多樣而分殊化全球城市之分析：以上海轉型為例 - 政大學術集成

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(1)國立政治大學亞太研究英語碩士學位學程 International Master’s Program in Asia-Pacific Studies College of Social Sciences National Chengchi University 碩士論文 Master’s Thesis. 政治大. 立. ‧ 國. 學. ‧. 多樣而分殊化全球城市之分析：以上海轉型為例 Analyzing a Diverse and Specialized Global City: The case of the Transformation of Shanghai. n. er. io. sit. y. Nat. al. C. i n U. v. heng Student: Robert c h i Koszta. Advisor: Leng Tse-kang. 中華民國 106 年 1 月. 01. 2017..

(2) 多樣而分殊化全球城市之分析：以上海轉型為例 Analyzing a Diverse and Specialized Global City: The case of the Transformation of Shanghai 研究生: 羅高特. Student: Robert Koszta. 指導教授: 冷則剛. Advisor: Leng Tse-kang. 國立政治大學. 政治亞太研究英語碩士學位學程. 大. 立. ‧. ‧ 國. 學. 碩士論文. y. sit. Nat. A Thesis. er. io. Submitted to International Master’s Program in Asia-Pacific Studies a. n. iv l C n U h eChengchi National n g c h i University. In partial fulfullment of the Requirement For the degree of Master in China Studies. 中華民國 106 年 1 月 01. 2017..

(3) Abstract The examination of urbanization processes in China with the combination of global and world city research are expected to provide new insights to this neglected area. Global city idea had often emerged in contemporary city development plans, mainly indicating rapid modernization efforts via building a so-called global city. The wide-scale embeddedness of this idea suggests that it became the synonym of international competitiveness and prosperity. The best example of that is China with its massive network of cities. Until recently public datas were less accessible regarding the major Chinese cities, sith the reasons behind their growth and properity are still widely unexplored. The goal of this thesis would be to collect data and examine the most relevant segments of a specific Chinese city, namely Shanghai in the context of global city formation and competition. In order to justify or deny the overall achievements of industrial and spatial restructuring, the thesis will rely on the latest datas, including the related theoretical aspects and two short case studies. There are multiple layers of conducting city-related research from which, there are statistically less traceable ones. Thus, the intention of the thesis is to highlight two, internationally relevant and comparable areas, such as the financial industry and the newly upgraded free trade zone. According to the author’s intentions the strengths and the weaknesses of Shanghai as a global city will be empirically tested, while at the same time there will a l on the introduction of iworldbe a strong emphasis and global cities’ v n theoretical background C as h well. Within that the Chinese global city idea U i e h n g c counterpart and the contraints of will be distinguished from its Western current political system will be pointed out in terms of operation or management. The main subject of inquiry would be to learn more about the extent of global city transformation in the city, compared to the general assumptions on an actual global city. Since this thesis has its own limitations both in size and data processing capability, thus it mainly analyzed and used second-hand sources to derive its conclusions. The main purpose of this work would be to contest the aspects of Shanghai’s global citiness.. 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. Key words: global city, world city, urban geography, Shanghai, financial market, free-trade zone, urban economy 1.

(4) TABLE OF CONTENTS Abstract .................................................................................................................................. 1 TABLE OF CONTENTS ....................................................................................................... 2 1. Introduction ...................................................................................................................... 3 1.1. Understanding the terms: global and world cities .................................................... 4 1.2. Research difficulties ............................................................................................... 13 2. Global city formation in East-Asia ................................................................................ 15 2.1. What happened in Seoul and what can be learnt from its success? ........................ 16 2.2. Application of global city theory in East-Asian context ........................................ 18 2.3. Examining the Chinese context .............................................................................. 21 2.3.1. How and why do some Chinese global cities stand out among regional. 政治大. centres? ............................................................................................................ 21 2.3.2. Outlook on the social aspects of Chinese transition ........................................ 26. 立. 3. Shanghai’s global citiness .............................................................................................. 27. ‧ 國. 學. 3.1. Fundaments and economic structure of the re-designed Shanghai ......................... 28 3.2. Comparative advantages of the city ........................................................................ 29 3.2.1. Implications of city development plans ........................................................... 31. ‧. 3.2.2. A main financial centre of an opening economy ............................................. 33 3.3. Global citiness and the Shanghai Stock Exchange ................................................. 34. y. Nat. sit. 3.3.1. Trading difficulties and challenges ahead ....................................................... 39. er. io. 3.3.2. Controversy of the policies: internationalization of renminbi ......................... 42 3.3.3. Adaptation challenges in the post-crisis era .................................................... 45. n. al. Ch. i n U. v. 3.3.4. Summary.......................................................................................................... 45. engchi. 4. Globalization and economic freedom within Shanghai’s Pilot Free Trade Zone .......... 47 4.1.1. Conflicts of interests between Shanghai and the state..................................... 51 4.1.2. Outlook and Summary ..................................................................................... 52 4.2. Limitations of SPFTZ and its research ................................................................... 54 4.3. Other remarks on Shanghai’s transition to a global city......................................... 55 4.3.1. Changing mindset with educational and technological catch-up .................... 55 4.3.2. Entrepreneurship beyond SPFTZ .................................................................... 57 5. Conclusions .................................................................................................................... 60. Appendix .............................................................................................................................. 63 Abbreviations ................................................................................................................. 63 List of figures and tables ................................................................................................ 64 Bibliography ........................................................................................................................ 65. 2.

(5) Analyzing a Diverse and Specialized Global City: The case of the Transformation of Shanghai. Introduction Cities in Asia-Pacific region tend to operate in a more dynamic environment. Unlike most of their European or North-American counterparts, major coastal cities almost exclusively achieved their globally renowned status from the last quarter of 20th. 治政大 sign of development was the footsteps of the former two. Initially the most notable 立 rapid transformation of urban landscapes in the newly modernizing cities. These. century. After the Japanese and Korean transition, China has begun to follow the. ‧ 國. 學. metropolises were the first to build down their traditional economic structures. As a result of spatial restructuring, the core of local and provincial centers began to. ‧. resemble to those in developed countries. (The spillover of the same phenomenon had similar effect on several landlocked provincial ’capitals’ as well.). y. Nat. sit. In order to understand the unexpectedly quick and complex changes happened. al. er. io. throughout most of the major Chinese cities, it is suggested to look behind their. n. evolution. Many of these cities came down on different paths, yet were able to. Ch. i n U. v. achieve a successful transformation. The existing East-Asian developmental model. engchi. does not necessarily provide an ample coverage on specific cases induced by urbanization related changes. Moreover it doesn’t provide enough input on how did these cities become the engines of their economies. World city or global city research helps to clarify the root of these changes and reflects on why some specific coastal centres performed so well in the concentration of knowledge, innovation and (hightech) production of goods and services. Global city theory both measures the economic and social changes that could lead to a transition within a real/hypothetical network of cities.. “The world city network is an interlocking network but, [...] it is not an exact analog of other such networks. In particular this relates to the cities being nodes, but not. 3.

