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

1. Regional Cooperation in China’s Transitional Economy

1 Regional Cooperation in China’s Transitional Economy Anthony G. O. Yeh and Jiang Xu This book has its origins in the Conference on Regional Cooperation and Infrastructure Construction held at the University of Hong Kong in June 2008. In a time of increasing global competition and rising urban entrepreneurialism, regional cooperation provides opportunities to overcome the negative effects of political fragmentation in regional and mega-city development. ‘Region fever’ is generating considerable excitement, as witnessed by the increased research interest in the theoretical and methodological issues surrounding regional cooperation and governance. Although regional cooperation has also become an important development issue in China, with increased discussion focusing on such regions as the Greater Pearl River Delta (PRD), Pan-PRD and Yangtze River Delta, the issue is complicated, as all of these regions have contextually specific governance problems and socio-political conflicts. This book discusses the issues surrounding the development of and prospects for regional cooperation in China, as well as how and to what extent infrastructure and real estate policies can promote such cooperation. Regional Cooperation in the Era of Globalization The accelerated pace of globalization in the past few decades has generated a new regime of accumulation and regulation, which has led to a process of ‘restructuring, rescaling and reordering’in advanced capitalist societies (Jessop 2002).An important consequence of global restructuring has been the emergence of neo-liberal practice, which favours ‘strong individual private property rights, the rule of law, and the institutions of freely functioning markets and free trade’ (Harvey 2005, 64). As neo-liberalism rationalizes and promotes a ‘growth-first’ approach in which cities represent key regulatory arenas, broad political transitions have occurred, including 20 Anthony G. O. Yeh and Jiang Xu a shift from municipal managerialism to urban entrepreneurialism and from the ‘managerial city’to the ‘entrepreneurial city’(Harvey 1989; Hall and Hubbard 1996). Capitalist cities and regions are being run in a more businesslike manner, mobilizing diverse political strategies to enhance their attractiveness to footloose global capital. This entrepreneurial stance of promoting local economic development by adopting risk-taking and profit-motivated approaches has given rise to intense inter-urban competition (Xu and Yeh 2005). Although the neo-liberal approach holds that individuality and the multiplicity of regional development is the most desirable way of achieving better regulation (Zhao 2002), it becomes powerless in the face of inherent territorial problems rooted in competition and local protectionism (e.g., internal trade barriers, environmental degradation). Since the 1960s, there has been a proliferation of regional cooperation projects around the world to overcome the negative aspects of urban entrepreneurialism. Each project has its own rationale, developmental pattern, institutional capacity and managerial ability to manage territorial growth, and each reflects contextually specific governance problems and socio-political conflicts. A large body of literature has attempted to theorize regional economic cooperation and explain the mechanisms of regionalization. For example, Balassa (1961) conceptualizes five levels of economic cooperation that range from free trade to full economic integration. Formal and informal patterns of inter-governmental cooperation at both the national and regional levels have also been identified (Florestano 1994; Akao 1995). Regional cooperation, which is intended to remove the barriers of local protectionism and deepen intra-region interdependence, has the capability to ‘build capacity by employing specialist expertise, provide higher quality services, ensure that resources are distributed more equitably, foster economic development, and enhance regional planning and coordination’ (Marshall et al. 2006, 240). Moreover, regionalization is ‘cost effective’because it can ‘deliver economies of scale and scope, and reduce duplication’ (Marshall et al. 2006). Given the potential benefits of cooperation, McCarthy (2003, 141) claims that ‘the extent to which localities can cooperate and invest their resources more productively has implications not only for the prosperity of cities and regions but also for their national and supranational economies’. The degree of regional cooperation, according to Berry et al. (1993) and Sampson and Woolcock (2003), is influenced by several attributes of its member jurisdictions, including complementary economic structures, geographic propinquity, equal stages of development, the distinctiveness of regional identities and existing economic relations. Regionalization has become an ‘institutional fix’ for cities and regions looking to solve regional issues and enhance competitiveness in the era of globalization. 21 Regional Cooperation in China’s Transitional Economy New regionalization and the emergence of the Pan-Pearl River Delta The process of neo-liberal restructuring has not only prevailed in developed capitalist economies, but...