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The world city hypothesis and Zhajiang Delta cities

The world city hypothesis propounded by Friedmann, as stated explicitly, "is neither a theory nor a universal generalization about cities, but a starting point for political enquiry" (1986:69). Understandably, cities differ according to not only the mode of their integration with the global economy, but also their historical past, national policies, and cultural differences. Friedmann argued, however, that the economic variable is the most decisive in all attempts at explanation. It should be also noted that Friedmann's elaboration of the world city hypothesis refers to core and semi-peripheral countries only, and income is employed to define the core and the periphery. China in general, and the Zhujiang Delta system in particular, are outside his consideration. Moreover, income may not be the best criterion to define the core and the periphery. Nevertheless, Friedmann's (1986:70-79) seven interrelated theses are a convenient framework for examining the extent of integration of the Zhujiang Delta cities within the global economy. For the sake of clarity, some overlapping arguments by Friedmann are simplified.

Thesis one

Contemporary employment restructuring within cities is related to the form and extent of their integration with the world economy.

According to this thesis, a close examination of the employment structure, by means of the output value of various industries, can be conducted. Support for this thesis can be drawn from the following observations.

Fig. 13.6 Employment in Hong Kong by economic sector, selected years (%) (Source: Hong Kong Government, Annual Report, 1977, 1982, 1987, and 1990)

First, Hong Kong's position as a financial centre, shopping paradise, and entrepôt for Pacific Asia leads to the predominance of its tertiary sector in the employment structure. The decreasing importance of its industrial employment demonstrates that it has now reached the stage of late-industrial metropolis (fig. 13.6), and that it is moving towards the stage of international metropolis (Taylor and Kwok, 1989).

Secondly, apart from Guangzhou, Shenzhen, Zhuhai, and Huizhou, Zhujiang Delta cities are basically labour- and land-intensive production units. Their economic structure is dominated by manufacturing, while their tertiary sector is relatively small (table 13.2). One can thus classify them as industrial cities on the basis of their economic structure. Interaction with the outside world is limited. However, their industrial structure and opportunities are changing as they establish more links with the world economy (table 13.3). It is clear that some of these changes are externally induced because the products of China's light industries are more competitive in overseas market than are those of heavy industries, and that these cities are undergoing the process of adaptation to change.

Thirdly, endogenous conditions, such as preferential treatment and partial closure to the free movement of people and commodity imports, favour some cities more than others. The spectacular rise of Shenzhen and to a lesser extent of Zhuhai as trading centres confirms the thesis that the development of the urban system and its employment restructuring can be somewhat modified by endogenous conditions. However, Guangzhou remains central in the Zhujiang urban system.

Table 13.2 Gross domestic product and value of services of the Zhujiang Delta cities, 1990 (US$m; US$ = 5.199 RMB)

Sources: Hong Kong - Hong Kong Government, Hong Kong 1992, p. 365; Macau - Macau Census and Statistics Department, Macau in Figures, 1990, 1991; PRC cities - Statistical Yearbook of Guangdong, 1991, p. 78.

a. 1989.

Table 13.3 The gross value of industry in selected PRC Zhujiang Delta cities, 1985, 1987, and 1990 (million yuan RMB at constant 1980 prices)

Sources: Statistical Yearbook of Guangdong, 1986,1988,1991.

Table 13.4 The value of the imports and exports of the cities of the Zhujiang Delta, according to Customs and Excise figures, 1990 (US$'000)

Sources: PRC cities - Statistical Yearbook of Guangdong, 1991, p. 86; Hong Kong - Hong Kong Government, Hong Kong 1991; Macau - Macau Census and Statistics Department, Macau in Figures, 1990.

a. 1989.

Thesis two

Key cities are used by international capital as basing points in the spatial organization and articulation of production and markets.

The resulting linkages make it possible to arrange world cities into a complex spatial hierarchy.

