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The socioeconomic and spatial transformation of the Shenyang-Dalian Extended Metropolitan Region of China,… Wang, Mark Yaolin 1995

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THE SOCIOECONOMIC AND SPATIAL TRANSFORMATION OF THE SHENYANGDALIAN EXTENDED METROPOLITAN REGION OF CHINA, 1978-1992byMARK YAOLIN WANGB. Sci., Shanxi Teachers’ University, 1982M. Sci., Changchun Institute of Geography, Chinese Academy of Sciences, 1985A THESIS SUBMITTED IN PARTIAL FULFILMENT OFTHE REQUIREMENTS FOR THE DEGREE OFDoctor ofPhilosophyinTHE FACULTY OF GRADUATE STUDIES(DEPARTMENT OF GEOGRAPHY)We accept this thesis as confirming to the required standardTHE UNIVERSITY OF BRITISH COLUMBIAOctober 1995© Mark Yaolin Wang, 1995 r7/.1. . ../In presenting this thesis in partial fulfilment of the requirements for an advanceddegree at the University of British Columbia, I agree that the Library shall make itfreely available for reference and study. I further agree that permission for extensivecopying of this thesis for scholarly purposes may be granted by the head of mydepartment or by his or her representatives. It is understood that copying orpublication of this thesis for financial gain shall not be allowed without my writtenpermission.Department of______________The University of British ColumbiaVancouver, CanadaDate 1—/ (‘ /77JDE.6 (2/88)ABSTRACTChina’s post-1978 reform programs have been responsible for the release of over 100 millionrural labourers from farming activities. The experience of western countries suggests that this rateofdevelopment and modernization will also involve a dramatic transition from rural-to-urban society.This should also lead to a change in the features ofthe urban system. However, it may be argued thatsome distinctive features of China’s Extended Metropolitan Regions (EMRs) including highpopulation densities, the persistence of agriculture and a strong decentralization of decision-makingfor economic enterprises offer the possibilities of a different form ofurbanization. This thesis assesseswhich of the recent processes of socioeconomic and spatial transformation in the Shenyang-Dalianregion of Liaoning province- China’s major industrial heartland - are producing such an extendedurban region. The purposes are first to examine China’s rural-urban relationships as a generalbackground to description and analysis of the spatial patterns and processes of the Shenyang-DalianEMR; and secondly to critically evaluate the practice of the PRC government in keeping rigid rural-urban divisions in administrative and allocative practices. The overall objective is to examine thevalidity ofthe EMR conception as a distinct urban form, and to assess the degree to which this modelfits the contemporary Shenyang-Dalian growth corridor.The analysis of secondary data shows dramatic demographic and labour changes in theShenyang-Dalian corridor since 1978. The corridor’s rich natural resource endowment, the specialconditions of historical development, and recent administrative changes and transportationimprovements have led to a spatial pattern which conforms with the EMR model - albeit withcharacteristics that clearly distinguish this region from other mega-urban zones in China andelsewhere. In-depth case studies of three villages along the corridor show that the impacts of thereconfiguring of settlement and economic patterns vary; yet there was sufficient commonality toindicate that a kind of ‘invisible urbanization’ has occurred since 1978 in the rural areas of thecorridor. It is concluded that the measurement ofunderlying urbanization along the Shenyang-Daliancorridor is far more difficult than is officially recognized by the Chinese government.11The rapid urbanization of the countryside and increasing rural-urban interaction has brokendown the stark pre-1978 rural-urban divide in the Shenyang-Dalian region. Spatial and sectoralsegregation of rural and urban areas have been replaced by growing levels of integration andinteraction. This increased integration has been fuelled primarily by improvements in infrastructureand favourable government policies.For the Shenyang-Dalian corridor, new government policies, such as the creation of openzones, emphasis on industrial decentralization and rural industrialization, changes in administrativesystems, and the establishment ofmodem transport infrastructure have been driving forces in creatingnew forms of rural-urban integration. Yet the state is not the sole architect of the regionaltransformation. Much of the change one finds on the ground is driven by local enterprises andinitiative. It is this local dynamism which gives the region its vibrancy and marks the path of changeas mercurial but not predefined. The pace and indeterminacy ofregional socioeconomic changes posea number ofproblem for the government, such as deteriorating environment, infrastructural needsand conflicting landuses. This thesis argues that the Chinese government will need to further modifyits policies to cope with the emergence of the Extended Metropolitan Regions.111TABLE OF CONTENTSAbstract.iiList ofTables .iiList ofFigures xiList ofAbbreviations xiiiAcknow1edements xivPART ONE: CONCEPTUALIZING EMRS IN CHINA- A TIllORET1CAL REVIEW OF ChINA’S RURAL-URBAN RELATIONS 1Chapter 1. Introduction 11.1. Introduction 11.2. The Shenyang-Dallan Region 71.3. Research Framework and Methodology 91.4. Rationale ofData Sources 12Chapter 2. The Chinese Urbanization Process In A Comparative Context 132.1. Introduction 132.2. Previous Western Models ofRural-Urban Relations 142.3. The Changing Context ofUrbanization 192.4. The Asian Extended Metropolitan Region (EMR) Model 212.5. China’s Special Case 242.6. EMR research in China 282.7. A Stages Approach to Rural-Urban Transition in China 302.8. Summary 42Chapter 3. The Rural-Urban Divide - Chinese Definitions 433.1. Introduction 433.2. The Household Registration System (Hukou) 453.3. Changes in Statistical Definitions ofUrban and Rural Areas 523.4. Changes in Statistical Definitions ofUrban and Rural Population 563.5. Summary 60Chapter 4. The Rural-To-Urban Transition In China - Changing Policies 624.1. Introduction 624.2. Changes in Government Policies Towards Urban Development 624.2.1. Pre-1978 Policy (Stages land II) 634.2.2. Post-1978 Policy (Stage ifi) 694.3. The Search for Optimum Urban Development Policies-Debates over City Growth 724.3.1. The ‘Small City And Town’ Approach 74iv4.3.2. The Large City Approach .754.3.3. The Medium-Sized CityA Approach 784.4. Summary 81PART TWO: CHARACTERISTICS OF TIlE SRENYANG-DALL4N REGION 83Chapter 5. The Regional Context 835.1. Introduction 835.2. Liaoning as China’s Industrial Heartland 855.2.1. The Natural Resource Endowment 855.2.2. Concentration ofHeavy Industry 875.3. Characteristics ofthe Urban System 915.4. The Historical Development of the Shenyang-Dalian Corridor 935.4.1. The Early Stage ofDevelopment (The Period Before 1840) 935.4.2. The Period of 1840-1930 955.4.3. The Japanese Colonial Period (1930-1945) 975.4.4. The Enhancement ofHeavy Industrialization during 1949-1978 1025.4.5. The Region in Reform (Post-1978) 1065.5. Summary 112Chapter 6. The Emergence OfThe Shenyang-Dalian EMR, 1978-1992 1136.1. Introduction 1136.2. The Emergence ofthe Shenyang-Dalian EMR 1136.3. The Concentration ofPopulation and Wealth 1236.3.1. Concentration ofPopulation 1236.3.2. Concentration OfWealth 1246.4. Spatial Patterns within the Corridor 1266.5. Characteristics of the Shenyang-Dalian Corridor- The Coexistence ofAgricultural and Non-Agricultural Activities, 1978-1992 1326.5.1. Non-Agricultural Activities 1326.5.2. A Well-Developed Agricultural Economy 1366.6. Summary 138PART TE[REE: TOWARDS GREATER SPATIAL INTERACTION, 1978-1992 140Chapter 7. Changes In Administrative Systems And The Emergence OfPeasant Workers 1427.1. Introduction 1427.2. Changes In Administrative Systems And Their Implications 1427.2.1. Establishment of a City Listed Separately in the Plan 1447.2.2. The Central City Administering Surrounding Counties 1457.2.3. Implications 147V7.3. The Rise ofPeasant Workers .1487.4. Summary 154ChapterS. Industrial Decentralization And Rural Industrialization 1558.1. Introduction 1558.2. Establishment ofGrowth Poles along the Corridor 1558.3. Urban Industrial Decentralization and Rural Industrialization 1588.4. Changing Patterns in the Local Spatial Economy 1628.5. Summary 166Chapter 9. Improvement In Transportation Infrastructure And Time Space Convergence 1689.1. Introduction 1689.2. Improvement ofTransportation Infrastructure 1689.3. Informal Transportation Sectors 1769.4. Population Flows 1789.5. Patterns ofCommodity Flows 1889.6. Summary 190PART FOUR: CASE STUDY VILLAGES- ACTWE INCORPORATEON IN TIi1 EMERGENCE OF THE E11k 193Chapter 10. Hunhebu Village - A ‘Near Suburban’ Village Case Study 19510.1. Location and Natural Resource Endowments 19510.2. Processes ofEconomic and Social Changes 19810.2.1. Changing Ownership Structure 19810.2.2. Diversifications ofAgricultural Products 20010.2.3. The Growth ofTertiary Sectors 20110.3. Occupational Transition 20210.4. Rural-Urban Linkages- Subcontractor Firms and their Impacts on Rural Technology Transformation 20810.5. Summary 210Chapter 11. Houshi Village - A Rich Resource Village Case Study 21111.1. Location and Natural Resource Endowments 21111.2. Processes ofEconomic and Social Changes 21311.2.1. Diversifications ofAgriculture 21311.2.2. Changes in Collective Ownership 21511.2.3. Formation ofLocal Specialty Productions 21811.3. Occupational Changes 22111.4. Rural-Urban Linkages 22311.5. Summary 224VChapter 12. Tuchengzi Village - The Chicken Raising And Leather Bags Village 22512.1. Location and Natural Resource Endowments 22512.2. Processes ofEconomic and Social Changes 22612.3. Occupational and Income Changes 23212.3.1. Income Changes and Distribution 23412.3.2. Occupational Change 23512.3.3. Gender Issues 24012.4. Summaiy 240Chapter 13. Common Features Of Socioeconomic Transformation 24213.1. Introduction 24213.2. The Accessibility and Location Factors 24313.3. Access to Sources ofInvestment Capital 24613.4. Fully-Employed Rural Labour 24713.5. Income Growth and Income Equality 25013.6. Internal Differential of Income andthe Emergence ofNew Socio-Economic Groups 25513.7. The Changing Role ofWomen 25913.8. Common Problems 26013.9. Towards Invisible Urbanization in the Three Villages 26213.10. Summary 267PART FLVE: RESULTS AND CONCLUSIONS 268Chapter 14. Conclusions 26814.1. Summary ofMajor Findings 26814.2. Theoretical Implications 27414.3. Implications for Public Policy 27814.4. Suggestions for Further Research 281APPENDIX 284Appendix 1. Field Work in China 284Appendix 2. The Major Stages of China’s Post-1978 Reform Program 286Appendix 3. Calculation of Invisible Urbanization Levelin the Three Case Study Villages 289Appendix 4. Peasants’ Per Capita Net Income inLiaoning Province, 1978-199 1 291Appendix 5. The Share Holder System in Hunhebu Case Study Village 292Appendix 6. China’s ‘Comparatively Well-off (xiao kang) Indices for 2020and Hunhebu Village’s Indices in 1992 293Appendix 7. Survey Result for the ‘What Families Become Rich’ in 1992 294BIBLIOGRAPHY 295ViiLIST OF TABLESTable 3.1. Urban growth and Industrial Development in Different Eras in Liaoning and China 44Table 3.2. China’s Subsidies in 1981 47Table 5.1. Major Mineral Deposits in Liaoning Province in 1992 86Table 5.2. Selected Industrial Production in Liaoning, 1991 90Table 5.3. The Urban System in the Shenyang-Dalian Region, other EIv1Rs and China, 1991 92Table 5.4. Major Heavy Industrial Production in Liaoning, 1932-1944 100Table 5.5. Selected City Population in Shenyang-Dalian Region, 1930-1945 (‘000) 101Table 5.6. Capital Investment in Liaoning (billion yuan) 103Table 5.7. Economic Growth Rate in Liaoning Province (%), 1949-1991 105Table 5.8. Major Industrial Sectors in Selected Cities of Shenyang-Dalian Region 106Table 5.9. Utilized Foreign Investment in Selected Coastal Provinces ofChina, 1984-199 1 111Table 6.1. Selected Socioeconomic Indices in the Shenyang-Dalian Corridor, 1991 125Table 6.2. Rural Counties’ Economic Growth Levels between EMR and Non-EMR in Liaoning 127Table 6.3. Rural Labour Force and Gross Domestic Product Structureby Major Industries in the Shenyang-Dalian Mega-Urban Region (1991) (%) 134Table 6.4. Agricultural and Industrial Output Value by Suburbs and Counties inthe Shenyang-Dalian Region, 1978-92 (million yuan in 1980 fixed prices) 137Table 7.1. Critical Processes and Spatial Outcomes in the Shenyang-Dalian Corridor, 1978-92 141Table 8.1. Industrial Output Value by City core, Suburbs, and Rural Areas in MajorMetropolitan Regions ofthe Shenyang-Dalian Corridor 1978-92 (million yuan) 163Table 8.2. Population by City Cores, Suburban Districts, and Rural Areas ofthe Shenyang-Dalian Region, 1984 and 1992 (million) 165Table 9.1. Major Developments ofTransportation Infrastructure in Liaoning Province 170VIIITable 9.2. Travel Time between Shenyang and Dalian .173Table 9.3. Passengers’s Travel Purposes (by Bus) (%) 182Table 9.4. Floating Population ofMajor Cities ofthe Shenyang-Dalian Region (‘0,000) 184Table 9.5. Amount of Water Supply Per Capita Urban ResidentWith and Without Floating Population (Litre/Per Person Per Day) 186Table 9.6. Migration as Percent of total Population in Selected Countiesand Suburban Regions, 1990 (per thousand) 187Table 10.1. Land use in Hunhebu Village in 1991 196Table 10.2. The Output Structure ofHunhebu Village 199Table 10.3. Labour Occupation Structure inHunhebu Village in 1978 and 1991 203Table 10.4. Ratio ofNon-agricultural and Agricultural Index in Hunhebu Village in 1992 205Table 10.5. The Labour Structure by Gender in Hunhebu Village in 1991 (persons) 207Table 11.1. Land Use inHoushi Village in 1991 212Table 11.2. The Output Value Structure in Houshi Village (10,000 yuan) 214Table 11.3. Village-Collective Shares ofLabour, Income Sources,and Per capita Income in Houshi Village, 1984-92 216Table 11.4. Labour Structure inHoushi Village, 1978-1991 (persons, %) 222Table 12.1. Economic Structure in Tuchengzi Village, 1978, 1986, and 1992 (‘000 yuan) 227Table 12.2. Change in Occupational Structure in Tuchengzi Village from 1978-1992 233Table 12.3. Per Capita Income Group in Tuchengzi Village, 1986 and 1992 (%) 236Table 12.4. Household Occupation Structure and Income Level in Tuchengzi Village in 1992 237Table 12.5. The Relationship Between Occupation and Input/output Ratio in Tuchengzi, 1992 239Table 13.1. Summary ofLocation Advantages and Major Rural-Urban Linkagesin Three Selected Villages in the Shenyang-Dalian Corridor 245xTable 13.2. The Capital Sources of Village Enterprisesin Selected Villages in the Shenyang-Dalian Region in 1990 248Table 13.3. Summary of Survey Results of’Seriousness ofYour Village Surplus Labour’ 249Table 13.4. Rural Per Capita Income ofLiaoning Province and Three Selected Villages 252Table 13.5. The Comparison ofRural-Urban Income Gaps between National Averageand Three Selected Villages in the Shenyang-Dalian Region (yuan) 254Table 13.6. The Survey Results for ‘Who Earns More Income’in the Case Study Villages, 1991 (%) 256Table 13.7. Peasants Taxes and Net Income in Tuchengzi (yuan/person), 1986-92 261Table 13.8. Living Standard of Selected Villages in the Shenyang-Dalian Region (1990) 264Table 13.9. Summary of Calculations for Invisible Urbanization Indexin Three Selected Villages in the Shenyang-Dalian Region, 1990 266xLIST 01? FIGURESFigure 1.1. China’s Major Mega-Urban Regions 6Figure 1.2. Location ofthe Shenyang-Dalian Corridor 8Figure 1.3. Thesis Framework and Data Sources 10Figure 2.1. China’s Major Urban Clusters 29Figure 2.2. China’s Rural-Urban Transfontiation Model 32Figure 2.3. Rural-Urban Linkages and Major Influencing Factors 38Figure 3.1. Urban/Rural Areas in Dalian Metropolitan Region, Liaoning, 1992 55Figure 3.2. Different Population Statistics in Dalian Metropolitan Region, Liaoning, China, 1992... .57Figure 5.1 Location ofthe Shenyang-Dalian Corridor 84Figure 5.2. Major Agricultural Production Regions in the Shenyang-Dalian Region 88Figure 5.3. Historical Events Impact Space Economy in Liaoning Province, 1840-1992 94Figure 5.4. Cities ofthe Shenyang-Dalian Corridor, 1980-1992 108Figure 6.1. Index 1: Share ofNon-agricultural Labourin total Labour Force (by County), Liaoning, 1991 115Figure 6.2. Index 2: Per Capital Rural Non-Agricultural Output Value (by County),Liaoning, 1991 116Figure 6.3. Index 3: Per Capita Agricultural Output Value (by County), Liaoning, 1991 117Figure 6.4. Index 4: Population Density by Counties in Liaoning, 1992 118Figure 6.5. Index 5: Per Capita Net Income (by County), Liaoning, 1991 119Figure 6.6. Index 6: Per Capita GDP (by County), Liaoning, 1992 120Figure 6.7. The Shenyang-Dalian Extended Metropolitan Region in Liaoning 121xiFigure 6.8. Industrial Output Value of Village-Run and Private Rural IndustriesPer Land Area by County in Liaoning Province in 1992 129Figure 6.9. Foreign Investment (by County) in Liaoning, 1992 130Figure 6.10. Exported and Imported Goods by Metropolitan Region, Liaoning Province, 1991 131Figure 7.1. Comparison of Administrative Structure:Contemporary Liaoning and Traditional China 143Figure 7.2. Three Categories ofPeasant Workers in the Shenyang-Dalian Region 150Figure 8.1. Direction ofIndustrial Development and Special Open Zones in Liaoning Province 156Figure 9.1. Transportation Networks and Cities in the Shenyang-Dalian Region, 1992 171Figure 9.2. Automobiles and Motorcycles Per 1,000 Populationby Metropolitan Regions in Liaoning Province, China, 1991 173Figure 9.3. Frequency ofTravel Times Per Capita inLiaoning Province, 1990 179Figure 9.4. In-ward and Out-ward Migration Patterns by Counties inLiaoning in 1990 181Figure 9.5. Commodities Transported by Train and Truck inLiaoning, 1990 189Figure 9.6. Commodities Transported Along the Major Highways inLiaoning Province (1990) 191Figure 10.1. Location ofthe Case Study Villages in the Shenyang-Dalian Region 196Figure 11.1. Local Specialty Production Lines in Houshi Village 219Figure 12.1. Leather Bag and Suitcase Production and Raising Chickensin Tuchengzi Village, Liaoning, China 229Figure 13.1. Rural Labour Transition in the Shenyang-Dalian Region 251xliLIST OF ABBREVIATIONSEMRs Extended Metropolitan RegionsGDP Gross Domestic ProductHHB HunhebuHS HoushiLRSEST Liaoning Socioeconomic Survey TeamLRSEST-]]HB Liaoning Socioeconomic Survey Team, HunHeBu villageLRSEST-HS Liaoning Socioeconomic Survey Team, HouShi villageLRSEST-TCZ Liaoning Socioeconomic Survey Team, Tuchengzi villageLSB Liaoning Statistical BureauLSYB Liaoning Statistical Year BookLYB Liaoning Year BookPRC People’s Republic of ChinaSEZs Special Economic ZonesSSB State Statistical BureauTCZ TuchengziX1llACKNOWLEDGMENTSI am deeply indebted to Dr. David Edgington, my thesis supervisor, for his comprehensiveguidance in the completion of this dissertation. I am especially grateful to Dr. Edgington for hiscritical comments on my research proposal and detailed comments on my draft. The completion ofthis thesis and my doctoral program would also not have been possible without the valuable supportand wise guidance ofProfessor Terry McGee. His inspiration and encouragement are critical for meto complete my Ph.D. work. I am also indebted to Professors Walter Hardwick and David Lai,members ofthe thesis supervisory committee, who have provided many constructive suggestions toimprove earlier version of this thesis. My appreciation also goes to Dr. Francis Yee and Dr. ScottMacLeod for their helpful comments and editing an earlier draft of this thesis.I would also like to thank many Chinese scholars, especially to my previous colleagues,Professors Benlin Wang and Zemin Liu as well as colleagues of my previous working unit at theChangchun Institute of Geography, Chinese Academy of Sciences, for their letters of introductionwhich greatly facilitated data collection in the field. Also, special thanks to Mr. Chenjun Pan at theLiaoning Rural Socioeconomic Survey Office who allowed me to collect valuable data and materials.I would also to express my gratitude to the International Development Research Centre of Canada(IDRC) for the financial support of my field work.I would also like to express my sincere thanks to my wife, Yue Lu and my daughter, SherryWang for the romanization of Chinese names into Pinyin. My eight-year daughter is learning ChinesePinyin and her home work was to correct the Chinese names for my thesis using standard Pinyin.Finally, the successful fulfilment of this thesis was ‘pushed by the birth of my second baby boy -Dennis Wang. His coming to this world forced me finish the dissertation quickly.xivIntroductionPART ONECONCEPTUALIZING EMRS IN CHINA- A THEORETICAL REVIEW CHINA’S RURAL-URBAN RELATIONSCHAPTER 1. INTRODUCTION1.1. IntroductionSince the economic reforms of 1978, China has experienced dramatic socioeconomic changesand has moved towards becoming a kind of hybrid known as a ‘socialist market economy withChinese characteristics’ (Bell, Khor and Kochhar, 1993: 4). The establishment of the ‘economic openareas’ along the coast has brought China wealth, industrial power, foreign exchange earnings, andeconomic might (Abegglen, 1994: 81-108; Byrd, 1991; Hu and Huenemann, 1984). In particular,its rural reform programs have released about a quarter of its rural labour force (about 110 millionrural labour force are viewed as ‘surplus labour’).1 Within this matrix of changes, some focus mustbe directed to China’s country-side.China’s rural reform programs and the rapid growth of rural industrialization are critical tothe success ofcurrent changes. The changes in many rural areas may be summarized as ‘China’s silentrevolution due to the goal of developing the Chinese economy as rapidly as possible within the basicframework of socialism and the existing political system.2 Data presented below outline the1n 1994, among 440 million rural labour force, 110 million of 440 million rural labourforce were considered surplus (People’s Daily- Overseas Edition, April 4, 1995).2’Silent’ features of the Chinese approach to reform are discussed by Bell, Khor andKochhar, 1993: 4.1Introductiontremendous scope of this revolution. In particular, changes in lifestyles, economic activities andpatterns of movement which one might well call urban are coming to the country-side of theShenyang-Dalian corridor. In these changes, the region of concern has much in common with otherareas of China,, but also much to distinguish it.China’s post-1978 spatial development has been most pronounced along the coast. Several‘growth corridors and triangles’ have emerged. These include the Shenyang-Dalian and BeijingTianjin corridors and the ‘growth triangles’ of Shanghai-Nanjing-Hangzhou and GuangzhouShenzhen-Hong Kong. Together with the other Coastal Open Cities and Special Economic Zones,these regions have become the focus of economic expansion in coastal China. The coastalconurbations have acted as ‘catalysts’ for China’s modernization (Yeung and Hu 1992; Laquian, 1989;Edgington, 1986). Furthermore, these ‘development corridors’ have become more integrated into theworld economy due to the changes in the capacity and structure of the essential transport andcommunication infrastructures which weld cities and mega-regions within the Pacific Economic Zonetogether (Rimmer, 1994; Rimmer, 1993).The dynamism of change found in these emergent regions has led too easily to generalization;the rampant pencilling-in ofzones, corridors and triangles ofhyper-growth along China’s coast. Suchexuberance has perhaps clouded urban geographers’ judgements as to what is really happening ‘onthe ground.’ Consequently the many interpretations of coastal China’s spatial fhture appear to havemoved far ahead of what we know of the changes which have occurred over the last few years.Assuming a high economic growth scenario for China over the next two decades or so, it is,therefore, all the more important to develop a base of grounded case studies on actual changesoccurring within China’s settlement systems. Such studies may begin to answer a number of criticalquestions. Will rapid industrialization in China result in an increasing concentration of population inexisting large cities as the conventional wisdom of the urban transition might have it? Or will ruralindustries and diversified agricultural activities continue to absorb the majority of rural surplus labour,especially as a report indicated that in 1994 about 75 per cent of China’s rural surplus labour remained2Introductionin rural areas.3 Answers to these questions must come from a consideration of China’s unique geohistorical path and recent changes in the government’s approach to managing the nation’sdevelopment trajectory.Conventionally, a socialist nation is understood as being dominated by a powerful state whichnot only monopolizes all economic affairs ranging from production and distribution to consumption,but also controls the mobility of population. How has this situation changed in China since thereforms? Will urban residence be tightly controlled and mobility constrained in favour of the growthof small cities and towns? Moreover, what will happen to the rural communities surrounding largecities? We need to reflect on what has occurred since 1978 at a micro-level in order to understandthe critical processes involved in changes affecting the residence and livelihood of China’s populationas a whole. This study of the Shenyang-Dalian corridor of northeast China4 is intended to achievethis goal and to clarifj broad processes of change through specific case studies.In engaging in such a project, the experience of the developed countries, which have movedto high levels ofurbanization over a period of one hundred years are of limited help in assessing thereality of a reforming socialist China. Thus, there is a need to formulate a more suitable urbansettlement model which explains China’s condition in the post-reform period. Within Asia, China hasa unique role as the largest socialist nation.Many scholars argue that the developing socialist countries have common characteristics, of31n 1994, of 110 million rural surplus labour force, only a quarter of them migrated to thecoastal and other relatively developed areas. The majority of the rural surplus labour wereemployed (fully or partially) in rural areas (People’s Daily- Overseas Edition, April 4, 1995).4Northeast China is called “Manchuria” in English. In China, the term “Manchuria” isviewed as a colonial term. Some Chinese scholars suggest that this term should not be used in theEnglish-speaking world (Zhao 1994: 183-184). Chinese people refer to Manchuria as Dongbei(meaning Northeast China). In this thesis, “Northeast China” includes the provinces ofLiaoning,Jilin and Heilongjiang.3Introductionwhich the most common is the slower rate of urban growth compared with many other developingcountries (Lo, Salih and Douglass 1981: 4 1-42; Chan, 1992: 275-305; Kirkby, 1994: 128-155; Lo,1987: 440-458; Ma and Hanten, 1981; Murphey, 1976: 311-329). Almost by definition, in countriessuch as China the state is the main agent determining the rates and patterns of growth and regionalchange (Cannon, 1990: 32; Cheng, 1990: 65-66; Forbes and Thrift 1987: 1-26; Demko and Reguiska,1987: 289-292). Tn non-socialist systems, the level of urbanization, the viscosity of populationmovements, and the economies and dis-economies of agglomeration tend to be regulated by marketforces, with pricing mechanisms playing a dominant role. Contemporary capitalist space-economieshave been marked by an apparent trend towards increased movements of people and other resourceswithin thickening ‘transactional webs’ (e.g. the spaces of flexible accumulation). Yet in China, theplanned economic system (particularly before the 1978 economic reforms) generally excluded marketforces and their economic requisites from explicitly shaping the emergent space economy. Settlementand enterprise patterns were determined by the state according to its own priorities. Restructuringofcirculatory or transactional environments was largely carried out via administrative measures. Thisis no longer filly the case. Market regulation is increasingly coming to characterize the evolution ofChinas space economy. This statement is true at the macro, national level and within given regions.A key outcome ofthis reorganization is the shifting relationship between cities and the countryside.Alongside carefUl empirical analysis of spatial and economic changes in the Shenyang-Daliancorridor, is the need to add to consider a more general literature which seeks to conceptualize howthe rural-urban transition is evolving in post-reform China. Central to any such project must be aconsideration of the model ofExtended Metropolitan Regions (EIVIRs).Urbanization and the growth of metropolitan regions in Asia over the last several decades hasbeen shown to possess different features which clearly separate them from the growth trajectories ofWestern cities (McGee 1989: 93-108; McGee 1991: 3-26; Ginsburg 1991: xiiixviii; Pannel andVeeck 1991: 133). There are already several studies on the emergence of China’s EMR.s (Yeung1992; Zhou 1991). For example, Zhou identified four such mega-urban regions in the coastal area4Introduction(Shenyang-Dalian in northeast China, Beijing-Tianjin in north China, Shanghai-Nanjing-Hangzhouin Yangtze delta, and Guangzhou-Shenzhen in the Pearl river delta) and argued that these mega-urbanregions formed a main Street of China’s space-economy (Zhou, 1991: 89-122) (see Figure 1.1).However, models of these regions still remain largely at the stage of a mere description of the spatialdistribution of population and economic activities, and the delineation of their broad-scale features.There are few detailed studies on the internal dynamism of China’s major mega-urban regions whichaddress, for example, the driving forces of contemporary change and what the broader policyimplications might be. Moreover, the emergence of mega-urban regions in China raises a criticalquestion. Are they a new form of settlement transition? If so, what is the validity of the EMRsdescribed by Zhou as a distinct urban form and how well do they match the current models of theurban transition, which McGee and others have proposed for other Asian contexts?The process of rural to urban change involves economic, social, and political shifts, as wellas geographical changes in the distributions ofpopulation and workforce. These require an empiricalinvestigation, partly because the processes and outcomes are likely to vary widely over such a largecountry as China. The present research focuses on the Shenyang-Dalian corridor as just one ofChina’s major urban concentrations. The purpose of this research is to examine rural-urbanrelationships in China and test the validity of a new form ofurban settlement - the mega-urban regionor ElviRs in a specific setting. The unique contribution of this thesis is to use both field research and‘internal’ material5to investigate the fascinating dynamism of socioeconomic and settlement changesoccurring in the Shenyang-Dalian corridor over the last few years. In addition, I was born and raisedin north China and I worked in northeast China for many years. This has been a major positivecontributing factor to the successful gathering of data.51n China, many data sources are defined as ‘internal materials’ or ‘confidential’. Foreignscholars, even most Chinese scholars, cannot access such data and information.5IntroductionFigure 1.1China’s Major Mega-Urban Regions(Source: Adapted from Zhou, 1991)6Introduction1.2. The Shenyang-Dalian RegionThe Shenyang-Dalian corridor is located in the southern part of northeast China (Figure 1.2).Shenyang-Dalian has been an important part of China’s coastal open areas since 1978. However, theShenyang-Dalian region may be contrasted with other EMRs in China by way of its traditionally city-based industrialization (based on its rich natural resource endowments) which came to be reflectedin a dominance of heavy industrial sectors and high population concentrations in the large cities ofthe region. This is an ideal region in China to investigate the emerging regional space economy fora number of reasons. First, the Shenyang-Dalian corridor is the best example to test how the pre1978 city-based industrialization have affected mral-urban relations in China; this is because the citiesin this region were major focuses for heavy industrial investment from the central government (Liang,Zhao and Wang, 1990: 257). The corridor has also been the focus of many of China’s major state-owned enterprises. Even today, state-owned enterprises, such as machine tools, iron and steel,machinery, coal, petroleum, shipbuilding, chemical industry and building materials form the largestshare of the region’s economy and are proportionately more important than in other parts of China(Liaoning Foreign Affairs Office, 1992: 18).Second, the Shenyang-Dalian region was also an important part of Japanese colonialterritories in the 193 Os and the early 1 940s, which in part accounted for its form of developmentLiang, Zhao and Wang, 1990; Lu, 1990; Teng, 1992; Li and Shi, 1988). Consequently, it is also auseful region to delineate how China’s colonial experience has affected more recent socioeconomictransformations.Third, to date very little research has been conducted on the Shenyang-Dalian region. Someother scholars have conducted research on the Pearl river delta (such as Johnson, 1992; Lin, 1994),as well as the Yangtze delta (Marton, 1994). Yet, so far, northeast China has been an under-analyzedregion.7IntroductionFigure 1.2Location ofLiaoning Province and the Shenyang-Dalian CorridorMongoliaAutonomou:Regoj Province_____________________TiefaTiding.Fuxin.Belpiao Shenyang•Chaoyang•yang BnxiLmgyuanflZhOUPJmilaiche g• Skenyang-DaluuiJinxi CorridorXingcheng.BayuquanHebei Dandong NorthProvince KoreaZhuanghe,.l’ulandian________Jurisdictional AreaBoha, Sea ofCentralCityDalian Yellow Sea 0 100 km8Introduction1.3. Research Framework and MethodologyThe thesis attempts to examine rural-urban relationships in China, document rapidsocioeconomic transformations and assess the geographical impacts on the Shenyang-Dalian corridor.Accordingly, the thesis has four major foci. The first theme is to examine the distinctive features ofthe urbanization process in China. The second is to document the emergence of an EMR in theShenyang-Dalian corridor. The third is to examine time-space collapse processes in the region.6Finally, this thesis aims to explore recent socioeconomic changes along the Shenyang-Dalian corridorat the local level and to show how sectoral and structural shifts of economic activities in certainvillages of the region (including changes in occupation, income, and enterprise ownership) affectrural-urban relations. The empirical research is used both at the levels of county (xian) and village(cun) on the Shenyang-Dalian region to evaluate China’s existing urban development policy. Inparticular, this study will critically evaluate the practice ofthe PRC government in keeping rigid rural-urban divisions in administrative and allocative practices.The discussion will unfold in four parts (see Figure 1.3). Part One examines theoretical anddefinitional issues. It looks at the urbanization process in reforming socialist China and suggests amore suitable ‘three-stage’ approach to explaining the contemporary rural-urban transition in Chinais proposed. This model forms the framework for research contained in the remaining parts of thethesis.Part One also examines Chinese government policies and their effects on rural-urban relations.The political dimension is paramount because analysis in China is always confused by statistics -which in turn have been influenced by political ideology (e.g., the definition of’urban’ and ‘rural’).6J this thesis, the terms of “time-space collapse” and “time-space compression” are usedinterchangeably to capture the reduction in transaction and travel time made possible by improvedcommunication technology.9IntroductionFigure 1.3Thesis Framework and Data SourcesTRESISSECTIONPart One andIntroduction(Chapters1,2, 3,4)Part Two(Chapter 5)Part Two andPart Three(Chapters6,7,8,9)Part Four(Chapters10, 11, 12)Part Four(Chapter 13)and Part Five(Chapter 14)TUESIS FRAMEWORKPublicationsand ResearchPapersProvincial leveldata: statisticalyearbooks andresearch papersMunicipality andCounty level data:statistics, andgovernmentdocumentsVillage level data:Interviews andSurveys undertakenbyboththeauthor and theLiaoning RuralSocio-EconomicSurvey TeamDATASOURCESRESEARCHQUESTION:How mpidsocioeconomictransformationsimpacted onthe rural-urbantransition in theShenyang-Daliangrowth corridor10IntroductionPart Two of the thesis outlines the empirical research on the rural-urban transition in theShenyang-Dalian corridor since 1978. The first half of Part Two describes the broader regionalcontext and its historical development. The thesis then identifies the emergence of an ExtendedMetropolitan Region along the Shenyang-Dalian corridor and outlines its major social and economiccharacteristics.Part Three examines in detail the processes which have shaped the rural-urban transition inthe Shenyang-Dalian corridor during the 1978-1992 period. This is done by investigating thecontribution of transportation facilities and their impacts on flows of commodities and population,as well as the role ofgovernment policies and programs such as changes in the administrative system,industrial decentralization, and rural industrialization in the corridor.In Part Four, the focus of the scale of analysis shifts to the micro scale with case studyexaminations of the rural transformation in three villages along the Shenyang-Dalian corridor. Theinitial purpose ofthis part is to provide a close look at the lowest level of settlement hierarchy - ruralvillages. A phenomenon termed ‘invisible urbanization is defined through a broad analysis ofvillagelevel change. Part Four ends with a summary of the common experiences and problems in each casestudy area.Part Five then concludes the study by examining the validity of the EMR model at a moregeneral level as distinct urban form, and assesses the degree to which EMRs in China represent anon-going form ofMcGee’s theory of settlement transition in Asia. It draws the analysis together andtries to show what has been unique about the Chinese experience and what is special about theShenyang-Daiian EMR compared with developed and other Asian countries. Implications for theoryand public policy and suggestions for further research are also given.11Introduction1.4. Rationale of Data SourcesIt always problematic for scholars to interpret Chinese statistical data. Some of the statisticaldata are incomparable between regions and over time and some are not accurate. The reliability ofthe data is fi.irther aggravated by confusing definitions (see for example, Chan, 1994: 19). Therefore,finding the right data source and correctly interpreting statistical definitions are very important factorsinfluencing research concerning China’s socioeconomic development.Data for this dissertation include first-hand investigation (sight surveys, meetings, andinterviews), analysis of secondary data (statistical materials, research papers, government documentsand publications), and various other materials, such as government survey materials. Data for thethree case study villages were collected in two ways. First, a field trip from November 1992 to May1993 made it possible to conduct interviews directly with village heads, accountants, and family headsin the three selected villages. A second source was the survey results (unpublished and viewed as‘internal material’) conducted by the Liaoning Rural Socio-Economic Survey Team (LRSEST).Interestingly, this organization was a newly-established government section, aiming at collecting firsthand information from the rural household level. Because ofwell-established personal contacts, many‘confidential’ survey results and ‘restricted materials’ were also available for use. It is considered thatthe case study data used in Part Four are reliable and accurate. Secondary data and information forthe macro level studies at the provincial and county levels, carefully used with my clarification, weremainly collected from the Statistical Bureau ofLiaoning province, and its municipalities, as well asfrom various academic institutions.12The Chinese Urbanization Process in a Comparative ContextCHAPTER 2THE CHINESE URBANIZATION PROCESS IN A COMPARATIVE CONTEXT2.1. IntroductionThe relevance of utilizing urban transition models based on the historical experience ofdeveloped countries has been challenged by several scholars (Koppel, 1990: 47-70; Ginsburg, 1991b:27-46; McGee, 1987a and 1987b). They query these models which assume that an increase inurbanization associated with economic growth will be repeated in all developing countries. Theyargue that a careful analysis of the urbanization process in developing countries will suggest different“paths” for the urban transition. The aim of the rest of this section is to examine the arguments ofMcGee (1987a, 1987b, 1991) and others to a framework as a broader conceptual context for theempirical research on contemporary rural and urban transition in the Shenyang-Dalian corridor. Thisreview will appraise the applicability of previous western models to the Asian situation and examinenew models, such as the Extended Metropolitan Regions (EMRs) of Asia (McGee, 1987a; Ginsburg,1988). Then, in order to provide a more suitable framework for the remainder of the thesis, a threestage Chinese rural-urban transitional model