China's Dynamic Industrial Sector: The Internet Industry

A Singapore-based economic geographer explores and analyzes the spatially uneven evolution of the Internet industry in China, arguing that the country's immense regional disparity in the provision of Internet services is best explained by the interplay of place- and path-dependence. The author demonstrates how the highly uneven regional endowments in relevant industrial and entrepreneurial resources have led to the substantial and persistent regional imbalance within China's emerging "new economy." His initial survey of the country's 100 leading Internet content providers (firms), identified from a listing of ca. 11,700 commercial websites, is selectively augmented to reflect an increase of over 70 million Internet users in 2007, reaching a total of 253 million in June 2008, and thus overtaking the United States as the world's largest Internet market. Journal of Economic Literature, Classification Numbers: L10, L86, O30. 6 figures, 1 table, 53 references.     

Economic statecraft in China's new overseas special economic zones: soft power,business or resource security?

China's rapidly growing economic engagement with other developing countries has aroused intense debates, but these debates have often generated more heat than light. The Chinese government is clearly pushing its companies to move offshore in greater numbers, and state‐owned firms figure prominently in many of the major investments abroad. Yet relatively little research exists on when, how and why the Chinese government intervenes in the overseas economic activities of its firms. China's state‐sponsored economic diplomacy in other developing countries could play three major strategic roles: strengthening resource security, enhancing political relationships and soft power, and boosting commercial opportunities for national firms. This article examines China's programme to establish overseas special economic zones as one tool of Beijing's economic statecraft. It traces the process by which they were established and implemented, and investigates the characteristics of the 19 zones initially selected in a competitive tender process. The article concludes that even in countries rich in natural resources, the overseas zones were overwhelmingly positioned as commercial projects. Particularly in the Asian zones, China is following in the footsteps of Japan. The zone programme, and the Chinese foreign investment it hoped to foster, represents a clear case of the international projection of China's developmental state. However, in Africa (but not generally elsewhere) discourse surrounding the zones publicly positions them as a transfer of China's own development success, thus potentially enhancing China's political relationships and soft power on the continent.     

Technological Innovation in China's High-Tech Sector: Insights from a 2008 Survey of the Integrated Circuit Design Industry in Shanghai

An intensive investigation of China's high-tech sector led by a noted Hong Kong—based geographer examines the patterns of cooperation between firms and local governments (so-called "state-firm strategic resonance") as an alternative to knowledge spillover in an effort to explain why certain firms are more likely to innovate than others within an economic cluster. As a case study, they select the integrated circuit design industry (a key in the development of more efficient computing and thus a critical element of the digital revolution) in Shanghai, one of the most advanced metropolitan regions in China. A systematic analysis of firm-level data obtained inter alia from the authors' 2008 survey and interviews revealed a significant pattern of variation in innovation that could not be explained by inter-firm interactions in the process of industrial clustering. The authors argue that the uneven pattern of technological innovation is contingent on a state-built institutional and market environment designed to stimulate firms' innovative activities, and demonstrate how firms respond to that environment in a Chinese metropolis. Journal of Economic Literature, Classification Numbers: H700, L630, O310, P230, R280. 5 figures, 7 tables, 57 references.     

Real Estate FDI in Chinese Cities: Local Market Conditions and Regional Institutions

Two China-based geographers test the importance of market conditions and local institutions in determining the locational pattern of foreign direct investment in real estate development (FDIRE), a major component of China's urban growth since the 1980s. Using data from 35 major Chinese cities, they trace the diffusion of FDIRE from a concentration in China's major coastal cities in the late 1990s to a more dispersed pattern including large inland cities in 2008. In addition to investigating the general association between FDIRE, local market opportunities, and liberalized economies/more developed land markets, the authors assess differences in the locational behaviors of developers from Hong Kong-Taiwan-Macao and foreign countries. A concluding section explores the implications of FDIRE activity for the restructuring of China's urban system. Journal of Economic Literature, Classification Numbers: F210, L850, O180, R330. 3 figures, 7 tables, 35 references.     

