Political economy of unbalanced development in China

Over the past 20 years one important feature of China's reform has been decentralization. Decentralization, however, is not equally conducted across China. In 1979, in the face of economic stagnation and inefficiency, the Chinese government abandoned the balanced development strategy and adopted an unbalanced development strategy that put emphasis on the coastal regions and temporarily tolerated the deterioration of interregional equality. This new initiative and the succeeding favorable policies offer to the coastal provinces in the 1980s gave the coastal provinces some freedom from tight central control and allowed these provinces to take advantage of their strengths. Shortly after the crackdown at Tiananmen Square, the central government shifted its development priority to the Yangtze River Delta and Shanghai. In 1992, after Deng Xiaoping's southern tour, the central government gave a dozen inland cities some of the preferential policies the coastal cities had. This resulted in another round of opening-up and high-speed growth. As the interregional disparity deteriorated, in 1995, the special status of the Special Economic Zones was challenged. After several months of heated disputes, the central government decided to maintain the status of the SEZs but gradually adjust some of preferential policies granted to the SEZs. In the same year, more emphasis was placed on the interior regions. And in 2000, western provinces were offered some favorable policies.; It is apparent that policy disparities across regions and favoritism in the policy making process are an important feature of China's decentralization strategy and regional development program in the past twenty years. This dissertation focuses on China's regional development policies and the policy disparities across regions. Based on case studies on Shanghai's revival in the 1990s, the sweeping but unequal decentralization, the debate over the Special Economic Zones in 1995, and the speeding up of development of the inland regions since 1995, this thesis elaborates the important issues related to policy disparities, discusses the important players in the making of China's regional development policies, and addresses how economic variables gain political weight and how the top leaders, regional leaders and central bureaucrats interact in China's institutional contexts. The dissertation argues that the regional development policies are the result of the interaction of economic logic and political logic.