The validity of this thesis as regards the Zhujiang Delta urban system can be substantiated by checking the volume of external trades. Table 13.4 summarizes the relative position of the various cities in the international trading hierarchy. It would appear that Huizhou, Dongguan, Zhongshan, Jiangmen, and Zhaoqing are at the very bottom of the hierarchy, because their exports and imports have to be reported via other customs offices. Qingyuan's volume of trade is negligible. Foshan, Zhuhai, and Macau come next in rank, followed by Shenzhen and Guangzhou. Hong Kong stands in a class of its own, because its volume of trade dwarfs not only that of the other Zhujiang Delta cities but that of any other Chinese city, including Shanghai. The total throughputs of these cities' related seaports point to a similar structure of spatial organization (table 13.5). Total tonnage figures are less useful than the number of containers handled (measured in twenty-foot-equivalent units - TEU), because a large proportion of the cargo handled in Guangzhou is made up of low-value bulk cargo.

Table 13.5 The relative size of seaports related to the cities concerned, 1990

Sources: PRC Zhujiang port figures - Statistical Yearbook of Guangdong, 1991, pp. 182 and 184, Shenzhen Ports, Jan. 1991, pp. 21-22; Hong Kong - Hong Kong Government, Hong Kong 1991, pp. 249 and 447.

a. By oceangoing vessels and river vessels.

More telling as regards sophisticated spatial organization and the articulation between production and markets are the transshipment practices of general cargo and containers. It is, however, unfortunate that no complete sets of data have ever been compiled for this purpose. Sung (1991) indicated that about 31 per cent of Hong Kong's exports to China are made up of transshipments, but only 20.8 per cent of Hong Kong's imports from China are for transshipping to overseas destinations, and in total this accounts for 30 per cent of Hong Kong's re-export trade. Being geographically proximate, one can speculate that the Zhujiang Delta contributes significantly to this trade. The flows of containers could also help illustrate the pattern. In 1990, a total of 805,000 TEUs passed through Shenzhen-Hong Kong checkpoints by road haulage, in addition to 281,000 TEUs ferried to Hong Kong by riverine vessels and lighters from ports all over the Zhujiang Delta (Chu, 1991). Compared with Hong Kong's annual throughput of containers of 5 million TEUs in 1990, this is by no means insignificant. The pivot-feeder relation between Hong Kong and the Zhujiang Delta is evident.

Table 13.6 The importance of Hong Kong and Macau in foreign-related corporate activities in the PRC Zhujiang Delta cities, 1991

Source: Fieldwork, 1991.

a. Figures do not include foreign banks and their branch offices.

Thesis three

Global control functions can best be measured by the number of representative offices of transnational corporations (table 13.6).

These offices are the driving forces of world city growth and of high levels of business activities such as advertising, accounting, insurance, and legal services. In one sense, these offices represent the ideological penetration and control by the headquarters of transnationals at the very core of world cities. However, the whole urban system under consideration ranks very low in the world city hierarchy. Hong Kong, the key city in the system, ranks as a secondary centre in the semi-peripheral countries. It is part of the Tokyo-Singapore axis, with Singapore playing a subsidiary role as a regional metropolis and as a primary centre. It can also be inferred that the Zhujiang cities other than Hong Kong are located at the extreme periphery of the world city system.

Thesis four

World cities are theatres of concentration and accumulation of international capital.

This thesis can be illustrated by the foreign investment pattern in the Zhujiang Delta cities (table 13.7). However, caution must be exercised in reading this table; the definition of "foreign" is problematic because over 60 per cent of "foreign investment" in the PRC Zhujiang Delta is contributed by Hong Kong. After 1997, Hong Kong will no longer be foreign to China, and its investment will become domestic investment of some kind. Taiwanese capital, too, is of growing importance. Should it be considered foreign? One further complication is that foreign investors in the PRC Zhujiang cities include the offshore state companies of China. However, this situation cannot be improved unless a different system of statistics collection becomes available.

Table 13.7 Actualized foreign investment in the PRC Zhujiang Delta cities, 1990 (US$'000)

Source: Statistical Yearbook of Guangdong, 1991, pp. 86-89.

Aside from the inadequacy of statistics, an additional point that deserves mention is that Zhujiang Delta cities have become active areas of participation by overseas Chinese family capital, which may originate from Hong Kong, Taiwan, or South-East Asian countries such as Malaysia, Indonesia, Thailand, and the Philippines. The realm of overseas Chinese capital, like that of transnationals, is more functional than territorial. One of its features is kinship ties with southern Chinese counties and cities; the direction of capital movement is thus partly conditioned by social affinity. Overseas Chinese capital, often regarded as an intrusion into territorial sovereignties in South-East Asian countries, keeps looking for suitable theatres for growth and accumulation. The Zhujiang Delta urban system is one such preferred area for investment.

