The developing East Asian giant: China

1. The developing EastAsian giant: China dr. Jeney László Senior lecturer jeney@elte.hu Economic Geography I. International Business bachelor study programme (BA) Autumn term 2015/2016. CUB Department of Economic Geography and Futures Studies

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 2

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 3

4. Farming and rural living in the 2000s • Agriculture: prominent in the rural economy • Through Mao Zedong years: farming • Low govermental priority • Separated from other aspects of the economy • Low levels of mechanization  high labour inputs • 1980: agriculture still employed the entire – growing – rural workforce • Early 1980s: relaxed commune controls  individuals and groups plan their own programs • Personal involvement  higher output • 2000: half of the rural workers in farming

5. Rural industrial expansion • Township and village enterprises (TVEs) • New rural sourcs of income • Took underused rural labour • Higher wages • 130mn employees (30% of rural workforce) • Driving forces • Initially: collectively owned enterprises (by late 1980s: from 22 to 36 % of Chinese industrial output) • Later: individual and private enterprises • Millions of people remained in industrializing rural areas • BUT: many milions more moved out of the rural areas to the cities

6. 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

7. 4 important industries • Traditional • Textile and clothing industry (16%): sea coast (Shanghai), inner parts • Food industry (10%): areas 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

8. 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

9. 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)

10. 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

11. HDI: Human Development Index

12. „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