will be introduced which will be tested in the remainderof this thesis.In Chapter 3, Chinese statistical definitions related to rural-urban relations will be discussedin order to avoid conceptual confusion over China’s rural-urban tradition issues. Chapter 4 willreview changing Chinese government policies related to rural-urban activities.13The Chinese Urbanization Process in a Comparative Context2.2. Previous Western Models of Rural-Urban RelationsIn general usage, urbanization is associated with the concentration of population into townsand cities and an increase in the level of urbanization. In the developed countries, it has beenassociated with economic growth and structural change with the movement of the labour force fromagriculture to non-agricultural occupations and structural change in the various sectors of theeconomy with industry and services becoming more important. This process is associated over timewith a large movement of population from rural to urban areas (McGee, 1967).As a demographic phenomenon, urbanization is interpreted as a process involving the absoluteand relative growth of cities and towns. This is often represented as taking place in two stages. First,an increasing proportion ofthe population is resident in urban places. Second, the proportion livingin the largest cities increase. Some works indicate that there is also a third phase in whichintermediate cities grow in size and create a more balanced urban system (Richardson, 1978; 1990).The end of the sequence is presented as an almost completely urbanized society (Johnston, 1984;Roberts, 1978).In developing countries, the shift of population from rural to urban areas is driven by severalforces. Lee (1966), focusing on migration decision making and factors affecting these decisions,argues for two polarized sets of elements known as ‘push and pull’ forces. Thus, rural poverty hasbeen viewed a universal ‘push’ force encouraging urban migration, and the ‘bright lights’ of the cityis obviously an example of a ‘pull’ force, attracting rural migrants into cities. While all cities indeveloping countries cannot provide enough jobs or economic opportunities, Todaro (1978) arguesthat migration from rural areas to the city is often decided upon by migrants’ perceptions as to thevalue of expected earnings. Although there is debate over timing and extent, this form of rural tourban migration, leading to eventual rural de-population (eventually the rural population dropped inabsolute as well as relative terms), was a widespread phenomenon in developed countries (Brigg,1973; Connell and others, 1976; Haque, 1984; Yap, 1975).14The Chinese Urbanization Process in a Comparative ContextLinked to the demographic process is the structural change in society consequent upon thedevelopment of industrial capitalism. Geographers have broadened this emphasis on populationchange with an interest in the underlying economic changes underlying urbanization (e.g. Carter,1981; Johnston, 1984; King and Golledge, 1978; Taylor, 1946). Cities are the foci of the exchangeprocesses and the optimum location for many production fUnctions. The search for an increase inproductivity leads to the development of urban factories to use the economies of scale that theygained from the processes of concentration and centralization. Therefore, the major economiccharacteristics of developed countries were variously associated with occupation shifts from theagricultural sector to the non-agricultural sector. Commenting on this process in southern Ontario,Whebell (1969), for example, points out that the resulting shift in spatial patterns would eventuallylead to tightly defined urban areas, where most industrial jobs were surrounded by non-industrial ruralareas. Here, we can see that the urbanization process in developed countries was correlated withurban economic growth and the population decline of rural areas. Thus, as farming became more andmore capital intensive, the ability of agriculture to absorb rural labour fell. Therefore, assumingsufficient growth in the industrial sector, non-agricultural sectors in urban areas became major labouremployment absorbers for the surrounding rural population.Urbanization is also said to induce changes in behaviour, and urban centres, especially largecities, have also been identified as centres of social change. Attitudes, values and behaviour patternsare modified in the particular milieu of the urban place, characterized by its size, density, and theheterogeneity ofits inhabitants (Wirth, 1938) and then spread to the rest of population by processesof dilThsion through the urban system and beyond it to rural areas (Johnston, 1984). The so-called‘urban-rural continuum’ theories (McGee, 1971) argue that the role of cities and urbanization ininducing positive social changes is also said to reinforce industrialization as the western urbanizationexperience indicated. The city is also considered to be the centre of social change, introducing newsocial patterns and breaking down the traditional patterns; and social changes occurring in cities arealso considered to spread eventually outwards to rural areas (Richardson, 1978).15The Chinese Urbanization Process in a Comparative ContextThis model of the urban transition based on the experience of developed countries has beenchallenged on several grounds. From the perspective of this thesis, the most important challenge isdirected at the assumption of the model that rural-urban differences remained clearly demarcatedduring the urban transition. It is now realized that the rural-urban distinction falsely representedreality and has to be replaced by a model of ongoing rural-urban interaction (Chambers, 1983,Gilbert and Gugler, 1982, Harris, 1982, Potter, 1985). Since the publication ofLipton’s (1977) urbanbias book, the whole rural-urban debate has been evaluated with much more emphasis on rural-urbanlinkages Koppel, 1991). However, Lipton’s (1977 and 1984) urban bias theory regards urban andrural societies as dichotomous entities and has portrayed the behaviour of urban elites versus the ruralpopulation as representing the most important conflict in developing countries. Recently, a groupof scholars, such as Potter and Unwin (1989) and Baker (1990), emphasize the increasing importanceof urban-rural relationships rather than their differences, and argue that a theoretical reappraisal isneeded to analyze the rural-urban transition. Accordingly, urban-rural linkages have sprung againinto the limelight ofmany development studies.Urban Corridors and Mega Urban Regions:Also relevant to the Shenyang-Dalian EMR are studies on the spatial patterns of industrializedmetropolitan corridor regions, such as the models of’megalopolis’ (Gottmann, 1961), ‘ecumenopolis’or ‘universal city’ (Doxiadis, 1963: 250), ‘development corridors’ (Yeung and Lo, 1992; Whelbell,1969: 4; Rimmer, 1991: 3-6), and ‘galactic metropolis’ (Lewis, 1983: 23-49), as well as the conceptsof ‘dispersed metropolis’ (Ginsburg, 1961: 631-640; Hayes, 1976: 3), and recently ‘extendedmetropolitan regions’ (EMR) (McGee, 1991 a; Ginsburg, 199 ib) (The last two concepts are basedon the Asian urbanization experience and will be discussed later in this chapter). Among them,Whebell’s corridor development model, based on metropolitanism in south Ontario, and Gottmann’s‘megalopolis’ in the northeastern seaboard of USA are western models more relevant to this study.Whebell’s (1969) study indicates that, within a metropolitan corridor, high speed arteries existessentially for the convenience of the inhabitants and businesspeople of the largest urban places.16The Chinese Urbanization Process in a Comparative ContextAlthough urban areas depend on surrounding rural areas for food and water, Whebell argues thatrural dependency on urban places is more prevelant, reflected by the fact that the problems ofeconomic life become more and more concentrated in the metropolitan areas, where stresses occurfrom the very rapidity of growth. Whebell hypothesizes five stages of the spatial development of acorridor system, from subsistence agriculture to commercial exchange, to rail transport dominance,to the early automobile period, and finally to a stage of rapid transit and metropolitanism (Whebell,1969: 5-6). Here, transport development is regarded as diagnostic of distinct stages of developmentof the urban system. Apart from the importance of changes in transportation links to this study ofthe Shenyang-Dalian corridor, is Whebell’s most advanced form of urban transition - the metropolitanstage. With relatively high levels of population mobility and no lack of labour-saving machinery, hepostulated that the agricultural population would decline, and rural to urban migration would involvemainly young people. This would lead to strong contrasts between young urban and elderly ruralpopulations, which of course holds many implications for social and political affairs. Essentially,Whebell postulated that urban areas would be the chief recipients of migrants both from outsideOntario and from its rural areas (Whebell, 1969: 12).Other approaches to the development of urban corridors, and so relevant to this thesis, arethe studies of mega-urban regions in developed countries. Mega-urban region studies in thedeveloped countries were enhanced by Gottmann’s study of ‘megalopolis’, a belt of cities whichextends some 800 kilometres from southern New Hampshire to the Virginia suburbs ofWashingtonand with a width between fifty and a hundred kilometres (Gottmann, 1961). Megalopolis areas, suchas Boston-Washington, Toronto-Montreal, and Tokyo-Osaka as well as the metropolitan belts ofGreat Britain and Germany demonstrate a remarkable degree of concentration of people, skilledlabour, wealth, knowledge, and economic opportunity (Gottmann and Harper, 1990). Theirlocational advantages (such as port facilities) have certainly contributed greatly to their respectiveregional development. Of importance to this study of the Shenyang-Dalian corridor is that the landuse pattern within a megalopolis is characterized by ‘a new mixture of urban and rural.’ The symbiosisofurban and rural can be expressed by the understanding that many people living in the ‘rural’ areas17The Chinese Urbanization Process in a Comparative Context(classified as rural population) are often in reality ‘city folks’ commuting to the cities to work, oftendue to a car-based pattern of living. So it may be said that the concepts of’time-space convergence’(Janelle, 1969: 351), ‘collapsing time and space’ (Brunn and Leinbach, 1991, xviii), and ‘a shrinicingworld’ (Abler, 1975) comprise one of the major contemporary characteristics of the Megalopolis.The work of Gottmann in the 1950s and Whebell in the 1960s have produced models of thespatial patterns involved in the rural-urban transition, based on the developed countries’ experience.Is it therefore correct to predict, as Gottmann (1961) believed, that the expansion of concentratedurban growth would be replicated “in slightly different but not too dissimilar version in many regionsof a rapidly urbanizing (developing) world” (Gottmann 1961: 257).To summarize, it should be emphasized that the traditional models ofurban transition (at leastup to the 1960s), predicted the eventual decline of the rural population due to rapid migration, andthe concentration of industry within the boundaries of the cities’ proper. Hence, it was assumed thatthe distinction (both clear spatial and occupational differentiation) between rural and urban wouldpersist as the urbanization process advances.More recent work on developed countries’ urban growth has focused upon the process ofurban expansion which are summarized by Bourne (Bourne, 1991). This research places greatemphases upon the processes of residential shifts from city cores to the suburbs and the movementofindustry and service firms into the outer-rings ofthe cities often motivated by the cheapness of landand the growing labour pool. In the United States, this process has been described in “Edge City”(Garreau, 1991) and in Soja’s study ofLos Angeles (Soja et al, 1983). While some similar processesare occurring in China, they are not as advanced as in the United States and it will be argued that theparticular features of the Chinese urbanization process are quite different.18The Chinese Urbanization Process in a Comparative Context2.3. The Changing Context of UrbanizationThe changing context ofurbanization in developing countries is important when comparingtheir experience with developed countries. As McGee argues, “there are distinctive facets of thephenomenon in the Asian context which reflect the different patterns of development andincorporation ofthe (Asian) countries into the international system” (McGee 1989: 93). It can alsobe argued that several dramatic socioeconomic changes in Asia within the last few decades have madethe Asian urban transition more special. These features are considered briefly below.Much Faster Time-Space Collapse:When comparing the contemporary Asian urban transition with the period of initialurbanization which occurred in western countries in the early to mid49th century, a great numberof new concepts have been created to describe how transport and telecommunication innovationsfacilitate the spatial reorganization of human activities (Janelle, 1969: 353). We frequently speakabout the ‘shrinking world’ (Brunn and Leinbach, 1991, xviii). For example, because of improvementsin transport and communications more people are able to move often and much more rapidly thanever before. In a general sense, therefore, distance and time have diminished and location has becomemuch less relevant than ever before. Compared with earlier periods, more activities are peripateticon a large scale, more are shared, and nearly all are accessible on the international network (Jones,1990: 112-113). With the development of modern technology, time-space has converged morerapidly in Asia than that in the developed countries at comparable period of early urbanization. Thegreater freedom of movement has loosened the urban fabric, and activities have become morescattered over the rural areas around the major large cities and modem urban-type activities such asproduction and commerce are no longer tied to compact urban areas. The importance oftransportation technology to these differences is a key feature in this study of the Shenyang-Dalianregion.19The Chinese Urbanization Process in a Comparative ContextDifferent Historical Experiences:Another important factor which differentiates the Asian urban transition from the developedcountries is its distinct historical experience. The prevailing paradigm of the urban transition drawsits rationale from the historical experiences of urbanization which occurred in Western Europe andNorth America in the 19th and 20th centuries. Clearly, this is not neatly transferable to theurbanization process in Asia. Most Asian countries, as McGee (1 987a) argues, have been unevenlyincorporated into the world economic system from the 15th century onwards due to the differentexperiences of colonialization. The European and later Japanese colonial rule, directly or indirectly,generated a port-based, export-oriented urban economy existing largely for the benefit of themetropolitan countries. Furthermore, the uneven incorporation of these Asian countries into a worldeconomic system created divergent patterns of urbanization, which reflect the different interactionsbetween Asian countries and the world system than those of the developed countries.Changes In The World Economic System:Finally, forces leading to the globalization of economic activities in the post-1945 period, suchas direct foreign investment and international financial flows, have greatly accelerated the transitionalprocesses oflarge cities in developing countries, and this aspect was largely missing - or at least muchless evident- at the time of urbanization in Western Europe and North America. Large cities indeveloping countries play dual roles. They are both participants of the global system as well asmetropolitan centres of a nation (Armstrong and McGee, 1985). The great cities in the developingcountries are no doubt part of a global system, but they are in most part also expressions of their owndistinctive cultures. As Jones has indicated, the large cities of developing countries became points ofcontact between indigenous and intrusive cultures during the colonial period. Today these cities haveconsiderable elements ofa ‘global culture’ which bring them into the world orbit, but more importantlythey are part of an overwhelmingly indigenous society and culture. Not all these cities share in thetransitional network which is the essence of a ‘world city,’ but they are metropolises in their own right20The Chinese Urbanization Process in a Comparative Contextbecause they embody the achievements of distinctive local cultures, exercise political and socialcontrol over large areas, and are magnets which attract millions of migrants (Jones, 1990: 16-17).Again, the role and inction of urban systems in developing countries have been changed due toemergence ofa world economic system. Here, what is specific to Asian countries is their role in theworld system (Armstrong and McGee, 1985). The way the Shenyang-Dalian region has beenincorporated into the world economy is a key feature of this study (the Shenyang-Dalian corridor’sincorporation into the world economy both the Japanese colonial period and the post-1978 reformperiod will be discussed in Chapter 5).In summary, following the above arguments (which are set out in more detail in McGee(1987, 1989, 1991a) and Ginsburg (1991a), such different socioeconomic conditions and divergentpatterns of urbanization together suggest that the conventional view of clearly defined rural-urbandifferences and the process of transition, which were mostly based on the western experiences, cannot neatly fit the Asian reality and so needs to be reevaluated. Moreover, although an awareness ofthe importance ofthe urban-rural transition and urban-rural relationships in Asia has attracted moreand more attention, the bulk of research in this field has still been devoted to the analysis ofurban andrural development as separate issues. Increasingly, it is argued that rural and urban change shouldbe seen not as processes in themselves, but rather as the products of deeper structural economic andsocial transformation, which together involve both rural and urban areas. This reorientation ofattention, particularly in developing Asia, has enabled different kinds of research agenda to beformulated (McGee, 1989) and is a particular focus of the present study of the Shenyang-Dalianregion.2.4. The Asian Extended Metropolitan Region (EMR) ModelAs a result of the interaction of the processes identified earlier in this chapter, McGee andothers have recently identified new and distinctive regions of economic interaction and growth in21The Chinese Urbanization Process in a Comparative ContextAsia. Such mega-urban regions are termed as ‘Desakota’7 or ‘Extended Metropolitan Regions’(EMRs), such as Tokyo-Osaka (Ginsburg, 1991b), the four Chinese EMRs (Zhou, 1991), theBangkok EMR (Greenburg, 1994), and regions such as Taipei-Kaohsiung and Java (McGee, 1989).With highly-mixed rural and non-rural activities, EMRs are normally located along corridors betweenthe large cities in various Asian countries. In fact, the EMR phenomenon concerns the emergenceof large urbanizing regions, sometimes stretching over one hundred kilometres, typically locatedbetween and including two existing large urban centres. These EMRs are characterized by intenseconcentrations and flows ofboth people and commodities. McGee (1987) and Ginsburg (1988) haveidentified and documented a general model for this process, and they conclude that the traditionalurban-rural divide in many Asian countries is becoming blurred. Moreover, as the EMRs becomeincorporated into the global economy, McGee and Ginsburg have argued that these mega-urbanregions may offer an alternative spatial form as well as a different way of understanding the urbantransition process in Asia to that provided by older models such as those provided by Gottmann andWhebell.According to McGee’s (1991b) EMR. model, these mega-urban regions reflect a new anddistinctive pattern of settlement transition. The major features of such regions emerging in Asia arebriefly summarized as follows:First, these regions are mostly in wet rice areas where paddy cultivation correlates positivelywith high population density. The density of rural population in these EMRs is sometimes higher thanin western urban suburbs. One of the results of this high density is the freeing of labour for nonagricultural activity due to electrification, irrigation improvement, and increased mechanization -which leads to lowering the