Economic Restructuring Essay PDF

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What is the economic geography of the Pearl River Delta, why is it significant, and how has the region experienced economic restructuring? Economic globalization is a process in which all levels of society are affected, requiring society to have the ability to be able to respond effectively to these challenges. In a capitalist society, the link between a state, market and society are often restructured in order to respond and evolve alongside these changes (Hu & Chan, 2002). In the face of economic globalising processes, the phrase economic restructuring is often used and heard. The term is used to instantiate changes in an economy, mainly focusing upon the developing nature of industrial sectors, corporate organisations, occupational structures, employment cultures, and working practices (Economic Restructuring: Geographic Aspects, 2015). The mass economic restructuring which occurred in China during the 1970s significantly affected the production of raw materials becoming less significant, redundancy being found to be a common occurrence in manufacturing employment and flows of capital becoming key part of economic development, instead of trade of goods and service trades (Economic Restructuring: Geographic Aspects, 2015). Economic geography is also often linked with economic restructuring as it allows researchers to understand the economic structure of an area, the relationship with other regions and how it came to develop (Briney, 2019). In order to analyse the significance of the economic geography of the Pearl River Delta and how the region has experienced economic restructuring, an examination into why China went through the process of economic restructuring and how it leads to the economic restructuring of the Pearl River Delta will also be analysed. Firstly, the beginning of the economic restructuring of China in 1978 will be examined. Secondly, the significance of the economic 1

geography and how the Pearl River Delta region has experienced economic restructuring will also be analysed. In order to complete this task and examination of this topic, analysis by Kroeber, Knox and others will be utilised. The economic geography of the Pearl River Delta, the significance and how the region experienced economic restructuring will be debated. The goal of this task is to allow one to have a deeper understanding of the context of how China became the global powerhouse it is today through the importance of the economic geography of the Pearl River Delta and how it experienced economic restructuring.

“Let China sleep, for when she wakes, she will shake the world” (Napoleon Bonaparte). The famous quote from the French military statesmen and general would foreshadow the rise of China’s economy more than a century later after his death. China began its economic restructuring in late 1978 opening up to the world economy with its economic growth rapidly evolving with multiple changes including domestic reforms and development as well as changes to operational mechanisms (Shangquan, 1997). The restructuring process transformed the social, economic and environmental landscape of the country with a growth in GDP of about 10% during 1980-1990, ranking it as one of the highest countries in the world (Knox et al., 2014). By 2014, as measured by total GDP, China had the world’s 2nd largest economy after the USA, however by total per capita GDP, China ranked below 92nd meaning it is still relatively underdeveloped and that the world’s largest source manufacturing output is still a developing country or social inequalities is still an increasing issue (Knox et.al, 2014). The goal of the gradual restructuring began with past generations, building the foundations upon which China would be able to rise. The reform went through numerous experimentations in rural areas before spreading to cities, gradually building up to a nationwide scale with the establishment of economic zones transitioning to coastal regions and provinces (Shangquan, 1997). Factors involved in China’s constant rapid growth

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included; successful application of what scholars called the East Asian Model(used by other countries such as Taiwan, Japan, South Korea, Singapore and etc.), successful postcommunist transition, a unique political structure with was both centralised and decentralised, favourable demographics (young working population, with less elderly population on government benefits) and being in the right places at the right time (opening economy at the right time as well a positive geographic location) (Brødsgaard, 2016).This produced many benefits such as raising the living standards, average Chinese citizens have better lives than they did a few decades ago as well as demand from the rest of the world for Chinese products. Despite the many benefits that seemingly come economic restructuring such as the avoidance of major issues, various ongoing problems have also resulted in minor repercussions which are yet to be overcome. These minor repercussions include dependency on foreign investment, large-scale unemployment and removal of health benefits, weak agriculture production capacity and labour reallocation(Meng, 2004). One of the most significant regions that helped China rise to power was the Pearl River Delta due to the significance of its economic geography and the restructuring process which benefitted both the region and China as a whole.

The Pearl River Delta is an area of fertile land approximately 26,000km2, located in the southern province of Guangdong, with a close proximity to Hong Kong, Macau, Taiwan and other regions who could take advantage of it’s cheap land and labor. Today the area is one of the most economically vibrant regions in the world as it is also where urban growth and land conversion have been most significant since the beginning of the economic restructuring of China in 1978. In 1978 after Deng Xiaoping took power in the Chinese government, he created four special economic zones in order to attract foreign direct investment and encourage private enterprises to relocate there, creating an immediate impact (Routley, 2018).