The Service Sector in the Chinese Economy: A Geographic Appraisal

A U.S.-based economic geographer and observer of China's economy examines the rapid expansion of the country's largely overlooked service sector, at both the national and regional levels. A particular focus of the author's research is on identifying regional variations in the development of services within the country and exploring some of the more important contributing factors. Based on the findings, the paper also discusses structural shifts that occurred in China's regional economies, disclosing inter alia that inequality in the contribution of services to GDP did not follow the same trajectory as that of employment in services. Journal of Economic Literature, Classification Numbers: L800, O180, P230. 6 figures, 4 tables, 82 references.     

China's Dynamic Industrial Sector: The Automobile Industry

Two leading Beijing- and Singapore-based economic geographers examine the recent developments and spatial change in China's automobile industry (currently the world's third largest). The paper covers changes in market share among major automobile transnational corporations as well as domestic assemblers; industrial restructuring in the form of product diversification (SUVs to hybrid cars) and production concentration; the massive increase in exports of motor vehicles; and the rise of new automobile production centers. Also included in the paper is a case study of the firm Chery to illustrate the development path of Chinese domestic car assemblers. The embeddedness of transnational corporations and deregulation by the Chinese government are advanced as the two major factors that shape the car industry's geographic distribution in China. Journal of Economic Literature, Classification Numbers: D20, F21, L62. 15 figures, 2 tables, 46 references.     

The Russian Copper Industry and the Noril'sk Joint-Stock Company in the Mid-1990s

An American resource geographer examines current production in one of the world's major copper industries, with special emphasis on the Noril'sk Nickel Joint-Stock Company—the world's most important producer of platinum-group metals, a leader in nickel and cobalt output, and the leading Russian producer of copper as well. The author documents and analyzes changes in operating procedures and raw material supplies in the industry during the 1990s, focusing on adjustments (such as tolling arrangements and imports of concentrate in the raw-material-deficient Urals and efforts to introduce cost economies in resource-rich Noril'sk) prompted by the severing of industry production linkages of the Soviet period and their partial reintegration under new corporate structures. In addition to restructuring, likened to similar adjustments in the American copper industry, the investigation covers exploration and new mine development at various Russian locations as well as the economics of producing copper and other exportable metals at Arctic production centers. 1 figure, 4 tables, 103 references. Journal of Economic Literature, Classification Numbers: L61, L72, Q32.     

Angola 2025: The Future of the “World's Richest Poor Country” as Seen through a Chinese Rear‐View Mirror

Abstract: As Africa's foremost “emerging market” Angola is receiving increasing recognition for its oil wealth, leading to attempts to engage it as a strategic partner, especially amongst the “rising powers”. In particular, there has been considerable escalation in development cooperation between Angola and China recently, though relatively little is known about the precise terms of this “partnership” despite China's key role in Angola's post‐conflict reconstruction. The growing importance of Chinese credit lines and increasing presence of Chinese corporate agencies across Angolan territory raise important questions about development, poverty reduction and inequality; governance and labour relations; and Angola's institutional capacity and the social structure of its cities. This paper critically examines the specific outcomes of Angola's “partnership” with China along with the hybrid conceptions and tangled geographies of “development” produced as a result. In particular, it seeks to interrogate the visions of Angola's future articulated by the Angolan state and the reference points and “models” of development that they draw upon.     

Picking 'winners' in space: Impact of spatial targeting on firm performance in China

This paper examines the spatial patterns of China's industrial encouragement policy and its distributional impact on firm productivity. To this end, I develop separate proxies to measure three popular policy instruments (subsidies, tax holidays, and preferential access to loans). I first show that China's industrial support policies tend to exhibit a prominent spatial feature of targeting firms located in lagging cities with lower density. Taking into account potential endogeneity of industrial policy, unobserved heterogeneity and firm dynamics, quantile regression techniques show that more intense industrial support leads to: (a) a reduction in the productivity of lower-performing firms, especially in denser cities; and (b) a small productivity gain for better performing firms but only in denser cities. Counterfactual analysis further reveals that pursuing an alternative, space-neutral industrial encouragement policy would increase average productivity by 14–16%, in aggregate, but also contribute to significantly higher regional inequality.     

