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The Foreign Economic Liberalization of China's Domestic-International Linkages on China’s Periphery: The Foreign Economic Liberalization of China’s Border Regions (2000-2015) by See-Won Byun B.A. in Economics, May 2002, Brown University M.A. in International Studies, February 2006, Yonsei University M.A. in International Affairs, May 2008, The George Washington University A Dissertation submitted to The Faculty of The Columbian College of Arts and Sciences of The George Washington University in partial fulfillment of the requirements for the degree of Doctor of Philosophy May 21, 2017 Dissertation directed by David Shambaugh Professor of Political Science and International Affairs The Columbian College of Arts and Sciences of The George Washington University certifies that See-Won Byun has passed the Final Examination for the degree of Doctor of Philosophy as of December 12, 2016. This is the final and approved form of the dissertation. Domestic-International Linkages on China’s Periphery: The Foreign Economic Liberalization of China’s Border Regions (2000-2015) See-Won Byun Dissertation Research Committee: David Shambaugh, Professor of Political Science and International Affairs, Dissertation Director Susan Sell, Professor of Political Science and International Affairs, Committee Member Mike Mochizuki, Associate Professor of Political Science and International Affairs, Committee Member ii Dissertation Abstract Domestic-International Linkages on China’s Periphery: The Foreign Economic Liberalization of China’s Border Regions (2000-2015) Why and how have China’s late-developing border regions responded differently to the shared challenges of economic globalization? Theories of political economy and accounts of China’s integration into the world economy remain divided on the relative significance of internal and external forces of change. I argue that China’s foreign economic liberalization is best understood at the subnational level, where the interaction of central, local, and international actors produces distinct provincial trajectories of reform. While central state preferences dictate policy choice under authoritarian leadership, they can change through local feedback effects and domestic institutional innovations brought on by external agents. My case studies of Jilin (Northeast Asia), Yunnan (Southeast Asia), and Xinjiang (Central Asia) since China’s turn to inland development in 2000 trace “top-down, bottom-up” and “inside-out, outside-in” dynamics of change, presenting the other side of what have primarily been coastal accounts of China’s global economic integration. iii Table of Contents Dissertation Abstract……………………………………………………………………...iii List of Figures……………………………………………………………………………..v List of Tables……………………………………………………………………………...vi List of Abbreviations……………………………………………………………………..vii Chapter 1: Subnational Economies in a World of Interdependence: The Case of China…...1 Chapter 2: Domestic-International Linkages on China’s Periphery……………………...42 Chapter 3: The Foreign Economic Liberalization of China’s Border Regions since 2000………………………………………………………………………………………82 Chapter 4: Linking Northeast China and Northeast Asia: Jilin’s Enduring Quest for Economic Regionalism…………………………………………………………………124 Chapter 5: Linking Southwest China and Southeast Asia: Yunnan’s Rise as a Regional Bridgehead….………………………………………………………………...154 Chapter 6: Linking Northwest China and Central Asia: Go West Goes East in Xinjiang…………………………………………………………………………………184 Chapter 7: Asian Integration and the Liberalization of China’s Regional Economies…..208 Bibliography……………………………………………………………………………234 Appendix………………………………………………………………………………..298 iv List of Figures Figure 1.1: China’s Provinces and Regions by National Development Program…………13 Figure 2.1: Key Actors in China’s Foreign Economic Liberalization…..………………...67 Figure 2.2: Domestic-International Dynamics of Provincial Economic Liberalization…..67 Figure 3.1: Foreign Trade as a Share of Provincial GDP (2000-2013)……………………92 Figure 3.2: Provincial Share of China’s Foreign Trade (2000-2013)……………………..92 Figure 4.1: Trade Openness and Export Dependence, Jilin (1978-2013)………………..131 Figure 4.2: Share of Northeast Asia Trade in Total Foreign Trade, Jilin (2005-2013)......132 Figure 4.3: Jilin’s Share of China-Northeast Asia Trade (2005-2013)…………………..132 Figure 5.1: Foreign Trade Openness, Yunnan (1981-2013)…………………………….159 Figure 5.2: Share of Southeast Asia Trade in Total Foreign Trade, Yunnan (2000- 2013)……………………………………………………………………………………160 Figure 5.3: Yunnan’s Share of China-Southeast Asia Trade (2000-2013)………………161 Figure 6.1: Foreign Trade Openness, Xinjiang (1985-2013)…………………………....188 Figure 6.2: Share of Central Asia Trade in Total Foreign Trade, Xinjiang (2000- 2013)……………………………………………………………………………………189 Figure 6.3: Xinjiang’s Share of China-Central Asia Trade (2000-2013)………………..190 Figure 7.1: Trade Dependence on Asian Neighbors…………………………………….211 v List of Tables Table 1.1: Regional Economic Initiatives (1991-2015)……………………….