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Patterns of China's Regional Development Strategy*

Published online by Cambridge University Press:  12 February 2009


The purpose of this article is to compare and contrast China's approaches to regional industrial development in the Maoist and post-Mao periods. By focusing on patterns of investment and regional shares of gross value of industrial output (GVIO), this article will argue that China's regional industrialization strategy has changed to one of uneven regional growth in the post-Mao period from the Maoist emphasis on eradicating regional industrial disparities through interior–orientated investments. In short, the post-Mao Chinese leadership has not only relaxed its Incantation of the Golden Hoop, or strait-jacket on the coastal region but has come to rely on the coastal region to provide the “engine of growth” for China's economic development.

For the sake of simplicity, I will call the development strategy of the 1953–78 period the “Maoist development strategy.” Though it varied in degrees in different sub-periods, the Maoist strategy dominated China's industrialization efforts until it gradually faded out in the late 1970s. It relied on heavily redistributive measures in an attempt to equalize regional economic development, emphasized- Extensive rather than intensive modes of economic growth, and allowed no foreign direct investment in China.

In contrast, the post-Mao Chinese leadership has gradually, but decidedly, reversed the Maoist model and come to adopt a new development strategy. This new strategy, which, for lack of a better term, I shall call the “uneven development strategy,” represents another attempt to bring China out of economic backwardness. Focusing on economic results, the new strategy emphasizes regional comparative advantage, accepts regional disparities as inevitable, encourages foreign investment and international interaction, and seeks to foster technological innovation.

Research Article
Copyright © The China Quarterly 1990

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1 In the classic Chinese novel Journey to the West, the monk uses the Incantation of the Golden Hoop to control the Monkey King, or Sun Wukong.

2 The Sixth Five-Year Plan of the People's Republic of China for Economic and Social Development (1981–1985) (Beijing: Foreign Languages Press, 1984), see esp. Chs 20–21 of Pt III. Zhonghua renmin gongheguo guomin jingji he shehui fazhan diqige wunian jihua (1986–1990) (The Seventh Five-Year Plan of the People's Republic of China for Economic and Social Development (1986–1990) (Beijing: Renmin chubanshe, 1986), see esp. Chs 16–18, 20 of Pt III.

3 Owing to space limitation, I will not try to compare in detail the three regions with the widely known and widely used six political–administrative regions (North-east, North, East, Central South, South-west, North-west). It suffices to say that, while the division of the country into six regions was mainly based on political, military, and administrative considerations, the three-region scheme is almost entirely based on economic and geographic considerations. For a chronology of the changes in China's administrative divisions (1949–1980), see Paine, Suzanne, “Spatial aspects of Chinese development: issues, outcomes and politics 1949–79,The Journal of Development Studies, Vol. 17, No. 2 (January 1981), pp. 193–94.CrossRefGoogle Scholar It must also be pointed out that there exist different regional classifications for China. I have simply adopted the one promulgated in The Seventh Plan, p. 91.

4 I use the word “province” to denote any one of the provincial-level administrative units, including: provinces, centrally administered municipalities, and autonomous regions.

5 An incomplete list of major industrial cities in the coastal region would include Beijing, Tianjin, Shanghai, Dalian, Anshan, Fushun, Shenyang, Qingdao, Jinan, Nanjing, Hangzhou, Fuzhou, Guangzhou.

6 Since amounts in constant prices are not always available, most of the tables in this article use shares of the total in order to eliminate the price factor. Owing to rounding, figures may not always add up exactly to their totals.

7 The Seventh Five-Year Plan, p. 91.

8 State Statistical Bureau, Guanghui de sanshiwu nian: 1949–1984 (Thirty-five Glorious Years: 1949–1984) (Beijing: Zhongguo tongji chubanshe, 1984), pp. 64–65.

