Political Economy of the Accelerated Growth in Western China: Variation in the Local Growth Patterns
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POLITICAL ECONOMY OF THE ACCELERATED GROWTH IN WESTERN CHINA: VARIATION IN THE LOCAL GROWTH PATTERNS A THESIS SUBMITTED TO THE GRADUATE SCHOOL OF SOCIAL SCIENCES OF MIDDLE EAST TECHNICAL UNIVERSITY BY VEYSEL TEKDAL IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF DOCTOR OF PHILOSOPHY IN THE PROGRAMME OF AREA STUDIES NOVEMBER 2019 Approval of the Graduate School of Social Sciences Prof. Dr. Yaşar Kondakçı Director I certify that this thesis satisfies all the requirements as a thesis for the degree of Doctor of Philosophy. Asst. Prof. Dr. Derya Göçer Akder Head of Department This is to certify that we have read this thesis and that in our opinion it is fully adequate, in scope and quality, as a thesis for the degree of Doctor of Philosophy. Assoc. Prof. Dr. Ceren Ergenç Asst. Prof. Dr. Derya Göçer Akder Co-Supervisor Supervisor Examining Committee Members Asst. Prof. Dr. Burak Gürel (Koc Uni., SOC) Asst. Prof. Dr. Derya Göçer Akder (METU, ARS) Prof. Dr. Ebru Voyvoda (METU, ECON) Prof. Dr. Seriye Sezen (Ankara Uni., SBKY) Asst. Prof. Dr. Şerif Onur Bahçecik (METU, IR) I hereby declare that all information in this document has been obtained and presented in accordance with academic rules and ethical conduct. I also declare that, as required by these rules and conduct, I have fully cited and referenced all material and results that are not original to this work. Name, Last name : Veysel Tekdal Signature : iii ABSTRACT POLITICAL ECONOMY OF THE ACCELERATED GROWTH IN WESTERN CHINA: VARIATION IN THE LOCAL GROWTH PATTERNS Tekdal, Veysel Ph.D., Programme of Area Studies Supervisor: Asst. Prof. Dr. Derya Göçer Akder Co-Supervisor: Assoc. Prof. Dr. Ceren Ergenç November 2019, 205 pages This dissertation investigates the context and dynamics of the accelerated growth in western China since the mid-2000s through an examination of the mid and large- sized cities. In particular, the dissertation addresses the puzzle of how and why the cities in western China differ in their growth paths. The dissertation develops an understanding of how some cities in western China, such as Chengdu, Chongqing, Xi’an, and Guiyang, have remarkably progressed with opening up and sectoral diversification and upgrading, while some others, such as Lanzhou, have owed a great deal of their accelerated growth to infrastructure investments and the price boom in natural-resource commodities and their adjacent industries. On the other hand, both successful and mediocre cities share two particular problems with the accelerated growth: comparatively high share of the construction sector, and the surging debt stock on the part of local governments, which is linked to debt- financed infrastructure investments. With regard to how China’s state-permeated, decentralized political economy operates in western China, the dissertation concludes that while a proactive and aggressive local leadership is the key to upgrading the industrial structure and forging close ties with global markets, the central government wields a significant capacity in defining the conditions of local iv development through place-targeted policy measures such as large-scale infrastructure investments, administrative arrangements, fiscal support, personnel appointments and as well as by way of specifying cyclical macroeconomic priorities. Keywords: Western China, Political Economy, Local Development, Lanzhou, Guiyang v ÖZ BATI ÇİN’DE HIZLANAN BÜYÜMENİN POLİTİK EKONOMİSİ: YEREL BÜYÜME BİÇİMLERİNDE FARKLILAŞMA Tekdal, Veysel Doktora, Bölge Çalışmaları Tez Yöneticisi: Dr. Öğr. Üyesi Derya Göçer Akder Ortak Tez Yöneticisi: Doç. Dr. Ceren Ergenç Kasım 2019, 205 sayfa Bu tez, orta ve büyük ölçekli şehirleri inceleyerek 2000'li yılların ortalarından bu yana batı Çin'de gözlemlenen hızlanmış büyümenin bağlamını ve dinamiklerini araştırmaktadır. Daha özel olarak tez, batı Çin'deki şehirlerin büyüme biçimlerinin nasıl ve neden farklılaştığı bulmacasını ele almaktadır. Tez Chengdu, Chongqing, Xi'an ve Guiyang gibi batı Çin’deki bazı şehirlerin nasıl dışa açılma ve sektörel çeşitliliği artırma ve niteliği yükseltme konusunda dikkat çekici bir ilerleme kaydettiğine, buna karşın, Lanzhou gibi diğer bazı şehirlerin ise hızlanan büyümelerini daha çok doğal kaynak ürünlerindeki ve onlarla ilişkili sanayilerdeki fiyat artışına ve altyapı yatırımlarına borçlu olduğuna dair bir anlayış geliştirmektedir. Öte yandan, hem başarılı hem de ortalama performans gösteren şehirler hızlanan büyümeyle ilgili iki sorunu paylaşmaktadır: inşaat sektörünün nispeten yüksek payı ve borçlarla finanse edilen altyapı yatırımlarıyla bağlantılı olarak yerel yönetimlerin artan borç stoku. Çin’in devlet nüfuzlu, ademi merkezileşmiş politik ekonomisinin batı Çin’de nasıl işlediğine ilişkin