(introductory text...)

David K. Y. Chu

Introduction

In the 1960s and the early 1970s, most scholarly publications on economic development and regional planning in the capitalist world focused on the role of cities or city systems in relation to their catchment areas. The importance of cities in integrating national and regional economies was fundamental in many of these endeavours (Myrdal, 1957; Hirschman, 1958; Berry, 1972; Friedmann, 1973). According to many of these views, the most basic advantage of cities stems from the reduction of distance, or the elimination of friction of space. This advantage is implicit in urban concentration, and cities are thus centres of change and economic growth (Dwyer, 1972). In any given region, the largest urban centre forms the core, while its catchment area, including the secondary cities, towns, and countryside, forms the periphery. Through either forward or backward linkages or both, a process of polarization takes place, whereby capital, technology, innovation, and people are increasingly drawn to the core. Increasing concentration of resources enables the core to expand and grow, often at the expense of the periphery. Authors of the diffusion school assert that, at some point in time, the process of economic development begins to trickle down, leading to the eventual growth and development of the periphery (Hirschman, 1958; Berry, 1972). Others contend that polarization takes precedence over dispersion, with the likelihood of the latter not occurring at all. The result is an unimpeded expansion of the city at the core, leaving the periphery as underdeveloped as ever. These arguments are notably seen in the writings of the school of capitalist underdevelopment (Frank, 1969; Amin, 1974).

China presents a very different model from that of the diffusion school or the school of underdevelopment. First of all, it deviated from the norm by employing the Stalinist model of heavy industrial development and urbanization in the late 1950s. Chinese urbanization was then influenced by counter-urbanization measures to restrain the growth of cities throughout the Cultural Revolution. In terms of industrialization, its strategy was that of "walking on two legs": the modern and the traditional were both found useful (Dumont, 1973; Gurley, 1976; Wong, 1976). Agro-development with a heavier emphasis on the rural side was pursued to overcome the contradictions between town and countryside. The anti-urban bias of the Chinese model was carried forward to the mid-1970s until the death of Mao.

Towards the end of the 1960s, disillusioned by the progress made in general and in developing countries in particular, development specialists began to question the raison d'être of economic growth for its own sake and to acknowledge the impossibility of meeting rising expectations with known resources. Seers (1969) raised some fundamental questions concerning the "meaning" of development, especially the variance between per capita income and other yardsticks of development such as income distribution, unemployment, and degree of inequality. For Friedmann and Weaver (1979), Seer's speech marked the beginning of the end of a decade-long search for development strategies using conventional models for understanding development.

From the mid-1970s onwards, the search for ways of ameliorating the consequences of unequal development has not been for simple departures from "polarized development" or "rural-urban" frameworks but for different concepts altogether. Instead, in conjunction with the trends of the international division of labour, the growth of transnational corporations, and the recognition of an emerging world economy, this new phase of evolving a development doctrine was fashioned in a series of scholarly works and reports.

A milestone is Wallerstein's formulations on the modern world system (Wallerstein, 1974, 1979, 1984). His works project a new role for cities as part of the larger historical movement of industrial capitalism. The new world system of production and markets is spatially articulated through a global network of cities - the world cities. Life in these cities reflects to a considerable extent "the mode of their integration into the world economy...; the mode of world system integration... will affect in determinate ways the economic, social, spatial and political structure of world cities and the urbanizing processes to which they are subject" (Friedmann and Wolff, 1982:309313). The position of a particular city in the world city hierarchy could be measured by the number of headquarters of transnationals and other supporting corporate services in relation to the new international division of labour (Cohen, 1981). An essential feature of this new transnational-motivated ideology is its global approach to the development issue, where global reorganization is increasingly oblivious to national boundaries (Henderson and Castells, 1987). This feature is also reflected in the series of reports produced by the Club of Rome calling for a global approach to tackling shortages of resources and the diversification of industries (Meadows et al., 1972).

Rather than putting a heavy emphasis on the role of the transnationals and the international circulation of capital and technology in economic development, the International Labour Office (ILO) called for a different approach to development in the mid-1970s (ILO, 1974). It put the emphasis on self-reliance in development, chiefly by weakening a country's tie to the world economy of transnationals, because the latter offer no chance whatsoever of meeting the ever more distressing problems of joblessness and landlessness in developing countries. This implies a territorially based, autonomous development that would give priority to raising agricultural production and to meeting the basic needs of the masses (ILO, 1976).

At the same time as the ILO was preparing its conferences, a set of independent reports was published, related in one way or another to the United Nations. They all stressed the importance of self-reliance ("Cocoyoc Declaration," 1974). Friedmann and Douglass (1975) proposed an "agropolitan" strategy in order to integrate rural with urban development, the countryside with cities. To this end, they considered the creation of a parallel economy: a wage-goods economy in the domestic market existing side by side with an export-oriented, internationally competitive economy based on a cellular principle whose smallest self-governing unit was the agropolitan district. This proposal was followed by Sachs's concept of ecodevelopment (Sachs, 1976), which combined basic needs strategies with an environmental ethic gleaned from, among others, the UN Stockholm Conference of 1972. Ecodevelopment is focused primarily on the rural aspects of development; it is directed at the rural poor in whom the transnationals have only minimal interest. It thus lends itself to engineering a somewhat similar but rural-urban embracing and environmentally conservative doctrine - sustainable development (Pearce, 1988; Barbier,1989).

The different strands of thought about development since the 1960s, though interrelated, converge upon two different forms of social integration: territorial and functional. This was first proposed in 1979 by Friedmann and Weaver (fig.¹³.1). It is a unity of opposites. The two forms not only complement but also contradict each other. This is especially so when we study the Zhujiang Delta city system. There is evidence to suggest that this city system has become a spatial expression of a bitter struggle between the two contradictory and yet complementary principles. China is basically a physical entity with clear-cut territorial sovereignty. The functional sovereignty that the transnationals represent expresses itself in the form of the international division of labour. The transnationals are in the lead in global organization and technology, which China lacks. The challenge faced by China in the 1980s was to find ways to accommodate the transnationals and the world city system within its jurisdiction.