labour absorption capacity ofthe land. Therefore, large numbers of ruralworkers in these areas are available to be employed. Considering the case in the Shenyang-Dalian7The concept of desakota is coined by T. G. McGee from Indonesian kota town, and desavillage. For details, see T. G. McGee, 1991a: 7.22The Chinese Urbanization Process in a Comparative ContextEIVIR, high density is one ofthe major characteristics of this region, but rice-growing agro-economicniches is not necessarily one ofprerequisites ofgrowth in the Shenyang-Dalian EMR It is postulatedin this study that non-rice farming activities also render the large rural labour supply.Second, all these regions are located along major transportation routes. Historically, theEMRs in Asia have already had a well-developed infrastructure of roads, canals, and informationnetworks. These have assisted in speeding up the circulation of commodities, people, and financialactivities as well as information. The availability of relatively cheap transport facilitates the quickmovement between the core city and the remainder of the region along major transport routes. Oneofthe outcomes is that family members can engage in different economic activities in different places.Thus, some family members within the EMRs may work in the central cities, commuting by bus,moped, or even bicycle, depending on the distance from their rural residences. In fact, certainmembers might actually be living inside the core cities or their suburban satellites, and be remittingportions oftheir incomes to remaining members of the family who may be still involved in agricultureon the city fringe. Rural households therefore can increasingly earn more income from nonagricultural activities and create a multiplicity of income sources within the same household. Thisoften leads to household income figures that are much higher than in other non-urban regions in thenation as a whole (Ginsburg, 1991a; McGee, 1991b). Interestingly, within the Asian EMRs, not allrural labour moves to the urban core, but rather often commutes between the rural and urban areas(in most part, through daily commuting, but also through working and living in the city for manyweeks at a time). There is supporting evidence which shows that the urbanization process within theEMRs does not require a massive rural-urban migration. This unique rural-urban transition patternsignificantly distinguishes the Asian experience from other developing regions (as also argued byDwyer, 1972). The implications for this study are not only the frequent population mobilitiesbetween the rural and urban areas within the corridor, but also the peasants’ involvement in bothfarming and non-farming activities.Finally, these mega-urban regions are also characterized by an intensive mixture of settlement23The Chinese Urbanization Process in a Comparative Contextand economic activity with agriculture, industrial estates, and suburban development, and other usesexisting side by side. The fringes ofthese regions are to some extent ‘grey’ zones from the viewpointofthe state authorities. Urban planning and building regulations may not, for example, apply in these‘semi-rural areas’ (McGee, 1989). This study proposes that an ‘invisible urbanization phenomenonhas emerged in the Shenyang-Dalian region due to the non-urban areas approaching urban levels ofoccupations, living standards, and consumption patterns.Overall, the Asian EMR model has demonstrated that these regions tend to dominate thenational space economy ofthe countries concerned. They involve a juxtaposition of the agriculturaland non-agricultural economy and functions between cities and the surrounding countryside. Nowthe question is how these Asian EMR features fit into the Chinese case. Therefore, the thesis turnsto examine each of these EMR features in the Shenyang-Dalian analysis by taking into account thespecial ‘Chinese characteristics’ of the urbanization process.2.5. China’s Special CaseWithin Asia, Chinese cities are both Third World cities and Socialist cities. China’s rural-urban transition has been rather special due to its strong government interventions- both before andafter the 1978 economic and political reform. To begin with, the strong centralized control of theeconomy since 1949 has impacted on the space economy, rural-urban relationships, and urbanizationpatterns (Chan, 1992b: 275-305; Chang, 1981: 202-219; Kirkby, 1994: 128-155; Kwok, 1981: 147-8Savage and Warde classify five prominent urban types (Third World Cities, Global Citiesor World Cities, Old Industrial Cities, New Industrial Districts, and Cities in Socialist Countries).Third World Cities tend to posses distinctive features of ‘over-urbanized’, ‘urban biased’, and‘dualistic.’ Cities in Socialist Countries have experienced dynamics very different from those incapitalist world. They have tended to grow more slowly than their capitalist counterparts. Manysocialist regimes have been explicitly anti-urban and the immediate post-revolutionary periodtended to freeze, and in some cases reduce, urban population growth. These cities have beensubject to greater levels of planning and zoning (Savage and Warde, 1993: 39-40).24The Chinese Urbanization Process in a Comparative Context193; Lo, 1987: 440-458; Ma, 1977: 1-12; Ma and Hanten, 1981; Murphey, 1976: 3 11-329; Pannell,1990: 214-236). Moreover, since the reforms of 1978, China has experienced very importantsocioeconomic changes (Ho and Huenemann, 1984; Johnson, 1992: 185-220; Kwok and others,1990; Laquian, 1989; Linge and Forbes, 1990: 10-3 4). So, in order to understand the contemporaryrural-urban transition, it is necessary to analyze the changing role of the Chinese government.In another context, Musil’s research in the socialist countries ofEastern Europe indicates thatthe nations’ urbanization and settlement strategies had some permanent features in common that weredue to a socialist style ofgovernment, namely a ‘planned’ or ‘managed’ urbanization (Musil, 1980: 6).Managed urbanization presupposes the working out of a general strategy embracing both goal-settingand the instruments to be used. The central issue common to all the socialist countries is how tointegrate the social and economic goals of socialist ideology. The search for the optimal synthesisconcerns both regional policy and urbanization strategy, especially in efforts to regulate theconcentration processes. Research in the socialist countries is concerned, then, not only withanalyzing the urbanization process itself but also with formulating normative principles for itsadvance. Therefore, central to urbanization process in the socialist countries is the significant rolewhich the government plays in terms of control of production and distribution within a communistsociety (Forbes and Hamilton, 1987).Literature on the Chinese-type socialism based on the pre-1978 available information supportsthe idea ofa distinctive Chinese model ofgiving priority to agricultural development as attacking theproblem of development at its root, and thus offering greater promise as a unique, alternativeapproach for other underdeveloped societies (Oksenberg 1973: 1-16; Maxwell 1979; Weisskopf1980: 283-318). Such a ‘pro-rural’ position believes that the Maoist ‘anti-urban’ development strategywas characterized by policies that favoured the countryside over the city which aimed at ultimatelyeradicating the differences between the two (Meisner 1974: 207-252; Forbes and Thrift, 1987).Therefore, Ma concludes that “any serious study of China’s urban evolution since 1949 must takeMao Tse-tung’s explicit anti-urban and pro-rural policies into consideration” (Ma, 1976: 114).25The Chinese Urbanization Process in a Comparative ContextThe major features of Chin&s urbanization policies include the transformation from consumerto producer cities; establishing industrial enterprises in rural communes, and improving services inrural areas; limiting the growth ofurban population by controlling inflows to cities, especially to largecities; resettling urban intellectuals and youth in the countryside to promote rural development; anddeveloping urban industries that support agriculture (Bernstein, 1977; Cell, 1980: 48-69; Chen 1972:361-386;Chiu, 1980: 89-107, Lewis, 1971: 1-26, Ma, 1976: 114-118, 1977: 1-12;Murphey 1975:165-168).This ‘anti-urban stance in urbanization was said to contrast with Stalin’s urban-industrial bias.Therefore, some scholars argue that “Soviet and Chinese patterns of urban development areintrinsically dissimilar” due to the different concepts ofurbanism and sectoral priorities adopted bythe two communist regimes (Frolic 1976; Meisner 1974; Bornstein, 1985; Spulber, 1963: 1-16).However, the research works based on information first made available since 1978 haveincreasingly questioned and refuted many of the past assertions and presumptions about the Maoistdevelopment model (Prybyla, 1982: 38-42; Leung and Chan, 1986; Stone, 1986: 63-72). In the fieldof economic development, careful research by Lardy (1983) and others (e.g. Tang, 1984) argue thatthe Maoist strategy was indeed heavily skewed in favour of industry. Kirkby’s (1985) work onurbanization has made an important advance in the field. He refutes the argument that the Chinesegovernment embodied a philosophy of favouring development of the countryside over the city.Instead, he argues that the practice of restricting urbanization in China was a result of the pursuit ofhigh rates of industrialization and accumulation rather than any ideological ‘anti-urbanism.’ This isan important dimension of China’s urbanization patterns and policies. This argument was furtheradvanced by Chan and Xu (1985: 583-613), Perkins (1990), and Zhang (1991), as well as in studiesfocusing on the impact ofthe Household Registration System9on migration (Christiansen, 1990: 78-9The Household Registration System (hukou) divides Chinese citizens formally either intopart of the agricultural population or ‘urban residents.’ For details see Chapter 3.26The Chinese Urbanization Process in a Comparative Context91; Li, 1992), and also in comparative urbanization studies (Douglass, 1988).Post-1978 urbanization policies in China have been said to involve a shift from the previous‘anti-urban’ approach to one favouring rapid urbanization (Banister 1986; Kwok 1987). Yet therecent work of Chan (1994) argues while the Maoist approach was certainly not in favour of ruraldevelopment, neither can one categoricafly label the post-Mao policy as ‘pro-urban.’ Chan argues thatthe reality is more mixed and fI.ill of apparent contradictions (Chan 1994: 13). Although post-Maoleaders have abandoned previous urban-biased practices, many Maoist legacies have continued to playan important role. For example, as far as urbanization is concerned, the Maoist policy of restrictinglarge urban in-migration to control urbanization costs is called an ‘invisible wall’ and is a continuingpolicy theme (Chan, 1994: 136).While China adopted this ‘managed’ approach to urbanization, leading to restriction on ruralto urban migration between 1949-1978 and leading to only a 17.9 per cent national urbanization rateby 1978 (Chinese Academy of Social Sciences, 1991), this government orientation involving strictcontrol is no longer so true. China’s reform programmes, starting from 1978, have gradually relaxedthe regulation controlling population mobility (Christiansen 1990: 78-91; Li 1992). This does notnecessarily say the post-1978 period is an ‘un-managed’ era. The Chinese government still keepsurban growth under its control. As long as migration causes problems, such as congestion of majortransportation stations, potential social insecurity in major large urban centres, the peasant migrantsare often forced back to their home towns.Nevertheless, the post-1978 period witnesses a relaxation of regulation towards populationmobility control and some parts of China, e.g. the coast region, have experienced rapidsocioeconomic transformations. One of the most important changes for this study, which hasemerged after the reform, is the ‘new’ occupation category of ‘peasant worker’ (yigongyinong ornongmingong, meaning people who are both farmers and factory workers) (Huang, 1990: 288-30 1;Blecher, 1984: 109-123;WuandZheng, 1986: 14-15;YaoandWu, 1982). YaoandWu(1982)27The Chinese Urbanization Process in a Comparative Contextwere among the first scholars to study these ‘farmers-and-workers’ migrants, and suggested that theiremergence was leading to a special form of urbanization, one based on the integration of rural andurban activities in rural areas (This complex issue will be discussed fully in Chapter 7).This brief summary ofexisting literature has argued that state government policies have beenintegral to understanding the urbanization process in China and that it is not adequate to view China’spost-1949 process ofurbanization as uniform. Neither can one ignore the fact that since 1978 China’surban and regional development issues have been linked with trends in the larger world system (e.g.dramatic increases and expansion in the global trade and foreign investment in China). Thus, China’surbanization and development processes have been quite varied.2.6. EMR Research in China:The post-1978 reform programs have led to the emergence of the large urbanizing regionsin China - including rural, urban, and suburban areas in close proximity along the pattern envisagedin the EMRs model discussed earlier. The EMR research by Chinese scholars is merely at a stage ofmacro-level description, such as the location of China’s major EMRs and their major socioeconomicfeatures. In 1989, Zhou commenced research on China’s mega-urban regions. The term he used todescribe the rapid socioeconomic changes in the urbanizing corridors along the coastal China wasMetropolitan Interlocking Regions’ (MTRs). The dimension of each MIR is about 50 kilometre radiusaround incorporated cities located on major transportation corridors (Zhou, 1991: 89-112). Heidentified four MIRs and two ‘pre-MIRs.’ Located along the east coast of China, these four MIRsare Shenyang-Dailan in central and southern Liaoning province; Beijing-Tianjin-Tangshan in northernChina Naijing-Shanghai-Hangzhou in the Yangtze Delta and Hong Kong-Guangzhou-Macao in thePearl River Delta. Two pre-MIRs are the Shandong Peninsular and the seaboard ofFujian provincefrom Fuzhou to Xiamen (Figure 2.1) (Yao, 1992).28The Chinese Urbanization Process in a Comparative ContextFigure 2.1China’s Major Urban Clusters(Source: Adapted from Yao, 1992: 24)29The Chinese Urbanization Process in a Comparative ContextOther Chinese scholars classifj China’s ElviRs into different groups based on their size andregion ofinfluence. For example, Yao (1994: 24) and others have identified up to 13 urban clusters.According to the size ofurban cluster, Yao recognized three major classifications, namely ‘large andsuper-large scale urban clusters,’ ‘medium scale urban clusters,’ and ‘small scale urban clusters’ (seeFigure 2.1). The ‘large and super-large scale urban clusters’ include Shenyang-Dalian, Beijing-TianjinTangshan, Shanghai-Nanjing-Hangzhou, and Guangzhou-Shenzhen-Hong Kong in the Pearl Riverdelta. These comprise several very large cities (Shanghai, Beijing, Shenyang, Guangdong, Tianjin,and so on) and their surrounding areas. Within these urban clusters, the transportation networks(highway, railway, airports and sea ports) and telecommunication facilities are at an advanced levelwhich make them possible to connect with, and deliver their services, nationwide. The daily directservice radius ofleading cities reach as far as 150-200 kilometres. The ‘medium scale urban clusters,’such as Harbin-Ulanhot, Shandong Peninsula, Fuzhou, are comprised of several large or mediumcities and have accessible local transportation networks. The daily direct service radius of the citieswithin urban clusters can reach as far as 80-100 kilometres. The ‘small scale urban clusters,’ such asZhengzhou, Xian, Lanzhou-Xining, Wuhan, Changsha, mainly act as local economic centres (Yao,1992).The existence of such urbanizing regions, which involve rapid changes in both urban and ruraleconomies, has eroded the traditional urban-rural dichotomy which existed in China. Rapid rural-urban interaction, and the integration ofthe rural-urban economy within these EMRs, represent a newspatial economy and demonstrate a new form ofrural-urban transition. As will be shown later in thisthesis, there are many ramifications for urban-rural planning and management.2.7. A Stages Approach To Rural-Urban Transition In ChinaAt this time, a reinterpretation of rural-urban relations is required: one which draws onprevious literature but which recognizes the contemporary trends leading to a new spatial paradigmbased on the EMR construct. Moreover, so far, most studies of China’s EMRs have been largely30The Chinese Urbanization Process in a Comparative Contextdescriptive. There are few detailed studies on the internal dynamism of these regions which address,for example, the driving forces behind the emergence EMRs in China, whether this phenomenonrepresents an ongoing urban transition process, what the broader policy implications. A newframework is therefore necessary to guide further empirical research on the contemporary urbantransition. Accordingly, this thesis proposes a three-stage rural-urban transformation model, onewhich covers the last four decades of the postwar period (It is shown that changes of politicalideology and government policies towards urban-rural relations are most critical10). These threestages are briefly described here, and will be used in Chapters 4 and 5 to organize more detailedinformation on the hukou system and its impacts on urbanization and rural-urban relations as well aspolicy changes towards rural-urban transition.Stage I covers the period of immediate post-revolutionary reconstruction (from 1949 to themid-1950s); Stage II lasts about 17 years from 1960-1978, including the ‘cultural revolution’ period(1966-76); and Stage ifi is the period of economic reforms (post-1978) (see Figure 2.2). Each stagehas its own characteristics in term of degree of involvement in the global system, unique urban-rurallinkages, role of the government, and specific patterns of the spatial economy. This modelincorporates the following components, which are both sensitive to China’s post-war history andimportant features in later parts of this thesis:1) the development of a distinctive government policy on human settlements (including thehousehold registration system);2) external relations (i.e. economic connection with the world system, such as the open citiesand special economic zones and rapid growth of foreign investment);3) structural changes in ownership patterns in both the urban (i.e. heavy industry, lightindustry, and tertiary sectors) and rural economy (including agricultural and non-agricultural10The following essential components, which reflect the Asian macro-spatial framework,are important for the establishment of the model: external relations, urban formal and informalsectors, rural export sector, and rural peasant economy, and are suggested by Lo, Salih andDouglass, 1981: 7-43.31Figure2.2China’sRural-UrbanTransformationModelI I IStageI(1950s)StageII(1960-1978)StageIII(post-1978)LinkstotheWorldMarketSystemGovernmentEconomicStructureOwnershipStateCollectiveStateCollectiveState,PrivateandCollectiveNotes: LI=Light Industry;HI=HeavyIndustry;TS=TertiarySector,A=Agriculture; NA=NonAgriculture; 1-contmlledproduction anddistributionsystem; 2&3-surplus transfer mechanismfmmrural agriculturetourbanindustry;4-mobilityofpopulationPrivate,CollectiveThe Chinese Urbanization Process in a Comparative Contextcomponents); and4) rural-urban migration; and rural-urban division.These components have been chosen to illustrate that China’s rural-urban transition is differentnot only from western patterns but, as indicated earlier, different also from general urbanizationprocesses in other Asian regions. This is because of strict controls on rural-to-urban migration,extreme self sufficiency promoted in rural areas prior to 1978, openness and rural reform, limited selfdetermination in rural areas only recently (after 1978), and recent promotion of rural industry andindustrial decentralization by the government rather than the market.The Pre-1978 Period:The major differences between stage I and II comprise the direction of migration and therelationship between industrialization and urban growth. Thus, during the first stage, there was noclear policy in the PRC to limit rural-to-urban migration. Actually, the rapid industrialization planof the 195 Os, especially the Great Leap Forward, favoured city-based industrialization. Largenumbers ofthe rural labour force were called upon to move to China’s major coastal and inland citiesto meet the need of rapid expansion of heavy industry (Chan, 1994). Thus, this stage wascharacterized by massive rural-to-urban migration, resulting a pattern of industrialization with rapidurban growth. The Great Leap Forward (1958-60) was launched on the premise that rapidmodernization could be accomplished better through mobilization of the unskilled masses thanthrough the introduction ofnew technology, in other words, better through ideology and politics thaneconomic planning. This was a two-pronged attack, with the Chinese people told that they must learnto ‘walk on two legs’ by gaining self-sufficiency in both agriculture and industry (Salisbury, 1990: 85).Rural-urban linkages were ignored at this time mostly due to the introduction of the commune systemfrom 1958 onward which was designed to stimulate self-sufficiency and independency in the citiesand in rural areas. This radical campaign ended in failure by the late 1950s and the early 1960s dueto unrealistic campaigns, combined with natural disasters (e.g. a famine in 1960-1962, see Dando,33The Chinese Urbanization Process in a Comparative Context1983: 262-280 and Ashton, 1984: 6 13-645).The failure ofGreat Leap Forward caused the Chinese decision makers to select an alternativedevelopment plan focusing on de-urbanization. Thus, the features of Stage II were the directoutcome of this policy and urbanization processes were characterized by a ‘zero-growth’ ofurbanization level (Tang and Jenkins, 1990). This was achieved due to a strict enforcement of theHousehold Registration System (hukou) (commenced in 1958) combined with the ‘sendt-down’ oftens of millions of urbanites to the countryside (Chan, 1994; Chen, 1972). Although, thecommencement of agro-processing in rural areas served agricultural production (Sigurdson, 1977),most industrial projects were urban-oriented (Chan, 1992a: 4 1-63). Therefore, industrializationwithout the rapid expansion of urban population formed a distinct feature of Stage II.Yang (1990) calls the development strategy during Stage I and H the Maoist developmentstrategy.’ Though it varied in degrees in different sub-periods, the Maoist strategy dominated China’sindustrialization efforts until it gradually faded out in the late 1970s. It relied on heavily redistributivemeasures in an attempt to equalize regional economic development, emphasized extensive rather thanintensive modes of economic growth, and allowed no foreign direct investment in China.China’s pre-1978 production and distribution were strictly controlled and planned by thecentral government. Within such a planned economy, the function of the market in determining price,plans, allocation, and distribution ofgoods varied over time, but was generally minimal in the first twostages from 1949 to 1978 (Ogden, 1992: 75-117). The regional development policy was dominatedby a ‘self-reliant’ strategy. On the one hand, the government controlled production and set upproduction quotas for producers, and factories, or production teams in villages, followed theseorders with very limited autonomy. On the other hand, the role of government was very strong,reflected by an administrative transfer mechanism of funds for the benefit of city-basedindustrialization. The government controlled the distribution system, fixed prices for all commodities,and created a mechanism to transfer rural surpluses to develop urban industry by fixing lower34The Chinese Urbanization Process in a Comparative Contextwholesale price for agricultural products brought to the cities while forcing peasants to pay highprices for industrial goods (Cheng, 1990: 65-77; Chen, 1982: 5574).h1 During Stages I and II therewas a clear distinction between urban and rural areas, characterized by a dual spatial economicstructure, i.e. the urban economy was dominated by manufacturing industry and the rural economywas dominated by agriculture (mainly grain production) (Schran, 1993: 135-136; Kwok, 1992: 65-85). Urban-based industrialization was possible only because of the government transfer ofagricultural surplus to urban industrial investment (Cheng, 1990: 65-77; Xue, 1979). In this period,population mobility between rural and urban areas was strictly monitored and controlled by thegovernment. Thus pre-1978 Chinese cities may be characterized as ‘isolated islands’ (Cheng, 1990:69).Both Stages I and II shared certain features in terms of their rural-urban relations. Stage I(1949-60) witnessed the paralleled growth of both urbanization and industrialization, mainly due tothe influence of Russian planners and the adoption of Stalin’s city-based industrialization (Chan,1994). By contrast, Stage II created a model of industrialization without rapid urban growth. Thisperiod was characterized by an industrialization process that entailed ‘zero’ growth in China’surbanization levels (for details see Chapter 3). However, at a broader level, the urbanization policyduring Stages I and II (Maoist period) was largely a product of China’s dualistic economy (Bhalla,1990: 1097-1110). As shown in Figure 2.2, rural-urban relations in the pre-1978 period werecharacterized by a dual structure of the national space economy in both sectoral and geographicalterms. In summary, China’s dualistic economy was characterized by a rural economy dominated byagriculture (mainly grain) contrasting with city-based heavy industry (Kwok, 1992: 65-85). Somescholars argue that China’s urban areas were protected by an ‘invisible wall’ of administrative measuresset up against any possible in-migration (Chan, 1994: 143; Cheng, 1990: 65-77; Xue, 1979). Suchurban-rural dualism was much stronger in Maoist China than in many other Third World countriesin similar development stages, mainly because the former was both structural and state-policy initiated‘1This issue is discussed in detail in Chapter 3.35The Chinese Urbanization Process in a Comparative Context(Chan, 1994).Another common feature during stages I and II was the very limited involvement of China inthe world system. In the 1950s this was mainly confined to its links with the former Soviet Union andother socialist counties. The decades of 1960 and 1970s also witnessed very limited external linkages(Phillips and Yeh, 1990: 226-229).The Post-1978 Period:Stage UI brought in a wide variety of changes. The year 1978 was a turning point in China.Following 1978, China adopts a new development strategy which emphasizes regional comparativeadvantage, accepted regional disparities as inevitable, encouraged foreign investment and internationalinteraction, and sought to foster technological innovation (Yeung and Ru, 1992: 1-24; Ho andHuenemann, 1984; Denny, 1991: 186-208). An important spatial development has been the shift inChinese government policies to favour coastal region over the interior (Cannon and Jenkins, 1990).The government reoriented its policies to develop the coastal areas first, as they believed that coastaldevelopment would serve as a catalyst for the modernization ofthe whole country (Yang, 1990). Thenotion of regional comparative advantage is central to understanding the post-1978 regionaldevelopment policy. The government advocated that each region specialize in its comparativeadvantage. That is to say that the regional division of labour was in the national interest, even if oneregion moved ahead of the others in terms of economic development.To further this aim, the coastal region, including the five Special Economic Zones (SEZs) andCoastal Economic Development Zones, such as the Shenyang-Dalian open economic zone (LiaoningPeninsula Economic Development Zone) were granted in 1984 special administrative and economicpowers (Fincher, 1990: 35-44; Phillips and Yeh, 1990; Yee, 1992). Firms located within these specialzones, now enjoy tax privileges and other benefits (Naughton, 1987: 5 1-80). For example, from 1984city officials such as in Tianjin could approve joint venture projects with capitalizations of up to36The Chinese Urbanization Process in a Comparative ContextUS$30 million (Edgington, 1986, Laquian, 1989). The reduction of bureaucratic formalitieseverywhere greatly accelerated development in the coastal region (Laquian, 1989). Arguably, thesereforms have invigorated Chin&s economy. In the past decade for instance, its GNP averaged a 9.3percent increase annually. China’s GNP, National Income, and State Revenue have all more or lessdoubled since 1980 (SSB, 1991). As might be expected, urban-rural relations and China’s patternsof spatial economy have changed tremendously.In fact, the third stage of China’s rural-urban transition is an outcome of the recent economicreform programs which caused rapid socioeconomic changes and reshaped rural-urban relations(Figure 2.2). Since 1978, China’s ‘open door’ policy has gradually integrated its economy into theworld economy and trade with Japan, Hong Kong, USA, Taiwan, and other countries has increasedrapidly (Phillips and Yeh, 1990). China is no longer an isolated country but has integrated itseconomy with the world economic system. Of importance for this thesis is the fact that rural-urbanrelations have now become more integrated (Putterman, 1992: 467-493), and the strict dividebetween them is now becoming blurred in many places. This is particularly the case in the fourExtended Metropolitan Regions along the coast (such as Shenyang-Dalian in northeast China,Beijing-Tianjin in north China, Shanghai-Nanjing-Hangzhou in Yangtze delta, and GuangzhouShenzhen in the Pearl river delta).The Major Factors Influencing the Post-1978 Rural-Urban Linkages:The change in rural-urban relations during this period of time is mainly due to the changesbrought about by the reform policies (both rural and urban reforms), and other administrative changesrelated to rural-urban relations. In sum, these include the broad-scale rural reforms initiated in 1978,rural industrialization policies, the relaxation of population mobility regulations (e.g. changes in thehousehold registration system), and policies for the establishment of’open areas’ (such as open coastalcities and open zones along the coast), as well as encouraging development of rural free markets(Byrd, 1991) (Figure 2.3).37The Chinese Urbanization Process in a Comparative ContextFigure 2.3Post-1978 Rural-Urban Linkages and Major Influencing Factors38The Chinese Urbanization Process in a Comparative ContextThe most fundamental reforms that swept China during the 1980s were those in the ruralareas. These included the implementation of the ‘household responsibility system,’ the lease of landto households, and the push for economic diversification, including in particular the encouragementofrural enterprise, which involved the rapid growth ofthe small enterprises and other non-agriculturalactivities in rural areas (Fincher, 1990: 35-58; Leeming, 1993). The responsibility system was a clearbreak from past practice when the income of members ofwork-terms and brigades was based on theaverage income generated by the entire brigade or commune. In this period, the more productiveteams and team members had their hard-earned gains diluted by the less productive ones (Wu and Xu,1990: 131), but the responsibility system made households free to band together and farm theircombined field. Thus those who preferred to engage in non-agricultural activities were allowed tosublease their plots to be worked by others. Such arrangements often included a guarantee to supplythe original lessee with rice or wheat at government-set prices, thus enabling the original lease holderto pursue non-agricultural activities with the certainty that low-price staples would be available (Wuand Xu, 1990: 133). The most important outcome of these new arrangements was that while theresponsibility system greatly enhanced agricultural productivity, it was also necessary to diversify therural economy to promote growth and to provide employment opportunities for the vast underutilized rural labour force (Byrd and Lin, 1990; Johnson, 1992: 185-220; Johnson, 1986, Leeming,1993: 94-107).The drive towards rural economic diversification not only shifted peasants to other branchesofagriculture12- fisheries, forestry, and husbandry- but also the formation of large numbers of newrural enterprises provided employment opportunities for those displaced from growing monoculturecrops. These new enterprises- including manufacturing, commercial, and service activities-flourished in prosperous rural areas or near large urban centres (Fei, 1993: 12; Lee, 1991: 147-148;Byrd and Lin, 1990; Du, 1993). From the government’s perspective, the promotion of such‘21n China, “Agriculture” includes both farming (grain and cash crops) production in anarrow sense and farming, forestry, animal husbandry, fishery, and sideline productions in a broadsense.39The Chinese Urbanization Process in a Comparative Contextenterprises assisted in supporting the policy of’containing’ the rural population, especially the surplusrural labour force, within existing rural areas and small towns. This containment policy refers the so-called litu bu lixiang (leaving the land without leaving the villages) program, which sought tocombine a spatial policy of population containment with the diversification of the rural economy. Itcommenced nationwide in the early 1980s and involved expanding the capacity of rural industry toeither facilitate local production or to expedite the decentralization ofurban industries. Since 1980,urban industries have been encouraged to establish branches and workshops to produce completelines or components through direct investment or joint ventures with village or township workshops(Li and Li, 1985).An important outcome ofthis new diversification of economic activities in rural areas has beena dramatic change in China’s spatial economy. Thus, the previous dual spatial economic structure (i.e.a manufacturing-dominated city economy versus a farming-dominated rural economy based on grainproduction) has gradually moved to a more diversified spatial economy, involving the developmentof rural industries and other non-agricultural activities. Such a structural shift can be traced mostclearly in both absolute and percentage declines in the agricultural labour force of rural areas, andconcomitant increase in service sectors within urban areas (S SB, 1992). Such a diversification ofrural economic activities and the rapid increase of rural industries has also reduced the pre-1978urban-rural gap in income and other measures of the quality of life. Thus, nationwide, the urban-ruralhousehold income ratio narrowed from 2.4:1 in 1978 to 1.7:1 in 1985, yet rose to 2.2: 1 in 1991(SSB, 1992). Moreover, there is certain fragmentary evidence to show that in the surrounding areasofcertain large cities in coastal areas, some rural districts have equivalent or even higher income andliving standards than urban areas (Bao, 1991).With spectacular production increases in agriculture post-1978, together with the rapiddiversification of the rural economy and the meteoric growth of rural enterprises during the 1980s,the government began in 1988 to relax its strict controls over population mobility (Wu and Xu, 1990:134). Thus those peasants who could provide their own staples (food and housing) and who could40The Chinese Urbanization Process in a Comparative Contextprove that they had the resources to establish a new enterprise or were employed, were permitted tomove to the towns and cities either temporarily or permanently. This substantially freer mobility ofpopulation began to promote greater rural-urban interaction. For example, in the Shenyang-Dalianconidor, people began to increasingly commute between the rural and urban areas, and starting fromthe late 1 980s, many peasants moved from the rural areas from outside the corridor to work eitherin the cities or rural areas ofthe corridor (for details, see Chapter 8). Other important policy changes,which impacted on rural-urban interaction, included the establishment of a system of counties underthe jurisdiction ofa central core city, and the establishment of open cities and open economic zonesin China’s major EMRs (Solinger, 1993: 75-81).All these policy changes have largely broken down the old spatial rigidities of the communisteconomy, and have transformed urban-rural relations in many parts of China. Although the post-1978reforms themselves can be subdivided into several different stages (see Appendix 2), rural-urbaneconomic linkages in China have been gradually integrated due to the generally smooth andincremental features of the reform program (Bell, Khor, and Kohhar, 1993: 75-8 1). The importantcharacteristics of this gradual reform program are the transformation of both the rural and urbaneconomies without dramatic social and political instability (except of course the 1989 Tiananmenincident and its aftermath). That is to say that the role of the government has been crucial inproviding a stable framework to the on-going rural-urban transition.The above review reveals that the major features of stage III constitute an increasingintegration of China into the world economy; the central government gradually decentralizing itseconomic decision making power to local authorities and individual operators; a rural economycharacterized by a mixture ofboth agricultural and non-agricultural activities; and intense rural-urbaninteraction reflected by massive migration from rural areas to urban regions and the emergence ofurban capital and know-how diffusing into rural areas. Each feature has assisted in breaking downthe former severe rural-urban division in the Chinese space economy.41The Chinese Urbanization Process in a Comparative Context2.8. SummaryThis chapter has examined previous western models of rural-urban relations, the changingcontext of urbanization and the Asian Extended Metropolitan Region (EMR) model as well as theprocesses ofurbanization in China. The review suggested that there were distinctive elements in theChinese experience which are leading to a growth ofExtended Metropolitan Regions at an earlierstage than that characterized in many developed countries.The rapid socioeconomic transformations during the post-1978 reform period in China havegreatly reshaped the nation’s space economy and rural-urban relations. A three-stage rural-urbantransition model was proposed to guide further empirical research work on the contemporary urbantransition in China and form a research framework for the rest of the thesis and a detailedinvestigation ofchanges in the Shenyang-Dalian region. However, before the empirical research cantake place, it is first necessary to explain aspects of China’s rural-urban transition in a broader contextin order to adequately interpret the research results. Consequently, the following two chaptersprovide a background for some of China’s on-going rural-urban transition issues. Chapter 3 aims toclaril’ some Chinese definitions, and Chapter 4 aims at understanding the nation’s changing policiesrelated to the rural-urban transition since 1978.42The Rural-Urban Divide - Chinese DefinitionsCHAPTER 3TILE RURAL URBAN DiVIDE - CHINESE DEFINITIONS3.1. IntroductionThe aim ofthis chapter is to examine the first major theme of the study, which is that China’srural to urban transition has followed a rather singular trajectory. China’s three stages of urbantransition (Figure 2.2) have each witnessed distinct urbanization processes (Chan and Xu, 1985: 583-613; Kirkby, 1985, Ma and Cui, 1987: 373-395). Liaoning province (where the Shenyang-Daliancorridor is located) has experienced similar processes. Table 3.1 shows that both China and Liaoningprovince have shared a common experience of urban growth since 1949, although the urbanizationlevel in Liaoning has been much higher than China as a whole’3. During Stage I, both Liaoningprovince and China almost doubled their urbanization levels primarily because the rapidindustrialization. Stage II exhibited a special feature which was characterized by industrializationwithout rapid urban growth. In fact, urbanization levels declined from 19 and 39 per cent in 1960to 17 and 30 per cent in 1978 in China and Liaoning, respectively. This second stage is an exampleof’development without urbanization’ (Koshizawa, 1978: 3-3 3). During Stage III, the urbanizationprocess once again accelerated both in Liaoning and China. Further analysis of the components ofurban growth shows that during these three stages of the urbanization processes, the average annualnatural increase kept the same population size at approximately 2.1 to 2.5 million for China, but thenet in-migration was very different. Stage III recorded the highest at 7.6 million net in-migrants intocities per year, compared with 4.8 million for China during Stage I and about 1 million decreaseduring Stage II (Table 3.1).