(6) being primary actors. This specific feature of the world city network has important implications for both theory and practice [...]. (Taylor, 2001). Nowadays, the two most advanced urban economies in China are Beijing and Shanghai. Beijing in many ways is different from the rest of its domestic rivals, mainly due to the role it fulfills as the centre of governance and decision-making. Shanghai – unlike the capital – was in a disadvantaged position with its lack of influence on central policies. There was only a short period around the millennia, when Shanghai could enjoy preferential treatment – almost comparable to Beijing’s – however such a short period alone wouldn’t explain its globally growing recognition as a global city.. 治政大 as an East-Asian nodal point. competitive and diverse economy) and the role it fulfils 立 Does Shanghai trully deserve her global city title? Does the city have solid enough This research is willing to examine Shanghai as a global city (= a city with advanced,. ‧ 國. 學. fundaments to maintain its economic leading role under the increasing domestic competition? Before proceeding to the actual analysis, it is necessary to place. ‧. Shanghai into the proper theoretical or political-economic background. Due to the complexity of global and world city ideas, this reseach will select only. y. Nat. sit. certain attributes which are expected to illustrate either the advantages or the. er. io. disadvantages the city bears.. n. Understanding theaterms: global and world cities iv l. Ch. n U engchi. World city and global city are two different terms that often appear in the discussions to describe cities with special characteristics and influence beyond their host states’ national borders. Currently for the public they quasi became synonyms, despite that the two ideas were originally conceptualized along different perceptions of urbanization. Global city can be considered the newer one, (Sassen, The Global City: New York, London, Tokyo, 1991) while ’world city’ can be dated back to 1915, although the term used nowadays should rather be linked to Friedmann’s work: The World City Hypothesis (Friedmann, 1986). The two approaches applied by the authors indeed show some overlap, but these needed to be clarified in their details. 1 1. Interestingly Friedmann also mentioned the term “global city” on the first page of his work. It can be found right after the quotation below as he continued his explanation: “It helps us to understand what happens in the major global cities of the world economy and what much political conflict in these cities is about.”. 4.

(7) Firstly, it is not negligible that the two prominent authors developed their ideas simultaneously and were aware of each others scientific results. Their intention was different though: Friedmann wanted to prepare a framework for the growing number of urbanization related works from the early 1980s, which often aimed to examine the direct ties of cities to the world economy. On the other hand Sassen could already reflect on the establishments of the previous decade and had narrowed down her research to ’archeotipical’ global cities on three continents, using them as an example to demonstrate similarities and differences at the same time. World city hypothesis analyzed and ranked cities in a broader context, involving historical development and strategic importance. So to speak, world city formation had been presented as a longterm evolutionary process shaped by both domestic and world events. However, the. 治政大 known seven points of Friedmann (Table 0). 立. idea itself is seemingly more complex than that – as it was summarized in the well-. ‧ 國. 學. Table 0: Friedmann’s common origin of struggles within the global system of market relation 2. ‧. The seven points of Friedmann’s world city theory Friedmann unlike Sassen, considered historical development. The other two notable points are: national policies and social conditions.. sit. n. er. io. al. y. Nat. 1. The form and extent of a city’s integration with the world economy, and the functions assigned to the city in the new spatial division of labour, will be decisive for any structural changes occurring within it. 2. Key cities throughout the world are used by global 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.. Ch. i n U. v. World cities are mostly located in “core” countries. This outdated categorization reflects on the bipolar world and shows major differences compared to the contemporary “network” of world cities. Based on the description world cities’ network is fragmented and weak in Europe. Hosting high value-added services; concentrating business-support and information (media/news). High number of blue collars are working in service sector as well. The case of Tokyo, and less developed world city hosts. (Seoul has become similar to Tokyo from early 1990s onward). engchi. 3. The global control functions of world cities are directly reflected in the structure and dynamics of their production sectors and employment. 4. World cities are major sites for the concentration and accumulation of international capital. [“Although this statement would seem to be axiomatic, there are significant exceptions.” (Friedmann, 1986)] 5. World cities are points of destination for Domestic rural and/or international migrants large numbers of both domestic and/or are often strictly, but mostly inefficiently 2. The description in Friedmann’s original proposal to promote (world) city and city network research.. 5.

(8) international migrants. 6. World city formation brings into focus the major contradictions of industrial capitalism - among them spatial and class polarization. 7. World city growth generates social costs at rates that tend to exceed the fiscal capacity of the state.. controlled. One of the causes of early social polarization, however physically demanding jobs are transferring to low-paid service sector ones, including retail. In later stage social polarization is even capable of affecting local middle-class. Furthermore deteorating amenities provided by state (transportation, education, etc…).. Thus before resuming the comparison, I would like to quote the original definition given by Friedmann as follows:. “The world city hypothesis is about the spatial organization of the new international. 政治大. division of labour. As such, it concerns the contradictory relations between production in the era of global management and the political determination of. 立. territorial interests.” (Friedmann, 1986). ‧ 國. 學. Both of the authors originally imagined world or global city operation in a world capitalist system, although Friedmann’s views were clearly influenced by either. ‧. structuralism or neo-marxism (Sassen several years later avoided the same ’mistakes’,. sit. y. Nat. but was rightfully criticized about other aspects of her research). 3 They both realized that some cities had been undergoing a rapid quality change, which – in Friedmann’s. io. n. al. er. interpretation was externally induced and precipitated in functional reorganization of. i n U. v. metropolitan level including the labour(-market). In his attempt of world city. Ch. engchi. categorization the contemporary ideas of Wallerstein had considerable impact on him (coreperiphery, etc...). Perhaps as a result in “The World City Hypothesis” the role of labour and the (international) division of labour had been somewhat overemphasized; also the social aspects and division of classes diminished the importance of other social changes related to world city formation.. “...world cities are characterized by a dichotomized labour force: on the one hand, a high percentage of professionals specialized in control functions and, on the other, a vast army of low-skilled workers engaged in manufacturing, personal services and the. 3. Sassen tried to describe various (economic-related) phenomenons without having indepth understanding on the matter.. 6.

(9) hotel, tourist and entertainment industries that cater to the privileged classes for whose sake the world city primarily exists.” (Friedmann, 1986). Despite its few shortcomings, the essay successfully indicated other main focal points as it was enumerated in the seven points mentioned above. Thirty years later some may have lost its relevance, but I would like to briefly introduce some of the ideas appeared. According to Friedmann, labour and global capital are in interaction throughout the demand of spatial (re-)organization; moreover global capital shapes markets and production. In order to achieve or maintain an outstanding position (and be directly linked to world economy) cities usually have enjoyed support from the country’s. 治政大 On the other hand world organization and the support of dynamic production). 立 cities ’should’ fulfil extra roles beyond competitive production or high-level of. government via proper development policies (immigration rules, regulated spatial. ‧ 國. 學. openness.. At this point, it is clear that Sassen used multiple elements of World City Hypothesis. ‧. (or other previously published works of Friedmann) when she built up her own work. The difference is in the scale: Friedmann didn’t limit his examples to the most. y. Nat. sit. obvious cases or types and tried to create a second and a third tier for world cities. al. er. io. based on the specific contributions they make in finance; with transnational. n. institutions or their headquarters; as manufacturing centres; or business services along. Ch. with other specific service industries.. engchi. i n U. v. Global capital allocation also appears in both of the works and enjoys a distinguished attention as it is identified as one of the drivers of further development. What makes them ’unique’ is that these cities are capable of significant capital accumulation by themselves as well. By having such an advantage, world cities make impact on broader regions – despite the fact that they often suffer from financial problems themselves. Institutionally both global- and [first tier] world cities 4 must serve as corporate headquarters, financial service centres and hubs of (air-)transportation. All these should exist within a prosperous environment with sufficient amount of skilled- and 4. It is important to note that only first tier world cities can be seen as global cities. Only these cities can fulfil multiple criterias of global citiness at once, while lower tier ones are usually highly specific and may have significantly smaller metropolitan area as well.. 7.