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A significant number of crucial factors helped the restructuring of the region, a potential world-class seaport, large and inexpensive labour pool as well as growing corporations. In order to take advantage of the prospect, Deng applied five key policies; “A shift from the capital- intensive heavy industry to labour-intensive light industry, a focus on light industrial exports to generate the foreign exchange needed to import capital equipment, the establishment of SEZs, allowing foreign companies to set up factories on preferential terms, price reforms, to reduce the power of central planners and increase the role of the market, increased tolerance for private enterprises” (Knox et al., 2014 p.71). The five key policies allowed the foreign investment, manufacturing and trade into the region, allowing it to prosper. Workers and migrants migrated towards the region searching for work urbanising the area. Urbanisation overlaps with economic growth, modernising and industrialising these new areas in the Pearl River Delta. The construction of all this new infrastructure would allow new employment opportunities. Due to the geography of the Pearl River Delta and all the infrastructure coming up in the area, the Chinese government perceived the potential of the region allowing it to utilise the opportunity provided during the restructuring process and China opening its economy to the world. The region with its close proximity to Hong Kong, which is already a world-class trading port, would utilise foreign direct investment through Hong Kong boosting its significance to the Chinese government (Knox et.al, 2014). “Chinese manufacturers would be allowed to access trade routes as well as the “soft” infrastructure needed for a modern economy” (Knox et.al, 2014 p.67). Hong Kong’s pivotal role in the Pearl River Delta’s ongoing connection to the global economy can be seen in today’s media as China tries to influence Hong Kong’s protests and government in order to retain a significant part of what helped its restructuring process despite an agreement to maintain the city’s autonomy until 2047 (Routley, 2018). Today the Pearl River Delta region has a GDP equivalent to that of South Korea and has overtaken Hong Kong’s GDP. The significance of

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the region is further instantiated by the rapid urbanisation of the Pearl River Delta from which cities and townships benefitted. and the severe competition between cities and townships over boundaries of the Delta. While twin-cities are a rare occurrence in China, within the Pearl River Delta Region, there are six twin-cities which can be found further highlighting the severe conflict of space as there is no regional institution directly organising the development. This can be seen in the partial urbanisation issue china faces today despite its restructuring wherein, and there are multiple ghost towns. These ghost towns are a result of infrastructure overtaking the urbanisation process, leaving thousands of homes in cities empty. Despite there being numerous ghost towns, the economic restructuring and geography of the Pearl River Delta region have resulted in a social division and inequality where parts of society have been able to benefit significantly more

In conclusion, the economic geography of the Pearl River Delta as a port and manufacturing port and its close proximity to other regions such as Hong Kong, Taiwan and etc. has allowed it to be an extremely significant part of the restructuring process of China. The region experienced economic restructuring through the key policies first made by Deng Xiaoping, which have been continually altered till today as well as good fortune and timing of the world economy restructuring at the same time China opened its economy to the world. For the Pearl River Delta to continue succeeding in its processes a single city/level of government needs to maintain the development of the region, as the current conflict between townships and twincities around the area are causing more complications instead of benefits to the area. Further significant issues that must be addressed include the heavy reliance upon direct investment by foreign multinationals in it’s the Pearl River Delta restructuring. The heavy reliance upon direct investment by foreign multinationals creates a significant flaw in China’s economy. Chinese corporations also face a challenge in moving up into highest-value niches due to the

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cheap costs of manufacturing, unlike other developed nations whose products typically have a higher cost. The issue of increasing social inequality among Chinese society has become more evident as the economic restructuring process creating a lay-off for multiple people despite it also creating jobs. There are still millions of people waiting to be integrated into the contemporary structure, typically due to various rights being unevenly enforced, leaving limited opportunities for those in poverty. The Pearl River’s impact on the economic restructuring in the short-term has been extremely significant, however whether this will remain in the long-term future is yet to be seen.

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References Briney, A (2019, April 1). Economic Geography Overview. ThoughtCo. https://www.thoughtco.com/economic-geography-overview-1434556 Brødsgaard, K. (2016). Arthur R. Kroeber. China’s Economy: What Everyone Needs to Know. The Copenhagen Journal of Asian Studies, 34(1). https://doi.org/10.22439/cjas.v34i1.5191 Economic Restructuring: Geographic Aspects. (2015). In International Encyclopedia of the Social & Behavioural Sciences (pp. 61–66). https://doi.org/10.1016/B978-0-08097086-8.72015-0

Giles, J., Park, A. & Cai, F. (2006) How has Economic Restructuring Affected China's Urban Workers? The China Quarterly. 61-95. http://dx.doi.org.ezproxy.lib.uts.edu.au/10.1017/S0305741006000051 Hu, Y. Chan, R. (2002) Globalization, Governance, and Development of the Pearl River Delta Region *1. China Review. 61-83. https://search.proquest.com/docview/1703507224?accountid=6724 Knox, P., Agnew, J., & McCarthy, L. (2014). The Geography of the World Economy (p. 410). Routledge. https://doi.org/10.4324/9780203775189 Meng, X. (2004). Economic Restructuring and Income Inequality in Urban China. Review of Income and Wealth, 50(3), 357–379. https://doi.org/10.1111/j.00346586.2004.00130.x Routley, N (2018, August 3) Megacity 2020: The Pearl River Delta’s Astonishing Growth. Visual Capitalist. https://www.visualcapitalist.com/pearl-river-deltamegacity-2020/ Shangquan, G. (1997). China’s economic restructuring, structural adjustment and social stability. China Economic Review., 8. https://doi.org/info:doi/

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