olarak tez, proaktif ve agresif bir yerel liderliğin endüstriyel yapıyı iyileştirme ve küresel pazarlarla yakın ilişkiler kurmada esas etken olduğu sonucuna varmıştır. Bununla birlikte merkezi hükümet büyük ölçekli altyapı yatırımları, idari düzenlemeler, vi mali destek, personel atamaları gibi yer-hedefli politikalar ve ayrıca dönemsel makroekonomik öncelikleri belirleme yoluyla yerel kalkınma koşullarını belirlemede önemli bir kapasiteye sahiptir. Anahtar Kelimeler: Batı Çin, Politik Ekonomi, Yerel Kalkınma, Lanzhou, Guiyang vii ACKNOWLEDGEMENTS No PhD dissertation is an easy undertaking. Things may get even more complicated if you do a PhD research on China from Turkey, where the academic resources in China studies are relatively weak. Yet, many people and institutions have facilitated my undertaking with a variety of supports. I should first and foremost underline the supervision I have been able to get from my academic advisors at the Middle East Technical University (METU). Ceren Ergenç, as a scholar with a long-time and substantial interest in Chinese politics, has mentored me from the early days of my academic engagement with China. Her support included not only supervision of my dissertation, but also generous guidance on the methods and conventions on doing China research. She also helped me with building a network in China and accessing some resources vital for this research. Derya Göçer, who supervised my research after Ergenç’s leave from METU, has been a formative figure throughout my PhD training. Her guidance on methods and practicalities of doing Area Studies research has always been a valuable source of learning for me. She also fully supported my academic endeavours. I am much indebted to Professors Ergenç and Göçer. Professors Burak Gürel, Ebru Voyvoda, Seriye Sezen, and Şerif Onur Bahçecik kindly accepted to act as dissertation committee members. I am very grateful for their valuable suggestions and criticisms on the dissertation. I also would like to thank Professor Şirin Saraçoğlu due to the valuable suggestions she shared during the thesis monitoring meetings. Professor Wu Yongping kindly agreed to host me as a visiting PhD student at the School of Public Policy and Management of Tsinghua University. Introduction letters penned by Prof. Wu crucially facilitated my fieldwork in Lanzhou. I much appreciate his precious support. viii I also would like to sincerely thank Chris Glatz, probably one of the most informed people about Lanzhou’s business environment, who generously shared his insights in our email communication. What he said provided very useful hints and pointers for my investigation on Lanzhou. I learned much from the conversations with Huali Tong of the Northwest Normal University in Lanzhou. I am thankful to her. Wei Yu (魏钰) assisted me during most of the fieldwork I conducted in Lanzhou. She was always mindful and eager to help. Ma Chunqin (马春琴) too accompanied me several times. I would like to thank them. Many people with whom I did interviews in Lanzhou contributed this dissertation with the insights and information they kindly shared. I will remember their kindness and help. My thanks also go to Erse Kahraman and Zeynep Tuba Sungur, my friends and intellectual companions. Their ideas and endorsement have been precious to me. I am thankful to Pelin Tuştaş for her help with the summary of the dissertation in Turkish. Most importantly, I am grateful to my wife Şeyma for her constant support. She patiently tolerated my absence from household duties during the busy times of writing. Things are easier, and life is much joyful with your partnership and love. Finally, I should thank the Scientific and Technological Research Council of Turkey (TUBITAK), METU, and Eskişehir Osmangazi University for financial support. I would not have been able to conduct fieldwork in China without TUBITAK’s research fellowship (1059B141601253) and METU’s research grant (METU BAP-07-03-2017-011). ix TABLE OF CONTENTS PLAGIARISM ....................................................................................................... iii ABSTRACT .......................................................................................................... iv ÖZ .......................................................................................................................... vi ACKNOWLEDGEMENTS ................................................................................ viii TABLE OF CONTENTS ....................................................................................... x LIST OF TABLES .............................................................................................. xiii LIST OF FIGURES .............................................................................................. xv ABBREVIATIONS ............................................................................................