(10) less skilled labour available. Last, but not least most of the global/world cities are considered to be centres of ’creative industries’ a new term used only in more recent literature (earlier these were divided into news/media, entertainment and cultural spheres). To be qualified as a global/world city has seemingly no strict rules and only some of the criterias are needed to be met. 5 On the other hand to maintain successfulness it is necessary to cooperate on national level, especially with the policy-makers. Consequences of development such as urban transformation almost always appear as a challenge for global cities. As it was noted by several authors – quickly deteriorating non-advanced industries may almost certainly lead to social polarization. The phenomenon requires help from either the state or the local decision-makers,. 治政大Global City: New York, London, remain competitive (Friedmann, 1986) (Sassen, The 立 Tokyo, 1991) (Sassen, The global city: strategic site/new frontier, 2001) (Vogel, et al.,. although for the sake of world/global city is almost certainly unavoidable in order to. ‧ 國. 學. 2010) (Timberlake, Wei, Ma, & Hao, 2014).. Immigration or migration is also a specific consequence of global city formation,. ‧. however as it was pointed out by Friedmann – can be distinguished into two categories: interregional or international. Furthermore the stage of host state’s. y. Nat. sit. development clearly marks the differences between core and periphery (developed. al. er. io. and developing). Understanding this relation is crucial and since the outbreak of. n. Syrian civil war, it also enjoys special attention from scholarship as various. Ch. i n U. v. perceptions of migration among the nation states of EU led to a consequent turmoil. engchi. and debate about the integration of migrants with different cultural background. However in major global cities (including Paris and London) migration is rather considered as something positive, regardless of cultural background and being one of the drivers of development. This tendency is very similar to an initial developmental stage, when interregional migration generates demand for urban “remodelling”. Specifications exist though: migration policies of Singapore or Japan for instance are still relatively strict and change cannot be expected anytime soon. On the other hand for those workers with specific knowledge, relocation in general does not cause any problems. Along these double standards states are trying to optimize the benefits of migration, while also ’protecting’ their national borders. 5. Sometimes top global cities are referred to as ’hyper’ global cities and concentrates all the functions at the same time.. 8.

(11) On long term it can be perceived that global cities or global city aspirants once may have tried to control external (interregional) population inflow, but as Friedmann pointed out it generally remained unsuccessful and for many of these cities it was inevitable to grow very large. 6 Although it is not directly linked to migration, but social changes are also the part of global city formation. In contemporary literature this perceptible polarization is mostly described as gentrification, a simple, but illustrative term for noticeably expanding middle-class. There is of course more behind this phenomenon that requires explaination. Friedmann stated that a division exist among core, semiperiphery and periphery in regards to the income disparity (world city contra other regions), wherein low-income regions of core territories have a roughly 1:3 ratio. 治政 as 1:10 and in the poorest regions of the periphery大 were only marked as “steep”, but 立 possibly reaching as high as 1:50 (or even higher).. compared to high-income ones, while in semi-periphery these numbers can be as high. ‧ 國. 學. What is behind this phenomenon? As it was summarized in The world city hypothesis it is firstly caused by the “huge income gaps between transnational elites and low-. ‧. skilled workers”, secondly the interregional “migration from rural to metropolitan areas”, thirdly the “evolution of jobs” (Friedmann, 1986). The main problem with. y. Nat. sit. such a simple classification is related to its broadness. Unfortunately, the author didn’t. al. er. io. explain the exact meaning of “transnational elites” and their relation with global cities. n. remained somewhat unclear. Meanwhile an other important term had been mentioned,. Ch. i n U. v. the “evolution of jobs”, which requires further explanation whether it is the shift from. engchi. industrial to service sector, or it means more than just that? Will that entail modernization in any way? If it happened, where do/did these transformations lead exactly? As it seems a more general pattern can be set up in this case, where the first generation of (im)migrants are very likely to end up in certain industries – sometimes in the informal/grey/black industry. For them the working environment won’t be fortunate either way regardless where they had engaged into work. Later, however these tendencies may be affected by the raising developmental level. The overall situation in more developed states are somewhat better, either for those who arrived to 6. Friendmann mentioned eight cities with population between 10-20 million (megacities), which within the last thirty years has already grown to at least thirty and some of them are potential global city candidates, although as the author pointed out, mere size is not a decisive factor of global/world citiness. (Friedmann, 1986). 9.

(12) the city as a result of transnational migration or relocated via immigration. In the case of developed states, the inflow of external masses may cause noticeable changes in the cost of labour, especially in three sectors: personal and consumer services (catering, retail, entertainment), low-wage manufacturing, and surprisingly in finance and business (Friedmann, 1986). But what does that mean? In a more mature state of global city status, (work)shops or other manufacturing capacities will eventually decline sharply – if not disappear – (at least from the core parts of the city), however the cheap labour will be continually employed in the nowfancy neighbourhood’s boutiques or similar kind of new stores. This cheap labour is also suitable for filling up jobs in higher value-added sectors, such as the administration section of finance (clerks) to help to reduce the overall costs.. 政治大. In the seventh point, Friedmann reflected on social injustice as:. 立. “World city growth generates social costs at rates that tend to exceed the fiscal. ‧ 國. 學. capacity of the state.” (Friedmann, 1986).. ‧. Speedy growth of population may lead to certain kind of problems beyond the wellknown housing problem. In this case perhaps the two most relevant one are. y. Nat. sit. transportation and education, which can visibly affect the quality of life for. al. er. io. both ’locals’ and ’new-comers’. Beyond that, Friedmann also raises attention about. n. how political elite often ignore the need of the disadvantaged segment(s) of society,. Ch. i n U. v. and how this problem may cause struggle among people with limited rights and/or. engchi. immigrants and corporate or political interest.. Following the introduction of the main ideas in Friedmann’s work, it is possible to have a better understanding about the evolution of global city research, and how the initial concerns of world/global city debates looked like in this early stage. By introducing a broad spectrum of possible analyses on the field, some of these points could fuel debates (or affect researches) until today. However, some critics are necessary to be made. Starting with Sassen’s work The Global City: New York, London, Tokyo, which has emerged from mainly sociological perspectives of the 1980s. Globalization related discussions had deep impact on global city research as well. Geographical location in the second half of the 20th century started to break down. 10.

