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Emerging Pacific-Asia urban corridors and formulation of the functional city system

Figure 2.5 depicts the distribution of "million cities" in Pacific Asia by the year 2000. The pattern is not radically different from the previous decades, except perhaps that a few more new cities have crossed into this size. By and large it is a static depiction of the distribution of large cities that does not take into account or capture the fundamental and profound economic restructuring and interdependence that have been occurring in the region and in the world.

Table 2.1 Approved direct foreign investment in ASEAN, 1986-1988 (US$ million and % share)

Source: Economic Planning Agency, Japan.

In an historical analysis of the system of world cities between A.D. 800 and 1975, Chase-Dunn (1985) concluded that population size was not a good measure of centrality in the world economy. This finding is echoed by King (1990:37), who maintained that size alone was insufficient to give world city status. Other more important factors may include the strength of the economy to which the city belongs, its location in relation to zones of growth or stagnation in the international economy, its attraction as a potential basing point for international capital, and its political stability. There is, however, a broad consensus that the operation of the new international division of labour is spa tially articulated through a global network of cities (Heenan, 1977; Friedmann and Wolff, 1982; Timberlake, 1985; Henderson and Castells, 1987). This was later extended to the world city hypothesis in which the roles of mega-cities are highlighted (Friedmann, 1986). Friedmann emphasized that the processes of urban change had become increasingly oblivious to national boundaries. Similarly, Nakakita (1988) submitted that the very concept of national boundaries had been altered because of, first, dramatically reduced prices in transportation, information, and communications owing to technological innovations and, secondly, the abundance of business opportunities to transfer managerial resources. An outstanding example of the globalization of Japanese firms is furnished by the meteoric rise of Kumagai Gumi in the construction industry, which captured more than one-third of all overseas contracts won by Japanese construction contractors in 1985 and 1986 (Rimmer, 1990). None the less, in the new territorial dynamics consequent upon global restructuring, many countries are faced with the contradiction of "placeless power and powerless places" (Henderson and Castells, 1987:7). In any event, these arguments provide the explanation for the borderless economies that, on the basis of economic logic and transcending national boundaries, have emerged in several parts of Pacific Asia.

Fig. 2.5 The "million" cities of Pacific Asia, c. 2000

Rather than population size alone, it is by the functions a mega-city accrues that its centrality and importance in the regional, indeed global, system of cities is measured. King (1990:17) has aptly summed up thus:

Internationalization of production and finance has meant the internationalization of administration and control through advanced producer services, activities assisting user firms to carry out administrative, development, and financial functions, whether these are research and development, strategic planning, banking, insurance, real estate, accounting, legal services, consulting, advertising, and so forth. It is this that has extensively changed the employment structure in the "advanced" capitalist countries and it is the growth of such activities and employment that [is seen] as being intrinsic to the formation of world cities.

Hitherto a central conceptual underpinning of the world city system has been one premised upon "dependency." The radical capital theory and the core-periphery framework are variants of this conceptual mould (Friedmann, 1986; Smith and Feagin, 1987; King, 1990). They all denote linear types of economic relationships. What distinguishes the functional urban system in Pacific Asia from previous conceptualizations is its accent on "interdependency" rather than "dependency."

In the context of Pacific Asia, as the globalization of Japanese firms and FDI flows into the NIEs and ASEAN continued, the technological level of these countries further improved. This permitted the deepening of intra-firm trade and the division of labour between head offices and their subsidiaries abroad, thus effecting a greater division of labour between Japan and the concerned countries in the region. In consequence, a dimension of the growing regional economic interdependence has been the devolution of power from the head office to overseas subsidiaries, although overall coordination and R&D functions firmly remain in headquarters in Japan (Nakakita, 1988).

What has emerged here is a "functional city system." The element that distinguishes this new city system from previous conceptual constructs is that what used to drive and sustain the growth of cities was their special advantages with respect to raw materials, location, or transportation endowments, all derived from their spatial relations to an immediate hinterland. In the "functional city system" being identified here, it is the "functions" of a city that largely determine its role and importance nationally, regionally, and globally. In a borderless economy, these functions are spatially footloose and highly sensitive to cost factors and locales that are the most attractive for the generation of those functions. Thus, instead of a city system by population size, a linkage of cities through an important functional network tends to strengthen the external economic, social, and political relations of a given city within the network more than a city outside of the network. As the processes of globalization of production, capital markets, telecommunications systems, airlines and tourism, networks of transnational corporations, flows of new technology, investment and labour force are interwoven and superimposed one over another on major cities across the nations at the world regional level, the accumulation of different functions by a given city forms a foundation for its external linkage and economic strength of growth under the current world economic system. For instance, the populations of Singapore and Bangkok are smaller than that of Calcutta but both Singapore and Bangkok are emerging as world cities as their functional linkages have expanded with the global economic integration and rapid growth of Pacific Asia.