9 Roll, Charles R. Jr., and Yeh, Kung-Chia, “Balance in coastal and inland industrial development,” in China: A Reassessment of the Economy, A Compendium of Papers submitted to the Joint Economic Committee, United States Congress (Washington, D.C.: Government Printing Office, 1975), p. 82.Google Scholar

10 State Statistical Bureau, Thirty-Five Glorious Years: 1949–1984, p. 64.

11 Di, Yu, et ai, Zhongguo jingji dili xue (China's Economic Geography) (Beijing: Zhongguo shangye chubanshe, 1983), p. 30.Google Scholar

12 Roll and Yeh, “Balance in coastal and inland industrial development,” p. 84.

13 Zedong, Mao, “On the ten great relationships,” in Stuart, Schram (ed.), Chairman Mao Talks to the People: Talks and letters: 1956–1971 (New York: Pantheon Books, 1974), p. 65.Google Scholar

14 Ibid. pp. 66–67.

15 Normal planning was not resumed in China until the 1980s.

16 The then much-celebrated slogan during the Leap was: “we ought to catch up with and surpass the United Kingdom in the output of iron, steel and other major industrial products” in 15 years. See Macfarquhar, Roderick, The Origins of the Cultural Revolution, Vol. 2: The Great Leap Forward: 1958–1960 (New York: Columbia University Press, 1983), p. 17.Google Scholar

17 Bernstein, Thomas, “Stalinism, famine, and Chinese peasants,” Theory and Society, Vol. 13, No. 3 (May 1984).CrossRefGoogle Scholar

18 Naughton, Barry, “The economy of the Cultural Revolution: military preparation, decentralization, and leaps forward,” paper presented at the conference on “New Perspectives on the Cultural Revolution,” Fairbank Center for East Asian Research, Harvard University (15–17 May 1987), p. 5.Google Scholar

19 Yongzeng, Li and Shuzhong, Li, “Zhongguo sanxian jianshe de lishi zhuanzhe” (“The strategic turning-point in China's third-front construction”), Liaowang (Outlook) (Hong Kong), No. 30 (29 July 1985), p. 10.Google Scholar

20 Provinces whose percentage of the national average changed by a mere 1% are counted as “even.” Hence, Shanxi and Sichuan, both interior provinces, are not counted as losers. Nevertheless, even if they are counted as such, a larger proportion of the coastal provinces suffered decline.

21 Riskin, Carl, China's Political Economy: The Quest for Development Since 1949 (New York: Oxford University Press, 1987), p. 212.Google Scholar See also, Lardy, Nicholas, Economic Growth and Distribution (Cambridge, U.K., and New York: Cambridge University Press, 1978).CrossRefGoogle Scholar

22 Cheng, Chu-Yuan, China's Economic Development: Growth and Structural Change (Boulder, Co.: Westview Press, 1982), p. 435.Google Scholar

23 Rawski, Thomas G., Economic Growth and Employment in China (New York: Oxford University Press for The World Bank, 1979), pp. 160–64.Google Scholar Mao Zedong was clearly aware of the productivity differential between the coastal and interior industries when he wrote: “The technical level of coastal industry is high, the quality of its products good, its costs low, and it produces many new products.” In “On the ten great relationships,” p. 67.

24 Lyons, Thomas P., Economic Integration and Planning in Maoist China (New York: Columbia University Press, 1987).Google Scholar

25 Guoguang, Liuet al, Zhongguo jingji fazhan zhanlue wenti yanjiu (A Study of the Question of China's Economic Development Strategy) (Shanghai: Shanghai renmin chubanshe, 1984), pp. 269–70.Google Scholar See also, Shao, Qingyu, “The issues in regional planning in China,” in Karlheinz, Hottes, Diamond, Derek R. and Wu, Chuan-Chun (eds.), Regional Planning in Different Political Systems (Stuttgart: Erdmann in K. Thienemanns Verlag, 1985), p. 100108.Google Scholar

26 Liu Guoguang et al, China's Economic Development Strategy, pp. 270–72. An excellent analysis of the Maoist self-reliance policy is found in Carl Riskin, China's Political Economy, Ch. 9.

