City Repositioning and Competitiveness Building in Regional Development: New Development Strategies in Guangzhou, China

Abstract

Competition among cities for mobile capital in the twenty‐first century has intensified. The urban hierarchy of regions is undergoing transformation, causing economic fortunes to vary markedly among different localities. In China, these global forces and regional restructuring have caused a relative economic decline in some historically powerful cities, and have also brought about the emergence of new economic centers. In response to these forces, many Chinese cities have been driven into adopting a series of new competitive strategies, which seek to win back and build up their leading positions and competitiveness. To translate these strategies into concrete actions, local governments have promoted high‐profile and face‐lifting projects and investments. The extensive new urban development in Guangzhou is a particularly interesting case. As the provincial capital of the Guangdong Province, and a historically central city in the Pearl River Delta region, Guangzhou’s importance has recently declined. This article attempts to reveal the general strategies and specific projects initiated in Guangzhou as important promotion devices in its revitalization program, and to examine the rationales behind them. The ambitious new strategies are most likely to occur under the ‘soft budget constraint’ syndrome in China, and these strategies could be risky. Although the extent to which these strategies actually do stimulate business and lure investment is yet to be seen, the citizens are immediately and directly benefiting from them and consequently they have gained much popularity and support. However, the competitiveness building in Chinese cities has called into question the legitimacy of local state governance, and the validity of large projects that lack financial discipline, social objectives and accountability for unsuccessful investments. Au vingt‐et‐unième siècle, la compétition pour attirer le capital mobile s’est intensifiée entre les villes. La hiérarchie urbaine des régions évolue, créant de nettes différences de réussites économiques entre localités. En Chine, ces forces planétaires et la restructuration régionale ont provoqué un relatif déclin économique dans certaines grandes villes traditionnellement puissantes, entraînant par ailleurs l’émergence de nouveaux centres économiques. Face à ces forces, de nombreuses villes chinoises ont été poussées à adopter une série de stratégies concurrentielles visant à reconquérir ou bâtir leur compétitivité et leur position dominante. Pour traduire ces stratégies en actions concrètes, les gouvernements locaux ont encouragé des investissements et des projets de rajeunissement d’image très en vue. La nouvelle urbanisation d’envergure que connaît Guangzhou est un cas particulièrement intéressant. Capitale de la province du Guangdong et centre historique établi dans le delta de la ‘rivière des Perles’, Guangzhou a pourtant connu un récent déclin. L’article tente d’identifier les stratégies d’ensemble et projets spécifiques lancés à Guangzhou comme instruments promoteurs de sa rev...

Glurbanization of the Chinese megacity Guangzhou – image-building and city development through entrepreneurial governance

“…It used to be the largest port city in China, known as the "Southern Gate of China", which led to the development of a booming industry, to national and international pre-eminence and a prosperous city community of over one million inhabitants by the year 1840 (cf. Xu and Yeh, 2003). However, Guangzhou's status as a trade and commercial hub and its monopoly in foreign trade were (gradually) weakened after 1840 due to colonial impacts and the subsequent communist takeover.…”

“…The British victory in the First Opium War resulted in the Treaty of Nanjing that designated, apart from Guangzhou, the four cities of Xiamen, Fuzhou, Ningbo and Shanghai as free-ports, and thus strengthened trade competition for Guangzhou. Finally, the communist party leadership from 1949 to 1978 led to new ideological reorientations and a collectivised economy with free trade and marketization being abolished (see Huang et al, 2010;Xu and Yeh, 2003 for a deeper insight into Guangzhou's history). The major breakthrough for Guangzhou's repositioning as a regional hub was based on the reform and open-door policy introduced in 1979 and the declaration in 1984 that made it one of the seaport cities that were to open their doors to the world market.…”

“…According to Xu and Yeh (2005), the concept of "competitiveness" in a Chinese context particularly accentuates the need to attract (foreign) capital, enhance economic activities and therefore develop a more business-friendly environment. A widely cited definition by the China Academy of Social Science (CASS) refers to city competitiveness in China as: "The relative ability of a city in comparison with other cities to attract, compete for, sustain, control, and utilize [capital] resources, and the ability to grab and control markets in order to create value for the city and provide [prosperity] to its residents" (Ni, 2001, 1;quoted in Xu and Yeh, 2005, 286).…”

Optimal Country's Policy Towards Multinationals When Local Regions Can Choose between Firm-Specific and Non-Firm-Specific Policies

“…This is not a problem because, given g 2 = v h , the tax in the …rst row of (27) is exactly the same as the one in the second row. Thus, from (26), (27) and (28) we get that R 1 's equilibrium taxes (expected payo¤s) are the ones reported in the …rst (second) column of Table 3; the parameter values under which each of the equilibria applies are in the third column. 38 Needless to say that R 2 gets an expected payo¤ of zero.…”

“…"Bidding wars" for speci…c plants have become widespread, with incentive packages escalating in total worth (see LeRoy 2005 andChirinko andWilson 2006). Moreover, since the early 1990s, the same type of regional competition has begun to proliferate in developing countries such as Brazil (see Versano, Ferriera, and Afonso 2002), China (see Xu and Yeh 2005) and India (see Schneider 2004), to mention only a few.…”