cities. Inherited inequalities Virtually all industrial activity in was located in two types of area, both now considered to be part of the Coastal Region.

These were, first, the disconnected and highly localized developments in cities—all of them ex-treaty ports—on the coastal fringe e. Shanghai, Tianjin, and Qingdao , where foreign entrepreneurs and their Chinese emulators had established various businesses after see Chapter three. Second, in the northeast provinces which collectively became known as Manchuria, Russian and later Japanese colonisation led to significant development of raw material resources, especially iron and coal, and heavy industry, much of it serving the needs of the Japanese economy.

The rest of the country was virtually devoid of modern industry: Beijing Peking , though not very distant from either of the areas mentioned, had virtually none. Other cities which today are notorious for their industrial pollution, many of them far inland like Taiyuan, Xian, Wuhan, Chengdu, Lanzhou, or Kunming, were innocent of such disturbances. This does not mean that China had never had industry. In many respects the nation had been more advanced than anywhere else in the world in Song times in the twelfth and thirteenth centuries AD , and some industries employing many thousands were continuously successful long after that.

But agriculture continued to dominate, and even the inroads of foreigninitiated industry after made little impact. In short, the emphasis was on large-scale plants, and a lot of them in heavy industry and under strict central control. But it was also a product of the international environment with which the new Chinese state found itself having to cope see Chapter eleven.

In this, strategic concerns determined both the nature of rapid accumulation, and the location of investment. The very nature of the industry on which the plan concentrated also had its spatial effect. Much of it relied on coal and other locationally specific 34 Spatial inequality and regional policy Figure 2. This meant that the benefits of the new jobs were spread beyond the Coastal Region, but to relatively few places in the other regions. Being spread so thinly, this industrial growth hardly constitutes the creation of a new regional pattern. But the impact was to disperse a significant amount of industrial capacity Figure 2.

Of nearly large- and medium-scale projects underway in the First FYP, two-thirds were inland. The Korean War —3 and its aftermath put China on a war footing, and this also affected the type of industries which were given priority. But this also determined that military-strategic concerns affected the location of the new projects.

To reduce risks from possible bombing and invasion 35 Geography of contemporary China on the coast, many of the new industries were spread inland. Defence remained a very significant factor in the location of industry until the s. He argued that the development of the interior would be helped by the greater accumulation of capital made available from the more rapid advance of the coast. Inherent in this argument is a set of conflicts over economic policy and regional priorities which are still controversial today. Should there be regional specialisation based on comparative advantage, which might allow the more efficient coast to race ahead?

Instead, ought there to be a more equitable locational policy, or would this actually cost more in resources because it reduces production efficiency? During the phase which followed the First FYP it was, in effect, policy that there should not be regional specialisation, on the basis that economic considerations were insufficient to judge efficiency. The name indicates something of the intention: In theory the GLF and the concurrent commune system was intended to promote a greater spread of economic opportunity throughout rural China. But to understand the GLF once again requires an appreciation of the international situation, and the growing threat after in the south of China.

As if this were not enough, antagonism with the USSR led in to the Soviet Union withdrawing its aid, and the beginning of the thirty-year rift. It was based on the idea of regional self-sufficiency in the production of key minerals and industrial products, so that in event of civil war or invasion there were smaller units which supposedly could survive independently. The nature of external threats changed in the s and required another approach. The military threat was from both superpowers, so where could economic and military activity now be placed for security?

A quite extraordinary episode in regional development now emerged, lasting from about to the early s. We now know that over a seven-year period there were massive and secret investments in certain parts of the country which were thought safest from invasion and bombing, known as the Third Front sanxian region in the southwest Figure 2. Such was the nature and size of these developments and their associated transfers of personnel that the effects on the efficiency of the economy are likely to continue to be felt for some time to come.

The answer to the threat of attack from either or both the USA and the USSR was a policy to duplicate or withdraw many industrial enterprises, research establishments and military installations into this interior heartland. The core province of the Third Front was Sichuan, an inland basin of rich agricultural land, relatively well off in fuels, and surrounded by mountains.

