Cities in China: Recipes for Economic Development in the Reform Era

By Jae Ho Chung | Go to book overview

3

A comparative analysis of economic reform and development in Hangzhou and Wenzhou cities

Keith Forster and Yao Xianguo


Introduction

During the reform period Zhejiang has experienced one of the highest growth rates of any province in China. The key features of its reform experience, which have been detailed elsewhere, 1 include: a high accumulation of domestic financial resources but a below average reliance on foreign investment and trade, unusual for a coastal province; a high level of private economic activity; highly unbalanced intra-provincial regional growth; lagging coastal development; a high concentration of economic activity in rural areas with rapid growth of the township and village sector; a GDP structure characterized by a weak agricultural base, imbalanced industrial sector (excessive reliance on the processing and manufacturing of light industrial goods), and relatively undeveloped tertiary industries; weak public infrastructure particularly in the areas of transport and energy; relatively low input of science and technology into industrial output, and a high reliance on the quantitative increase in inputs of labour and capital; a government which to a large extent has played either an obstructionist or passive role in this process; and a very low level of urbanization and an accompanying relatively weak growth of core cities and their subsequent radiating influence on surrounding rural areas. In sum, what could be called the Zhejiang pattern of development (and this is not to say that such a pattern has not been followed in other provinces but the pattern does seem somewhat paradoxical for an economically advanced province such as Zhejiang) has relied on crude, extensive, small-scale, rural-based, domestically-financed industrialization. Additionally, social development in Zhejiang, partly as a result of this type of economic development, has lagged behind in terms of many national indicators, particularly in the fields of education and science and technology.

The low level of urbanization in the province clearly has great relevance for this chapter, which examines and compares economic reform and development in two of Zhejiang's three principal cities (the third being the coastal port of Ningbo). 2 By Chinese standards Zhejiang province has a below-average percentage of its population living in cities, and even fewer classified as belonging to the urban non-agricultural population, who in the Maoist years were differentiated from the the agricultural population living in cities by the fact that under the command economy they were supplied with grain coupons. Another anomaly in the pattern of Zhejiang's

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