The Chinese Hukou System at 50

A noted American authority on urbanization in China presents a retrospective analysis of China's hukou (household registration) system on the occasion of the 50^th anniversary of its promulgation, reviewing the history of that system from a broad socio-political perspective. More specifically, the paper focuses on revealing trends in the development of the system over time and identifying many of its important ramifications for modern Chinese society, as well as on the impact of hukou on the country's industrialization, urbanization, and social and spatial stratification. The author argues that the hukou system now presents a major obstacle to China's quest to become a modern, first-world nation and global leader. Journal of Economic Literature, Classification Numbers: O180, O530, P200, R120. 2 figures, 3 tables, 111 references.     

Store Wars: Changing Retail Ownership in Beijing

Two U.S.-based economic geographers analyze recent changes in retailing activity in Beijing, focusing on changes in store ownership. More specifically, they investigate declines in state ownership in the retail sector since the early 1980s in conjunction with the rapid growth of the domestic private sector and foreign ownership. The paper outlines a new geography of successful (and not-so-successful) retailers that has emerged due to rationalization of the industry, marketization, globalization, as well as government policies at a variety of levels. Changes in store ownership provide insights into the complexity of China's transition, the evolving relations between state and capital, and the role of the local state in the country's economic reforms. Journal of Economic Literature, Classification Numbers: D23, L20, L81, O18. 2 figures, 3 tables, 1 appendix, 114 references.     

Reassessing Human Geography in the Wake of China's Rise

A prominent human geographer, introducing a series of papers in a Eurasian Geography and Economics mini-symposium devoted to China's emergence, surveys the myriad global impacts of that country's rapid recent rise. The topics covered include the economic (i.e., rapid growth in the size of China's economy, preeminence as an exporter of manufactured goods, and role as a major natural resource consumer, overseas investor, and purchaser of U.S. debt obligations), the geopolitical (increasing involvement in international organizations, rising assertiveness in defense of territorial claims), and the environmental (e.g., carbon footprint, accelerated urbanization, dam building), as well as the implications of China's rise for the study of geography and development. He argues that assessment of the consequences of the country's emergence should not be based on simple extrapolation of present trends, but must take into account a number of looming questions relating to the competitiveness of China's manufacturing labor force (vis-à-vis other developing countries), capacity to innovate (as well as imitate), and transformative societal impacts of modernization and development.     

Foreign Trade in China's Electronics Industry

Three Taiwan-based economists examine the effects of GDP, per capita GDP, geographic distance, FDI outflows and inflows, openness to trade, bilateral investment treaties, and other factors on the volume of bilateral trade between China and 40 of its trading partners in the up-, mid- and downstream segments of the country's electronics industry. Pooled cross-section and time-series data are employed in an empirical estimation for the period 1995-2005, which indicate that the Chinese electronics sector's import/export volumes have grown substantially alongside China's economy. The authors address a specific set of issues questioning whether FDI inflows have created a trade effect in the electronics industry, whether they have lead to a measure of import substitution in China's electronics industry, and whether the net impact of opening the market has been positive or negative on the sector's foreign trade. Journal of Economic Literature, Classification Numbers: F14, F21, L63, O53, P33. 6 tables, 23 references.     

China's Exports and Imports of Agricultural Products under the WTO

An American economic geographer specializing in the agricultural sector of China's economy presents a study of that country's trade in agricultural products. The paper is focused on patterns of change in the regional distribution of agricultural and aquacultural exports and imports before and after China's accession to the World Trade Organization in 2001. Drawing on research during the course of a field trip in July 2008 and utilizing data compiled by China's Customs Bureau, the author provides a comprehensive assessment of the country's trade with 10 major world regions through the year 2007. Journal of Economic Literature, Classification Numbers: F14, F40, O13, Q17. 1 figure, 4 tables, 32 references.     

