Geography Reference
In-Depth Information
rural to urban transformation, the rate of growth of labour productivity in
non-agricultural activities has been on average two-thirds higher than that
for agriculture, in addition to the fact that urban employment has been
increasing at nearly five times the general rate (World Bank 2008c). This
would suggest that agglomeration effects also operate, and urban-rural
income disparities have consequently increased in almost all economies
undergoing transformation. If we follow the logic of economic geography
arguments, it also becomes clear that economic growth will increasingly
be associated with divergence and polarization, with rising differences
between the sub-national regions which are winners and those which are
losers. Moreover, there is already mounting evidence that such trends
are well underway. Here we investigate some of this evidence by initially
observing the behaviour of by far the largest, the fastest growing, and
the most open of BRIICS economies, namely China. We then extend the
analysis to the other BRIICS economies.
8.6.1
The Changing Economic Geography of China
Of all developing and transition economies, the most remarkable trans-
formation has been that of China. Between 1980 and 2000 China
increased its share of global exports from 0.9 per cent to 6 per cent, its
share of global imports from 1.1 per cent to 4.1 per cent, and its share of
global GDP from 2.9 per cent to 3.4 per cent (Fujita 2007b). The result of
the increasing involvement in international exchanges was that between
1980s and 2000 China's GDP per capita increased by ten-fold (World
Bank 2005). However, the initial impetus for China's restructuring and
growth came from fairly modest reforms (World Bank 2005). China
began with the introduction of a rudimentary system of property rights in
order to create incentives, and only recently gave constitutional recogni-
tion to private property (World Bank 2005). However, acknowledging
the need to access global capital, technology and knowledge assets via
inward multinational investment, China has subsequently also liberalized
many rules regarding services industry ownership, as well as manufac-
turing industry. These changes now allow for greater levels of overseas
ownership in many advanced sectors, and have been instituted because
China is aiming to attract both a broader range and a higher quality
of inward FDI (UNCTAD 2005). In particular, the National Economy
and Social Development Plan 2005 emphasized the need to improve
the quality of FDI by encouraging it in technology-intensive industries,
advanced manufacturing, modern services and agriculture and environ-
mental protection. The plan also encourages the establishment of R&D
centres, regional headquarters, and bases of advanced manufacturing,