As one illustration of a new global production network of transnational corporations, Fujita and Ishii (1991) examined the locational behaviour and spatial organization of some major electronics firms between 1975 and 1991 and have found as follows. Nine leading Japanese electronics firms increased their new production plants much more rapidly in overseas countries than in Japan. In particular, the share of East Asia is increasing while those of North America and the European Communities are rather stable, which also implies that the share of the rest of the world is decreasing (fig. 2.6). However, their R&D facilities continue to concentrate in the metropolitan areas such as Tokyo or Osaka in Japan located near the world headquarters. This observation also confirms a location theory well known in Japan that when production facilities are relocated and spread over a system of cities the "central managerial function" (Cheusu-Kanri-Kino) tends to concentrate in a major metropolis (table 2.2). The central managerial functions of a given firm include long-term strategic management, financial and legal decision-making, long-term R&D strategy and new product development, information system, quality control, procurement, and overseas planning. In other words, the more a firm decentralizes its production network, the more the decision-making function tends to centralize. Many studies have confirmed that Tokyo's recent growth is basically attributable to the concentration of the world headquarters of Japanese firms spread across the world market. The spread of FDI from Japan has in fact created an ever stronger functional city system of manufacturing production over the world. One of the results of this trend is increasing network relations between Tokyo and a city system spread across NIEs, ASEAN, and the coastal area of Pacific Asia. In a much more limited scope, Korea, Taiwan, Hong Kong, Singapore, and ASEAN countries also have become the home countries of an increasing number of transnational corporations spread across the Asian cities and extending towards the rest of the world. All of this spontaneous growth of a network of industries has reinforced the functional linkage of the Asian cities with the rest of the world.

The spatial transformation in response to the global restructuring may be observed at several levels. At the individual city level, because of the primacy of finance in the new world economy, there is a tendency for capital to be centralized in a fewer number of cities. The importance of any city is directly related to the range of key functions it can attract and provide for in the global division of labour. Briefly, three groups of functions may be identified, namely, goods and commercial transactions, movement of people, and information flows. For manufacturing functions within large cities, such as Bangkok and Jabotabek, they are more likely to be located in the suburban region because of relatively cheaper land costs and more stringent pollution controls on the environment in the urban area.

Fig. 2.6 The location of overseas production plants of nine Japanese electronics firms, 1975 and 1991 (Source: Fujita and Ishii, 1991)

Fig. 2.6 (cont.)

Table 2.2 Location of R&D facilities and plants of nine Japanese electronics firms, 1975-1991

Source: Fujita and Ishii (1991). The Japanese electronics firms are Hitachi, Toshiba, Mitsubishi, Matsushita, Sony, Sanyo, Sharp, NEC, and Fujitsu.

The phenomenon of the faster suburban regional growth is amply demonstrated by the population increase data for Jabotabek (chap. 11) and the Hong Kong-Zhujiang Delta (chap. 13). In the former, Jakarta's population grew at an annual rate of 2.4 per cent versus the equivalent of up to 6.3 per cent in Bekasi between 1980 and 1990. Similarly, if Hong Kong is viewed as the centre of the Hong Kong-Zhujiang Delta region, its annual population growth of 2.0 per cent is only a fraction of the more than 30 per cent per year in neighbouring Shenzhen and Zhuhai, two Special Economic Zones, in the period 1978 to 1988 (table 2.3). From this viewpoint, the development of the extended metropolitan areas in Asia (Ginsburg et al., 1991) is highly pertinent.

