China's Pan-Pearl River Delta: Regional Cooperation and Development

7. Establishment and Improvement of Regional Cooperation Mechanisms in the Pan-Pearl River Delta

7 Establishment and Improvement of Regional Cooperation Mechanisms in the Pan-Pearl River Delta Guanghan Chen Regional Cooperation: An Introduction Regional cooperation can be viewed as support and exchange among regions in terms of market liberalization, investment, trade, infrastructure development and environmental protection, with the common aim of maximizing economic, social and ecological advantages. To facilitate such compliance, a regional cooperation framework is usually formed through the establishment of relevant agreements and the constitution of corresponding organizations and institutions. Definition A regional cooperation framework should have two main components: a set of rules which can be agreed upon and observed by members of the region as guiding principles for regional economic cooperation; and a responsible party to enforce the rules. The former comprises an institutional framework, whereas the latter is an organization. The framework provides the foundation for regional cooperation, and the organization is the enforcer of its rules. The organization supervises and coordinates the application of the rules and ensures the consistence and effectiveness of the cooperation. Types of frameworks A framework for regional cooperation is typically composed of goal-orientated, action-orientated, operation-orientated and benefit-orientated frameworks. These four components form an interactive relationship that drives regional economic progress. 126 Guanghan Chen Goal-oriented framework To complete a set of feasible and enforceable goals is the initial and ultimate basis of a goal-oriented cooperative framework. Such frameworks include objectives and involve the coordination of these objectives through a reasoned methodology. The overall goal of the framework is to provide a fair and equal market environment for regional cooperation. In the main, implementation of this goal should be the responsibility of the public sector, but governments need to facilitate cooperation to achieve it through the establishment of an appropriate institutional basis and framework. Governments also need to eliminate the barriers erected by regional administrations or the market and establish fair and open regional market mechanisms. Another aim is to catalyze the development of infrastructure and to upgrade to a dynamic economic structure, thereby creating a better ecological environment. The implementers of this aim should be the public and private sectors, but again governments should be responsible for providing basic infrastructure and protecting the ecology. Enterprises, for their part, should be charged with the upgrading of the regional economic structure, the optimization of productive resources and the development of infrastructure. The ultimate goal is to implement a framework that allows interactions, coordinated development and progress among regional stakeholders, thereby achieving sustainable development and the better positioning of the regional economy. Action-oriented framework This framework is driven by the active participation of the various regional stakeholders. The opportunity costs of being marginalized as a result of nonparticipation and the perceived potential benefits from collaboration are the motives for regional economic cooperation. Such cooperation gains from enlargement of market and the efficient division of labour. Operation-oriented framework This refers to the establishment of a system of organizations, rules and procedures that ensures the realization of intentions and the smooth activation of regional cooperation. It emphasizes the feasibility, self-regulation and cost-effectiveness of collaboration. Generally speaking, this framework consists of two interdependent and mutually beneficial components: one market-driven and the other aided by institutions. Although regional cooperation should mainly be based on a marketdriven framework, the fine-tuning and operation of the market still relies on cooperation and negotiation among different administrations to eliminate market segregation, enable the free flow of goods and productive capital and form a 127 Establishment and Improvement of Regional Cooperation Mechanisms regionally unified market, thereby allowing the market to function as the distributor and optimizer of resources. Benefit-oriented framework This framework emphasizes the overall gains of the region as a whole and is established to optimize the gains generated by the division of labour within the region. It usually refers to the necessary exchange, communication, negotiation, mediation and arrangement of rules when goals are not aligned or the distribution of gains is uneven.Abenefit-oriented regional cooperation framework usually includes negotiation, mediation and compensation mechanisms employed during conflict and dispute resolution. Characteristics Regional cooperation mechanisms must be compatible and well coordinated with the relevant entities. According to institutional economics, when conflicts and incompatibilities exist between formal and informal systems, the former are inclined to be too superficial, which results in the failure to ‘transplant’ the system. A scientific regional cooperation framework must be tailor-made to a region’s...