‘3The reason for higher urbanization levels occurring in Liaoning than China as a wholewill be discussed in Chapter 5.43The Rural-Urban Divide - Chinese DefinitionsTable 3.1Urban growth and industrial development in different eras in Liaoning and ChinaStage I (1949-1960) Stage II (1960-1978) Stage III (1978-1992)China Liaoning China Liaoning China Liaoningurbanization 10.6/1949 23.4/1952 19.7/1960 39.6/1960 17.9/1978 30.7/1978level (%Iyear) 19.7/1960 39.6/1960 17.9/1978 30.7/1978 26.2/1990 42.3/1990urban pop. 7.5 10.3 1.5 0.0 4.7 6.9growth rate (%)by natural 30 n.a. 2.4# n.a. 25 n.a.increase (%)by net in- 70 n.a. -1.0# n.a. 75 n.a.migration (%)industrial 12.2 26.5 3.0 3.4 4.0 9.2growth rate (%)Notes: Data for urban growth from 1950-1960, and for industrial growth rate from 1952-1960. StageIll covers 1978-1990; #: cannot be computed due to negative net migration, which was mainly dueto the ‘sent-down’ urban intellectuals and youths to the countryside; n.a.-not available.Source: Data for China from Chan, 1994: 146 and 36; Data for Liaoning from LSB, 1992.44The Rural-Urban Divide - Chinese DefinitionsOfficial definitions are important in order to understand China’s urbanization process becausethey are a primary source of information that establishes concepts ofwhat is ‘urban’ and what is ‘rural,’and also show how Chinese approaches to urbanization have evolved. It should be noted at theoutset that the wide range of different definitions of urban population in China createsmisunderstanding over China’s urbanization levels. This is because analysis and research about Chinaby many foreigners is confused by Chinese statistical definitions (Pannell, 1990: 218; Orleans andBurnham, 1984: 788-804). Therefore, before any attempt can be made to examine urban-ruralrelations at the local level, a short digression on Chinese spatial statistics is required.The chapter examines how the Chinese central and provincial governments have defined urbanand rural areas and measured change. Central to these questions is the need to define the concept ofHousehold Registration System (hukou). This chapter will explain the hukou system and its rationale,function, and, and contrast it with western ID systems (e.g. social insurance number and driverslicence). This will help us understand the nature of population mobility and the urbanizationprocesses in China, particularly during Stages II and III. Associated with the hukou system is theissue of exactly how the Chinese government has defined urban and rural populations.3.2. The Household Registration System (Hukou)The Household Registration System (hukou) divides Chinese citizens formally either into partof the ‘agricultural population’ (nongyc renkou) or ‘urban residents (chengshi jumin renkou). Allcitizens are registered as a member of a hukou, a household with local policy offices, and every familyhas a ‘Household Registration Book(let)’ (hukou bu). The booklet lists the members of eachregistered family, and on the first page of the book it states that a citizen is either part of an‘agricultural household’ or an ‘urban resident household.’ This distinction is of great importance foreverybody as the hukou registration determines whether or not a person can receive subsidized foodand public services. For instance, if one happens to be registered as an ‘urban resident,’ then such acitizen is entitled to a number of rationed goods at subsidized prices, as well as work allocation45The Rural-Urban Divide- Chinese Definitionsdetermined by the government’s Labour Bureaus (normally this involves work in a state-owned orcollective-owned enterprises). Urban residents are also entitled to free or low-fee schooling forchildren together with Medicare, housing and thel. The hukou registration also has a significantimpact, therefore, on public resource allocation. Thus in 1981, national urban subsidies for theseservices totalled 48 billion yuan, about 33 per cent of expected current revenue, of whichapproximately 56 per cent was allocated for maintaining the standard of living of urban residents(Cheng, 1990). Table 3.2 shows that in that year the subsidy for urban residents totalled 26.8 billionyuan, covering the subsidies paid for domestic food grain and cooking oil, non-staple foodstuffs,cotton, coal and housing’4.By contrast, people with an ‘agricultural’ hukou do not share these privileges. The‘agricultural’ hukou is linked to rural families who are part of a specific administrative village (cun,formerly a production brigade or a de facto production team). Each person with an ‘agricultural’hukou is attached to an agricultural production team and shares his or her collective assets with otherteam members, including all land and collective enterprises (Goldstein and Goldstein, 1985, 1991).Besides impacting upon public resource allocation, the hukou system has also been a mainsocial division line between rural peasants and urban residents, and so is fhndamental in understandingchanges in the Chinese urban-rural divide. Essentially, the transfer of hukou status in China is verydifficult, both across the agricultural and urban resident classification and also between localitieswithin any class. Local police offices maintain a register of all known inhabitants within theirjurisdiction as well as their personal data, and try to monitor unauthorized migration strictly.The effect of the hukou system is to limit the mobility of the population, as well as being adecisive tool for the distribution of public goods and services. The following analysis will mainly‘4Actually, the urban labour force’s employers or working units (danwei) also provide anadditional list of subsidies, such as subsidies for bathing, haircuts, transportation, and so on.46The Rural-Urban Divide - Chinese DefinitionsTable 3.2China’s subsidies in 1981 (billion yuan)Item Amount %1. Subsidies directly to 26.8 55.8urban residents12.2 25.4food grain2.8 5.8cooking oil5.0 10.4housing6.8 14.2others2. Subsidies 10.2 21.3for enterprise3. Industrial goods for 2.2 4.6agricultural production4. Imported agricultural 8.8 18.3productsTotal48.0 100.0(1-4)Source: Cheng, 1990: 72.47The Rural-Urban Divide - Chinese Definitionsfocus on its impacts on the nature of population mobility, and this is followed by a discussion of itschanges during the post-war period, broken down by the three stages of Chinese socialist urbanizationdiscussed in Chapter 2.Stage I (1949-60):During the first decade of the Peopl&s Republic, the hukou system was not a major elementfor the urbanization process because people were free to migrate until 1958, when the hukou systemwas introduced (Zhang, 1989). In fact, the government actually encouraged rural-to-urban migrationin the early period. As discussed in previous chapter, urban-based industrialization called for largenumbers of rural labourers to work in urban factories. Due to rural to urban migration, the annualurban growth rate averaged 7.2 per cent during the period of 1952-57, which was more than twicethe natural urban increase (about 3 per cent) (Chan, 1994: 36). This was accelerated in the radicalindustrialization campaign of the ‘Great Leap Forward’ (1958-60), averaging 9.1 per cent over andabove the previous annual urban growth rate. The result was a rapid increase of China’s urbanizationlevel from 16.2 per cent in 1958 to 19.7 per cent in 1960, the all-time high in the pre-1980 era (SSB,1991: 79).Such rapid growth ofthe urban population forced the central government to realize that therewas an insufficient supply of food, urban housing and other infrastructural facilities. Thus the hukousystem was introduced in 1958 to control rural-to-urban migration (Chan and Xu, 1985: 583-613).Since then, the hukou system has applied to all natives of China (Cheng, 1990: 72).Stage IL (1960-1978):In sharp contrast to the previous period, the second stage (1960-78) was characterized by astrict control of rural-to-urban migration, mainly due to the implementation of the hukou system.Once the hukou controls were set in place, a set of specific principles was developed to meet national48The Rural-Urban Divide - Chinese Definitionsmigration goals. First, rural to urban population movements were strictly controlled, especially ruralmovements to China’s three major municipalities - Beijing, Tianjin, and Shanghai. Secondly,movements from towns to cities, from small cities to big cities, and from rural places to urban suburbswere limited. Thirdly, movements between places of similar size did not need such severe controls,and finally movements from large to medium or from medium to small urban places, or from urbanto rural places, were encouraged. Such strict household registration regulations officially requiredthat any migrant to a city had to register with the Local Police Station (Paichushiao) in order to stayfor more than three days (Laquian, 1989: 5). This system of migration controls operated through thehousehold registration system and was enforced through differential access to grain rations, jobs, andhousing (Goldstein and Goldstein, 1985: 17-44). As noted earlier, migration without a properHousehold Registration status was viewed as illegal. Therefore, it was virtually impossible forpeasants to move to cities.This period also witnessed net urban outflows, particularly of urban youth. It was reportedthat the migratory flows generated by ‘rustication”5of urban youth during 1960-77 (especially the‘cultural revolution’ period of 1966-1976) totalled 17 million and net flows to the countryside(excluding returned youth) was 8.6 million (Chan 1994). Therefore, China’s urbanization leveldropped from 19.7 per cent in 1960 to 17.9 per cent in 1978. A similar process took place inLiaoning where the urban intellectual and youth in Shenyang, Dalian, Anshan, and other large citieswere sent down to the countryside, and their hukou status was changed from urban to agriculturalresidents. Eventually the urbanization level in Liaoning declined from 39.6 per cent in 1960 to 30.7per cent in 1978 (see Table 3.1). It was easy to understand how the hukou system restricted thoserusticated youth and intellectuals in returning from rural areas to their home cities.The effect of China’s hukou system in restricting rural to urban population mobility accounted‘5Rustication refers to the campaign of sending urban residents to the countryside. Formore details see Chen, 1972: 361-386; Bernstein, 1977.49The Rural-Urban Divide- Chinese Definitionsfor a sharp rural-urban division during the pre-1978 period, as already noted (See Stages I and II,Figure 2.2). As a characteristic of China’s urban transition, the hukou system is one of the keys tounderstanding the very unique rural-urban transition processes involved in Stage II - the successfulfulfilment of city-based industrialization (as high as 3 per cent of average industrial growth rate)without parallel urban growth.Stage ifi (post-1978): New Structural Changes In The Hukou System:Since 1978, due to the implementation of both the rural responsibility system, theliberalization offree markets, and various urban economic reforms, the large population of the ruralsurplus labour force has made the household registration system economically inefficient (Gong,1989: 32-3 6; Zhang, 1991). Higher agricultural productivity brought on by the reforms led to agreater urge for migration among China’s rural peasants, who desired to search for new economicopportunities outside their villages (Blecher, 1984:110-112; Shan and others, 1984: 36-37; Wang andCal, 1986: 58). In response to the increasing mobility of farmers away from agriculture, the centralgovernment decided to allow, or to turn a blind eye to rural-to-urban migration after 1978. A newtype ofregistration was introduced. The first policy change was carried out in 1983, when the statecouncil allowed rural households, without changing their residence, to take up cooperative venturesin market towns. In 1984, the policy was further relaxed and peasants were officially permitted towork or do business in cities and towns provided they could raise their own funds, arrange their ownfood rations and find a place to live. This policy was called the ‘self-supplier household’ status (zilihukou) (Wong, 1994: 337). Although, their ‘urban resident’ hukou status would be different from thenormal ‘urban resident’ hulcou, in that the state grain authorities would not supply them withsubsidized grain, rural peasants with this status would be allowed to work legally in urban areas whileobtaining grain at the negotiated price through free markets.On September 6, 1985, the Twelfth Meeting ofthe Standing Committee of the Sixth NationalPeople’s Congress promulgated the People’s Republic of China Residents’ Identity Card Regulations.50The Rural-Urban Divide - Chinese DefinitionsThese required all citizens over sixteen to apply for a personal identity card and empowered all policeto make identity checks. No doubt useful as a tool of law enforcement, the ID card system alsoencouraged mobility and business transactions. In place of a letter from one’s work unit or villageofficial, Chinese rural peasants could, from 1985, buy a rail ticket to a city, check into a city hotel,and apply for a city job or a business licence upon presenting this document (Wong, 1994: 343). Theintroduction ofthe ID system therefore triggered spontaneous migration to medium-sized and largecities; a phenomenon referred to as the ‘floating population’ (liudong renkou). Consequently, in thelast ten years or so, rural migrants have entered China’s big cities in growing numbers. This has beenespecially the case for the coastal regions, such as the Pearl river delta, the Yangtze river delta, andthe corridors of the Beijing-Tianjin and Shenyang-Dalian regions. Here, large scale employmentopportunities have arisen, including construction projects in Special Economic Zones, Open CoastalCities, and Open Areas along the coast (Yee, 1992). These prosperous areas attracted significantnumbers ofrural workers both legally and illegally (Wang, 1994). Ample supplies of grain in urbanareas facilitated this movement, as the state monopoly on grain distribution, and the rationing of otherbasic consumer goods, have mostly disappeared (see Appendix 2). A new free market trade makesit possible to obtain the most important food commodities to stay in large cities, rendering life thereeasier for non-residents. Therefore, peasants can stay, practically, as long as they want, and someof them may never register at the local authority offices (as field work in the Shenyang-Daliancorridor indicated, see Chapter 10).The reasons for this new surge of rural to urban immigration are varied. Some people eitherleave their village to earn extra money in order to meet increasing expenses for agriculturalproduction materials and living costs, while others travel around China purely to visit big cities andother prosperous regions for pleasure. Still others leave their homes in those districts struck bynatural disaster, and during times of food grain shortage, in order to ease the burdens on the familyeconomy (Christiansen, 1990: 31). This new migration phenomenon in China therefore should beconsidered natural, given income differences between rural areas and large cities (or prosperous ruralareas), and the seasonal character of rural production. Christiansen argues that rural-to-urban51The Rural-Urban Divide- Chinese Definitionsmigration can, by way of remittances, contribute to the transfer of capital to the less prosperouscountryside and so be conducive to rural development (ibid: 23-42).The breakdown of the hukou system since 1978 represents then one of significant forces incontemporary rural-urban relations in China. The impact of the reformed hukou system is that ruralpeasants may now change their occupation from farming to non-farming, even though the governmentstill recognizes them officially as part of the ‘agricultural population.’ Thus more and more peasantsturned into non-agricultural workers in rural collectives, private, and individual enterprises during thereforms. For the purposes of this thesis, it is important to note that the term ‘agricultural’ hukou isnot adequate as a description of a peasant’s role in the rural economy any more (see Chapter 13).In summary, the hukou system was an important way of socially dividing the Chinesepopulation into strictly defined rural and urban areas and occupations, as well as monitoring andcontrolling rural-to-urban migration. The hukou system also contributed to the formation of twodistinct occupational divisions- workers and peasants. As far as life styles and governance areconcerned, the separation of the rural and urban masses made China a country of two nations.Therefore, the hukou system is an important concept to understand why China’s rural-urban transitionprocess in Stage II (ofFigure 2.2) could achieve city-based industrialization without parallel urbangrowth. Moreover, the change in the hukou system after 1978 was an important factor leading toincreasing rural-urban interaction during Stage III of China’s rural-urban transition.3.3. Changes In Statistical Definitions Of Urban And Rural AreasApart from the hukou system, this thesis also has to consider the Chinese definition of “urbanplaces,” as this is an important concept in shaping rural-urban transition processes in the last fourdecades. In general, the Chinese definition ofurban places has not been solely related to populationsize in any given locality, or the percentage of individuals engaged in non-agricultural activity, hasbeen affected by a unique Chinese perspective on the notion of’urban.’ This is based largely on the52The Rural-Urban Divide- Chinese Definitionspolitical decision whether the state has accepted responsibility for providing the population’s grainneeds under the hukou system. As we have seen, only these people with official urban residencestatus could enjoy urban-type subsidies and job allocations.So, the first order of business before any serious effort at rural-urban transition analysis canbegin is to establish, from a Chinese census perspective, what constitutes an ‘urban place’ and whatconstitutes a ‘city.’ Establishing such definitions has been no easy matter in socialist China.Inconsistent definitions, and especially inconsistent numbers published in urban population statistics,have bedeviled western scholars, some of whom have complained bitterly about this situation (seeOrleans, 1982: 268-302, Orleans and Burnham, 1984: 788-804).Scholars studying China have been puzzled about the actual size of China’s total urbanpopulation, the actual level of China’s urbanization, and the conflicting figures for the sizes ofindividual Chinese cities (Orleans and Burham 1984; Ma 1983: 206-207). These problems areconfusing even to Chinese scholars. For example, according to the 1982 Statistical Yearbook ofChina published by the China State Statistical Bureau (S SB), the percentage of total populationcategorized as ‘urban’ was 13.9 per cent for 1981. Later in the same book, the percentage waschanged to 20.2% for the same year (SSB, 1982: 89). In another example from the SSB data, thepercentage ofthe total population deemed to be ‘urban’ was 20.8 per cent for 1982, 23.5 per cent for1983, 39.5 per cent for 1984, and 49.9 per cent for 1989 (SSB, 1990). Yet the data for 1990 wasshown as 26.2 per cent in the China Population Year Book (SSB, 1991). Why do such discrepanciesexist?The major issue is how the government treats what is urban and what is rural. The term‘urban’ (chenzhen) in Chinese is a combined term - city (chen) and town (zhen). Officially, urbansettlements in China consist oftwo administrative levels- city (s/il) and designated town (zhen). Yetthe term ‘town’ actually includes two broad groups: a designated town (jianzhizhen), whose officialtown status has been approved by the appropriate provincial authority; and a market town (fizhen),53The Rural-Urban Divide - Chinese Definitionswhich refers to these not having official town status (Ministry of Internal Affairs, 1986). Theaccepted definition of an urban area in China includes only designated cities and towns. Thus a smallmarket town does not belong to any ofthese urban categories and so is excluded. Consequently, the‘real’ urban population is underestimated in official reports. For example, Dalian metropolitan regionrefers to the total areas under the jurisdiction of the central city - Dalian - and includes Dalian city(2,415 square kilometres), 4 county-level cities (9,664 square kilometres), and 1 county (152 squarekilometres). The area of this metropolitan region amounts in total therefore to 12,574 squarekilometres (see Figure 3.1). Dalian city itself includes a built-up area (137 square kilometres) with3 urban districts, which are officially defined as urban areas, and 3 suburbs (non-urban) (2,238 squarekilometres). It is important to bear in mind that the Chinese definition of the city proper extends toan area which is much larger than the actual urban built-up area. Consequently, the administrativearea of Dalian city consists of two parts: the three urban districts and three suburban or non-urbandistricts. Large areas (about 87 per cent of Dalian city) which are classified as the suburban regionsofDalian city are really market towns or villages in terms of the official definition, even though theyare counted as parts of Dalian city’s administrative units. This is the classic problem of ‘overbounding’ in defining urban areas.All the officially designated towns, consisting of suburbs, county-level cities and counties aretreated as urban areas (see Figure 3.1). They usually comprise seats of governments; that isgovernment either ofcounty-level cities, counties, suburb administrations, or township governments.However, the market towns (un-designated) are not listed as urban areas. Such an artificial spatialdivide between rural and urban places leads to the question of how to define the urban population foranalytical purposes. Moreover, not all residents living in areas defined as urban by the governmentare classified as being part of China’s urban population. Some are classified as part of the urban‘agricultural population.’ In other words, the agricultural population (mainly farmers) also live inurban suburbs and even urban built-up areas. This mix of farmers and town folk co-existing in thefringe of built-up areas makes it difficult therefore to define the ‘true’ urban population of China.54The Rural-Urban Divide - Chinese DefinitionsFigure 3.1Urban/Rural Areas in Dalian Metropolitan Region, Liaoning, 1992Dalian city(2,415 km2)Three:::Lricts(137:kjn2y__________ __________ __________ __________ __________Desig: Market::nated::: towns&towns: : villages(130 (2,108::kk})::. 2)Notes: Only the shaded units withinthe metropolitan region are officiallyrecognized as urban aiuas(*: mainly includes land use formilitary-oriented pmjects and facilities)Sources: Liaoning Yearbook, 1992: 6 14-629; Sketch of Liaoning UrbanDevelopment - 1950-90, 1991: 58; Sketch of Liaoning Small Towns: 20-26;and Stekctch of Liaoning Statistics, 1992: 380CDalian Metropolitan Region(with total aiua of 12,574 km2)M Others*(343 kn )[ Four county-level One county.•1 Lties(9,664km2)Others*(4Okm2)____:Desig-: Market :1)csig-: Marketnated towns & nated towns &towns villages towns villages(280 (9,384 (14 (138::kju:)::: 1cm2) ::kj:y:: 1cm2)ThreeSuburbDistricts(2,2381cm2)[S. D.=Suburban District;C. L C.=County-Level City]55The Rural-Urban Divide - Chinese Definitions3.4. Changes In Statistical Definitions Of Urban And Rural PopulationYet another important issue when attempting to examine urbanization levels in China concernschanges in the definition of the urban population over time. Since the establishment of the People’sRepublic, considerable confusion has characterized reports on the size of China’s urban population,in part because varying definitions of urban place and urban population have been used at any giventime, and in part because the definitions have changed over time (Goldstein, 1990: 673-702). Afurther complication is the result of definitions based on the hukou status, rather than by using spatialunits per se. According to Ding’s research, there are at least four major definitions currently used inChinese statistics (Ding, 1993: 16-23).1). The Non-agricultural - Agricultural Division Based on the HukouOne of the definitions for urban population includes all non-agricultural population in bothurban areas and mral areas. This definition ofurban population is not based on any spatial units, butrather is wholly grounded on the official hukou registration status of the Chinese population withoutconsidering residential location. Based on this particular definition, the nation’s urbanization level was19.43 per cent in China in 1990. This definition produced an urbanization level of 44.6 per cent inthe Dalian metropolitan region in 1992 (see Figure 3.2). However, a serious problem exists, whichis that the urban population based on the definition of the hukou system cannot actually indicate apersons occupation status. Rather, it refers only to an eligibility or qualification for access to urbantype subsidies and other welfare benefits available from the government. Consequently, it is notsuitable to show changes over time between agricultural and non-agricultural occupations.56The Rural-Urban Divide - Chinese DefinitionsFigure 3.2Different Population Statistics in Dalian MetropolitanRegion, Liaoning Province, China, 1992(an Metropolitan Re’(5.195)Ar__1 Five Countiesi Dahan City II (2.415) I & County- LevelCities (2.780)CD_ _Three IUrban I Thr Non-Agri. Ajncul.Disthcts Suburbs Popui. ropul.1186) I l.229) I O.55l) I 2.229)283%]) [ 3.66%] [2.91%]_ _IJIi Non-a r Agric. (Data in parentheses are totalI population in million and dataj[22.68%]I [).l5%J [11.32%] [12.34%] in square bracket are share ofJ j____ ____population in metropolitan total)TYPES OF URBAN POPULATION iN DALIAN:1.Total non-agricultural population of the metropolitan region (G+I+E),which was 44.6% of Dalian Metropolitan population2.Totai non-agricultural population of 3 urban districts (G), which was 22.7%of Dalian Metmpolitan population3.Total population of 3 urban districts and 3 suburbs and rural non-agriculturalpopulation (C+D+E), which was 57.1% ofDalian Metropolitan population4.Total population of 3 urban districts (G+H), which was 22.8% ofDalianMetropolitan populationSources: Liaoning Year Book, 1993: 431-46857The Rural-Urban Divide - Chinese Definitions2). The Urban Non-agricultural - Rural DivisionAnother definition often used by the government to measure the urban population is basedon a classification which only includes the non-agricultural population in urban districts. That is tosay, this definition ofthe urban population includes neither all residents in a city proper (as it missesout the agricultural population in urban districts), nor the non-agricultural population in rural areas.Based on this definition, the urbanization level of China was only 16.5 per cent in 1990 (SSB, 1993:374), and that ofDalian metropolitan region was 22.8 per cent in 1992 (Figure 3.2). Ding, naturallyenough, believes that such a definition of urban and rural is too narrow (Ding, 1993: 16-23).3). The Non-Rural-Agricultural DivisionYet another way of delineating Chin&s urban population is to include all the population of ametropolitan region except the rural agricultural population. Here, the urban population includesagricultural and non-agricultural population in the cities proper, as well as designated towns, and thenon-agricultural population in rural villages and market towns. Based on this definition, theurbanization level of China was 70.9 per cent in 1990, and the urbanization level in Dalianmetropolitan region was 57.1 per cent in 1992 (Figure 3.2). Ding argues that this classification maytoo broad, but he also argues that the non-agricultural population in rural areas, particularly in markettowns, are ‘semi-qualified’ urban population (Ding, 1993: 16-23). This definition then may be helpfulfor the government to predict potential urbanized population.4). The Urban-Rural DivisionThe final classification is based on where a person actually resides when the census takes place(i.e. the de facto urban population). Thus both those whose stay in urban areas with the official urbanhukou registration and those stay in urban areas without the official urban hukou registration are allcalculated as part ofthe urban population. It should be noted that persons are not counted as urban58The Rural-Urban Divide - Chinese Definitionspopulation if they are absent on the night of the Census even their hukou registration lies in urbanarea. Under this definition, the city population includes the total population of either urban districtsor the population of a city street community (jiedao renkou) if a city has no urban districts. Thetown population includes the total population ofthe residential areas of a designated towns, includingtowns of urban suburbs, towns which serve as seats for county government, and towns directlycontrolled by county governments. Based on this definition, China’s urbanization level was 26.2 percent in 1990 and the Dalian metropolitan region was 43.2 per cent (LSB, 1992: 463). Thisclassification is now well-accepted both by the Chinese government and academics as showing themost valid level of urbanization (Qiao and Li, 1990: 22-28).The complexity oftreating urban areas and the urban population outlined above has led to anindividual city having several sets of data concerning urban population in any Chinese statisticalyearbook. For example, in the Dalian metropolitan region, at least 4 official urban population datacan be found, which creates a confusion over changes in Dalian’s urbanization level (see Figure 3.2).Thus, in 1992 the urbanization level in Dalian might be as high as 57.1 per cent if the total populationofthree urban districts and three suburbs and total rural non-agricultural population were calculatedas its urban population. By contrast, the urbanization level would be only 46.5 per cent ifjust theurban population ofDalian metropolitan region, including the total population of its urban districtsand suburbs were considered. Moreover, it would be just 44.6 per cent if the urban populationincluded only the total non-agricultural population of the metropolitan region. At a more extremelevel, it would be as low as 22.7 per cent if the urban population included merely the total populationofurban districts. Therefore, it can been seen that it is very important to define exactly which urbanpopulation is referred to and whether or not surrounding counties of any city are included.All of the above indices of Dalian’s urbanization have certain conceptual problems inattempting to determine the true urban population. Thus the first three classifications all suffer acommon problem in that they are based on a rigid rural-urban division - the hukou system. As shown59The Rural-Urban Divide - Chinese Definitionsearlier, the hukou system cannot any more actually indicate any persons occupation. During the post-1978 reform periods, the central government allowed rural peasants to work in urban industrial orservice sectors, even though their household registration status was agricultural and their officialresidence was in a rural area (Teng, 1988: 23). Moreover, as shown earlier, there has been anincreasing number ofrural labour force engaged in non-agricultural sectors in rural areas. Yet thesetwo categories are still excluded from the first three official definitions of the non-agriculturalpopulation.The last classification emphasizes where one stays rather than a person’s official registration.This is to say, all residents in defined urban areas are classified as the official urban population,eliminating whether or not a person’s hukou registration is an urban or agricultural residence.However, such classification has its weakness too. It may be argued that the existing criteria forurban places excludes some outlying market towns and villages, such as those located within thedefinition of EMRs, where their socioeconomic features (such as non-farming economy, lifestyle,non-agricultural occupation, and so on) are increasingly of an urban nature. Yet officially, thepopulation of these settlements is still not recognized as urban. This is the classic ‘under bounding’problem. While these definitional issues are complex, they have ramifications for the empiricalanalysis of the Shenyang-Dalian corridor contained in Part Four of this thesis.3.5. SummaryThis chapter has discussed the urbanization processes and Chinese definitions ofurban placesand urban population, in order to clarify some confusion about official data found in Chinese reports.More importantly, the discussion of the hukou system helps to understand why Chinese people cannot easily move from rural to urban areas. A further peculiarity ofthe Chinese urban transition relatesto how the Chinese government can successfully monitor and control population mobility.Accordingly, the relationship between the hukou system and the implementation of urbandevelopment policies, and how such policies have impacted on rural-urban relations, form the topic60The Rural-Urban Divide - Chinese Definitionsof the next chapter.61Rural-to-Urban Transition in China - Changing PoliciesCHAPTER 4THE RURAL-TO-URBAN TRANSITION IN CHINA- CHANGING POLICIES4.1. IntroductionThe question of whether or not urbanization is an inevitable trend in development hasgenerated lively debates within China (Yeung and Zhou, 1987: 9). Associated with this concern hasbeen the issue as to what should appropriate Chinese government policies be towards urbandevelopment in China. As shown in Chapter 2, over the years the Chinese government favours thedevelopment of ‘small cities and towns’ as a national urban development strategy and in the late1950s and 1960s, even an ‘anti-urban’ bias was evident (Ma, 1976; Forbes and Thrift, 1987; Meisner,1974). However, following the policy reforms of 1978, this restrictive stance has been challengedby many Chinese scholars due to changes in both urban and rural economies. As part of the necessarycontext for discussing changes in the Shenyang-Dalian urban corridor, this chapter will reviewChinese government policies towards rural-urban relations in the post-war period.4.2. Changes In Government Policies Towards Urban DevelopmentIn industrialized countries of the west, as well as many developing countries employingWestern models for economic development, it has been generally recognized that urbanization iseither a pre-requisite or an essential by-product of modernization. For example, “the relationshipbetween urbanization and economic development is often as virtually invariant, both historically andcross-culturally” (cited in Goldstein and Goldstein, 1990: 21-23). However, as shown in Chapter 3,as a centrally-planned economy China has not entirely followed this model. Rather, post-war Chineseurbanization policy has reflected divergent views about the role of urbanization in the development62Rural-to-Urban Transition in China - Changing Policiesprocess and the extent to which urban growth should be controlled (Zhou, 1990). Thus the policiesof transferring ‘consumer cities’ into ‘producer cities’ during the pre-1978 period, and the policy of“to strictly limit the size of large cities, rationally develop medium-sized cities and encourage thedevelopment of small cities and towns,” during the post-1978 period form the two major attitudestowards national urban development policy since 1949.4.2.1. Pre-1978 Policy (Stages I and U)It is important to notice that Chinese cities are socialist cities and, as discussed in Chapter 2,the Marxist-Leninist-Maoist ideological backdrop is crucial in understanding how these cities havedeveloped since 1949, particularly in the period up to 1978. A thoughtfhl analysis of the linkagebetween socialism and city development may be found in Demko and Regulska (1987: 289-292) andFrench and Hamilton (1979: 1-2 1). For example, Demko and Reguiska provide a discussion of theanti-urban bias that characterized the Marxist approach to cities and urban development between1949-1978. This stance is best reflected in ‘sent-down’ movement, including the transfer of urbanyouth to the countryside between 1966-1976 (Ma and Hanten, 1981).In assessing the role and impact ofMarxism-Leninism-Maoism on China’s urban developmentprior to 1978, two salient points stand out. First, there exists an ideological/theoretical commitmentto equity and egalitarianism that is inherent in a Marxist/socialist system. Secondly, there is a strongcommitment to central planning and policy making that undergirds the system and which provides theoperational thrust for implementing policies to create a more egalitarian society (Griffin and Zhao,1993). Political ideology, therefore, has influenced rural-urban relations and city fhnctions.Accordingly, pre-1978 urban development policies would be difficult to interpret without anexplanation of the following three critical concepts: first the concept of ‘productive labour’ versus‘unproductive labour;’ second the concept of ‘consumer cities’ versus ‘producer cities;’ and third thenotion of ‘rural industrialization.’ As will be shown in Parts II and III of this thesis, each isfundamental to this study of the post-1978 changes in the Shenyang-Dalian corridor.63Rural-to-Urban Transition in China - ChangingPolicies(a). Productive Labour And Non-Productive LabourThe classification of labour into primary, secondary, and tertiary industrial sectors has beena common practice in western social sciences. Yet, before 1978 the Chinese government onlyrecognized its labour force as either ‘productive labour’ or ‘non-productive labour.’ The formerreferred to that part of the labour force engaged in primary and secondary industries, such asmanufacturing and mining, and the latter to tertiary industry or service sectors (Chang, 1983: 195;Chan, 1994).First, such a conceptual division has had a profound influence on Chinese workers’occupational divisions, which were characterized by two major masses - workers and peasants.Secondly, such a division has also contributed to a spatial segregation - separation of the rural andurban areas, as discussed above. Finally, of equal importance has been its affect on development ofthe urban service sector. In the first three decades of the People’s Republic, the service sector wasviewed as unproductive and so its development was strictly restricted, leading to critical shortagesof service personal and facilities in both cities and rural areas (Chang, 1983: 196).The pre-1978 shift from ‘non-productive’ to ‘productive’ labours might be explained by theChinese leaders’ notion of ‘city-based’ industrialization (manufacturing) (or the Soviet Union model,see Bornstein, 1985: 188-219). Most of this transition took place in the urban centres.(b). Consumption Cities and Productive CitiesClosely associated with the ideological need to transform China’s labour force from nonproductive to productive sectors, the ftinction of Chinese cities has been viewed differently by theChinese governments than those in western society. Thus all traditional Chinese cities, such asBeijing, Shanghai, and Dalian, with a large number of people engaged in administrative work and inservice industries during the pre-war period, often in colonial enclaves, were labelled ‘consumer64Rural-to-Urban Transition in China - Changing Policiescities.’ They were seen as being parasitic on society and non-productive (Murphey, 1975, 1980; Ma,1976, 1977, Kojima, 1987; Lewis, 1971; Chen, 1972; Chiu, 1980; and Cell, 1980). As such they gaveserious ideological and political problems to the communist government in 1949 due to their formercommercial and service sector status associated with the presence of foreigners. ‘Producer cities,’ onthe other hand, were those associated with the newly established inland industrial cities, such asDaqing city in Heilongjiang province, and Panzhihau city in Sichuan province with a dominanteconomic activity of industry (manufacturing, normally heavy or mining) (Chang, 1983: 194-195).Their fhnction may be contrasted in socialist parlance with the more traditional post-colonial‘consumer cities’ which had largely service-based economic activities and were thus seen to be‘bourgeois’ in nature (Murphey, 1976; Chang, 1983: 194-195).Due to this particular attitude, one of the important implication was the perceived need totransform large existing cities, such as Shanghai, Tianjin, Beijing, Shenyang, Dalian, and so on, into‘productive cities,’ which were to be dominated by the basic sector (ie. heavy industry) of theeconomy. Lo’s study shows that powerful efforts were made in the 1950s and 1960s to create‘productive’ cities in this way (Lo, 1980: 130-155; Lo, 1987: 440-458). Yet in order to use theinfrastructure and the labour force of the old ‘consumption cities’ to the full, these larger traditionalcities tended to gain industrial functions without careful consideration as to whether or not they weresuitable sites for large-scale modem industrial locations (Chang, 1983: 194). For the purpose of thepresent research it is important to note that the cities in the Shenyang-Dalian region, such as theadministrative city of Shenyang and the port city of Dalian, were transformed into heavy industrialcentres in the 1950s as result of this policy (for details see Chapter 6).Although this ideological need to transform cities to an industrial base was implementedthroughout Stages I and II, some differences in application can be seen in the two periods. Especiallydue to a dramatic shift in government policies, China’s urbanization and rural to urban migrationpatterns were very different between the 195 Os and 1960-1978. The period of the 1950s wascharacterized, as indicated in Figure 2.2 in Chapter 2, by a massive rural-to-urban migration due to65Rural-to-Urban Transition in China - Changing Policieslarge-scale city-based industrial construction in both the first five-year plan as well as the developmentplans of the Great Leap Forward. Consequently, the urbanization level rose from 10.6 per cent in1949 to 19.7 per cent in 1960 (Li 1988: 2 1-25). However, this pattern dramatically changed duringthe 1960s and the early part of 1970s. Following Mao’s orders, large number ofurbanites were sentto the countryside due to the economic failure of the Great Leap Forward as well as increasingpopulation pressure in urban areas and for other ideological reasons.16 Kirkby calls such strongcontrol over urbanization and industrialization, as well as directing the urban population out of theindustrial cities as unique attributes of the Chinese road to urbanization (Kirkby, 1986). The resultwas that China’s overall urbanization level dropped from 19.7 per cent in 1960 to 17.9 per cent in1978 (Li 1988: 21-25). This was accomplished by sending down millions of urbanites to thecountryside during this period (Bernstein, 1977).