At another level, several economic hubs have emerged in the region that have essentially taken advantage of a certain complementarity, particularly of labour supply, across national boundaries. Often on a modest spatial scale, four growth triangles have been identified that have combined local resources to profitable use to all countries/cities concerned (Wallace 1991; see fig. 2.7), as follows:

• Batam, Johore, Singapore
• Southern China, Hong Kong, Taiwan
• Penang, southern Thailand, Sumatra
• South Korea, North Korea, Russian Far East

Chu (chap. 13) and Macleod and McGee (chap. 12) have marshalled detailed information to substantiate the concept of borderless cities. In the case involving synergetic relations between Hong Kong and the cities in the Zhujiang Delta, a large proportion of the manufacturing production in Hong Kong has been relocated to southern Guangdong. About 3 million workers in this part of China are reportedly employed in factories funded, designed, and managed by Hong Kong entrepreneurs, taking full advantage of cheap local labour costs and land. Taiwan capital has also been attracted to this mode and locale of production, although much of it has been channelled through Hong Kong intermediaries because of the lack of direct contact between China and Taiwan. These three territories have the makings of a powerful growth triangle as they possess different strengths and experience.

Table 2.3 Varying rates of population growth in Jakarta, Hong Kong, and surrounding cities

Source: Calculated from chapters 11 and 13.

By contrast, the Singapore Growth Triangle (alternatively called SIJORI triangle) involves three sovereign nations but essentially two paired relations centred on Singapore. Since the mid-1980s, Singapore has been seeking development outwards necessitated by its own structural change. It has found a spatial niche in developing industry, recreational facilities, hotels, and residential development on a large scale in Johore and Batam, with far-reaching social and political implications.

The four growth triangles are examples of the international division of labour over different territorial space. As these cross-border economic agglomerations prove successful, more such growth hubs will emerge in Pacific Asia. There are more subregions in the region that are seriously exploring the possibilities of cooperative development (Yeung 1994).

Batam, Indonesia-Johore, Malaysia-Singapore
Singapore wants to be the hub of a high-tech centre.

Fig. 2.7 Growth triangles in Pacific Asia (Note: * = estimate. Sources: Asia Yearbook 1991; World Book) - Batam, Indonesia-Johore, Malaysia-Singapore

Southern China-Hong Kong-Taiwan
The most developed of the economic growth triangles.

Fig. 2.7 Growth triangles in Pacific Asia (Note: * = estimate. Sources: Asia Yearbook 1991; World Book) - Southern China-Hong Kong-Taiwan

Penang, Malaysia Southern Thailand-Sumatra Indonesia
Indonesia's rickety telephone system may hurt business.

Fig. 2.7 Growth triangles in Pacific Asia (Note: * = estimate. Sources: Asia Yearbook 1991; World Book) - Penang, Malaysia Southern Thailand-Sumatra Indonesia

South Korea-North Korea-Russian Far East
One of the potentially most lucrative growth triangles.

Fig. 2.7 Growth triangles in Pacific Asia (Note: * = estimate. Sources: Asia Yearbook 1991; World Book) - South Korea-North Korea-Russian Far East

At still another level, which tends to extend over a wider territory and is centred on a number of mega-cities, is the formation of urban corridors in many parts along the Western Pacific Rim (fig. 2.8). Each of these epitomizes the highest level of interconnectedness among the cities they encompass within the delineated limits as part of the regional restructured economy. The urban corridors identified are as follows:

It has to be recognized that these urban corridors are at varying stages of formation, some exhibiting but incipient development whereas others are quite advanced in form and connectivity among the mega-cities. The best illustration of a mature urban corridor is provided by Choe (chap. 14), in which an inverted S-shaped 1,500 km urban belt from Beijing to Tokyo via Pyongyang and Seoul connects 77 cities of over 200,000 inhabitants each. More than 97 million urban dwellers live in this urban corridor, which, in fact, links four separate megalopolises in four countries in one.

Fig. 2.8 Emerging subregional economic linkages and urban corridors in Pacific Ada

A number of economic zones have been identified in Pacific Asia that, for geographic and other reasons, have been viewed as having a common interest in more rapid economic development. These are also the regions where urban corridors are likely to develop in the future. If all these zones witness rapid development as advocated, it is not a far-fetched scenario that the coastal region of Pacific Asia will in the future be a continuous urban corridor stretching from Japan/North Korea to West Java (focused on Jabotabek). Along the coastal region of China, the coastal cities have in effect linked an almost continuous corridor of rapidly developing areas from north to south, with the cities playing a catalyzing role in modernization and development and with tentacles of positive growth impulses reaching far to the inland provinces (fig. 2.9; Yeung and Hu, 1992).

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