Geography Reference
In-Depth Information
and welcomes the role of FDI in the reform of state-owned enterprises
(UNCTAD 2005).
The growth of R&D-related FDI investments in China began in 1993
and reached some 700 projects by 2004 amounting to around $4bn of
inward FDI. Most projects were implemented after China's accession
to the World Trade Organization (WTO) in December 2001 (UNCTAD
2005). These R&D investments are mainly focussed on technology-
intensive industries such as ICT, automotive and chemicals. As we see in
Figure 8.3, there is clear economic geography logic to these investments,
which are heavily concentrated in a small number of locations. In 2004,
Beijing had 189 foreign-owned R&D centres (60 per cent of those in ICT),
Shanghai had 140 - of which 91 are in Pudong - and the Guangdong and
Jiangsu provinces in the south close to Hong Kong are home to a com-
bined number of over 100 foreign R&D centres (UNCTAD 2005).
The fact that multinational R&D centres are being located in Shanghai,
Beijing, Guangdong and Jiangsu provinces represents an unambigu-
ous pattern (see also Head and Ries 1996; Tuan and Ng 2003; Lu et al.
2011). These locations are the core knowledge regions of the country, are
growing quickly, and form the major attractive centres for all types of
international investment. Both Beijing and Shanghai now exhibit many
world city characteristics. For example, Shanghai is now listed in the top
ten cities in the most recent global financial centre rankings (COL 2009;
Long Finance 2011) with both Beijing and Shenzhen (close to Hong
Kong) also both listed in the top twenty global financial centres. At the
same time, in 2003 the south eastern provinces of Guangdong and Jiangsu
individually accounted for 28 per cent and 19 per cent of FDI, respectively
(UNCTAD 2005). Not only FDI in general, but knowledge-related FDI
in particular, are being increasingly located in these high-growth cities and
regions of China.
During the 1970s and 1980s, inequality between provinces, and also
between urban and rural areas in China fell consistently (Golley 2007).
Until the mid-1980s, the growth in per capita productivity and expendi-
ture was higher in rural than in urban areas, which suggested a slow
process of rural-urban convergence (Angang et al. 2005). Between 1978
and 1985, the ratio of per capita disposable income between urban and
rural residents had fallen from 2.57 to 1.85, and that of per capita con-
sumption had fallen to just over 2.1 (Angang et al. 2005). However, from
the mid-1980s onwards these urban-rural ratios have been reversed: by
1990 the ratio of both per capita disposable income and consumption had
risen to above 2.0. Since the economic reforms started, as expected on the
basis of the earlier arguments, inequality between provinces in China has
risen continuously (Golley 2007). By 1997, the urban-rural ratios of both