The neighbouring provinces or parts of them were also involved Guizhou, Yunnan, Shaanxi, Gansu, and the western parts of Henan, Hubei and Hunan. Further west in Tibet, Qinghai and Xinjiang, other military and nuclear establishments were built up or expanded under this policy, making eleven provinces involved in all. The sanxian policy relied on safeguarding crucial productive capacity and research facilities in order to prosecute a war from a protected heartland. Its location was dictated by the threat from all sides, and the resultant industrial development is significantly different from the First FYP strategic policy, which had no need to avoid places near the Soviet and Mongolian borders.

The story emerged because of the current need to use the technology and personnel locked into the secret economy for civil purposes. Today the international situation hardly warrants such a strategic measure in any case, and China is more interested in using the productive and research capabilities of the Third Front establishments for modernising and developing the rest of the economy. The revelations about the policy show an astounding scale of investment, 37 Source: Information in China Daily, 27 May and unpublished papers Figure 2.

Most staggering of all, though, are the amounts of capital invested in the Third Front region. About 29, institutions of all sizes were involved, and of these around 2, were large and medium-sized enterprises in all China there were only 5, so defined in If we look at the eight provinces nearer the heart of the region i. By contrast, their share of the national total investment made in in fixed assets was only One study of this strategic region asserts with reason: The dispersal of enterprises and institutions under the sanxian policy had little at all to do with bringing about spatial equality.

Interpretations which assume that Chinese policy has been concerned with this are misguided. At times in CPC debates the question of greater regional equality has been raised, but the evidence is that major investment shifts, which have indeed had such massive regional effects, have been almost entirely for strategic reasons. The CPC has undoubtedly got the capacity to bring about major shifts in resources between regions, and on a number of occasions has done so. But the motivation has been to strengthen and preserve the country, not to equalise consumption or welfare between provinces.

This does not mean that China is devoid of politics. But political struggle and the time-consuming discussion of what is politically correct should no longer handicap the production process see 39 Geography of contemporary China Chapter one. Each of the modernisations has been promoted by a series of economic reforms, of which those affecting rural production were among the earliest begun in Significant poverty and hunger exists in areas officially acknowledged to include million people. This requires the state to provide limited aid to certain counties.

Their key characteristic is reduced central control over the economy. At lower levels of the administrative hierarchy, where previously orders were received from superior authorities, there is now much greater autonomy and new financial arrangements which reduce dependence on the centre. But there has been significant opposition from old-guard CPC members who still favour centralised control.

This decentralisation has had regional and spatial objectives associated with it, for instance the encouragement of regional comparative advantage as opposed to regional self-sufficiency. In parallel with the reform of industry have come policies to encourage new spatial forms in the economy, such as the designation of regional associations of enterprises which cut across province boundaries.

So, in various ways, there are new regional strengths and weaknesses emerging, and these are contributing to the economic and political crises which have affected the success and continuity of the reform period. As a article in Beijing Review put it: Therefore the pace at which areas and peoples become prosperous will never be simultaneous.

It is analogous with the policy that some individual peasants or entrepreneurs should be allowed to become rich before others. It is really a policy of regional comparative advantage: The surpluses and deficits which arise for the different products of each should be equalised through increased inter-regional trade despite the inadequacies of the transport network. Such regional specialisation is meant to be a result of the operation of market forces, at least in part.

But the government also has a clear notion of what pattern it prefers, based on what it sees as existing material conditions. This preference is demonstrated in the way the three macro-regions have been drawn up in the Seventh FYP see Table 2. Each of the three is described in terms of its existing resources, and the economic priorities it is supposed to pursue in the next ten years or so. It is the explicit promotion of the rapid advance of the Coastal Region in this which has resulted in conflict and protests from the leaders of both Central and Western provinces.

Although some basic characteristics and priorities for the three regions are given in Tables 2. Decentralisation and the dilution of planning The central planning system was already largely decentralised during the s in the sense that the Beijing authorities did not try to run everything. Oxford University Press, p. State-owned industry was delegated to the provinces and even to some city governments.

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But the crucial issue was who controlled profits and investment funds. Before these stayed firmly in the hands of the centre; since then, these too have been decentralised, and the centre allows local-level bodies to hold on to more of their profits and pay a tax to the centre instead.