(13) being an obstacle of transnational trade and global integration of cities has become more apparent. As Sassen claims:. “... global integration has created a new strategic role for major cities.” (Sassen, The Global City: New York, London, Tokyo, 1991).. These cities also started to fulfil four specific roles such as: highly concentrated command points in the organization of the world economy, key locations for finance and specialized service firms, producers of innovation and last, but not least market for the self-produced innovation products.. 政治大. Related to that, Sassen comes to the following conclusion:. 立. “Cities concentrate control over vast resources, while finance and specialized service. ‧ 國. 學. industries have restructured the urban social and economic order.” (Sassen, The Global City: New York, London, Tokyo, 1991).. ‧. This phenomenon and type of city had been named global city. The author however. y. Nat. sit. acknowledges that tendencies and dynamics do vary. Globalization does bring. al. er. io. forward the agglomeration of central functions, but capital cities usually cannot easily. n. been overthrown in that process (that is something that Sassen didn’t highlight in her. Ch. i n U. v. work). Moreover Sassen aimed to examine the fairly abstract indicator of. engchi. “production”, which enables global cities to reproduce their so-called global control. In her work Sassen also claimed that global cities constitute a system beyond being mere competitors of one another. However, this is a statement that is almost impossible to justify or traverse, while it poses further questions about the actual definition of global city itself. Although it is not the topic of this thesis, but controversies do appear in other cases of her theory regarding the social aspects of global city formation. Sassen’s attempt to forecast the evolution of social aspects of labour in a rapidly changing environment (e.g.: dissolution of Eastern Block, Asian financial crisis, rise of China and the ’recent’ crisis) couldn’t possibly be accurate, hence the current framework – wherein the ’global city idea’ is being explained – will purposedly neglect the unnecessary. 11.

(14) social factors, instead it chooses to focus on matters of globalization or local development via economically visible results. The order in the quotation above is not quite right either. In early stage of global city formation, services required for high(er) investment returns are the ones starting to develop first, then it is followed by finance-related industries. [My arguement is valid only, if the city didn’t fulfil a financial role at an earlier stage or the growth of the sector was not centrally supported]. Regardless of global city status, the specification of services create demand for highlevel coordination and integration; skills that can primarily be found in ’specific areas’ such as global cities, where the highest number of skilled labour-force is available. Sassen claims that the service sector (or advanced services) of global cities can be. 治政 should be placed in the centre of explanation, sith大 it provides more additional value 立 for the host city or state. divided into two categories: producer services and others. The former service type. ‧ 國. 學. “Advanced services are mostly producer services; unlike other type of services, they. ‧. are not dependant on proximity to the consumers served. Rather, such specialized firms benefit from and need to locate close to other firms who produce key inputs or. y. Nat. sit. whose proximity makes possible joint production of certain service offerings.”. n. al. er. io. (Sassen, The Global City: New York, London, Tokyo, 1991). The. author. derived. Ch. the. conclusion. that. engchi. i n U. v. “major. corporate. transactions”. simultaneously rely on these advanced services (legal, accounting, financial, public relation, IT, management consulting, etc.). As it appears twenty-five years later, Sassen described a transitional state of global cities (or capitalist economies) wherein, according to her observation the knowledge required for growth-support was in the hand of multiple smaller firms. This ’interdependent’ relationship is not an impossible scenario, albeit such a strong dependancy is rather fishy (guarantees of secrecy, lack of professional management at MNCs[?]). Therefore it is hard to imagine that a ’model’ like that ever had a determining role in the afformentioned transitional period. Less intertwined connections are justifiable though, firms with special knowledge has been present around business sector for a long time. The phenomenon that Sassen recognized does exist, but it should rather be linked to newly forming CBDs or its in connection with developing states. 12.

(15) Notwithstanding Sassen’s leading arguement about global cities says that:. “... spatial dispersion of economic activities and the reorganization of financial industry are two processes that have contributed to new forms of centralization insofar as they have occurred under conditions of continued concentration in ownership or control. The spatial dispersion of economic activity has brought about an expansion in central functions and in the growing stratum of specialized firms servicing such functions.” (Sassen, The Global City: New York, London, Tokyo, 1991).. Some of these ideas are still worthy for a second thought: forming base of financial. 治政大 caused structural changes and justification of correspondence between development 立 the boom in financial industry. However, the second part will remain object of critics centres in newly emerging countries may support and serve as references in the. ‧ 國. 學. unless it is throughly indicated.. Research difficulties. ‧. There are several key issues about global cities to be mentioned. Firstly, they are hard. sit. y. Nat. to distinguish. As it was mentioned earlier in the introduction, there is no clear boundary between a global city and a regionally important metropolis (global versus. io. n. al. er. glocal paradigm). Secondly, the criterias to be applied during their selection are also. i n U. v. difficult to set. What does it take to be a ’global’ city exactly? Unlike in the case of. Ch. engchi. world cities, there isn’t enough hint to tell so. 7 Thirdly, how to establish a general measurement system to compare or extract information from them? There are many individual approaches, yet no real comprehension except for GCA (Global Cities Analysis) or the less-influential GaWC. Most of the remaining research related problems were summarized as follows:. 7. It was the best explained in Global City Challenges: “[...] in emerging markets’ with a what might appear at first sight as‘natural’ relocation of command-and-control functions to these places. Capital, culture, political connections and even literary accounts do not simply travel undisturbed across urban ‘hubs’. Those very hubs are in fact loci of planning, financial practices or cultural hybridization that transform and shape the ebbs and flows of globalization, and that can actively respond to the regional, international and global contexts around them.” (Acuto & Steele, 2013). 13.

(16) The Globalization and World Cities project and its interlocking model, 8 went to great length to devise complex depictions of the changing geography of city-to-city connectivity. Yet the wider public quickly got seduced by a search for rankings and hierarchies that represent only the surface of the iceberg of global city theory. This cookie-cutter application of globalist discourses and competitive views of the ‘global’ city as a ‘better’ or more ‘highly ranked’ city than many other ‘ordinary cities’. (Acuto & Steele, 2013). The ’founder’ Saskia Sassen tried to combine her sociological knowledge with economics in order to describe global citiness. Without having indepth understanding of the latter, her ideas were subject to immediate critics, regardless she was right or. 治政大these, the economic aspects have economic researches about global cities. For most of 立 become more decisive, causing a slight downgrade on socio-cultural findings. not. It perhaps contributed to the – seemingly present – split between social and. ‧ 國. 學. Observation of multiplying urban clusters across the globe is being considered as a more a economic-originated phenomenon.. ‧. Although there has been numerous authors who attempted to contribute the cause, in fact it cannot be categorized as a ’disciple’ whatsoever. It does have a paradigm,. y. Nat. sit. however it didn’t manage to set up its own methodology/approach, instead it. al. n. (Acuto and Steele named it cross-disciplinary).. Ch. engchi. er. io. remained a sub-category within urban studies or urban geography respectively.. i n U. v. “The contested identity of the ‘global city’and its conceptual (non-identical) twin, the ‘world city’, have thus manifested as both an idea and a material condition of local/global processes that stretch the interdisciplinary boundaries of the global city research agenda.” (Acuto & Steele, 2013). Such heterogeneity makes it almost impossible to syntetize it on common ground. Therefore global city research can be seen as a loose theoretical and practical approach (only), that tends to be more economic oriented in its nature. The notion itself had not been contested for a while, however it is subject to bias or one-sided 8. GaWC focuses its research on the external relations of world cities, unlike most of the mainstream world/global city literature, which became involved in the studying of internal structures of individual cities.. 14.