27 Muqiao, Xue, Current Economic Problems in China, ed. and trans, by K.K., Fung (Boulder: Westview Press, 1982), p. 126.Google Scholar

28 Fureng, Dong, “Development theory and problems of socialist developing economies,” in Gustav, Ranis and T., Paul Schultz (eds.), The State of Development Economics: Progress and Perspectives (Oxford and New York: Basil Blackwell, 1988), pp. 235–41.Google Scholar

29 See Harding, Harry, China's Second Revolution: Reform After Mao (Washington, D.C.: The Brookings Institution, 1987); Gene, Tidrick and Chen, Jiyuan (eds.), China's Industrial Reform (New York: Oxford University Press for The World Bank, 1987).Google Scholar

30 See Xue Muqiao, Economic Problems in China, pp. 125–28; also Liu Guoguang et al., China's Economic Development Strategy, pp. 275–76.

31 Xue Muqiao, Current Economic Problems in China, p. 126. Many other Chinese scholars share Xue's views. See e.g., two collections of papers: Zhongguo gongye he diqu jingji fazhan zhanlue yanjiu lunwen ji (Research Papers on China's Industrial and Regional Economic Development Strategies) (Beijing: Jingji guanli chubanshe, 1985); Tian, Fang and Lin, Fatang (eds.), Zhongguo shengchanli de heli buju (The Rational Distribution of China's Productive Forces) (Beijing: Zhongguo caizheng jingji chubanshe, 1986).Google Scholar

32 The Seventh Five-Year Plan, p. 92.

33 For concrete examples of coastal planning in Shanghai and Guangdong, see Chen Minzhi (ed.), Shanghai jingji fazhan zhanlue yanjiu (A Study of Shanghai's Economic Development Strategy) (Shanghai: Shanghai renmin chubanshe, 1985); Shijie xinjishu geming yu Shanghai de duice (The New World Technological Revolution and Shanghai's Counterstrategy) (Shanghai: Shanghai shehui kexueyuan chubanshe, 1986); and Guangdong jingji fazhan zhanlue yanjiu (A Study of Guangdong's Economic Development Strategy) (Guangzhou: Guangdong renmin chubanshe, 1986).

34 The Seventh Five-Year Plan, p. 95.

35 Ibid. p. 98.

36 These cities are: Dalian, Qinhuangdao, Tianjin, Yantai, Qingdao, Lianyungang, Nantong, Shanghai, Ningbo, Wenzhou, Fuzhou, Guangzhou, Zhanjiang, Beihai.

37 Zhongguo Xinwen She, 4 April 1988, in FBIS-CHI-88–066, 6 April 1988, p. 44.

38 Waiwen Chubanshe Zhongguo Qingkuang Bianjishi, Zhongguo gailan (China Survey) (Beijing: Renmin chubanshe, 1987), pp. 294–99.

39 Chen Junsheng, “Sum up new experiences, reform the work of helping poor areas–two questions concerning the economic development of poor areas in nine southern provinces and regions,” Renmin ribao (People's Daily), 14 November 1987, p. 5; in FBIS-CHI-87–224, 20 November 1987, p. 26–32.

40 The Seventh Five-Year Plan, p. 103.

41 Mei, Yun and Xing, Yi, “1986 nian Zhongguo shehuizhuyi jingji lilun ruogan wenti yanjiu gaikuang (Summary of Research in 1986 on Many Problems in China's Socialist Economic Theory)” in Zhongguo jingji nianjian [Chinese Economic Year-book] (Hong Kong: Zhongguo jingji nianjian yiuxian gongsi, 1987), p. IX10;Google ScholarJianxun, Yu, “Woguo neidi de waimao fazhan zhanlue” (“The interior area's foreign trade development strategy in our country”), in Zhongguo duiwai jingji maoyi nianjian: 1987 (Yearbook of China's Foreign Economic Relations and Trade: 1987) (Hong Kong: Zhongguo guanggao yiuxian gongsi, 1987), p. 686.Google Scholar

42 For a summary and critique of the liberal economic theory of development, see Gilpin, Robert G. Jr., The Political Economy of International Relations (Princeton: Princeton University Press, 1987)CrossRefGoogle Scholar, esp. Ch. 7.