It is this transfer of control over funds which has largely been responsible for the boom in the industrial sector since , with growth rates of well over 10 per cent per annum, much higher in some years. The authorities which have gained more control over profits and capital are not so much the provinces but local authorities, including cities, townships and counties. These lower-level governments have, in effect, gone into business, often in a big way. Enterprise culture in China is based on bureaucrats and local party chiefs turned capitalists, and much of this growth is in rural areas.

In effect, the urban reforms mean the loss of control of much of the economy by central government. This is evident in a number of ways beyond the intended decentralisation, including the deliberate flouting by lower-level authorities of government directives and regulations. Some of these had been intended to minimise the damaging effects of the process. Let us look at some of the implications of decentralisation at different levels of the hierarchy. And whereas before the emphasis was on manufacturing, other activities in commerce and the tertiary sector have been experiencing massive growth.

Enterprises and local authorities now retain more investment funds, and are thus able to reinvest in other locations, and in sectors unrelated to their previous activities. Before, most funds were channelled through central authorities and had to be used within the enterprise see Chapter seven. This has led to cases of investment in places far away from the originating enterprise in a few instances even abroad. In similar fashion, township and city governments have used funds under their control to invest in the service sector and other activities, sometimes in other locations.

Questions of ownership and control have become very muddled. A crucial part of this change is a completely new attitude to how the state directs investment funds under its control. These are then recycled through the banking system, instead of by central allocation of invesment funds. The banks are expected to supervise loans, and the state to manipulate this new credit system by means of indirect controls such as the rate of interest. Unfortunately, the banks have little experience in the administration of lending; factories have borrowed to pay workers bonuses, or for projects whose merits or viability the bank is unable to judge.

However, once such experience has built up, in spatial terms this shift in funding is likely to favour enterprises in areas which have a higher certainty of success and repayment. This is likely to reinforce the dominance of the Coastal Region. These have been initiated at the level of county, township and smaller cities, often by the local government alone or in collaboration with private entrepreneurs.

Though technically called collectives, these businesses are often under the control of individuals, and it is frequently local CPC leaders who have used their power to get in on the act of decentralisation early. It is such locally initiated industry and commerce which has accounted for a large porportion of the rapid economic growth of the reform period. There is a significant regional aspect too: Such areas may enjoy sub-contracting relations with existing nearby large-city industries; the purchasing power of the population is higher so new products can sell; in some cases, foreign capital or investment from overseas Chinese back in their home area is significant; and surplus peasant labour in rich agricultural areas can be employed using rural-generated capital.

This is evident in parts of peninsular Shandong. In one county town, where party leaders have set up a range of new industries, 2, out-of-towners are employed and accommodated in dormitories. The example of south Jiangsu is also very significant, as described in Case Studies 6. Guangdong province demonstrates the most rapid growth of this type involving foreign funds.

But the leader overall has been Zhejiang, which, like Jiangsu, abuts Shanghai. Even in the earlier years of the reforms, Zhejiang saw much more rapid growth in the collective than in the state-run sector, so that by it was producing far more in the collectives, way ahead of other provinces.

Provinces have therefore been a key spatial as well as political unit in the implementation of state economic policy. The economic reforms have shifted this role considerably, weakening the planning function of provinces as agents of the centre. Whereas before there was little chance for co-operation between enterprises on different sides of a provincial border, they were now permitted to find their own suppliers of raw material and components, and to sell their own output. This should have increased efficiency by encouraging spatial concentration and more competition.

In some respects this has worked, and where enterprises have been able to escape the constraints of the former plan the province has become less significant as an economic unit. But in other ways provinces have seized on their greater autonomy to intervene in new forms of activity, and, in effect, to build up their own power in other ways. These include using protectionist measures to benefit enterprises under their control. Thus the more market-oriented intention of the last decade of reforms has been subverted by decentralisation.

New problems have been unleashed which alter the economic relations between provinces. The result runs counter to the intended increase in trade and investment across provincial borders. This situation has arisen in a number of inland provinces, creating conflict with the normal producers in the Coastal Region. An example is Gansu province in the west, an important wool producer which previously supplied this raw material to longestablished carpet factories on the coast. Now it has become the second largest producer of carpets in the country.

