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Warwick.Ac.Uk/Lib-Publications A Thesis Submitted for the Degree of PhD at the University of Warwick Permanent WRAP URL: http://wrap.warwick.ac.uk/106456 Copyright and reuse: This thesis is made available online and is protected by original copyright. Please scroll down to view the document itself. Please refer to the repository record for this item for information to help you to cite it. Our policy information is available from the repository home page. For more information, please contact the WRAP Team at: [email protected] warwick.ac.uk/lib-publications THE BRITISH LIBRARY BRITISH THESIS SERVICE COPYRIGHT Reproduction of this thesis, other than as permitted under the United Kingdom Copyright Designs and Patents Act 1988, or under specific agreement with the copyright holder, is prohibited. This copy has been supplied on the understanding that it is copyright material and that no quotation from the thesis may be published without proper acknowledgement. REPRODUCTION QUALITY NOTICE The quality of this reproduction is dependent upon the quality of the original thesis. Whilst every effort has been made to ensure the highest quality of reproduction, some pages which contain small or poor printing may not reproduce well. Previously copyrighted material (Journal articles, published texts etc.) is not reproduced. THIS THESIS HAS BEEN REPRODUCED EXACTLY AS RECEIVED UNIVERSITY OF WARWICK DEPARTMENT OF POLITICS AND INTERNATIONAL STUDIES THE DYNAMICS OF CROSS-BORDER MICRO-REGIONALISATION AMONG, GUANGDONG, TAIWAN AND JAPAN Sub-National Governments, Multinational Corporations and the Emergence of Multi-Level Governance KATSUHIRO SASUGA Submitted in fulfilment of the requirements for the degree of Doctor of Philosophy CONTENTS Maps and Photos vii Abstract x Transliteration xi List o f Tables xii List of Figures xiv List of Abbreviations xv Acknowledgements xix CHAPTER 1 INTRODUCTION................................................................................ I 1.1 Research Aims 2 1.2 Definitions of Key Terms 4 1.3 The Existing Literature on Chinese SNG's Foreign Economic Relations 9 1.4 The Framework of Analysis and Research Methodology 12 1.4.1 The Framework of Analysis 12 1.4.2 Research Methodology 16 1.5 The Structure of the Dissertation 26 CHAPTER 2 THEORETICAL PERSPECTIVES ON MICRO-REGION ALISATION...................................................................................29 2.1 What is a Region? 34 2.2 The Dynamics of Régionalisation 38 2.3 Explaining the Resurgence of Regions 45 2.3.1 The Flexible Specialisation School: Institutions. Industrial Divides and Small Finns 45 2.3.2 The California School: Industrial Organisation. Transactions, Agglomeration 47 2.3.3 Innovation, High Technology and Regional Development 48 2.3.4 The Perspectives of Evolutionary Economics: A Way Forward? 49 2.4 The New International Division of Labour and Commodity Chains 50 2.4.1 National Economies in East Asia 50 2.4.2 The New International Division of Labour 51 2.4.3 International Commodity Chains 51 2.5 Cross-Border Production Networks 53 2.6 The Political Spatiality of Regions 56 2.7 Micro-Regionalism in the International Political Economy 61 2.7 Conclusion 64 ii I CHAPTER 3 THE PROCESSES OF CHINA’S MICRO-REGIONAL INTEGRATION WITH THE WORLD ECONOMY...............................................70 3.1 Globalisation and Régionalisation 71 3.1.1 What is Globalisation? 71 3.1.2 Rethinking Globalisation 72 3.1.3 Globalisation and Régionalisation 74 3.2 East Asian Régionalisation and Multi-Level Governance 77 3.2.1 The State as a Unit 77 3.2.2 The Firm and the City as Units 79 3.2.3 Towards Multi-Level Governance 80 3.3 China’s FDI and Foreign Trade 83 3.3.1 Different Types o f Enterprise 83 3.3.2 China’s Inward FDI 84 3.3.3 China’s Regional Differentiation 85 3.3.4 China’s Processing Trade 86 3.4 Industrial Agglomeration in Guangdong 88 3.4.1 Guangdong in the Chinese Economy 88 3.4.2 Guangdong’s Foreign Relations 89 3.4.3 Industrial Agglomeration in Guangdong 90 3.5 FDI and Economic Development in the Pearl River Delta 92 3.5.1 FDI in the Pearl River Delta 92 3.5.2 Shenzhen and Dongguan 94 3.5.3 Dongguan’s Sub-Municipal Districts 98 3.6 Conclusion 99 CHAPTER 4 GUANGDONG AND CHINESE MULTI-LEVEL GOVERNANCE............................................................................................................104 4.1 Multi-Level Governance in China 106 4.2 The State System and Its Reform 108 4.3 Party Governance and Its Reform 111 4.3.1 Party Governance 111 4.3.2 The Restructuring of Party Governance 112 4.4 Guangdong Province and the Open Door Policy 115 4.4.1 The Open Door Policy and the Change of Centrai Leaders 115 4.4.2 Leadership in Guangdong 116 