43 Yu Jianxun, “Woguo neidi de waimao fazhan zhanlue (“The interior area's foreign trade development strategy in our country“), p. 686.

44 Wei, Wang and Fansheng, Guo, “Zhongguo dong xi bu fazhan de xianshi (“The reality of development of China's eastern and western regions”), Renmin ribao (overseas edit.), 10 March 1988, p. 8.Google Scholar

45 Zhao Ziyang, “Guanyu yanhai diqu jingji fazhan de jige wenti (“On several questions relating to economic development of the coastal region”), in Tian Fang and Lin Fatang (eds.), Rational Distribution of China's Productive Forces, pp. 26–27.

46 Zhao Ziyang, “Kaifa Xinjiang, kaifa daxibei, shi zhongyang de zhongyao zhanlue shexiang” (“Developing Xinjiang and the great north-west is an important, strategic tentative plan of the centre”), in Tian Fang and Lin Fatang (eds.), Rational Distribution of China's Productive Forces, p. 18.

47 Qingyu Shao, ”The issues in regional planning in China,” p. 107.

48 Zhibo, Sun, “Diqu jingji jishu xiezuo de jige wenti (“Several questions relating to regional economic and technical co-operation”), Nankai jingji yanjiu (Nankai University Economic Research), No. 2 (1985), pp. 2630;Google ScholarHongmao, Guo, “Diqu jingji jishu xiezuo shi yiujihua jingji teyou de yunxing jizhi (“Regional economic and technical co-operation is a special operating mechanism of a planned commodity economy”) Nankai jingji yanjiu, No. 1 (1986), pp. 1216.Google Scholar

49 The Seventh Five-Year Plan, Ch. 20.

50 Christine Wong, “Material allocation and decentralization: impact of the local sector on industrial reform,” in Perry, Elizabeth J. and Christine, Wong (eds.), The Political Economy of Reform in Post-Mao China (Cambridge, Mass.: The Council on East Asian Studies, Harvard University, 1985), pp. 274–75.Google Scholar

51 Beijing Review carried the following statistics, which are even more in keeping with the trend I have identified:

The statistics are from Beijing Review, No. 49 (8 December 1986), pp. 21-24; in Scherer, John L.(ed.), China: Facts and Figures Annual (Academic International Press, 1988), p. 134.Google Scholar

52 One is hard put to fully explain the decline in coastal share of GVIO in 1982–83 because of the lack of data for the pre-1981 period. However, a large proportion of the decline might be attributed to the centre's efforts to curb investment and restrain demand in the early 1980s. As a result, the national GVIO annual increase (based on 1970 prices) was as follows:

As Carl Riskin points out, gross industrial output grew more slowly in the early 1980s than the 11.4% per year for 1952–78 or the 9.4% per year for 1965–78. This low growth period can be regarded as a kind of engineered mini-recession. As a result, the more developed area, i.e., the coastal region, suffered more than the less developed areas.

53 Carl Riskin, China's Political Economy, p. 364.

54 For overall assessments of China's economic reform, see Perkins, Dwight H., “Reforming China's economic system,” Journal of Economic Literature, Vol. 26 (June 1988), pp. 601645.Google Scholar

55 Shangquan, Gao, “The key to implementing the strategy of economic development for coastal areas lies in deepening reform,” Qiushi (Seek Truth), No. 6 (16 September 1988), pp. 1620;Google Scholar trans, in FBIS-CHI-88–189, p. 54.