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The desire of the government to promote regional specialisation is neatly subverted. There are numerous examples: Because most of the output is exported, whoever controls this can earn foreign exchange and use it or abuse it to purchase imports, or sell it above the official rate in China. In Shanghai, normally the main processing city for silk goods, the industry had almost shut down in It was being starved of raw silk because producing areas were keeping most of it for their own new 46 Spatial inequality and regional policy factories, which increased their wealth and enabled them to earn foreign exchange.

So determined were some provincial authorities to ensure supplies for their own factories that they set up armed border guards to prevent silk leaving. By the late s the central government was trying to prevent this erosion of its control over foreign exchange and introduced a tax on exported silk goods at per cent. The intention was to force others to export through the state monopoly corporation, which then receives a complete rebate on this tax.

This competition for raw materials has affected other industries too, leading to inter-provincial conflict and regional rivalries of a new type. In an attempt to control the local economy, provinces are overstepping their legal authority, and the centre seems powerless itself to do much about it.

In some ways central government embarrassment at what has been going on between provinces is at odds with its desire to promote a market economy.

The problem it has not reckoned with is that markets encourage participants to compete by using any initial advantage they have, and this is being used for all it is worth. A situation is arising which may be worse than that under the central plans which market forces were meant to replace: Beggar-thy-neighbour attitudes are even more apparent in the actions of government and entrepreneurs in Guangdong province, which is part of the Coastal Region Hong Kong is adjacent to it. Its business practices have created conflict with neighbouring provinces and considerable resentment in Beijing and among other Chinese.

Inland provinces have argued that they should share in some of the experimental privileges enjoyed by Guangdong and the coast, since the Coastal Region is not simply earning through new business, but is distorting existing production patterns and weakening the inland provinces. Now Hunan province, for example, is being allowed to retain more of the foreign exchange it earns. The most serious grievances levelled at Guangdong include those arising from its practice of buying raw materials or even finished goods from neighbouring provinces with Chinese currency Renminbi , then selling them abroad so that the foreign currency earned never gets to the inland provinces.

Because the foreign exchange can be sold to those who will give more yuan than the official rate, Guangdong entrepreneurs can then afford to buy from their suppliers at higher rates, so cornering the market and boosting inflation. This has provoked the authorities in neighbouring inland Guangxi, 47 Geography of contemporary China Hunan, Jiangxi and even coastal Fujian to demand payments in foreign exchange, or to set up border controls on traffic in certain goods. In the late s it appears that the central authorities made a real effort to implement controls over some of the more blatant private and official dealings in Guangdong.

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These included the cancelling of over-budget investments and even some joint ventures with foreign partners. They are aided by the fact that when the central government attempts to institute proper regulation foreign business confidence is reduced; it is difficult to control economic growth without constricting supplies of outside capital and technology. Pressures for new province-level authorities There have been at least two attempts to redraw province boundaries in the last five years, and this may be indicative of the new advantage in controlling a province.

One was for the creation of a new province centred on the proposed huge Sanxia Three Gorges hydro-electic power HEP dam and flood control project at the Yangzi gorges. This has been shelved, and it is still uncertain whether the dam will go ahead because of cost and environmental protests. The other proposal was to separate the southcoast island of Hainan from its parent, Guangdong province, creating a new province; this was agreed in In many party leaders on Hainan were forced to resign after they misused their autonomous trade powers by importing large numbers of cars and motorbikes from Japan which were then resold on the mainland in conflict with import controls on such luxury items.

This indicates how decentralisation has created significant advantages for provincial officials. They are able to reduce their role as agents in the regulatory functions of the centre, and increase their own control over existing local resources and the growth of new ones.

Local power means being able to retain more control over the 48 Spatial inequality and regional policy increased wealth and foreign exchange generated some of which may find its way into personal benefits. From the low levels of the mids, trade had increased three times by the early s.

More significant than trade was the acceptance of foreign investment and borrowing of capital from foreign governments and banks. To the Maoists such policies were a sign of capitalism and subjection of the country to imperialism. The spatial impact of the new trade and investment opportunities has reinforced the growth of the Coastal Region. In addition, and more significant, are the fourteen port cities and one area Hainan island which were later granted particular rights aimed at encouraging foreign investment.