………….14 Table 1.2: Economic Indicators of China’s Regions (2013)………………….…………..17 Table 1.3: Foreign Trade of China’s Regions (2005 and 2013)……………..……………17 Table 3.1: Economic Indicators of China’s Provinces (2013)………………..…………...85 Table 3.2: Regional Shares of China’s Trade with Top Partners (2013)……..…………...86 Table 3.3: Economic Openness of China’s Regions (2013)…………………..…………..88 Table 3.4: Economic Indicators of Jilin, Yunnan, and Xinjiang (2013)……..……………89 Table 3.5: Economic Openness of Jilin, Yunnan, and Xinjiang (2013)……..……………90 Table 3.6: Top Trade Partners of Jilin, Yunnan, and Xinjiang (2013)………...…………..94 Table 3.7: Asian Regional Trade (2005 and 2013)………………………….……………95 Table 3.8: Multilateral Economic Initiatives on China’s Border…………….………….101 Table 4.1: The Changjitu Zone, Yanbian Korean Autonomous Prefecture…..………….138 Table 4.2: Major Foreign Economic Initiatives in Jilin (2000-2015)………..…………..142 Table 5.1: China-Southeast Asia Economic Mechanisms………………….…………...165 Table 5.2: Yunnan-Southeast Asia Economic Mechanisms……………….……………168 Table 5.3: Major Foreign Economic Initiatives in Yunnan (2000-2015)…..……………174 Table 7.1: Forces of Liberalization: Jilin, Yunnan, and Xinjiang………..……………...212 Table A.1: Sources: Chinese Economic Data…………………………….……………..298 vi List of Abbreviations Asian Development Bank (ADB) Asian Infrastructure Investment Bank (AIIB) Association of Southeast Asian Nations (ASEAN) Bangladesh-China-India-Myanmar (BCIM) Border Economic Cooperation Zone (BECZ) Brazil, Russia, India, China, South Africa (BRICS) Central Asia Regional Economic Cooperation (CAREC) China-ASEAN Free Trade Agreement (CAFTA) China National Petroleum Corporation (CNPC) Chinese Academy of Social Sciences (CASS) Chinese People’s Political Consultative Conference (CPPCC) Commonwealth of Independent States (CIS) Communist Party of China (CPC) Democratic People’s Republic of Korea (DPRK) Development and Reform Commission (DRC) Eurasian Economic Union (EEU) European Union (EU) Foreign Direct Investment (FDI) Free Trade Agreement (FTA) General Agreement on Tariffs and Trade (GATT) Greater Mekong Subregion (GMS) Greater Tumen Initiative (GTI) Gross Domestic Product (GDP) International Monetary Fund (IMF) International Political Economy (IPE) International Relations (IR) vii Mekong River Commission (MRC) Ministry of Commerce (MOFCOM) Ministry of Finance (MOF) Ministry of Foreign Affairs (MOFA) Multinational Corporation (MNC) Myanmar Oil and Gas Enterprise (MOGE) National Bureau of Statistics (NBS) National Development and Reform Commission (NDRC) National People’s Congress (NPC) Natural Economic Territories (NETs) One Belt, One Road (OBOR) Open Economy Politics (OEP) Organisation for Economic Co-operation and Development (OECD) Outward Direct Investment (ODI) People’s Republic of China (PRC) Renminbi (RMB) Republic of Korea (ROK) Russian Far East (RFE) Shanghai Cooperation Organization (SCO) Small and Medium-Sized Enterprise (SME) Special Economic Zone (SEZ) State-Owned Enterprise (SOE) Tumen River Area Development Programme (TRADP) United Nations Development Programme (UNDP) World Trade Organization (WTO) Workers’ Party of Korea (WPK) Xinjiang Production and Construction Corps (XPCC) viii Chapter 1 Subnational Economies in a World of Interdependence: The Case of China While theories of political economy claim that economic globalization drives domestic demands for liberal economic reform, 1 the impact in authoritarian political systems remains in question. In the case of contemporary China since its market transition in 1978, whether external forces of economic liberalization constrain, or are constrained by, domestic interests and institutions is a central issue of debate.2 This debate is amplified at the subnational level of analysis, where the interaction of domestic and international factors brings to question their joint effects on the trajectory of reform.3 China’s integration into the liberal economic order since 1978 is primarily a success story of coastal provinces.4 After thirty years of opening, China replaced the European Union (EU) as the world’s biggest exporter in 2009, surpassed Japan as the world’s second biggest economy in 2010, and in 2012 replaced the United States as the global leader in goods trade.5 But underlying this success are wide provincial disparities that emerged as a 1 Jeffry Frieden and Ronald Rogowski, “The Impact of the International Economy on National Policies: An Analytical Overview,” in Internationalization and Domestic Politics, ed. Robert Keohane and Helen Milner (New York: Cambridge
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