A tale of two regions in China: Rapid economic development and slow industrial upgrading in the Pearl River and the Yangtze River Deltas

Abstract

The study of regions has been undergoing an intellectual 'renaissance', resulting in a growing literature on the renewed importance and dynamics of varied forms of regions and regionalism (see Amin, 1999; Lovering, 1999; MacLeod, 2001). However, insufficient research has been devoted to the 'crucial middle' role of regions in bridging and integrating global, national, and local economies. This role also turns regions into highly contested terrains for the diverse tensions and outcomes of economic integration, or lack of it, to play out. These include simultaneous tendencies in competitive and cooperative policies and practices of subnational and local governments versus those of global and local firms, as well as shifting opportunities and constraints on economic development and industrial upgrading. In this article, I advance a thesis that new regional dynamics are capable of mediating or restructuring global-local economic relations in varied ways to either facilitate or hinder the course of local economic growth and industrial upgrading. This thesis is elaborated and validated through a comparative analysis of the Pearl River Delta (PRD) and the Yangtze River Delta (YRD) in China - two of the most dynamic manufacturing regions in the world. This analysis focuses on how the organizational and spatial formations of regionalized global-local production networks, the regional urban hierarchy, fierce inter-local competition, and decentralized governance have led to rapid economic development in two historically and geographically well-endowed regions but may impede industrial upgrading that is crucial to sustaining their economic development. The article concludes by offering improved regional governance approaches as collective solutions to what appears to be a spatially fragmented microeconomic challenge of upgrading to sustainable economic development. © 2007 SAGE Publications.