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6 Political Economy of Regional Cooperation in the Pan-Pearl River Delta Jiang Xu and Anthony G. O. Yeh There has been a proliferation of regional cooperation in many parts of China since the late 1990s. This has led to renewed scholarly interest in major territorial issues—from political fragmentation, internal trade barriers, market separation and inadequate coordination to urban sprawl, spatial mismatch, environmental degradation and the excessive use of scarce resources (Fan 1999; Liu 2001; Lee 2002; Xu and Yeh 2005). A number of regional coordination projects have been initiated or expanded in response to the rise in urban entrepreneurialism and local protectionism resulting from urban and regional politics in post-reform China (Wu 2002; Wu et al. 2007) The economic reform imposed by the transition to a market economy has led to greater competition among regions for both mobile capital and market share (Xu and Yeh 2005). Different theoretical interpretations are given of the contrasting trends in urban and regional development. On the one hand, the mainstream literature on urban and regional economics advances the idea of competition as a remedy for regional diseconomies (Zhao 2002). It is argued that the failure of collective action lies primarilyinthedegreeofcompetition,whichhasbeenneitherexcessivenorsufficient to trigger the impulse towards cooperation. Whatever the intellectual shortcomings and political dangers of this mindset, it appears to exercise considerable influence upon the ideology, practice and institutional infrastructure of urban and regional governance in contemporary China. On the other hand, concerns have been expressed about whether the effects of spatial fragmentation due to urban entrepreneurialism and local protectionism will cause a decline in regional competitiveness (Enright et al. 2005). It is believed that regional cooperation could result in significant returns by reducing the incidence of ‘beggar thy neighbour’ policies of major politicaleconomic authorities within or across jurisdictions in China. The theoretical debates on territorial development have led to many experiments in region-wide cooperation, including the three economic regions of the Yangtze River Delta (YRD), Pearl River Delta (PRD) and Bohai Sea Rim. These emergent 104 Jiang Xu and Anthony G. O. Yeh regional formations have been discussed extensively by scholars and journalists, and become important benchmark cases in discussions of similar developments in other parts of China. Commentators have argued that there is a general movement in China towards the formation of regional blocs that can act as significant domestic and global players (Yeung 2005). ‘Regionalization’ has become a catchword signifying contemporary regional projects that are grounded upon a firm and agreed-upon political agenda to promote the structural competitiveness of regions. In contrast to such assumptions, this chapter argues that contemporary regional cooperation projects in China are very complicated and reflect contextually specific governance problems and socio-political conflicts. They are driven by internal politics stemming from China’s economic reforms and the new regime of capital accumulation (Xu and Yeh 2009). These arguments are developed by reviewing region-wide cooperation in China and examining as a case study the development of the Pan-Pearl River Delta region (Pan-PRD). The Pan-PRD is a regional cooperation initiative by 11 provincial-level jurisdictionsinsouthernChina(seeChapter1fordetails).Thesignificantgeographical scale of this region highlights the potential for developing inter-provincial economic integration through breaking down administrative and market barriers and building upon complementary functions among participants. The huge economic disparity among members and the various political levels complicate the process of cooperation, making the Pan-PRD an interesting case to consider. The region is a product of the distinct social and political context of a transitional economy, and can serve as an example of the interplay between the central and local governments and among different provinces—the ongoing path-dependent transformation of relations among different levels of government in territorial development. The following discussion begins with a broad historical survey of earlier approaches to regional cooperation in China, which is followed by an interpretation of recent politics in such cooperation. Then, the Pan-PRD case study is presented. The main objective of this chapter is to explore whether the Pan-PRD is a formulaic aspiration or a new imagination and the factors that have influenced its growth and development.This will be done through examining issues related to its establishment, organization, achievements and prospects. The analytical discussion of these important yet under-researched issues can shed light on many other dimensions of regional cooperation. The chapter concludes with a reflection on Pan-PRD practices and their significance for future studies. Historical Geographies of Regional Cooperation in China China is distinguished from...

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