(17) views, even when its properly used [for instance the introduction of new categories in (Parilla & Trujillo, 2016)]. Among all aspects of global city research, the economicist approach was the least contested and the most resourceful, sith the analysis of Shanghai’s global city outlooks follows this path either. The intention of the thesis is to follow this line throughout a logically apt structure, wherein two selected segments of the economy will be examined after the general introduction of global city evolution in East-Asia and China. During the research the thesis will aim to find answer to the intriguing question: what makes a global city global? Moreover, if it can be stated, what are their roles exactly – aside from being command and control centres? Is it really possible for a city to dispone over “vast. 治政 In the next section I will move from theoretical to 大 a more practical approach and will 立 introduce a more mature (and recent) understanding of ’global city’ term before beginning to place Shanghai into this context.. ‧. Global city formation in East-Asia. 學. ‧ 國. amount resources” as Sassen claims?. y. Nat. Contemporary debates of the literature are originating from the abandoned holistic. io. sit. view on global cities, where the constant rise of exceptions defied either the. er. “Tokyo/Seoul-model” or the otherwise Western-dominated development scheme.. al. n. v i n Ch historical path of global city formation e n gincEast-Asia. h i U Essence of successfulness in the. Firstly in order to understand the different evolutions, it is necessary to look at the. region was mainly based on two policies: the developmentalism on national level and. the supportive international environment [through opened markets on the other side of the Pacific Ocean]. Changes in world economy made it necessary to re-examine the region and apply new approaches beside the liberal one (or review its assumptions on ’East-Asian model’) and learn more about the differences on national and metropolitan level (Hill & Kim, 2001). 9 As it was mentioned above, the East-Asian model is not a coherent one, the case of Seoul and Tokyo do differ. In Korea’s case the resemblance in pattern is in fact the final outcome of a diverse political-business 9. As the authors referred to that as follows: “Given the differences between Anglo-American liberalism and East Asian developmentalism - in history, ideology and political economy, and especially the relationship between industrial policy and the organization of finance, it seems reasonable to expect related contrasts in the role each sphere’s major cities play in the world economy.”. 15.

(18) relation, which had reflected on the colonial past and, – in the post-war period started off from a more liberal authoritarian system(sic!) that had been abrupted by a coup d’etat (led to a strict authoritarian and non-market-conform system for nearly two decades) – before showing signs of remission once again following the events of 1979, and eventually transforming into semi-liberal system. Regardless of the historical turmoils that affected South Korea’s rise, the role of state appears to be crucial, not just in resource allocation, but in protectionism and guidance for desired economic catch-up through supportive policies (Eckert, 1993) (Hill & Kim, 2001). 10 In order to achieve that, business and government relations remained intertwinned behind the scenes, but not entirely concealed. The case of Japan (and contemporary China) is fairly similar at this point – although China’s one party system nurtures a dual system,. 治政 national champions, just like several decades earlier大 in Japan or South Korea. 立 Following the quick historical wrap-up, it is also advised to look at the selected. with state owned and private sectors. Her private sector is dominated by some. ‧ 國. 學. highlights of world city attributes applied by Hill & Kim in their detailed analysis about Seoul. It may help us to distinguish raw economic power from quality of. ‧. service(s), or reflect on equally important aspects of world/global citiness.. y. Nat. sit. As it was stated by the authors: developmental states such as South Korea always had. al. er. io. to go through structural changes before their economies were acknowledged as. n. advanced (in this particular case valid from 1990s onwards). Seoul, the capital is the. Ch. best example of this gradual transition.. engchi. i n U. v. What happened in Seoul and what can be learnt from its success? South Korea’s capital, just like many cities in contemporary China, went through an urban boom beginning from the 1960s. Urbanization combined with the rapid population growth resulted in an Asian mega-city with more than 10 million inhabitants by the early 1990s. On the other hand, forces helped the country’s emergence were unique and reflected indigeneous characteristics; economic policies were combining socialist-like elements (five year plan under the military regime). 10. “The state used various incentives, including coercion, to tailor business interests to national goals” – besides, originating from the special circumstances: “Capital for business investment came from state-controlled domestic banks or from foreign lenders supplied with state guarantees. Korean businessmen could also count on state assistance when they got into financial trouble, considerably reducing their personal risk (Eckert 1993: 126).”. 16.

(19) along with strongly protectionist, but capitalist management of the scarce domestic capital – where success was awarded and failure to meet expectations was sanctioned. National needs had high priority and it was strenghtened by the regimes’ perception that South Korea had been competing in a ’hostile’ environment of other rival states. Despite these notions the economy could soar for decades and in general the capitalist way of doing business did prevail. It was clearly backed up by the state as well, via providing a proper legal background (protection of private ownership). However, certain drawbacks of the model remained long unchanged, such as the labour right issues or direct (sometimes indirect) supervision of the banking system. There were further anomalies in Korea regarding the necessary presence in Seoul for export oriented companies. Later it emerged to a problem of chaebol headquaters’. 治政大than 90% of the total population As a result – despite the high urbanization rate (more 立 lives in cities) – overall 95% of the important companies remains located in the overconcentration and the abundance of MNC branches in the capital.. ‧ 國. 學. capital.. It has been an unusual tendency, a South Korean specialty. Moreover it defied world. ‧. city theory at several points as well. Hill & Kim in their description said that Seoul initially was not home for significant “finance or producer service companies” – as. y. Nat. sit. world city theory suggests (Hill & Kim, 2001). Rather this financial command ability. al. er. io. of the city only started to develop relatively late – unlike in most cases of China,. n. where it is a centrally emphasized role, and not only the mere outcome of the development.. Ch. engchi. i n U. v. An other, but not exclusively Korean attribute is Seoul’s status as “national basing point for the global operation of domestic MNCs” (instead of being a ’true’ global city with borderless MNCs). During its earlier stage of development, diversification of industries with the help of the government greatly contributed to the country’s successfulness. Local entrepreneurs enjoyed a stable environment with accessible loans, that could further enhance their operation abroad. Following the city’s transformation to a ’developed’ location, the manufacturing and industrial output remained concentrated within the city limits or its agglomeration. Instead. of. relocation,. local. decision-makers. gradually. introduced. stricter. environmental measures and discouraged the usage of outdated technologies. This case is similar to that in contemporary Shanghai, where the large number of manufactury workers didn’t lose their job or intergrated into the service sector (yet) as 17.