Striking similarities may be found between the "agropolitan" strategy outlined by Friedmann and Douglass (1975) and what China experienced in the 1980s. After 1986, Zhao Ziyang's strategy of "Liangtou Zaiwai" (i.e. both market and raw material supply are external), and taking a position of full-fledged integration with the transnationals, was unacceptable to China and its leaders. The strategy vanished immediately after his downfall in 1989. Other than this short spell of open discussion encouraged by Zhao and his followers, the consensus reached among Chinese leaders and leading theoreticians is that China is unique and that the foundation of China's economy is agriculture. Consequently, basic needs must be addressed first, even before industrialization or opening to the world economy. Chen Yun's analogy concerning China's economic reforms likened the market mechanism in socialism to a caged bird that must be harnessed by central planning. His remark is just as important as Deng Xiaoping's remark that China must open to the world.

China's own development doctrine and its resistance to accepting the essence of economic development thinking, related to the globalization of factors of production and markets as well as the emergence of a world city system, have had profound repercussions on China's economic development in general and the Zhujiang Delta urban system in particular. The following sections outline the development of Zhujiang Delta and its cities over the past decades, and then analyse the characteristics of the Zhujiang Delta city system, using Friedmann's framework of the world city hypothesis. There follows a discussion on the theories outlined above in the context of China's unique political, historical, and cultural ways of viewing a regional, open city system, and its means of harnessing such a phenomenon.

Fig. 13.1 Streams in development doctrine and competitive paradigms (Source: Modified from Friedmann and Weaver, 1979)

The Zhajiang Delta and its cities

Definitions of the Zhujiang Delta

Unlike Guangdong province, the Zhujiang Delta lacks an official delimitation and definition (Zheng, 1991). Geomorphologically, the Zhujiang river basin is drained by Xi Jiang, Bei Jiang, and Dong Jiang. For centuries, Xi Jiang, the largest of the three with 80 per cent of the total flow capacity (about 3,020 billion m³ according to Qiao, 1981) and 90 per cent of the silt load (83 million tonnes, according to Liu et al., 1982), has been depositing sand and silt into the deltaic plain because the velocity of the water is greatly reduced when the rivers empty into the Zhujiang estuary. The Zhujiang region is thus a composite delta of the three rivers (fig. 13.2). As the lower courses of Xi Jiang and Bei Jiang are connected, the total area of their deltas is about 5,700 km². Separated from the Xi and Bei Jiang delta by Shizi Yang is the Dong Jiang delta, which is only 250 km² (Chen, 1978). The two deltas were linked up during the process of sedimentation, as with many other distributaries intersecting with one another.

Based on the relationship between tide and stream flow, the Zhujiang delta can be divided into a flood zone, a transitional zone, and a tidal zone (Wong and Tong, 1984). The flood zone is the uppermost section of the delta, beyond Xi Xian Jiao and Shilong. Since it is furthest away from the sea, the effects of tides are minimal and fluvial processes are more prominent. In the transitional zone between the flood zone and the tidal zone, the actions of both tides and rivers are important. The tidal zone stretches from the coastal region to Guangzhou and Jiangmen. Because of its proximity to the sea, the actions of tides are significant, with two high tides and two low tides every day. During high tides, the rate of the freshwater flow is much reduced and sedimentation occurs. The coastline of the delta is thus advancing seawards at an average rate of about 75-100 m per year.

Fig. 13.2 The Zhajiang Delta demarcated by physical characteristics (Source: Personal communication with Zheng)

Others may identify a second definition of the Zhujiang Delta, somewhat looser but still based on the physical geography. This includes the river basins drained by the lower reaches of the various rivers and islands encircled by the deposits. Under this definition, the delta is not an extensive flat area of low relief. It has about 300 hills of different heights, mostly ranging from 10 m to 300 m (Lu and Ye, 1981). The highest peaks are Wuqui Shan in the south (500 m) and Huangyang Shan in the west (591 m).

The common definition of the Zhujiang Delta is not very specific. It refers to the cities and counties drained by the lower reaches of Xi Jiang, Bei Jiang, and Dong Jiang. The common conception of the Zhujiang Delta (fig. 13.3) includes seven municipalities and seven counties, totalling 14,100 km² (7.92 per cent of the total area of Guangdong).

Historically, these cities and counties may have been under different district governments or directly ruled by the provincial government in Guangzhou. The delta has not been governed by a regional authority and an official definition is lacking. For the sake of deciding which counties should be eligible to offer preferential treatment to foreign investment, the "Zhujiang Delta Open Economic Region" was officially demarcated in January 1985 (fig. 13.4). The district so demarcated included 12 counties, with a total area of 22,800 km². However, Guangzhou, a designated coastal "open city,'' and the two Special Economic Zones (SEZs) of Shenzhen and Zhuhai were excluded. In October 1987 the central government of China revised the Zhujiang Delta Open Economic Region so as to include more cities as well as additional counties. Under the new definition, the Zhujiang Delta (called the "large delta") includes 7 municipalities and 21 xians with a total area of 42,600 km² (fig. 13.5), but Guangzhou urban districts and the Shenzhen and Zhuhai SEZs are still not included.

Even taking the broadest official definition of the Zhujiang Delta (i.e. the October 1987 "Zhujiang Delta Open Economic Region" definition), meaningful analysis of its urban development is difficult because the economic-political definition of the Zhujiang Delta employed by the PRC government excludes Hong Kong and Macau. These territories are under British and Portuguese administration, respectively, and will revert to China in 1997 and 1999, respectively.

The definition of the Zhujiang Delta employed in this chapter thus includes the PRC Zhujiang Delta Open Economic Region demarcated by the newest and broadest official definition, Guangzhou, Shenzhen, and Zhuhai as well as Hong Kong and Macau.