Thesis five

World cities are points of destination for both domestic and inter national migrants.

Undoubtedly, the Zhujiang Delta urban system is very attractive to potential migrants in the local region and even in distant regions and countries. For this reason, Hong Kong is now very stringent about accepting low-skilled migrants from China, South Asia, and South-East Asia. Hong Kong is, however, much less stringent towards migrants from the developed area with particular skills or training lacking in the territory. On the one hand, there is a sizeable expatriate community in Hong Kong whose presence is indicated by exclusive clubs, chambers of commerce, international schools, etc. On the other hand, temporary residents providing the necessary labour are getting more numerous. They are mainly from the capitalist countries, and, of late, China has become a new source. Every year there is also a constant flow of migrants from Hong Kong to Canada, Australia, the United States, and even Singapore. Another more cosmopolitan city in the urban system is Macau, owing to its colonial heritage.

Apart from Hong Kong and Macau, foreign residents recorded in the Zhujiang Delta cities are mostly Hong Kong supervisors of industrial or commercial operations. There are few facilities to support a Western style of living in the Zhujiang cities other than Hong Kong and Macau. Unattractive though they might be to expatriates, they are magnets for domestic Chinese migrants. This is evidenced by the statistics on temporary residents in Shenzhen, Guangzhou, and other Zhujiang Delta cities (table 13.8) and by occasional press reports of waves of "blind migration" of unemployed Chinese from northern and central Chinese provinces heading for Guangdong, with Zhujiang Delta cities as their major destinations.

Thesis six

World city formation brings spatial and class polarization.

Spatially, income differences between the semi-peripheral key cities, i.e. Hong Kong, and the peripheral cities are evident, but income differences among the PRC Zhujiang Delta cities are much smaller (table 13.9). Class polarization within cities is, however, notable. In Hong Kong and Macau, the middle-income sector is getting larger because of the development of the tertiary sector, and class conflicts are fully revealed in their attitudes towards the importation of labour from China, for example.

Table 13.8 The temporary population of various PRC Zhujiang Delta cities,

Source: Fieldwork, 1991.

Table 13.9 Average annual wages of workers in the PRC Zhujiang Delta cities, 1990 (RMB)

Source: Fieldwork, 1991.

Mass poverty does not exist in the urban system under study. In the PRC Zhujiang Delta cities, foreign joint ventures and private businesses have brought changes to their social structure (Sklair, 1991). Many state officials (formerly cadres) are involved in joint ventures and receive a high income through bonuses, while private entrepreneurs become rich through profits earned in their undertakings. They create the high-income groups. Skilled and semi-skilled workers hired by foreign-related enterprises also receive higher incomes than their counterparts in the state- or collective-owned enterprises, and could be regarded as a middle-income group. Retirees are poor in the sense that their pension hinges on the standard wage scale without adjustments for rising living costs. Those hired under temporary contracts in sweatshops and factories are the poorest. Many if not most of them are hired from counties outside the Zhujiang Delta and Guangdong. They have the poorest working and living conditions and few fringe benefits. They represent the lowest class in the new urban social structure.

Thesis seven

World city growth generates social costs at rates that tend to exceed the fiscal capacity of the state.

To a certain extent, Friedmann's last thesis about world cities is not applicable to Hong Kong and the cities of the PRC Zhujiang Delta as one has to concede that the Zhujiang Delta cities still have the fiscal capacity to cope with their problems if the minimum is defined as acceptable. Massive needs for social reproduction, including housing, education, health, transportation, and welfare, are being or are to be met. There are no homeless people forced to sleep in the streets. Heavily subsidized housing programmes have been undertaken, with prosperous private real estate markets for higher-quality flats. Primary education is readily available for urban children, and secondary education is available to over half of children. Many new universities have been set up. Health care is available for the poorest, and welfare schemes of one form or another are provided. There are few beggars, and most of them are not locals. Urban transportation is probably the least satisfactory among all the items listed by Friedmann. However, the demand for urban public transport is partly inflated by low fares (in Hong Kong, Macau, and Guangzhou alike). The number of vehicles could be reduced by raising licence fees but the shortage of road capacity could be ameliorated only by massive investment in urban transport infrastructural projects. All the cities under study have evidenced great enthusiasm over the past decade in improving their road networks.

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