Case Studies of China-Singapore Suzhou Industrial Park And
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Policy Innovation, Asymmetric Decentralization, and Local Economic Development in post-Mao China - Case Studies of China-Singapore Suzhou Industrial Park and Kunshan Economic and Technological Development Zone Thesis submitted for the degree of Doctor of Philosophy (PhD) by Shiuh-Shen Chien London School of Economics and Political Science 2006 UMI Number: U222125 All rights reserved INFORMATION TO ALL USERS The quality of this reproduction is dependent upon the quality of the copy submitted. In the unlikely event that the author did not send a complete manuscript and there are missing pages, these will be noted. Also, if material had to be removed, a note will indicate the deletion. Dissertation Publishing UMI U222125 Published by ProQuest LLC 2014. Copyright in the Dissertation held by the Author. Microform Edition © ProQuest LLC. All rights reserved. This work is protected against unauthorized copying under Title 17, United States Code. ProQuest LLC 789 East Eisenhower Parkway P.O. Box 1346 Ann Arbor, Ml 48106-1346 f % . ABSTRACT The Chinese government’s economic reforms over the last couple of decades have led to rapid economic growth for the country. However, many empirical studies on the post-Mao China show that the economic transition towards market economy is in large part actually propelled by active local governments, which are encouraged to make policy innovations in order to promote better local economic development. This thesis aims to offer an understanding on how, why and under what circumstances the local governments of post-Mao China - while still controlled by a one-party communist regime- are able to make policy innovations to deal with business operating under market transition conditions. Theoretically, the phenomenon of local policy innovation can be analyzed with a framework involving three dimensions. First, local policy innovation can be seen to take place in order to respond to challenges presented by the changing macro development environments. Second, local policy innovation can be understood as a consequence of changing responsibilities and competencies between central and local governments. Third, local policy innovation may be related to the dynamics of local-central strategic interactions. Empirically, with the contextual approach as its chosen methodology, this theoretical framework is applied to two successful cases of innovation in Jiangsu province within the Yangtze Delta of post-Mao China: Kunshan Economic and Technological Development Zone (KETZ); and China-Singapore Suzhou Industrial Park (CSSIP). The history of these two national development zones identifies the former as a case of a ‘locally initiated project’ while the latter represents an example of ‘local implementation of a centrally initiated project’. In terms of types of local-central dynamic interaction, ‘state- intention to tolerate’, ‘ ex-post state endorsement’, and ‘ ex-ante state adoption’ were seen sequentially in the case of KETZ, while ‘marginalizing the local’, ‘local obedience’, and ‘local flexibility’ operated simultaneously in the case of CSSIP. The thesis concludes that in post-Mao China significant local policy innovations were able to take place when localities encountered structural changes, including China’s reengaging with globalization, changing local-central relations, and serious territorial competition. Actions of local policy innovations were ignited by agents, across scales, whose self-interests were highly involved in local economic development in the context of asymmetric decentralization. More specifically, in the post-Mao China context of economic decentralization to the local combined with political centralization under the party, career-minded local officials utilized their decentralized ‘economic resources’ to strive for more development, which in turn became their ‘political capital’ with the upper-level government to get themselves promoted. CONTENTS PART I: Backgrounds and Research Questions CH 1: Perspectives on Local Policy Innovation in post-Mao China CH 2: The Emergence of Development Zones as a Post-Mao Local Policy Innovation PART II: Theoretical Framework CH 3: Policy Innovation as Local Responses to Global Restructuring CH 4: Local Policy Innovation and post-Mao China Asymmetric Decentralization CH 5: Policy Innovations and Local-Central Dynamical Interactions PART III: Methodology and Empirical Cases CH 6: Research Design and Case Selection CH 7: Policy Innovations in Locally Initiated Projects- Case study of Kunshan Economic and Technological Development Zone CH 8: Policy Innovations in the Local Implementation of Centrally Initiated Projects- Case Study of China Singapore Suzhou Industrial Park PART IV: Conclusion CH 9: Understanding Local Policy Innovations of post-Mao China Extended Contents Part One: Backgrounds and Research Questions CH 1: Perspectives on Local Policy Innovation in post-Mao China 1-1 Post-Mao Local Agents behind the China Miracle ....................................................1 China economic miracle over past two decades .......................................................1 Local agents making policy innovations ...................................................................2 1-2 Innovation: a Geographic Viewpoint ...........................................................................5 The characteristics of innovation .............................................................................. 5 Geography of technology innovation: innovation system and spatial clusters 8 Summary: innovations across different scales ........................................................12 1-3 Decision Making: a Perspective of Innovation ........................................................ 14 Rational action, satisficing behaviours, and the communicative turn ..................14 Decision making as social learning ......................................................................... 18 Summary: communication, learning, transfer and innovation ..............................23 1-4 In Lieu of a Conclusion: Local Policy Innovation as a Focus .................................24 CH 2: The Emergence of Development Zones as a Post-Mao Local Policy Innovation 2-1 Two transitions: China vis-a-vis Russia ................................................................... 27 Brief review on China economic performances .....................................................27 China's rise in contrast to Russia's fall ....................................................................29 Dual-track in China vis-a-vis shock-therapy in Russia ..........................................33 Experimentalism and policy diffusion of dual-track reforms ............................... 36 Compromised politics beyond dual-track reform ..................................................39 2-2 Political Economy of Open Door Policy- a Spatial Perspective ............................ 43 Policy of international trade and investment: from a ban to liberalization ..........43 Political economy of special economic zones ....................................................... 47 A pioneer: four special economic zones .................................................................49 2-3 Formation and Transformation of Development Zones .......................................... 53 Proliferation of development zones across China .................................................. 53 Expansion of the policy for national development zones ..................................... 55 Evolution of ETDZ: locally initiated and centrally initiated ................................ 57 2-4 Decentralization, Policy Innovation and Local Economic Development ..............61 Institutional innovation in transition economies .................................................... 61 Rephrasing research questions ................................................................................ 64 Synopsis of the thesis ...............................................................................................65 Part Two: Theoretical Framework CH 3: Policy Innovation as Local Responses to Global Restructuring 3-1 Entrepreneurial Localities and Entrepreneurial Governances .................................69 A typology of entrepreneurial localities ..................................................................69 The emergence of local/urban/regional entrepreneurial governance ................... 72 Structure of the chapter............................................................................................75 3-2 Global Restructuring: from Fordist/Socialist to Post-Fordist/ Post-Socialist 76 Regulation school: regimes of accumulation and modes of regulations .............. 76 From Fordism to post-Fordism ............................................................................... 77 From socialist regime to post-socialist regime ...................................................... 80 3-3 Macro Perspective of Responses: Localities in Competition ..................................82 Background: new operations of spatial organizations at different scales ............ 82 Territorial competition in the United States, Europe and China ...........................85 Competition and policy innovation (or not) ............................................................88 Market fragmentation: territorial competition, Chinese style ............................... 89 3-4 Micro Perspective of Responses: Politics behind Self-Interest Coalitions ............94 Local politics: elite or pluralist models ...................................................................94