Fig. 13.3 The common conception of the Zhajiang Delta (Source: Compiled from Zheng, 1991:1, and personal communication)

Fig. 13.4 Zhujiang Delta Open Economic Region, 1985 (Source: Compiled from Zheng 1991:5, and personal communication)

Fig. 13.5 Zhujiang Delta Open Economic Region, 1987 (Source: Compiled from Zheng 1991:5, and personal communication)

Urban development in the Zhujiang Delta

Before 1949, although the Zhujiang Delta was under three different governments (namely the Kuomintang Chinese government, the British colonial government of Hong Kong, and the Portuguese Macau government), free movement of goods, people, and capital between the three areas was unobstructed because both Hong Kong and Macau are free ports. Functionally, all the cities in the Zhujiang Delta were integrated into one urban system, with Guangzhou as the largest and the most prosperous. It was and still is the capital of Guangdong province and has been the most important seaport in Guangdong for over 2,000 years. Macau and Hong Kong were specialized cities of a lower order than Guangzhou, serving as outposts and entrepôts for colonial trade (Chu and Chiu, 1984). Other cities and towns in the Zhujiang Delta were not only market towns for their nearby catchment areas but localized centres of capital accumulation. Handicraft industries and trading in silk and cotton textiles were quite significant in Shunde and Foshan. Overseas Chinese invested heavily in their home towns.

The year 1949 witnessed the rise to power of the current mainland Chinese government. The civil war between the Kuomintang and the Communist Party and the victory of the latter drove waves of migrants from China to Hong Kong (and, to a lesser extent, to Macau). The sudden influx of migrants resulted in Hong Kong's population exceeding 1 million, which surpassed Guangzhou's (table 13.1). The free movement of people did not stop until 1952. The free movement of goods stopped when Communist China got involved in the Korean War and the United Nations subsequently imposed a trade embargo. From then on, Hong Kong and Macau were cut off from the rest of the Zhujiang Delta and developed independently. Other than a few waves of uncontrolled "refugees" swarming from the Zhujiang Delta to Hong Kong, interactions between the PRC Zhujiang Delta and the two colonial territories were kept to a minimum. Border trade was allowed but was insignificant. Trade and visits to China were made easier when spring and autumn trade fairs began to be held in Guangzhou in 1957.

Between 1957 and 1978, the PRC Zhujiang Delta cities grew slowly because of the "under-urbanization" policy of China. Strict household registration and the system of grain rationing prevented free rural-urban migration. Large-scale investment projects in the delta's industries and infrastructure were few because of (a) the perceived susceptibility to naval attack, (b) the proximity to the capitalist enclaves of Hong Kong and Macau, (c) Mao's purported endeavour to eradicate the disparities between the coastal regions and interior areas, and (d) out-migration (legal and illegal) to Hong Kong and Macau Consequently, the average annual rate of urban growth of the inner Zhujiang Delta was 0.75 per cent per annum (Xu and Li, 1990). However, Guangzhou's supremacy remained unchallenged in the PRC Zhujiang Delta in terms of its population size, industrial output, or trading volume.

Table 13.1 The relative size of cities in the Zhujiang Delta urban system, 19491990 (population in thousands)

City	1949a	1957a	1978	1984a	1990b
Dongguan	37	91	115	177	195
Foshan	148	134	189	230	303
Guangzhou	1,414	1,825	2,065	2,486	2,914
Hong Kong	1,860	2,790	4,703	5,398	5,859
Huizhou	38	n.a.	84	108	161
Jiangmen	65	103	126	160	219
Macau	187	169	268	391	444
Qingyuan	25	n.a.	n.a.	52	165
Shenzhen	18	12	23	153	600
Zhaoqing	39	n.a.	101	138	193
Zhongshan	66	130	123	209	112
Zhuhai	n.a.	4	13	68	132

Sources: PRC cities, 1949-1978 - Zheng (1991); 1984 - Statistical Yearbook of Guangdong, p. 65;1990 -Statistical Yearbook of Guangdong, 1991, pp. 82-85.

Hong Kong - Hong Kong Yearbook, various years.

Macau - Macau Census and Statistics Department, Yearbook of Statistics and Macau in Figures, venous years.

a. Non-agricultural population registered in Chinese cities.
b. Official number of residents in each city.

On the southern fringe of the Zhujiang Delta, Hong Kong rose quickly in this period and became the first industrial colony in the early 1970s as well as a financial centre in the late 1970s. Hong Kong's successes are well documented (see Hsia and Chau, 1978; Jao, 1979; Hsia, 1984; Chen, 1989; Henderson, 1991). In comparison with Hong Kong, Macau's economy has made less remarkable progress, and its industrialization did not start until the mid-1970s. Macau's economy was heavily dependent on Hong Kong (Cremer, 1991). To sum up, during this period urban development in the Zhujiang Delta was uneven and two independent urban systems were to be found in the region. The Hong Kong-Macau system grew much faster than its inland counterpart.

The period 1978-1990 witnessed a process of gradual merging of the two urban systems, at least functionally if not politically. Interaction among the cities in the Zhujiang Delta grew dramatically. Hong Kong's economic and perhaps cultural influences overshadowed those of Guangzhou in the regional urban system in almost every aspect: from population size to industrial output, the value and growth of foreign trade, foreign investment, telecommunications, international flights, fashion, and pop songs. In other words, China's open policy has submitted Guangzhou and other Zhujiang cities to the dominance of Hong Kong. Like Macau, which in fact grew less dependent on Hong Kong, Guangzhou was relegated to the position of a second-order city. Other Zhujiang Delta cities can be identified as third- and fourth-order cities following the merging of the two independent city systems. Also worth mentioning is the creation of two border cities - Shenzhen and Zhuhai. From a small border town, Shenzhen, in particular, has been growing very rapidly since the early 1980s (over 30 per cent per annum). Its total population (permanent and temporary residents) is now almost half that of Guangzhou. Also, other small cities and towns have grown faster than Guangzhou. According to Xu and Li (1990), there are signs that the region's system of cities is heading towards a rank-size, log-normal, or Pareto distribution.

