A developing giant on the Asian periphery: China Economic Geography I. International Business bachelor study programme (BA) Spring term 2014/2015. CUB Department of Economic Geography and Futures Studies dr. Jeney László Senior lecturer

2 1949–1976: Attempted Geographic Shifts Initial attempts of the Communist Government (Mao Zedong): Great Leap Forward + Cultural Revolution – –Expand output rapidly – –Distribute economic activities – –Equality within China – –Enhance national defence 1949: NE + Shanghai + Tianjin: 70% of output – –Move the production of military goods inland – –Factory locations close to the raw material sources (coal, hydroelectricity, oil) Poor transportation linkages Central and W China developed slowly – –Manufacturing production remained in NE 1978: economic output of China < S Korea or Taiwan

3 Changing directions after 1976 Deng Xiaoping: 1977 overall economic reforms – –„4 modernizations”: agriculture, industry, science, defence – –new approach to rural life – –Encouraged investment from foreign corporations – –Increasing manufactured exports – –Economy multiplied six fold within 20 years After 2000: further revolution based on telecommunication systems (use of internet and mobile phones) – –1990–2000: telephone lines 10  125 mn – –1995–2010: mobile phone users 5  800 mn (WR1) – –Sensitivity of state control of website content China does not follow the Asian sample – –Asian NIC countries: 1. raw materials and food export, 2. simple manufactured than 3. more sophisticated goods, 4. service industries – –China: all typed of goods from rice to microchips

Manufacturing 22% of labour force, half of GDP Standing on two legs: ancient-moderns, small-large Huge development during the last four decades Regional locations: – –Before the revolution Textile and food industry, ports Steelmaking (Japanese): Northeast – –First three decades of socialist industrialization Inner parts of the country, regional equalization – –From 1979: opening policy High-tech industries, ports again, increases regional differences

4 important industries Traditional – –Textile and clothing industry (16%): s ea coast (Shanghai), inner parts – –Food industry (10%): a reas producing raw materials, sea ports Rapid developing – –Machinery (30%): capital, ports, special economic zones – –Chemistry (10%): coal mining areas, oil refineries (Daqing) Other industries – –Iron and steel industry: Anshan, Shanghai – –Ceramics (porcelain of Jingdezhen) – –Paper industry

Opening to the world economy and its difficulties Till 1979: one of the closest economy of the world – –Lagged from Taiwan (21 mn) and Hong Kong (6 mn) Later intensified foreign economic relations – –Official opening policy – –Coming back of Hong Kong Main partners: Japan, USA Hong Kong: linking unit between China and the world market Difficulties of the opening – –Large country: ability for self-sufficiency – –Traditionally limited relations – –Self-sufficiency at regional and local level as well – –Linking to foreign trade only in coastal areas – –Underdeveloped transportation and telecommunication systems

Transportation Without developed infrastructure the program of „4 modernization” is very difficult Inner waterways: traditional important Rapid development 1990s: motorways – –Canton – Hong Kong, Shenyang – Dalian, surroundings of Beijing Railways: cannot follow the needs of economy – –3 railway lines to Russia (1 via Mongolia), N Korea, Vietnam, Kazakhstan-Europe (1992) – –Railway building to Inner Asia (Tibet)

Regional differences Two separated parts – –E, SE: core of the ancient Chinese civilization Better climate High population concentration, political centre 1/3 of the territory, 85% of population, 90 % of production – –W and Inner Asia Deserts, high mountains Political dependency Increasing han population Underdevelopment Regional policy: 3 regions  affect towards the increase of differences – –East: developed sectors, high technology – –Middle: raw materials, modernization of factories, development of infrastructure – –West: minority education, recovery of natural resources

HDI: Human Development Index

„Concentrated decentralization” Increase of territorial inequalities 1980: special economic zones (Shenzhen, Zhuhai, Shantou, Xiamen) – –1988: Hainan 1984: 14 ports opened – –1990 along Yangtze (Chang Yiang) River, 1992 border cities 1992: 13 customs free zones 1997 Hong Kong, 1999 Macau: special administrated areas „One country with two systems” – –Basis of unification with Taiwan