The entire island of Hainan was then also made an SEZ in The rapid growth of the Coastal Region, and the concentration in it of both enterprises and population with higher spending power, has attracted to it higher levels of imports of consumer and producer goods.

There have been hopes that oil would be found offshore at several sites on the east and south coasts, but so far there has been little success. Oil is already exported in large amounts from the northeast to help pay for technology imports, and new supplies would have helped reduce domestic energy shortages and would have also increased exports. It is difficult to separate out the causes of the relative success of the coast and decide how much to attribute to inherent locational advantage, to higher productivity, to greater enterprise spirit, and to government policy e.

What is clear is that it is achieving investment which is higher than the other macro-regions in relation to its share of population see Table 2. Taking account of all sources of capital, the investment in fixed assets in the Coastal Region in was The economic power of some coastal provinces to control supplies of raw materials has provoked conflict with inland authorities, as we have already seen. They added that those industries using large quantities of raw materials or energy should be cut back, and stress should be put on the growth of lighter industry.

The products should be aimed especially at export markets, so as to reduce the impact of selling goods inland in competition with other producers there. Clearly, a regional division of labour is producing its own political price, and the economic objectives of increased efficiency are not to be achieved without the emergence of social and political conflicts which themselves are unmeasurable but are real costs of such policies. The east-west divide The conflicts with the Coastal Region experienced by the inland provinces are most intensely felt by those in the Western region.

Despite the fact that growth rates in 50 Spatial inequality and regional policy the west are quite respectable, leaders and some people in the west feel that their region is being left behind, or even deliberately neglected, under state policies which so clearly promote the coast see Table 2. Government assurances that the Western Region will become the major growth zone of the next century are little consolation for people who have to endure current official policy of merely developing farming and animal husbandry, even if some including sections of minority peoples in the Western Region have experienced increased incomes under the new commercial policies see Figure 2.

Central governments explanations that the thrust to develop the coast first is intended to provide China with the wealth to develop the whole of the country is probably little consolation. But the grievances arise not so much from national minority groups such as the Uighurs, Tibetans or Mongolians, as from Han Chinese who have settled in the west in large numbers in recent decades. They are there often as a result of some compulsion, and resent being excluded from the benefits going to provinces in the east from which they may have been sent.

The minority peoples have other reasons to be discontented with central government, and in some respects their experience of being ruled by outsiders has been aggravated under the reform policies. Indeed many of the non-Han people as seen in protests in Tibet and Xinjiang would prefer the Han to withdraw and leave them with greater independence from what they experience as colonial control.

The ethnic conflict arises largely out of the minorities feeling that the Han want to use their areas mainly for the benefit of the Han economy rather than theirs, which are in most cases based on different resources and systems of production. Without really having any say, they see their pasture land taken over by Han settlers who cultivate crops for Han people, mines opened to provide the east with raw materials, territory used as a dumping ground for prison labour camps, and dangerous nuclear tests in Xinjiang. So although some of the indigenous people have benefited from the greater commercialisation of their areas under the impact of the economic reforms, much of the thrust of the new policies is seen as intensifying Han exploitation of their areas, rather than as sympathetic to needs which they are able to define for themselves.

This is not very easy, given their remote locations with long routes to markets in which they have to compete with much better-placed enterprises. Being expected to compete on this unfair basis is another element of the conflict creating the east-west divide, to which the central government has said it will pay more attention. You also may like to try some of these bookshops , which may or may not sell this item.

The National Library may be able to supply you with a photocopy or electronic copy of all or part of this item, for a fee, depending on copyright restrictions. Separate different tags with a comma. To include a comma in your tag, surround the tag with double quotes. Skip to content Skip to search. The Geography of contemporary China: Published London ; New York: Language English View all editions Prev Next edition 3 of 3. Chine -- Conditions sociales -- China. Chine -- Conditions sociales -- China -- Economic policy -- China -- Economic conditions -- China -- Economic conditions -- China -- Economic policy -- China -- Social conditions -- Notes Includes bibliographical references and index.

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