With the improvements of roads, railways, highway bridges, and telecommunications planned or under construction, plus rapid urbanization of the rural countryside, the functional integration of the cities, towns, and even villages in the Zhujiang Delta region will advance by leaps and bounds. By the year 2000, it will not be surprising if the region under study becomes a megalopolis comparable to other megalopolises of the world (Chu, Yeung, and Lam, 1989).

The making of the Zhujiang Delta megalopolis is now being accelerated by many factors:

· the reversion to China of Hong Kong in 1997 and of Macau in 1999;

· the completion of the first stage of the Hong Kong-Guangzhou-Macau superhighway in 1993;

· the completion of the nuclear power plant in Daya Bay in 1993, plus many other coal-fired thermal plants in the near future;

· the increasing use of new communications technology such as faxes, mobile phones, satellite TV;

· a new package of economic reforms;

· institutional and administrative reforms;

· the rationalization and commercialization of agriculture;

· industrialization, both urban and rural;

· the rise in average per capita incomes and an enlarging domestic market;

· desakota urbanization/extended metropolis.

The world city hypothesis and Zhajiang Delta cities

The world city hypothesis propounded by Friedmann, as stated explicitly, "is neither a theory nor a universal generalization about cities, but a starting point for political enquiry" (1986:69). Understandably, cities differ according to not only the mode of their integration with the global economy, but also their historical past, national policies, and cultural differences. Friedmann argued, however, that the economic variable is the most decisive in all attempts at explanation. It should be also noted that Friedmann's elaboration of the world city hypothesis refers to core and semi-peripheral countries only, and income is employed to define the core and the periphery. China in general, and the Zhujiang Delta system in particular, are outside his consideration. Moreover, income may not be the best criterion to define the core and the periphery. Nevertheless, Friedmann's (1986:70-79) seven interrelated theses are a convenient framework for examining the extent of integration of the Zhujiang Delta cities within the global economy. For the sake of clarity, some overlapping arguments by Friedmann are simplified.

Thesis one

Contemporary employment restructuring within cities is related to the form and extent of their integration with the world economy.

According to this thesis, a close examination of the employment structure, by means of the output value of various industries, can be conducted. Support for this thesis can be drawn from the following observations.

Fig. 13.6 Employment in Hong Kong by economic sector, selected years (%) (Source: Hong Kong Government, Annual Report, 1977, 1982, 1987, and 1990)

First, Hong Kong's position as a financial centre, shopping paradise, and entrepôt for Pacific Asia leads to the predominance of its tertiary sector in the employment structure. The decreasing importance of its industrial employment demonstrates that it has now reached the stage of late-industrial metropolis (fig. 13.6), and that it is moving towards the stage of international metropolis (Taylor and Kwok, 1989).

Secondly, apart from Guangzhou, Shenzhen, Zhuhai, and Huizhou, Zhujiang Delta cities are basically labour- and land-intensive production units. Their economic structure is dominated by manufacturing, while their tertiary sector is relatively small (table 13.2). One can thus classify them as industrial cities on the basis of their economic structure. Interaction with the outside world is limited. However, their industrial structure and opportunities are changing as they establish more links with the world economy (table 13.3). It is clear that some of these changes are externally induced because the products of China's light industries are more competitive in overseas market than are those of heavy industries, and that these cities are undergoing the process of adaptation to change.

Thirdly, endogenous conditions, such as preferential treatment and partial closure to the free movement of people and commodity imports, favour some cities more than others. The spectacular rise of Shenzhen and to a lesser extent of Zhuhai as trading centres confirms the thesis that the development of the urban system and its employment restructuring can be somewhat modified by endogenous conditions. However, Guangzhou remains central in the Zhujiang urban system.

Table 13.2 Gross domestic product and value of services of the Zhujiang Delta cities, 1990 (US$m; US$ = 5.199 RMB)

	Overall GDP	Tertiary sector GDP
City	(1)	(2)	(2)/(1) x 100%
Hong Kong	71,263	53,304	74.8
Macaua	3,173	n.a.	n.a.
Guangzhou	5,030	2,746	54.6
Shenzhen	2,062	960	46.6
Zhuhai	609	283	46.5
Huizhou	205	108	52.7
Dongguan	1,243	372	29.9
Zhongshan	838	213	25.4
Jiangmen	352	137	38.9
Foshan	666	163	24.5
Zhaoqing	234	93	39.7
Qingyuan	283	87	30.7

Sources: Hong Kong - Hong Kong Government, Hong Kong 1992, p. 365; Macau - Macau Census and Statistics Department, Macau in Figures, 1990, 1991; PRC cities - Statistical Yearbook of Guangdong, 1991, p. 78.

a. 1989.

Table 13.3 The gross value of industry in selected PRC Zhujiang Delta cities, 1985, 1987, and 1990 (million yuan RMB at constant 1980 prices)

	Heavy industry			Light industry			Total
City	1985	1987	1990	1985	1987	1990	1985	1987	1990
Guangzhou	5,036	5,723	7,913	9,342	11,728	17,134	14,378	17,451	25,047
Shenzhen	418	1,045	4,106	1,937	3,856	10,063	2,356	4,901	14,169
Zhuhai	45	142	660	335	745	2,980	380	887	3,640
Foshan	649	1,135	2,451	1,754	2,038	4,112	2,402	3,173	6,563
Zhongshan	380	652	1,356	1,117	2,005	5,587	1,497	2,657	6,943
Dongguan	215	481	1,910	773	1,394	4,399	988	1,875	6,309

Sources: Statistical Yearbook of Guangdong, 1986,1988,1991.