(20) theory would suggest. On the other hand, proposed technological upgrades may not be happening fast enough and can be partially blamed for slower convergence. Despite its highlighted role within Chinese economy, innovation among Shanghainese SMEs is not as wide-spread as in the case of Seoul. Current datas show that Shanghai marks only 1651 scientific patents, while Seoul for instance has 4048 (OECD, 2016). There are no seperate datas on SMEs, however the difference in numbers seems reassuring. The overall scientific expeditures – based on the nominal GDP – shows similar pattern: China’s 2,09 percent [2014] stands against South Korea’s 3,74 percent [2010] (Shanghai Daily, 2015) (Yonhap News Agency, 2011). There is at least one more irregularity with Seoul’s global/world citiness, namely the unusual fact that income disparity permanently remained very low, compared to the. 政治大. rest of the country or as other international examples would suggest – even on the same developmental level.. 立. ‧ 國. 學. Application of global city theory in East-Asian context Introducing the case of Seoul was informative, but also contradicting: findings. ‧. suggest that global cities – even from a nearby region – may differ greatly. Assumptions cannot be derived without examining global cities on a case by case. sit. y. Nat. basis. East-Asian global/world cities only exist as a loose geographical (and an even more loose functional) network, wherein some developmental patterns were more. io. n. al. er. alike than in Western global cities. Therefore, in order to explain the emerging. i n U. v. differences, researches should always consider the domestic context first, (e.g.: who. Ch. engchi. has the power to allocate resources or capital; to what extent the rule of law may prevail; how did the city reply to globalization and growing competition on international level). Social transformation induced changes are also sensitive parts of global city debates and highly country-specific. In many ways the interaction of citizens with ’their’ global city is marginal; what really matters is how the ’elite’ can foreplan and achieve a greater vision that brings forward the development. In order to examine global cities and Chinese cities within this context, it is necessary to rely on various datas, databases, which can be either direct or indirect sources published by government institutions (statistics bureaus) or reflecting the finding [or opinions] of various independent research institutions and business organizations.. 18.

(21) Besides, an external consensus must exist that acknowledges the existence of a global city either in literature or in ’real life’. Cities by now are highly measurable, although still subjects of individual preferences. In Shanghai’s (or China’s) case size probably matters more, if one consider’s the capital accumulation ability or regional weight in a competition seeking milleu. Nonetheless mere size among global cities is not determining. There is an expected behaviour, that can actually confirm the existence of a global city. Besides the earlier mentioned advanced science, technology and social structure, a world city must have the willingness to compete, a strategy on how to compete; the capital to compete with and the sufficient amount of locally available and (inter)nationally competetive human resource. There can be further factors too, especially. 政治大. among ’specialized global cities’ or under the special circumstances of Chinese economy.. 立. Following the initial theory-making process of Friedmann, Sassen, Hall, 11 and others,. ‧ 國. 學. global city research evolved further as it was pointed out in “Global cities with Chinese characteristic” by (Timberlake, Wei, Ma, & Hao, 2014), who once again. ‧. summarized the current standing of global city research. Currently scholars both rely on earlier theories and their own empirical findings, including a bulk of various. y. Nat. al. er. io. applies.. sit. statistics that may lead to constant fragmentation of the topic and the methods it. n. Nevertheless there is a collective name of the literature which sometimes referred to. Ch. i n U. v. as “global cities’ analysis” (GCA) and it covers a broad area of all related researches.. engchi. It has some general findings – being highlighted by Timberlake – that may be helpful to visualize the context wherein these researches are being carried out lately. Firstly: “the world’s cities are, to varying degrees, integrated into the global city network”, although most of them had never become visible, because of their marginal presence. Secondly: “this global network of cities is hierarchical, with some cities serving more central roles”, however ranking them without steep differences is fairly difficult. Some rankings can be biased/misleading according to personal or corporate interests. Usually what common in them is their are categorization of sources used for the introduction of local economy, education and society. 11. Peter Hall (1966): The world cities. It was one of the first books that described world city theory, mentioning the importance of political power and centrality of (inter)national business operations.. 19.

(22) Thirdly: “over time, particular cities may change their positions in these networks, with some cities becoming more central and others become less central”. Related to this research: some Chinese mega-cities suddenly became not just ’big’, but influential as well, while some of their American counterparts are no-longer prosperous enough to be recognized as a first class world city due to the shift in competitive industries. Moreover, the newly introduced criterias (individuals or institutions) are also capable of altering rankings and producing unusual results such as the highly ranked Los Angeles among global cities. Fourthly: “many of the social and political contradictions arising from globalization are starkly drawn in the world’s most globally central cities” – relevant in many ways and marks the importance of global city research as these locations usually have more. 治政大 city management. Leadership Competitiveness is essential and sensitive part of global 立 must find its way to quickly respond to globally occuring changes. The 學. ‧ 國. advanced social structures (Timberlake, Wei, Ma, & Hao, 2014).. notion ’competitiveness’ has been going through changes as well and there are multiple ways to maintain it via adaptation or planning.. ‧. Initially, the traditional centres of global economy weren’t designed, but were the outcome of a long-term historical development without carrying strategic incentive(s). y. Nat. sit. to become centre(s) of the world economy. There is however a necessary. al. er. io. correspondence between the global city and its host state. Size of local economy (and. n. to a lower extent population or geography) can boost or restrict the potential of global. Ch. i n U. v. city formation. But, interestingly the penetration of globalization into a city is less influential. than. its. e nenvironments gchi. domestic. (political,. legal,. institutional,. infrastructural). It can explain tendencies in the Far-East, why and how did the Pacific Coastline manage to catch up. East-Asian developmentalism along with the pretension of market governance resulted quick emergence of global cities in the region. (Mainly these cities are located in China and have begun their transformation in the 21st century with no obvious results yet.) One thing is certain though: despite global cities’ economically or technologically influential stance, alone none of them can be considered as an individual actor. Their strenght/command ability is originating from the city elites’ interest, including local politians. In a broader context: concentration of human activities is what indicates the. 20.

(23) best the true status of a global city. Certain states may try to reach or reinforce their status by providing additional sources according to their contingencies. In other cases direct choice of specification can also be observed. It still remains related to Friedmann’s categorization of second and third tier world cities, however it may less likely to suggest a ’quality’ difference.. Examining the Chinese context Many aspects are needed to be taken into account in order to describe the complexity of Chinese global city development. Cause and effect varies greatly, while the high population and continent size area makes the network of cities the most compound on Earth. In this specific case of global city research, economic weight is perhaps the. 政治大. most suitable way to mark the development related differences. On the other hand highly centralized apparatus tend to contain local efforts; decisions often require a. 立. final consent by Beijing instead of being directly made on provincial or municipality. ‧ 國. 學. level.. How and why do some Chinese global cities stand out among regional. ‧. centres?. y. Nat. The question is in correlation with the role expected to be fulfilled by a global city. sit. within its host economy. Normally it would require a long introduction of variables,. n. al. er. io. which is perhaps unnecessary at this point, – a simple division will indicate the main. iv n formation U. differences. Based on the location (resource/labour availability, the size of nearby. Ch. markets) and political traditions, global city. engchi. is the mixture of natural. selection and concious planning, while a geographically advantageous position may help to boost this process. Preferences of the local elite – throughout their initially set goals in city development plans among global city ‘candidates’ – may lead to lower international command ability, although domestically they bare with strong local resource and capital concentration capacities (similar to global cities). Some other places recognized that they may not be able to go that far, hence they deliberately transformed into a local centre, instead of aiming for a global status. It is/was mostly an option for either developed middle size cities or Chinese and other developing cities with higher population in a less capitalized environment. Remaining metropolises of the world are also affected by globalization and still respond to the challenges, although they tend to remain reserved in a competition21.