4.4.3 The Emergence of New Economic Governance 118 4.5 Changes in Inter-Governmental Relations 120 4.5.1 The Fiscal Dimension 121 4.5.2 Enterprise Reform 123 4.5.3 Legislative Decentralisation 124 4.6 Beijing’s Control and Its Circumvention by Guangdong 124 4.6.1 Beijing’s Control over Guangdong 125 4.6.2 Guangdong in the Politics of the Centre 126 4.6.3 Guangdong and the Bankruptcy of G1TIC 127 4.6.4 Intellectual Property Rights and Guangdong 128 iii 4.7 Conclusion 129 CHAPTER 5 JAPANESE FOREIGN DIRECT INVESTMENT AND EAST ASIAN MICRO-REGIONAEISATION.............................................133 5.1 The Political Economy of Japan's East Asian Policy 134 5.1.1 The Implementation of Japanese ODA 134 5.1.2 Japan’s Developmental Norms 137 5.1.3 Japan and East Asian Regionalism 139 5.2 An Historical Perspective on Japanese FD1 141 5.2.1 Post-war Japanese Outward FDI 143 5.2.2 The Plaza Agreement and Japanese FDI 144 5.3 The Main Characteristics of Japanese FDI 146 5.3.1 Manufacturing FDI and Trade 146 5.3.2 Intra- and Inter-Firm Trade 149 5.3.3 The Location and Local Sourcing o f Japanese FDI 151 5.3.4 Japanese Electronics FDI 153 5.4 Japanese EDI in Hong Kong and China 154 5.4.1 Japanese FDI in Hong Kong 154 5.4.2 Japanese FDI in China 156 5.5 The Governance of Production Networks 160 5.5.1 Keiret.su 160 5.5.2 The Evolution of Production Networks 163 5.5.3 Small and Medium-Sized Enterprises 165 5.6 Conclusion 166 CHAPTER 6 CROSS-BORDER PRODUCTION NETWORKS ACROSS THE TAIWAN STRAIT............................................................................171 6.1 I'he Taiwanese Government and the Electronics Industry 172 6.1.1 The Political Economy of the Electronics Industry 172 6 .1.2 The Restructuring of the Manufacturing Sector from the 1980s 173 6.2 Japanese FDI in Taiwan 176 6.2.1 Japanese Electronics FDI in Taiwan 176 6.2.2 Production Networks in Taiwan 181 6.3 T aiwanese FDI in China 185 6.3.1 Taiwanese FDI in ASEAN and China 186 6.3.2 Taiwanese Electronics Firms in China 187 6.3.3 Taiwanese Electronics Firms in the Pearl River Delta 189 6.3.4 The Evolution of Production Networks and the Shift of Production Sites to the Mainland 191 6.4 The Political Economy of the Taiwan Strait 192 6.4.1 The Asymmetric Relations across the Taiwan Strait 192 6.4.2 Business and Politics in Taiwan 194 6.5 The Governance of Production Networks 195 6.5.1 The Inter-Firm Relations of Taiwanese SMEs 196 6.5.2 Business Groups 197 tv 6.5.3 Geographical Concentration 198 6.5.4 The Governance of Production Networks across the Taiwan Strait 198 6.6 Conclusion 203 CHAPTER 7 THE OPERATION AND STRUCTURE OF CROSS-BORDER PRODUCTION NETWORKS AMONG GUANGDONG, TAIWAN AND JAPAN..................................................................................................................207 7.1 Hong Kong and the Pearl River Delta 207 7.1.1 Hong Kong’s Expansion into Guangdong 208 7.1.2 The Front-Shop, Back-Factory Model 210 7.1.3 The Characteristics of Production Networks in Hong Kong 212 7.1.4 Hong Kong’s Government and the Electronics Industry 213 7.2 The Role of Local Government 214 7.2.1 The Political Economy of Guangdong and the Electronics Industry 214 7.2.2 Guangdong’s Foreign Economic Diplomacy 215 7.2.3 Local Corporatism in Dongguan 216 7.3 Foreign Firms and Dongguan’s Local Government 219 7.3.1 Guanxi and Its Efficiency 220 7.3.2 Taiwanese Business Associations 222 7.3.3 Japanese Firms and Chinese Local Government 223 7.3.4 Multiple Local Networks and Sub-Municipal Government 224 7.4 The Chinese Electronics Industry 227 7.4.1 Chinese Electronics Firms 227 7.4.2 China’s Increasing Economic Presence 230 7.5 Micro-Regionalisation and China’s National Economic Integration 231 7.6 Conclusion 233 CHAPTER 8 CONCLUSION AND IMPLICATIONS.......................................237 8.1 How Should We Define and Characterise the Key Components of Micro-Regionalisation Among Guangdong, Taiwan and Japan? (Research Question 1) 238 8.2 W hat Kinds of Policy Environment and W hat Actors in the Home and Host Countries are Needed to Support Cross-Border Economic Relations? (Research Question 2) 241 8.3 How do Networks of Multi-Level Governance (MLG) Operate to Facilitate Micro-Régionalisation? (Research Question 3) 249 8.4 Theoretical Implications for the Study of Micro-Regionalisation 252 8.5 Implications for China’s Future Policy Agenda 261 8.6 Limitations of the Present Research 264 8.7 Future Research Directions 265 8.8 Summary of the Research Contribution 266 v The People’s Republic of China and Its Neighbours Source: Mackerras, Colin with Donald H Mcmillen and Andrew Watson eds., (1998) Dictionary o f the Politics of the People's Republic of China, London: Routledge, p.x.
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