A China Paradox: Migrant Labor Shortage amidst Rural Labor Supply Abundance

A U.S. geographer and noted authority on China's urbanization seeks to explain the apparent paradox between reported recent shortages of migrant labor in cities in eastern China's export-oriented manufacturing belt and the abundant supply of labor in China's rural areas. He examines important socioeconomic contexts often overlooked in the debate over whether China has reached the Lewis turning point (when dual rural-urban labor markets begin to merge and a labor surplus economy is transformed into a full-employment economy), which make possible the existence of such shortages over the short term and in local areas. These include the special characteristics of China's export industrialization (e.g., preference for workers in the age category 16-30); its immense migrant labor force, constrained under the hukou system; the short-term impacts of China's economic stimulus program launched in early 2009 in the wake of the global economic crisis; and cycles in the global economy that support or impede export production.     

Projections of China's normative soft power

Fuelled by unparalleled recent development, China has by necessity been reaching outward in search of foreign resources and international recognition. The three books reviewed in this essay all speak to China's spectacular global ascendency of the past two decades—and to the political consequences and international reactions that have followed. What unites these three volumes—Tongdong Bai's China: The Political Philosophy of the Middle Kingdom (2012), Peter Nolan's Is China Buying the World? (2012) and William Callahan and Elena Barabantseva's edited volume, China Orders the World: Normative Soft Power and Foreign Policy (2011)—is their focus on the uniquely Chinese norms that now underpin China's soft power in the twenty-first century. How will China go about ordering the world and will it succeed? The answers to these questions, as these authors demonstrate, may have less to do with China's present than with its ancient past.     

From Idealism to Pragmatism: An Analysis of China's Policies toward the Middle East

After World War II, the Middle East stage attracted Beijing's attention. While Israel and China proved at that time to be too diverse, through the 1950s China made inroads with Arab countries. Egypt became the first to recognize the P.R.C., which, however, suffered rebuffs as anti-Communist forces generally prevailed in the Middle East. Beijing supported the people of Palestine. After the Soviet Union had become China's enemy, China tried to unite the Third World against the two superpowers. With Deng in 1978, China's Middle Eastern policy became more pragmatic, tilting toward the developed countries and economic cooperation rather than ideology (e.g., with Yemen). China enhanced relations with Gulf states; cooperated with the United States in supporting the Afghan mujahedin; and declared neutrality in the Iran-Iraq War, although economic alliance with Iran grew. The Gulf War affected Beijing's attitudes toward weapons technology and toward the United Nations and China's role in it. Israel is currently viewed as a channel for possible influence with the West. Overall, China's basic policy now is to watch and wait.     

China's Exchange Rate Controversy: A Balanced Analysis

A noted American authority on China's economy and monetary policy presents a statistical as well as theoretical analysis of a variety of perspectives on the controversy surrounding China's currency, basing his paper on both. The author provides the historical background and comprehensive summaries, focusing on different viewpoints about whether China's currency is undervalued, and thus may contribute to global imbalances. In the paper, he divides observers involved in the controversy into two main camps, namely the ones who find China's trade balances to be sensitive to price effects through exchange rate adjustments and those who emphasize other factors as bearing the responsibility for China's large surpluses, including the U.S. credit bubble emerging before the global financial crisis, as well as a version of Dutch disease.     

Perspectives on the Potential of Russian Oil

A prominent American specialist on the economy of the former USSR comments on Russian oil in light of a preceding paper on the subject. Noting the congruence of Russia's economic growth with world oil prices, the author points out that the country's growth is endangered by sharp declines in those prices. He also recalls how an oil windfall shaped Russian thinking in the 1970s, questions how long Russia can pump oil at its maximum level by invoking the American experience from 1859 through the peak in 1970 until the present, analyzes the two corporate models in the Russian oil sector, and briefly outlines Putin's new approach to foreign investment in the sector. Journal of Economic Literature, Classification Numbers: L71, O13, O18. 3 figures, 8 references.     

Foreign-owned Firms' Campaign Contributions in the United States: An Exploratory Study

This study extends previous empirical work on corporate political activity by examining which foreign-owned firms provide campaign contributions to United States legislators. While numerous studies have examined which domestic firms make campaign contributions, little is known about the propensity of foreign-owned firms to make contributions. Using logit and Tobit analyses, the findings suggest that firm size, legislative issues, foreign ownership, and cultural characteristics are important determinants of a foreign-owned firm's political strategy. The findings also suggest that there are strong parallels between the political strategies of foreign-owned firms and domestic firms.