Table 13.4 The value of the imports and exports of the cities of the Zhujiang Delta, according to Customs and Excise figures, 1990 (US$'000)

City	Imports	Exports	Re-exports
Hong Kong	84,702,435	28,958,333	53,338,461
Macaua	1,525,949	1,691,513	n.a.
Guangzhou	6,835,780	7,069,800	n.a.
Shenzhen	4,462,490	5,051,520	n.a.
Zhuhai	1,421,090	1,668,920	n.a.
Huizhou	-	-	n.a.
Dongguan	-	-	n.a.
Zhongshan	-	-	n.a.
Jiangmen	-	-	n.a.
Foshan	903,330	1,113,360	n.a.
Zhaoqing	-	-	n.a.
Qingyuan	23,000	35,130	n.a.

Sources: PRC cities - Statistical Yearbook of Guangdong, 1991, p. 86; Hong Kong - Hong Kong Government, Hong Kong 1991; Macau - Macau Census and Statistics Department, Macau in Figures, 1990.

a. 1989.

Thesis two

Key cities are used by international capital as basing points in the spatial organization and articulation of production and markets.

The resulting linkages make it possible to arrange world cities into a complex spatial hierarchy.

The validity of this thesis as regards the Zhujiang Delta urban system can be substantiated by checking the volume of external trades. Table 13.4 summarizes the relative position of the various cities in the international trading hierarchy. It would appear that Huizhou, Dongguan, Zhongshan, Jiangmen, and Zhaoqing are at the very bottom of the hierarchy, because their exports and imports have to be reported via other customs offices. Qingyuan's volume of trade is negligible. Foshan, Zhuhai, and Macau come next in rank, followed by Shenzhen and Guangzhou. Hong Kong stands in a class of its own, because its volume of trade dwarfs not only that of the other Zhujiang Delta cities but that of any other Chinese city, including Shanghai. The total throughputs of these cities' related seaports point to a similar structure of spatial organization (table 13.5). Total tonnage figures are less useful than the number of containers handled (measured in twenty-foot-equivalent units - TEU), because a large proportion of the cargo handled in Guangzhou is made up of low-value bulk cargo.

Table 13.5 The relative size of seaports related to the cities concerned, 1990

	Cargoa	Container throughputs
City	('000 tonnes)	(TEU)
Hong Kong	75,781	5,040,000
Macau	n.a.	n.a.
Guangzhou	50,990	109,394
Shenzhen	11,590	33,810
Zhuhai	2,690	88,000
Huizhou	830
Dongguan	3,140
Zhongshan	3,000	74,000
Jiangmen	6,150
Foshan	6,750
Zhaoqing	4,210	n.a.
Qingyuan	2,010	n.a.

Sources: PRC Zhujiang port figures - Statistical Yearbook of Guangdong, 1991, pp. 182 and 184, Shenzhen Ports, Jan. 1991, pp. 21-22; Hong Kong - Hong Kong Government, Hong Kong 1991, pp. 249 and 447.

a. By oceangoing vessels and river vessels.

More telling as regards sophisticated spatial organization and the articulation between production and markets are the transshipment practices of general cargo and containers. It is, however, unfortunate that no complete sets of data have ever been compiled for this purpose. Sung (1991) indicated that about 31 per cent of Hong Kong's exports to China are made up of transshipments, but only 20.8 per cent of Hong Kong's imports from China are for transshipping to overseas destinations, and in total this accounts for 30 per cent of Hong Kong's re-export trade. Being geographically proximate, one can speculate that the Zhujiang Delta contributes significantly to this trade. The flows of containers could also help illustrate the pattern. In 1990, a total of 805,000 TEUs passed through Shenzhen-Hong Kong checkpoints by road haulage, in addition to 281,000 TEUs ferried to Hong Kong by riverine vessels and lighters from ports all over the Zhujiang Delta (Chu, 1991). Compared with Hong Kong's annual throughput of containers of 5 million TEUs in 1990, this is by no means insignificant. The pivot-feeder relation between Hong Kong and the Zhujiang Delta is evident.

Table 13.6 The importance of Hong Kong and Macau in foreign-related corporate activities in the PRC Zhujiang Delta cities, 1991

City	Representative offices of overseas companiesa	of which from Hong Kong and Macau
Guangzhou	945	729
Shenzhen	372	304
Zhuhai	63	46
Foshan	35	30
Dongguan	7	6
Zhongshan	28	28
Jiangmen	6	4
Zhaoging	0	0
Huizhou	0	0
Qingyuan	0	0

Source: Fieldwork, 1991.

a. Figures do not include foreign banks and their branch offices.

Thesis three

Global control functions can best be measured by the number of representative offices of transnational corporations (table 13.6).

These offices are the driving forces of world city growth and of high levels of business activities such as advertising, accounting, insurance, and legal services. In one sense, these offices represent the ideological penetration and control by the headquarters of transnationals at the very core of world cities. However, the whole urban system under consideration ranks very low in the world city hierarchy. Hong Kong, the key city in the system, ranks as a secondary centre in the semi-peripheral countries. It is part of the Tokyo-Singapore axis, with Singapore playing a subsidiary role as a regional metropolis and as a primary centre. It can also be inferred that the Zhujiang cities other than Hong Kong are located at the extreme periphery of the world city system.

Thesis four

World cities are theatres of concentration and accumulation of international capital.

This thesis can be illustrated by the foreign investment pattern in the Zhujiang Delta cities (table 13.7). However, caution must be exercised in reading this table; the definition of "foreign" is problematic because over 60 per cent of "foreign investment" in the PRC Zhujiang Delta is contributed by Hong Kong. After 1997, Hong Kong will no longer be foreign to China, and its investment will become domestic investment of some kind. Taiwanese capital, too, is of growing importance. Should it be considered foreign? One further complication is that foreign investors in the PRC Zhujiang cities include the offshore state companies of China. However, this situation cannot be improved unless a different system of statistics collection becomes available.

