Organizer and Chair: Joel Campbell, Tohoku University
Discussant: Francis Schortgen, Ricci Institute
The end of the Cold War has brought about a restructuring of the international political economy in which globalization of production and finance determine both economic choices and international relations. China’s two-decade march to quasi-capitalist economic development, one of the most important contemporary cases of transition from state-led to capitalist economies, illustrates the promise and pitfalls of developing nations joining the world economic system; it also demands a balanced examination of both the development of domestic industries, and growth of international trade.
The proposed panel will analyze the current political economy of China. Campbell, as chair, will stimulate audience participation in the panel by beginning the session with a brief (5–7 minute) discussion of a key Chinese political economic issue, selected for its timeliness and relevance to the panel. Paper presenters will address two key aspects of China’s emerging political economy: local and regional (i.e., inter-provincial) development, and international trade. First, Arnold will take up the political and economic aspects of China’s recent industrial growth, focusing on development of the automobile industry. Li will analyze the political and social problems of the various special economic areas of south China. Then, Keum will examine China’s growing economic links with South Korea, and the implications for both nations. Islamov will round out the panel by introducing the nascent trade relations between China and the nations in transition in Central Asia. Schortgen, a China local politics specialist, will discuss general themes among the papers (in line with the lead-in discussion), and ask both the audience and panelists to comment on those themes. Campbell will reserve one-quarter of the panel time for audience questions and discussion.
Wheels and Deals: The Political Economy of China’s Automobile Industry
Walter Arnold, Miami University
There are few case studies focusing on the development of China’s automobile industry. China’s automotive industry abandoned its self-reliant development in the 1980s, and aggressively pushed technological upgrading, based on foreign investment. While many Western automotive companies have established manufacturing joint ventures in China, the Japanese have been largely absent. While all major Japanese automobile companies were exporting cars to China, they showed little interest in investing in parts or assembly operations in China, since they perceived China’s as too undeveloped to support a viable domestic automotive industry. Thus, Chinese producers had to turn to Western automobile producers for joint ventures, with varying degrees of success.
This analysis elucidates the different uses of the automobile industry as a tool of national policy by the Chinese state, and its contribution to China’s technological and industrial development, based on systematic data on trade, investment and production. It also addresses the role of international players, and assesses the intended and unintended consequences of the development for national and regional development. Like many new industries, the automobile industry has made major inroads in Guangdong, Shanghai, Manchuria, and other fast-growth areas. Understanding of this important case study yields a clearer picture of China’s current and future growth patterns.
Whither China’s Special Economic Areas? A Political Economic Perspective
Pang-kwong Li, Lingnan College
Under economic liberalization, China has produced both high economic growth and improved productivity. As it has transformed itself from a centrally planned to market economy, China has adopted an "open door" policy to the outside world. An important component of this policy was the introduction of four Special Economic Zones (SEZs) in 1980. The subsequent opening up of other coastal and inner cities has given much of China’s urban economy an outward orientation, i.e., as active participants in the world and Asian economies. This paper explores the decentralization and liberalization of the Chinese economy since 1978, in light of the establishment of the various Special Economic Areas (SEAs) and attendant special economic arrangements. It focuses on the implications of operation of the SEAs for China’s growing economic regionalization and coastal/hinterland provincial conflicts. Finally, it considers ways to alleviate economic and political strains caused by decentralization in the 1990s, and suggests possible future scenarios for China’s local and regional development, as well as the future role to be played by SEAs.
Halfway Capitalism: Transition and Instability in Jiang Zemin's China
Hieyeon Keum, Seoul City University
Through close economic ties since the late 1980s, China and South Korea have developed a "complementary relationship," i.e., reciprocal in both political and economic spheres. The official relationship begun in 1992 has prospered and matured, despite many obstacles. Koreans view China as a potential capital and goods market, and a major influence on North Korea. Chinese see Korea as a useful regional economic partner in joint ventures and trade, and a force for development of North/Northeast China. While economic factors have been emphasized, political issues have been downplayed. Contrary to the common notion that improved economic ties may lead two nations to full-fledged relations, the current Sino-South Korean relationship is not yet controlled by true economic complementarity.
This study explores the reality of the bilateral political economic relationship, and examines the nature of bilateral interdependence. The key concerns are the political and economic bases of the relationship, and the degree of interdependence or dependence between the two countries. The paper uses empirical data on bilateral trade, investment, and aid to measure the degree of economic dependence. To measure interdependence, it considers the amount of economic and policy integration between the two nations. Finally, the paper addresses the possible future course of the China-South Korea relationship, and assesses its implications for China’s trade with both other Asian nations and other major trade partners.
Growing Pains, Growing Ties: The Development of Economic Relations Between China and the Newly-Independent States of Central Asia
Bakhtior Islamov, Tashkent University
Trade growth is steadily linking China with the newly-independent states of Central Asia. Asian nations’ share of trade and foreign investment in the region has grown rapidly, and (along with Japanese, Korean and other Asian firms), Chinese companies are taking advantage of the many business opportunities in the area. These include natural resources development, commodity trade, tourism, and cultural exchanges. Cross-border trade (most notably at Kashgar) has grown significantly, especially through an extensive railroad network, which brings Chinese ports much closer than Russian or Turkish counterparts to landlocked Central Asian traders, and allows creation of a modern "Silk Road" across the Asian land bridge, from China to Turkey. Establishment of direct air links and building of better transport facilities on both sides of the China border, along with projected plans for oil and gas pipelines from Kazakhstan to the east coast of Asia, will also bind China and Central Asia together.
While relations between China and Central Asia have generally been cordial, potential problems also need to be dealt with: possible joint development of cross-border resources, common economic development issues on both sides of the China border, latent geopolitical conflicts in Central Asia, and Uighur minority issues in Xinjiang. This paper measures the degree of economic integration between China and the five Central Asian republics, and suggests possible future directions for development of economic and political relations. It also compares China-Central Asia trade to Chinese trade with other regions.
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