China: Great Dragon Rising - Dragons and Tigers: A Geography of South, East and Southeast Asia - page 321

GUANGDONG: REGIONAL STATE
Guangdong fits the definition of a regional state. It is a nat-
ural economic zone shaped by the global economy in
which it participates. Guangdong Province—and espe-
cially the Pearl River Delta' s agglomeration of Guangdong,
Shenzen, and Zhuhai—has become a place apart from the
rest of China. Guangdong' s southern location has particu-
lar political-economic and sociocultural implications.
Proximity to Hong Kong and the incentive of low produc-
tion costs have transformed the Zhujiang Delta into an
outward processing zone. Since many Hong Kong resi-
dents once resided in Guangdong, business ties are facili-
tated. This explains the flows of labor-intensive industries
and investment into Guangdong from Hong Kong. Eco-
nomic structural change has seen a decline in agricultural
participation in favor of industrial participation.
Shenzhen has become Guangdong' s wealthiest area
and the most important channel for foreign investment.
It has established trade relations with 120 countries and
has attracted some 30,000 foreign investment projects.
At least 250 of the world' s top 500 corporations have in-
vested here. Shenzhen was destined to align with Hong
Kong in its transition from a British colony to a socialist
state, a showcase for exhibiting the concept of “one
country , two systems.”
The state has continued to expand open zones in
Guangdong. More rural and peripheral counties are be-
ing drawn into the picture as investors continue to seek
lower wages and subcontracting opportunities in the
context of established social relations and linkages. The
province now has 75 economic function zones, many for
the processing of high-tech equipment.
These development dynamics have generated new
migration streams in Guangdong and elsewhere. Al-
though migration was once strictly controlled by the
government, recent economic reforms have created new
push-and-pull forces fostering population movement.
The household responsibility system with its boom in
agricultural productivity has released a surplus labor
supply . Foreign investment has instituted a plethora of
labor-intensive industries looking to recruit workers. In
1984, a State Council directive allowed rural residents to
move to market towns and even larger urban areas, pro-
vided they did not require the state-rationed grains to
which the nonagricultural population was entitled. The
eastern region, including Guangdong, is now the recipi-
ent of migration streams seeking economic opportunity
in the industrial production system.
Changing employment opportunities have character-
ized the current economic crisis. Unemployment rose to

Observers use Pudong as an analogy . Hardware
in Pudong means infrastructure; software means
services. Both must exist in tandem for Pudong to
work. Change is in the offing and as Shanghai be-
comes more affordable for foreign investors, even
greater progress is expected.

CHINA 'S RUST BEL T
Home of the Manchus, founders of China' s last dynasty;
a region of historic contention among China, Japan, and
Russia; a northeastern extension of the agriculturally
productive North China Plain. This is former Manchuria,
resource-rich and responsible for 25 percent of China' s
industrial output in the 1970s. T Today, , the northeastern
provinces of Heilungjiang, Jilin, and Liaoning are trying
to overcome their rust belt status.
In the early years of communism, planners concen-
trated state-run industries around the coal and iron fields
of Shenyang, Fushun, and Anshan. Shenyang became the
nation' s leading steel-making complex. Discovery of the
Daqing oil fields west of Harbin rendered China self-
sufficient in oil at that time. Directed on giant state
farms, agriculture boomed and further illustrated what
communist planning could accomplish.
With the new market reforms of the post-Mao era,
state-run industries stood as monoliths of obsolescence,
unable to cope with privatization and restructuring. Now
the northeast contributes a mere 10 percent of China' s in-
dustrial output.
Nevertheless, there is light on the horizon for former
Manchuria. Its resource wealth and its proximity to
Russian, Korean, and Japanese ports make it a potential
core of development in East Asia. The launching of an
economic development zone at Dalian, as part of the
Liaoning Economic Development Area, has drawn the at-
tention of foreign investors, especially the Japanese.
In 1994, one-third of Japan' s investment in China
was pumped into Dalian to manufacture everything from
motors to chopsticks. Spatial association, economic in-
centives, a huge harbor, and a cheap labor pool have
drawn more than 800 firms to Dalian.
Although much of the northeast still struggles with
its rust belt heritage, some economic geographers see
economic potential in light of future possibilities. A
reunified Korea or a prosperous Russian Far East could
alter northeastern fortunes.