Table 13.7 Actualized foreign investment in the PRC Zhujiang Delta cities, 1990 (US$'000)

City	Loans	Direct investment	Other	Total
Guangzhou	57,800	117,010	14,860	189,670
Shenzhen	123,600	349,200	3,740	476,540
Zhuhai	32,230	62,190	1,630	96,050
Huizhou	-	146,230	30	146,260
Dongguan	-	100,100	1,700	101,800
Zhongshan	-	53,280	1,220	54,500
Jiangmen	-	28,340	340	28,680
Foshan	3,120	79,230	26,010	108,360
Zhaoqing	-	18,070	40	18,110
Qingyuan	-	16,340	840	17,180

Source: Statistical Yearbook of Guangdong, 1991, pp. 86-89.

Aside from the inadequacy of statistics, an additional point that deserves mention is that Zhujiang Delta cities have become active areas of participation by overseas Chinese family capital, which may originate from Hong Kong, Taiwan, or South-East Asian countries such as Malaysia, Indonesia, Thailand, and the Philippines. The realm of overseas Chinese capital, like that of transnationals, is more functional than territorial. One of its features is kinship ties with southern Chinese counties and cities; the direction of capital movement is thus partly conditioned by social affinity. Overseas Chinese capital, often regarded as an intrusion into territorial sovereignties in South-East Asian countries, keeps looking for suitable theatres for growth and accumulation. The Zhujiang Delta urban system is one such preferred area for investment.

Thesis five

World cities are points of destination for both domestic and inter national migrants.

Undoubtedly, the Zhujiang Delta urban system is very attractive to potential migrants in the local region and even in distant regions and countries. For this reason, Hong Kong is now very stringent about accepting low-skilled migrants from China, South Asia, and South-East Asia. Hong Kong is, however, much less stringent towards migrants from the developed area with particular skills or training lacking in the territory. On the one hand, there is a sizeable expatriate community in Hong Kong whose presence is indicated by exclusive clubs, chambers of commerce, international schools, etc. On the other hand, temporary residents providing the necessary labour are getting more numerous. They are mainly from the capitalist countries, and, of late, China has become a new source. Every year there is also a constant flow of migrants from Hong Kong to Canada, Australia, the United States, and even Singapore. Another more cosmopolitan city in the urban system is Macau, owing to its colonial heritage.

Apart from Hong Kong and Macau, foreign residents recorded in the Zhujiang Delta cities are mostly Hong Kong supervisors of industrial or commercial operations. There are few facilities to support a Western style of living in the Zhujiang cities other than Hong Kong and Macau. Unattractive though they might be to expatriates, they are magnets for domestic Chinese migrants. This is evidenced by the statistics on temporary residents in Shenzhen, Guangzhou, and other Zhujiang Delta cities (table 13.8) and by occasional press reports of waves of "blind migration" of unemployed Chinese from northern and central Chinese provinces heading for Guangdong, with Zhujiang Delta cities as their major destinations.

Thesis six

World city formation brings spatial and class polarization.

Spatially, income differences between the semi-peripheral key cities, i.e. Hong Kong, and the peripheral cities are evident, but income differences among the PRC Zhujiang Delta cities are much smaller (table 13.9). Class polarization within cities is, however, notable. In Hong Kong and Macau, the middle-income sector is getting larger because of the development of the tertiary sector, and class conflicts are fully revealed in their attitudes towards the importation of labour from China, for example.

Table 13.8 The temporary population of various PRC Zhujiang Delta cities,

City	Total temporary population	Permanent residents in urban districts
Guangzhou	561,000	2,914,000
Shenzhen	1,035,000	600,000
Zhuhai	107,000	132,000
Huizbou	173,000	161,000
Dongguan	453,000	195,000
Zhongshan	109,000	112,000
Jiangmen	104,000	219,000
Foshan	307,000	303,000
Zhaoqing	101,000	193,000
Qingyuan	42,000	165,000

Source: Fieldwork, 1991.

Table 13.9 Average annual wages of workers in the PRC Zhujiang Delta cities, 1990 (RMB)

City	Wage
Guangzhou	3,054
Shenzhen	4,304
Zhuhai	3,633
Huizhou	2,786
Dongguan	3,552
Zhongshan	3,499
Jiangmen	2,836
Foshan	3,543
Zhaoqing	2,291
Qingyuan	2,401

Source: Fieldwork, 1991.

Mass poverty does not exist in the urban system under study. In the PRC Zhujiang Delta cities, foreign joint ventures and private businesses have brought changes to their social structure (Sklair, 1991). Many state officials (formerly cadres) are involved in joint ventures and receive a high income through bonuses, while private entrepreneurs become rich through profits earned in their undertakings. They create the high-income groups. Skilled and semi-skilled workers hired by foreign-related enterprises also receive higher incomes than their counterparts in the state- or collective-owned enterprises, and could be regarded as a middle-income group. Retirees are poor in the sense that their pension hinges on the standard wage scale without adjustments for rising living costs. Those hired under temporary contracts in sweatshops and factories are the poorest. Many if not most of them are hired from counties outside the Zhujiang Delta and Guangdong. They have the poorest working and living conditions and few fringe benefits. They represent the lowest class in the new urban social structure.

Thesis seven

World city growth generates social costs at rates that tend to exceed the fiscal capacity of the state.

To a certain extent, Friedmann's last thesis about world cities is not applicable to Hong Kong and the cities of the PRC Zhujiang Delta as one has to concede that the Zhujiang Delta cities still have the fiscal capacity to cope with their problems if the minimum is defined as acceptable. Massive needs for social reproduction, including housing, education, health, transportation, and welfare, are being or are to be met. There are no homeless people forced to sleep in the streets. Heavily subsidized housing programmes have been undertaken, with prosperous private real estate markets for higher-quality flats. Primary education is readily available for urban children, and secondary education is available to over half of children. Many new universities have been set up. Health care is available for the poorest, and welfare schemes of one form or another are provided. There are few beggars, and most of them are not locals. Urban transportation is probably the least satisfactory among all the items listed by Friedmann. However, the demand for urban public transport is partly inflated by low fares (in Hong Kong, Macau, and Guangzhou alike). The number of vehicles could be reduced by raising licence fees but the shortage of road capacity could be ameliorated only by massive investment in urban transport infrastructural projects. All the cities under study have evidenced great enthusiasm over the past decade in improving their road networks.