56 sRosario, Lousie Do, “Asia's Fifth Dragon,” Far Eastern Economic Review, Vol. 142, No. 49 (8 December 1988), p. 62.Google Scholar The extraordinary changes in Guangdong are chronicled in Vogel, Ezra F., One Step Ahead in China: Guangdong Under Reform (Cambridge, MA: Harvard University Press, 1989).Google Scholar

57 Figures for the SEZs are calculated from State Statistical Bureau, Statistical Yearbook of China (Hong Kong: Economic Information and Agency and Oxford: Oxford University Press, various years).

58 The “tunnel effect” is put forward by Albert Hirschman. He used the analogy of a driver in a jammed tunnel. If the driver sees the other line moving, he will feel his situation has improved too. Apparently, he cannot wait forever. That waiting period of quiescence, Hirschman points out, is determined by many factors. We cannot determine in advance when the period is going to end with the driver resorting to some sort of action. See Hirschman, Albert O., “The changing tolerance for income inequality in the course of economic development,” in S.P., Singh (ed.), Underdevelopment to Developing Economies (Bombay: Oxford University Press, 1978), pp. 519–43;Google Scholar orig. pub. in Quarterly Journal of Economics (November 1973).

59 On this point, I cannot agree with part of the argument contained in a seminal article by Susan Shirk. She groups the inland provinces, heavy industry and the central bureaucracy into a “communist [read anti-reform] coalition,” and the coastal provinces, light industry and local officialdom into a reform coalition. She presumably would have trouble classifying Shanghai: a coastal provincial government, with a concentration of both heavy and light industries. Susan Shirk, “The politics of industrial reform,” in Perry and Wong (eds.)The Political Economy of Reform in PostMao China, pp. 195–221.

60 Hirschman, Albert O., The Strategy of Economic Development (New Haven: Yale University Press, 1958), p. 184.Google Scholar

61 Friedman, John, “A general theory of polarized development,” in Niles, Hansen (ed.), Growth Centers in Regional Economic Development (New York: The Free Press, 1972), p. 87.Google Scholar

62 Ibid. pp. 90–99.

63 Lampton, David M., “Chinese politics: the bargaining treadmill,”Issues and Studies, Vol. 23, No. 3 (March 1987), pp. 1141.Google Scholar

64 Yang, Xia and Zhigang, Wang, “Zhongguo jingji ‘geju’ xianxiang chutan (“Preliminary investigations into China's economic ‘warlordism'”), Liaowang (Hong Kong), No. 39 (26 September 1988), p. 3.Google Scholar

65 Xinhua She in English, 5 December 1986; in FBIS-China, 12 December 1986, pp. K4-K5.

66 Chengdu Sichuan Provincial Service, 29 March 1988; in FBIS-CHI-88–060, 29 March 1988, p. 19.

67 Xinhua She in English, 29 March 1988; in FBIS-CHI-88–062. p. 22.

68 Seth Faison, “Xinjiang fears coastal development rebound,”South China Morning Post (Hong Kong), 6 April 1988, p. 7; in FBIS-CHI-88–066, p. 23.

69 Xinhua She Domestic Service in Chinese, 1 April 1988; in FBIS-CHI-88–068, pp. 42–43.

70 Chen Junsheng, “Sum up new experiences,” pp. 27–28.

71 Dongfang, Xiang, “A strategic option for political structural reform in economically underdeveloped areas,” Guangming ribao (Guangming Daily), 29 August 1988, p. 3Google Scholar; in FBIS-CHI-88–184, 22 September 1988, p. 56.

72 Ibid.

73 Xiaoqiang, Wang and Nanfeng, Bai, Furao de pinkun (Plenty of poverty) (Chengdu: Sichuan renmin chubanshe, 1986), p. 101.Google Scholar

74 The Holy Bible, New International Version (New Jersey: International Bible Society, 1984), Matthew, Ch. 25: Verse 29.

75 This is in accordance with positions of many theorists, one of the most prominent of them is W. Arthur Lewis, The Evolution of the International Economic Order (Princeton: Princeton University Press, 1978), Ch. 10.