(24) seeking environment. Their goal is to locally maximize their potential before engaging in world-class financial or other, advanced service related expansion (if they choose to do so). It means that, in theorem they have the potential to grow beyond just middle-weight cities or local hubs, but their urban transformation have just begun, while some privileged cities in their region are expected to secure and maintain their leading position in the urban hierarchy. Until recently the scarcity of local literature and the domination of Western point of view also affected our understanding about the ongoing urbanization in China and elsewhere in the developing world. Changes can be perceived by the increasing number of publications that consider emerging-international or specifically the Chinese context. Meanwhile, authors are trying to emphasize that global city. 治政大 of global city is getting more city has to follow. It also means that the definition 立 inclusive. Emerging critics about methodology or indicators are subjects of further formation is possible through multiple ways. Thus there is no exact trajectory that a. ‧ 國. 學. reconsiderations within the topic. In general, global cities are the results of extensive planning and the application of multiple practises worldwide.. ‧. Analizing ’Chinese global cities’ under this general term would be misleading. Runner-ups behind regional leaders (Beijing, Shanghai, Guanzhou, Hong-Kong and. y. Nat. sit. maybe Shenzhen or Chongqing) are following their own paths with a great diversity.. al. er. io. The number of those cities being considered as a global/world city does vary:. n. contemporary lists mention at least fifty – from which only a few has been. Ch. i n U. v. acknowledged internationally. It is subject to further changes sith many cities engaged. engchi. in pursuing strategic expansion in order to achieve a global city vision. The outcome of these tendencies is not visible yet. Anyhow, in spite of the local/provincial intentions or policy agenda, it is unlikely that too many of the other large cities will fit into (or challenge) the already established ’system’. Top Chinese cities (Beijing and other leading cities of Pearl River Delta (PRD), Yangtze River Delta (YRD) or Bohai area concentrate the greatest amount of capital and R&D. Their superior position is backed up by their casual access to sea. In addition the already fierce competition for qualified labourforce bounds short-term technological catch-up. Without being attractive to high-value added industries, cities are not competitive internationally. Notwithstanding a transformation to third or second tier world city is undeniably possible.. 22.

(25) Chinese cities approach globalization in various ways based on the elite’s interest, however, it eventually remains influenced by the CCP’s concerns in Beijing. In this unique system the so-called transnational capital class 12 has no open access to Chinese cities, although they are unlikely to get completely rejected either. It is part of the central planning and affects pathways of global city formation. Further issues of one-party system (e.g.: invisible hand, freedom of speech or censorship) renders China to a less favourable location for international organizations. Compared to the economic weight of the country it is clearly lack of international NGOs and intergovernmental organizations (IGOs) that disregard global city endeavours as well. To indicate the difference, Chubarov called them “state-centered world cities” and. 治政 (Chubarov & Brooker, 2013). Meanwhile, Chinese大 uniqueness is getting more widely 立 recognized throughout Western literature, while in parallel, growing interest about pointed out that these cities require distinct approach from their Western counterparts. ‧ 國. 學. key aspects of world/global city researches can also be observed in China. Local scholars in the past twenty years, first translated, then adjusted Western perceptions to. ‧. the domestic context. 13 In the following period Chinese publications covered topics of internationalization or the impacts of related socio-economic changes. Despite the. y. Nat. sit. growing interest, it is still uncommon to see Western and East-Asian scholars working. al. n. uncertainities about proper categorization.. Ch. er. io. together, while the dynamic changes in the network of (Chinese) global cities causing. i n U. v. In a very recent publication of (Parilla & Trujillo, 2016), the two authors tried to re-. engchi. approach global city notion via introducing new terms for sub-categories such as: the area specific Asian Anchors located nearby the Pacific coastline or Knowledge Capitals with competitive education and R&D (Hangzhou). The rest of the division. 12. Investors and strategists either dependent or independent from MNCs. It is not embedded that well in academic circles yet: “Much research in China has been characterised by indeterminacy in naming and a lack of unified vocabulary for describing the articulation of Chinese cities with globalisation. Such a problem is ongoing and in Chinese language literature a number of terms are mentioned including ‘international city’, ‘internationalised city’, ‘internationalised metropolis’ or ’global city’. Of course [...] the term ‘world city’ has been [...] adopted in government reports and more commonly used in Chinese academic literature” (Chubarov & Brooker, 2013) Besides there is an author, who promotes the term: ‘internationalised metropolis’ which he thinks is more concomitant with Chinese conditions. 13. 23.

(26) (China Factory, American/International Middleweights, etc.) is less relevant for this research. 14 The Asian Anchors in Chinese context are those five cities that have been mentioned above. These cities either national basing points for domestic companies or financial service providers, and mainly dealing with RMB-related transactions (except for Hong Kong). Government support of capital market has clearly raised the importance of Shenzen and Shanghai. Apart from Beijing, these two cities control now the highest percentage of international transactions. 15. “All five are characterised by the growing presence and influence of financial services industry. [...] Shanghai has been identified by government to become a. 治政 denominated financial products. There were 1049大 financial institutions in Shanghai 立 as of the end of 2010, 439 more than five years earlier.” (Chubarov & Brooker, 2013). global financial centre and hub for transaction, pricing and clearing of RMB-. ‧ 國. 學. The situation is quite similar to Beijing, where recent statistics shows that 15% of the. ‧. city’s GDP is coming from financial related services (Chubarov & Brooker, 2013). It is controversial that despite the government agenda to further increase the importance. y. Nat. al. er. io. of assets.. sit. of Shanghai in global financial industries, Beijing still concentrates a higher portion. n. Nonetheless in several other aspects Chinese cities are not showing real signs of. Ch. i n U. v. catching-up. Although most of the coastal global cities were capable of attracting. engchi. major international events, average living conditions are still behind other global cities. It does not only mean recreational facilities or housing, but the low level of foreigners’ cultural and physical presence. Tourism is an other segment that remained weak with the only two exception of Beijing and Shanghai (Hong Kong excluded). Beijing as the nation’s capital overperforms other regional centres and dominates service industry, R&D and a significant portion of creative industries. Its comparison with other major cities would be misleading. The city already overtops its rivals in many global city indicators, although it derives from its centralization efforts, but not. 14. I came across only once with the similar distinction of global cities, hence it is safe to say that this sort of categorization is still fresh within the literature. 15 Functioning of Chinese Stock Exchanges will be explained in a later section. International transactions are limited within China, originating from the non-convertibility of the currency.. 24.