Territorial containment of a functional world city phenomenon

The purpose of the previous section was to establish the underlying features of the Zhujiang Delta city system vis-à-vis world city characteristics. Understandably, being at the bottom of the world city hierarchy and located on its periphery, not every world city characteristic is represented in the Zhujiang Delta urban system. This is because the periphery, unlike the core of world capital accumulation, is only partially integrated with the world economic system. There are other underlying reasons; for example:

· Economic reform policies since 1978 have not been a total deviation from China's strategy of agro-development, with basic needs as its guiding principle.

· China's open policy is a revival of a traditional policy of frontier zone management and territorial containment.

· As regionalism in the Zhujiang Delta region grows with economic prosperity and outside connections, the inhabitants of the Zhujiang Delta region are inclined towards further integration with the world city system and are looking for the possibility of upward movement in the hierarchy; but the government at the core will exercise every possible means of stopping this centrifugal tendency.

As outlined in the first section, China, because of its unique political and cultural position, did not closely follow the main stream of development thinking. Instead, it has always attempted to address its own problems in its own ways and find a "Chinese" solution. In the 1960s it went for agro-development rather than a city-based strategy. From 1978 onwards, many Western scholars have described China as having reversed its former strategy in favour of a development strategy oriented to the coastal cities. A careful analysis of the Chinese economic reforms will indicate that this may not be the case.

Economic reforms actually started in the rural areas with the "baogan daohu" system - a system of contractual responsibility between farming households and the collectives. In other words, it was the success in the catchment area of the cities in the Zhujiang Delta that created the material foundations for the development of the urban system. The liberalization of the price control system for basic staples relieved more people from tilling the soil. They could now either participate in the offshoots of transnationals run by Hong Kong subcontractors, or own private businesses or even private enterprises (often under the name of collectives). From here they began extending the "brogan" system to the urban area.

The less clear-cut property rights system in the urban state-owned enterprises made it difficult to implement urban economic reforms. Urban economic reforms encountered many problems in the Zhujiang Delta. This was especially the case for those enterprises having no potential for conversion into joint foreign partnerships. The distorted price system, the overburdened welfare system, low wages, "overstaffing," obsolete machinery, poor management, too many superior organizations that could intervene in operational management decision-making, and a relatively low rate of profit retention are features common to all Chinese state-owned enterprises. The enterprises of the PRC Zhujiang Delta are no exceptions, especially the large enterprises owned and run by the central ministries and provincial departments. Only the medium to small enterprises are actually run by the municipal and township bureaux. In general, Chinese domestic enterprises are still predominantly the largest employer, producing a significant share of industrial output.

The four cardinal principles that China must uphold (socialism, the dictatorship of the proletariat, communist leadership, and the thoughts of Marx, Lenin, and Mao) explicitly or implicitly affect decision makers in the PRC Zhujiang Delta at all levels and are part and parcel of the so-called "Chinese way of socialism." The upholding of the four cardinal principles means that China will not participate wholeheartedly in the new international division of labour, and the functional power of transnationals will be taken as a constant threat to the territorial sovereignty of China. It may not be the wish of the Chinese government to find itself integrated with the world system only in a peripheral position, with its cities in the Zhujiang Delta only in the lowest stratum of the world city hierarchy. It would, however, be a dilemma for China if the position of its cities in the world city hierarchy were able to rise only with a fuller integration of its economy with the world system. Integration in this sense means that China would have to offer more concessions in functional terms to transnationals, for example as regards their trademarks, patents, and other kinds of measures to protect intellectual property, which can be used in China only with permission.

The open policy has commanded great attention since 1978. The present form of the open policy - accepting foreign investment in setting up equity joint ventures in production as well as in the tertiary business sector - was absent in the period 1949-1978. However, if one goes back further in history one discovers that in many dynastic periods the Chinese government practiced open policies in the frontier zones but rarely in the ecumene (Chu and Zheng, 1992). Wholly owned subsidiaries and joint ventures with foreign and domestic partners were found in many coastal provinces and cities prior to 1949. The open policies since 1978 have not just been the response of the Chinese government to the emergence of transnationals, but are a continuation of a disrupted long-held tradition in frontier provinces. Inherent in the openness, Chinese central governments have traditionally sheltered their ecumene by territorial means. The first is distance decay, which weakens the impact of alien influences over distance. The second is territorial containment: alien elements are allowed only in well-defined and guarded plots of territory under Chinese jurisdiction. Apart from these defined plots of territory, there are some less well-defined areas where alien elements would be tolerated but not explicitly welcomed. This model of territorial containment could be observed in Guangzhou, Quanzhou, and Fuzhou during the Ming dynasty and even earlier.

The Special Economic Zones, the open coastal cities, and the deltaic Open Economic Regions are all territorial containment devices (Chu, 1986) to control the alien phenomena associated with the international circulation and accumulation of capital (of both transnationals and overseas Chinese families). Hong Kong and Macau have been part of the world city system since well before 1978. In the early 1980s, Shenzhen and Zhuhai were designated to contain the circulation of international circulated capital. These Special Economic Zones were the first to allow wholly foreign-owned subsidiaries offshoots of the transnationals. Joint ventures were permitted and tolerated in other Zhujiang cities and countryside between 1980 and 1984. The forceful penetration of overseas Chinese family capital in the Zhujiang Delta in the early 1980s and the successful integration of the area in the world economy by means of compensation trade and contractual joint ventures brought to the attention of the Beijing central government that the initial barriers of the Special Economic Zones had been breached and that other restraints were necessary. In 1984, 14 "open coastal cities" were designated to accept foreign and overseas Chinese family capital. A year later, the Zhujiang Delta Open Economic Region was created. The failure to contain the rapid growth of activities of alien capital in the inner Zhujiang Delta led to the retreat of the boundary of the Zhujiang Open Economic Region to the outer Zhujiang Delta in 1987. In the course of time, it is possible that China will have to enlarge this Open Economic Region again, or modify its containment strategy by creating new containers for the diversion and control of alien capital and to accommodate new investment.

Regionalism has always existed in the South China frontier zone (Solinger, 1977). With a strong central government, the centrifugal tendencies of the South are suppressed as much by military presence as by an effective centralized resource allocation system on which all outlying regional economies are dependent. When the core degenerates, as during the period 1966-1978, the fringe areas, as subsystems of the whole, are able to exploit their relative autonomy and transform themselves into "upward transitional peripheries" and break away from the control of the central government. The autonomy of Guangdong and Fujian in economic affairs was legitimized in 1978 and they have been granted the power to experiment with ideologically unconventional means of economic development. Innovative concepts of the acceptance of foreign capital, technology, and Western management in Guangdong and Fujian have been implemented, leading to the partial, if not total, integration of the economies of these two provinces with the world economic system and of their cities with the world city system. The Zhujiang Delta, being next to Hong Kong, which is already a member of the world city system, is therefore close to the network of world capital circulation and information flows.

The regionalist tendencies of Guangdong were reinforced and it subsequently succeeded in moving away from the system in mainland China towards the outside capitalist world. The account of the development of the PRC Zhujiang Delta above illustrated this without touching on the subtlety of the working mechanism. In brief, PRC Zhujiang Delta officials were bold enough to interpret the various measures of the open policy set by the central government, the autonomy in economic affairs, the four cardinal principles, etc. with the greatest flexibility. One official summarizes this situation well as follows: "Central government expects the regions to follow what is allowed; but the Guangdong officials do everything as long as the central government does not explicitly disapprove" (fieldwork, 1991).

Without the centrifugal tendencies, the regional officials' bold attempts to interpret central government directives flexibly would not have been supported by the public. In most cases they were rewarded with a high rate of economic growth in the region or monetary returns to their enterprises. However, some unlucky ones encountered sanctions from the central government. In Hainan Island, car imports and their resale to inland areas is a notorious example. Others are less publicized; for example, the appointment of Mr. Li Hao from Beijing to take over as mayor and first municipal party secretary of the Shenzhen Special Economic Zone, two key positions formerly held by the deputy governor of Guangdong.

Guangdong's emergence as an economic power among the provinces also enables it to have a bigger say in national policy. On the governorship of Guangdong, for example, the former governor's declared preference to retain his position rather than take a higher position in Beijing also indicated that Guangdong regionalism had never been stronger since 1949. This tendency will likely become accentuated when Hong Kong and Macau become part of China in 1997 and 1999 respectively. Being functionally integrated, Hong Kong, Macau, Guangzhou, and other prosperous Zhujiang Delta cities and towns exert a very strong economic, if not political, power over future national policy formulation in China. From the perspective of the central government, would a strong, united, and powerful Zhujiang Delta urban system in the southern frontier region of China be to its benefit?

Conclusion

To conclude, the Zhujiang Delta urban system has now become part of the world city system and, of course, part of the Asia-Pacific urban system. As the world city system itself can be regarded as a spatial outcome of the new international division of labour, the predominant process of the internationalization of capital and its inherent logic of accumulation and reproduction will push the Zhujiang Delta urban system to extend its influence northward and assume a bigger role as an intermediary for transnationals to extend their market and production facilities.

To date, most transnationals view China as a large market rather than as a production base. Overseas Chinese family capital differs from transnational capital in this perspective, in that for Chinese family capital China is both a market and a production base. This is reflected in the pattern of foreign investment in the Zhujiang Delta. To the Chinese government, the Zhujiang Delta urban system is the means for it to gain a toehold in the international market and to obtain the most advanced technologies, which can be utilized to increase exports and decrease imports so as to improve national trade balances. Economically, these expectations and perceptions of the roles of the Zhujiang Delta urban system are conflicting and difficult to reconcile, particularly to the satisfaction of all.

The undesirability of the Zhujiang Delta urban system in spreading "spiritual pollution" to the ecumene of China has always been a concern of the Chinese central government, and there is evidence that the conventional means of territorial containment have failed. In conjunction with the strong regionalism in the Zhujiang Delta, it will be very unfortunate if the urban system generates too much pressure for the Chinese system as a whole to sustain. To strike a balance between functional integration and territorial integration is thus a lesson that the Zhujiang urban system has to learn and learn well. These two concepts of Friedmann and Weaver are not simply theoretical constructs but suitable policy guidelines for the future leaders of the urban system.

Finally, in territorial terms Hong Kong is undoubtedly part of the Zhujiang Delta urban system, but in functional terms Hong Kong's sphere of influence has spread far beyond the Delta. Despite its small area and with only 5.8 million population, Hong Kong's GDP is as much as a quarter of that of the PRC (in 1990, total GDP for Hong Kong was US$71,263 million and for the PRC US$275,053 million), and in terms of trading volume Hong Kong is even larger (in 1990, Hong Kong's total imports were worth US$84,702 million as against China's US$53,360 million, and total exports were US$82,296 million and US$62,070 million, respectively). In terms of direct foreign investment and corporate control, Hong Kong is as important to other parts of China as to the Zhujiang Delta. One thus has to appreciate the relative importance of Hong Kong within the following framework: top-rank world cities - Hong Kong - various regions of China Guangdong- Zhujiang Delta, instead of simply taking Hong Kong as the highest-ranked city of the regional urban system of the Zhujiang Delta.

Acknowledgements

The research assistance of F. Soulard, who is funded by the UPGC Research Grant No. HKU 5/91, is much appreciated. C. W. Chan, C. K. Lu, and K. J. Peng also provided research assistance in data compilation at various stages in the preparation of this chapter.

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