(27) exclusively. Beijing perhaps been more carefully designed in order to serve as a representative capital for a strenghtening China. Thus, the development of coastal area should be examined without further comparisons with Beijing. Instead a more neutral way of ’measurement’ should be applied from the next paragraph. What appears to be very important in the topic of Chinese global cities is the term ‘zones’, sith these are the cornerstones of later unfolding development. Zones are limited geographical units in designated regions and offer better supervision (and control) for party elite over local economy. As the part of the opening up process variously named zones were created and remained important until today. Existence of them contributed to the rise of cities like Shanghai as regional and global centre.. 治政 “Development zones are the focus of China’s 大 efforts towards globalization and 立 modernization. They enjoy preferential tax treatment, improved urban infrastructure, ‧ 國. 學. easier access to international markets, and professional government services.” (Wei & Leung, 2005). ‧. Central efforts along with the exceptional abilities of Chinese state compared to other. y. Nat. sit. developing countries, enabled several coastal cities – including Shanghai – to carry. al. er. io. out economically/administratively favourable reforms with ’functional extension’.. n. The state together with the local government actively participate(d) in global city. Ch. i n U. v. formation wherein previously set up developmental zones had a substantial role.. engchi. Besides the states’ overview of the process, apperance and integration of MNCs was also a very important step. Inflowing FDI greatly contributed to Shanghai and her kins’ global city transformation. Despite the above mentioned complexity there is at least one more thing in common among all the notable globalized cities, namely the real-estate industry, which was capable of transforming urban space into a modern business and living environment. As part of this development sooner or later Central Business Districts (CBDs) emerged all over the country’s major cities, projecting the presence of capital and knowledge. It is, however often a result of one-sided view, wherein one certain aspect may dominates as follows:. 25.

(28) “Political and economic actors based in the emerging global cities appear to be keenly aware of how the context of “globalization” justifies putting public resources into making their cities more internationally competitive.” (Timberlake, Wei, Ma, & Hao, 2014).. Except for Timberlake, the correspondence of global city making and ’human factor’ was hardly mentioned by others, although it is clear that local elites put a lot of effort into global city building (almost exclusively led by personal interests not by altruism). Outcome does vary though, reaching and maintaining global city status is both very demanding and much depends on city leaders, national policy or the firms located in the proposed city. Considering that, Shanghai, Beijing and Guangzhou will be always. 政治大. dependant on ’external’ factors, and must find their ways to utilize resources in a successful way.. 立. Aside from the resources provided by the state, it is also important to have a good FDI. ‧ 國. 學. attraction ability on site with the effective support of R&D sector. Shanghai in that understanding proved to be the best performer. Its special rights (free. ‧. trade zones, extensive space waiting to be developed) guaranteed the city’s outstanding growth. There are multiple programs running simultaneously from which. Nat. sit. y. Shanghai can benefit. 16 It established the basis for her to become a major (global) city. al. er. io. for Chinese and world economy. The recreation of Shanghai’s urban places were. n. likely the best example of modernized China outside of Beijing. However, it doesn’t. Ch. i n U. v. mean that Shanghai has become a better place in all respects. Instead, as a side-effect. engchi. of its development now facing multiple problems originating from its status.. Outlook on the social aspects of Chinese transition International competition and expansion came along with the transformation of local societies. China is no exception here, but seemingly has an advantage by having a ’strong state’, which in fact couldn’t be as well realized as one would expect; housing problems remained a main issue all over the country’s major cities, while social polarization has increased. ’Floating population’ such as migrants without. 16 The broadest and most extensive among them is “High and new technology enterprise” program and “Technology advanced service enterprise” program (Marro, 2015).. 26.

(29) registration or hukuo 17 are constantly facing hardships (Timberlake, Wei, Ma, & Hao, 2014). Overcrowded cities may not be interested in improving certain conditions either, while there is an ongoing struggle with the population inflow and the mitigation of it. Local governments have the right and the power to relocate people, although sometimes they act against themselves by creating large satellites outside of the core city. The low-income labour being driven away nowadays may later emerge into a new type of problem (e.g: in infrastructure, services). However the discussion of this matter is not an intended topic for this thesis. An other aspect is related to the polarization of ’indigeneous’ population, whom sometimes fall under the same negative discrimination as hukous or illegal migrants, not to mention the problem of unaffordable housing.. 治政大inofficial population have huge example of Shanghai suggests, where official and 立 odds in numbers. Notwithstanding law enforcement on mitigation of migration still remains weak as the. ‧ 國. 學. Shanghai’s global citiness. ‧. Historically Shanghai can be seen as China’s first international(ized) city. Following. y. Nat. the Opium Wars, foreign powers set up their bases to access local market. This. io. sit. forcefully internationalized environment – based on local and Western manufacturing. er. – existed until 1950s, by when CCP completed the nationalization of companies.. al. n. v i n C Deng Xiao-ping’s reforms andhopening Shanghai, despite the long i U e n gwere c hproclaimed. In the next thirty-some years, there was literally no foreign presence in the city until. restrictions on non-indigeneous companies, shortly became a ’transitional economy’. in a sense that its manufacturing capacities considerably increased. However reappearing FDI didn’t entail a real technological progress. Low value-added industries (light industry, assembly-like activities) couldn’t fuel changes. More advanced manufacturing appeared only a decade later and its investments topped in 1990s-2000s with the parallel expansion of service sector (from 40 to 50 percent). Shanghai unlike Beijing, didn’t go through a rapid transformation in her economic structure, instead the city favoured to strenghten her local industry and service sector both at once. This model later was followed by several other major cities throughout 17 People who possess household registration, therefore staying in a certain town legally. A household registration includes identifying information such as name, parents, spouse, and date of birth, but also binds its owner to a certain geographical location.. 27.

(30) the country. Besides keeping alive the industrial traditions, it was very likely to be in accordance with local interests and aimed to mitigate social strains generated by the otherwise encumbering social transformation.. Fundaments and economic structure of the re-designed Shanghai Beginning from 1990s, the market-socialist approach of China has begun to dominate local investments. The system relied on both market (land leasing – alienable land use rights, capital market) and non-market mechanisms (state-directed investments or loans from state-owned banks) (Wei & Leung, 2005). There were further preferences including the removal of impediments on investment in certain industries, although the goal was to direct investors towards joint-ventures. Notwithstanding early datas. 政治大. show that many foreign originated companies (roughly 60%) which settled down in Shanghai didn’t form joint ventures and remained purely foreign owned (Wei &. 立. Leung, 2005). In accordance with the central government’s plan – FDI inflow. ‧ 國. 學. remained uneven for long: many projects were concentrating in Pudong area only. This was however an unusually complex ’zone’ wherein different kind of utilization. ‧. was foreplanned, based on the areas’ location. Lujiazui was designed for financial and trade purposes, Waigaoqiao as a free trade zone, Jinqiao as an export processing zone. sit. y. Nat. and Zhangjiang for corporate R&D activities. All areas were set up within Pudong without being adjoining to each other. Lujiazui located the closest to the core of the. io. n. al. er. city and can be seen as an extention of CBD. Zhangjiang following its integration into. i n U. v. public infrastructure has begun to grow, and now serves as an important research base. Ch. engchi. for either local or foreign companies. In the other two zones local companies in all size appeared (export zone), but in Jinjiao (free trade zone) primarily Japanese and Western MNCs dominate(d) the production. The other, more traditional development zone is concentrated in Puxi-Hongqiao area. This location has/had some advantages compared to the distant export processing zone, especially before the expansion of Shanghai metro or road system. Hongqiao used to be Shanghai’s main airport and provided better access to the downtown area (only 11 kilometers vs. Pudong Int’l Airport’s 30 kilometers). Part of the city’s innovation capacity was located near Hongqiao, which remained a relatively cheap location compared to the after-development Pudong. Although certain districts of Puxi were attractive for FDI or local companies, it remained less integrated in the 1990s or early 2000s. Quality changes in Hongqiao area only began in the last decade 28.