(c). Policies Towards Rural IndustryAs the empirical part of this thesis (in Part II and III) will discuss changes along the 400kilometre Shenyang-Dalian corridor, we must also consider some of the important policy shifts in thefield ofrural-based industries. During the 1950s, particularly during the Great Leap Forward period(1958-1960), government policies towards rural industrial development were characterized by anencouragement given to massive rural industrialization. At the time of the formation of ruralcommunes in 1958, most ofthe labour force in rural industries was engaged in building and operatingsmall-scale industries, including the famous ‘Backyard Furnaces.’ The number of female labour force‘6The reasons for the ‘sent down were (1) to reduce the rural-urban differences - the ‘threegreat differences’ (the difference between urban and country; between workers and peasants;between mental and manual labours); (2) to provide urban youth a re-education opportunityamong the poor and lower-middle peasants (Ma, 1977); (3) to avoid the urban problems emergingin the cities of other developing countries, such as serious social, economic and political problemsrelated to congestion and crowding (Calcutta and Djakarta are two of the frequently citedexamples). For details, see Ma, 1977; Murphey, 1980: 44; Naughton, 1988: 35 1-386; andBernstein, 1977.66Rural-to- Urban Transition in China - Changing Policiesparticipants increased greatly, as did the number of days worked by all in commune production(Schran, 1969: 75).After the failure of the Great Leap Forward and three years of famine between 1960-1962(Ashton, 1984: 6 13-645), the Chinese government tried to revive the rural economy and to correctthe negative effects of the previous policies and the commune movements (such as ignorance of theagricultural sector and the unrealistic plan of the Great Leap Forward). Thus during the early partof the 1960s, Chinese leaders turned towards supporting agricultural development. In Liaoningprovince, the provincial government stipulated in 1962 that •‘communes and villages are notencouraged to run industries” (Liaoning Economic Affairs, 1993: 160). After 1965, certain rural non-farm activities, such as small-scale repair shops for farming tools and flour milling, were encouraged.For example, in September 1965, the central government issued a document entitled “Resolutions onDeveloping Rural Non-farm Production,” which made recommendations for the promotion of non-farm activities under the management of production brigades.One ofthe reasons to encourage the development of small-scale and community-based non-farm activities in rural areas was aimed at raising agricultural productivity. In the late 1960s,fluctuations in grain production was one of the major problems that affected rural areas. Therefore,in August 1970, a special conference was held by the State Council which pointed out that one of thereasons for this problem was low agricultural productivity resulting from a low level of farmmechanization. It was therefore decided by the central government to improve the mode ofcultivation, irrigation and drainage through mechanization within ten years (Editorial Group of theChinese People’s University, 1979: 46). The central government announced that the target ofagricultural mechanization could be reached by ‘walking with two legs,’ i.e. by combining indigenoustechnical knowledge with urban technology. Therefore, the central government suggested that allrural areas ofthe country should develop the ‘five small industries.’ These were small-scale mining,iron and steel making, agricultural machinery, cement, and fertilizer operating which were developedmainly to serve local agricultural production (Editorial Group of the Chinese People’s University,67Rural-to-Urban Transition in China - Changing Policies1979: 46). These small-scale industries and extension services in rural areas were set up under thebanner of ‘self-reliance’. The goods and services provided by the small enterprises somehowsupplemented or supplanted more traditional local inputs, which had been less effective thananticipated, and they also substituted for the more modem products of large scale urban industries,which could not yet be made available in rural areas. But rural industry was still oriented to servinglocal farming oriented and the government had no specific plans to organize rural industry. It wasnot until 1976 that a new government organization - the Department ofEnterprise Management - wasestablished at the central level under the Ministry of Agricultural and Forestry to manage new ruralenterprises. Later, similar offices were opened at the provincial and county levels. The establishmentof this government organization indicated that the government had finally relaxed its ideologicaldifferentiation between ‘workers’ and ‘peasants’ and recognized the importance ofvillage and townshipenterprises in rural China (Wickramanayake and Hu, 1993: 21).In summary, before 1978 the Chinese government emphasized an urban development patternbased on the transformation of urban functions from previous ‘consumption-oriented’ into‘production-oriented’ ones during Stages I and II. The commercial and financial functions of a citywere reduced and reorganized so that its role as a centre to transfer new technology and innovationsto the hinterland was diminished. Although rural industries were developed, most of them weresmall-scale, self-reliant, and served agricultural activities. These were only intended to improveproductivity in agriculture by making farmers’ tools and other supplies (Howard, 1990), and wereoriented primarily towards the adoption of indigenous technology for agri-feed and agro-processingsuch as the ‘five small industries’ as indicated above (Lo, Salih and Douglass, 1981: 42).Consequently, a dualist economic development strategy (city-based industrialization and farmingdominant rural economy) formed the main feature of China’s space economy in this period (Chan,1994).68Rural-to-Urban Transition in China - Changing Policies4.2.2. Post-1978 Policy (Stage 111)Since the economic reforms of 1978, the growth of rural industry (which requires urbanservice for markets and technological assistance), increases in agricultural productivity (and extraagricultural products need urban markets), and released rural surplus labour force (which needs urbanemployment markets) challenged the closed urban door. Chinese scholars have argued that theurbanization is “a necessary consequence of the economic development of society, whatever thecountry, whatever the societal system, admitting absolutely no exception” (cited in Kirkby, 1985:221). Also, the Chinese government has gradually changed certain policies of its own related to rural-urban interaction. The 1980 National Conference on Urban Planning Work continued to reiterate theearlier urban settlement policy of controlling the growth of large cities and developing smaller urbanplaces. Yet by this time, the focus had already shifted to finding out how to go about developing theurban sector, rather than whether or not China should have more urban development (Zhao, 1988).Practically, many real changes took place after 1978, giving cities, especially those in the moredeveloped coastal regions, a greater role in China’s spatial economy (Yeung and Ru, 1992). Amongthem, the following four factors are very important. First, urban centres are now viewed not merelyas centres of manufacturing and administration, but more as multi-functional centres containingcommercial activities, technological innovation, financial services, and centres of education. As oneofficial commentary has put it, large cities possessed “high technology ... a strong material base, andmodern management expertise,” all of which were essential but scarce resources for China’smodernization (Renmin ribao, 1981, March 3). Second, as discussed in Chapter 3, restrictions wererelaxed in the early 1980s to allow higher levels of population mobility (e.g. the relaxation of thehousehold registration system). The third factor was that the government changed its policy toencourage more outward-oriented economies in rural China. Fourth, permission was given todevelop so-called ‘free markets’ (i.e. most of prices were determined by market demands), both inrural and urban areas (Leeming, 1993). Since these reforms, the formal distinction between theagricultural population and the urban resident population became, in practice, less important.69Rural-to-Urban Transition in China - ChangingPoliciesRural Industrial Development Policy:In contrast to the pre- 1978’s rural industrialization, the post-1978 goals of rural industrialdevelopment were designated to absorb surplus rural labour, raise farmers’ incomes, and so preventmigration to the cities. Consequently, rural industrial policies have become more oriented towardassisting the production of consumer goods for the towns, and supplying components to urbanindustry (Howard, 1990). Its growth has therefore been a feature mainly ofurban peripheries.Since the economic reforms of 1978, the environment for the further development of the nonagricultural economy in rural areas has been strengthened, and rural industries have received a newimpetus because they absorbed large number workers who left farming in the 1980s. The previouspolicy for developing rural industries, which encouraged localities to become self-sufficient byproducing goods for all their needs instead of specializing in what they did best, has been replacedsince 1978 by a policy of rural industrialization that took into account local resources, transportation,costs, and markets for the finished products (Ogden, 1992). The new village and townshipenterprises have not limited themselves to the ‘five-small’ industries, and many individual and privateenterprises have been developed by village collectives and individuals in areas such as manufacturing,transportation, catering, food services, and so on, where the market is aimed at urban areas and eventhe export market.During the 1979-1983 period, central government policies towards rural industries wereillustrated by Document No 1 issued by the central government on January 1, 1984 (ResearchDepartment of Secretariat, Central Committee of Communist Party of China, 1987). This documentrecognized that the existing township- and village-run enterprises were pillars of the rural economy,often closely linked to large factories in cities through subcontracting (see Part Four). As thecommune system disintegrated and eventually dissolved in 1984, towns and townships as well as70Rural-to-Urban Transition in China - Changing Policiesvillages and households - individually or in new ‘economic associations’t7- also became freer toundertake all kinds of non-agricultural activities of their own choosing. In particular, outward-directed industrial production for a larger market with deregulated inputs emerged as a profitablealternative to farming, and one which attracted a growing share of the rural labour force andcontributed a growing share of the rural product.In March 1984, the central government agreed to the suggestion from the Ministry ofAgriculture, Animal Husbandry, and Forestry to change the name of ‘Commune and BrigadeEnterprises’ to ‘Township Enterprises’ to reflect a departure of these enterprises from the directcontrol oflocal government (previously the commune or village) to a more autonomous form in termsof decision making (Research Department of Secretariat, Central Committee of Communist Party ofChina, 1987: 195). The new term also indicated the new legal status of enterprise ownerships, suchas township, village, multi-families (several family owned), and individuals (private). Moreover, othergovernment departments, such as transportation, taxation, and banking, which were closely relatedto the development of rural industries, refurbished their policies and programs to support ruralindustries. Following these changes, Chinese rural industries since 1984 have experienced among themost rapid growth in the world (Leeming, 1993; Byrd and Lin, 1990).One of the major impacts of these changes has been a tremendous transformation of theoccupation structure of rural areas, particularly in the open coastal zones. They have shifted frombeing predominantly agricultural to being more non-agricultural. Meanwhile, peasants are allowedto settle in towns or cities full-time to engage in industry, business, and service trade (Lee, 1992: 89-118).In summary, during the post-1978 period, urban areas are not viewed merely as locations for‘7Economic Association refers to a business operated in a cooperative manner by severalfamilies.71Rural-to- Urban Transition in China - Changing Policiesmanufacturing, but rather as multi-function centres, providing services, markets, and technology forthe surrounding rural areas. Meanwhile, policies have also encouraged the development of nonagricultural activities in rural areas. Increasingly, a contradiction has grown between the existingurban development policy (favouring smaller towns and cities) and other reform policies - such as there-emphasis of development on the coastal cities of Open Cities, Special Economic Zones, andEconomic Open Zones, as well as all capital cities of the provinces enjoying the same privileges asthe Open Coastal Cities. Clearly, the focus on economic growth challenges the ‘small cities andtowns’ urban development policy and its feasibility.4.3. The Search For Optimum Urban Development Policies - Debates Over City GrowthPerhaps not surprisingly, small city and town urban development policy (Buck, 1981: 114-146) has been increasingly questioned and challenged by academics and planners. The policy ispremised on the belief that the close linkage of industry and agriculture in smaller cities and townswill allow fuller use of local natural resources, raw materials, and manpower. For instance, China’sbasic urbanization policy calls for vigorous efforts to build up small cities and towns in rural areas(Tan, 1986: 13 8-148). Thus, small towns are expected to absorb the surplus rural labour forceresulting from the combined effects of population growth and the introduction of the responsibilitysystem in agriculture18 (Goldstein and Goldstein, 1990).Such an urban development policy led to formal abandonment of the previous rural communesystem (Ash, 1988: 529-555; Johnson, 1986: 12-13; 1982: 430-45 1) and between 1978 and 1992the re-designation ofexisting settlements as small towns. The highest ranked level of towns are nowthe county-capital towns, which are the administrative, economic, and service centres for theircounties. At the second level are other towns classified as urban, which have administrativejurisdiction not only for themselves but serve also as centres for their surrounding districts. At the‘8For details see Yamamoto, 1983: 129-157.72Rural-to-Urban Transition in China - Changing Policieslowest level are the rural towns - including various market centres, and villages. Each of these typesofplaces is seen as serving as an important link to the next level and, finally, to China’s larger cities,thereby creating a network of integrated urban and rural areas (Goldstein and Goldstein, 1990).However, the Chinese government’s urban policies aimed at limiting the growth of large citieshave not been successfully implemented, especially since the mid-i 980s, due to the large number ofrural migrants finding their way into large cities (Wang, 1994). While the government wishes torestrict the growth of large cities, its basic urban policy stance also calls for various measures toimprove the infrastructure of these cities for commodity circulation, including better provision ofstorage facilities, warehouses, transportation, and communication in large urban areas. Further, thegovernment has recognized that large and medium-sized cities play a key role in rural developmentby providing convenient locations of free markets for peasants, by offering sites for wholesale marketsfor farmer produce and sideline products, and by offering sites where trade centres might be created.This reorientation ofthe government’s large city policy, together with changes of the hukou system,resulted in the ‘freeing up’ of travel restrictions between rural and urban areas. This combined withthe relatively higher growth rates in China’s urban economies during the 1980s, led to a large numberof rural migrants travelling to and working in urban areas, either permanently or temporarily. Forexample, in 1989, the ‘floating population’9’in Shanghai reached 2 million (17 per cent of the city’stotal population), in Beijing 1.4 million (20 per cent), and Guangzhou 1 million (33 per cent) (Wang,1994). This indicates a failure of the Household Registration System to control migration.Meanwhile, a large numbers of the rural labour force engaged in rural non-agricultural activities whiletheir official registration status formally remained agricultural. This also indicates the inadequacy ofthe Household Registration System to truly reflect changes in the labour force’s employment statusafter 1978.‘9The floating population refer to those peasants who stay in a city without official urbanregistration status.73Rural-to-Urban Transition in China - ChangingPoliciesThe debate over the ‘correct path’ to urban development overwhelmed the 1980s’ urbangeography scholarly circles in China. The focus was which category of city size (small, medium orlarge) should be the optimum size, and which category should be given priority for furtherdevelopment. The Chinese policy makers and urban scholars challenged existing approaches tonational urban development policy in recent years (Ma, 1988: 67-82). There now exists in Chinadifferent viewpoints over the best or correct policy for city growth under conditions of structuralshifts in the economy, and a large and growing redundant rural labour force.4.3.1. The ‘Small City And Town’ ApproachThe ‘small city and town’ (cities and designated towns with population less than 200,000; fordetails, see State Council, 1984) school has so far been the dominant voice in China’s academic field,and one which has also been favoured by the government. The leading scholars of this school, suchas Fei (1986), have long promoted the development of small cities, towns, and townships and villages.Fei believes that from a practical perspective, small towns can be developed much less expensivelyand can serve as ideal points of local urban development in an economy undergoing fundamentalstructural shift from a rural farming to an industrial system (Fei, 1986: 169-170).The proponents of the ‘small city and town’ argue that China’s rural labour surplus could beabsorbed neither by medium nor by large cities. The reason behind this viewpoint are two fold. First,it is estimated that in the decade between 1985 and 1995, the countryside could shed between 200and 250 million rural surplus workers (Leeming, 1993: 153; Lei, 1990: 30-32; Taylor and Banister,1991). This immense number represents about half of the rural workforce. Therefore, large cities -such as Shanghai, Beijing, Shenyang, Guangzhou, and Dalian - are in danger of being overwhelmedby unemployed and underemployed residents, and due to existing infrastructure inadequacies therewould be no room for further expansion.Second, the cost of expanding existing large cities is too much. According to an estimate by74Rural-to-Urban Transition in China - ChangingPoliciesHou and Zhang, each additional urban employed labour requires about 10,000 yuan (aboutUS$1,200) fixed asset investment and approximately 5,000 yuan (about $600) for social welfare. Ifthe circulating capital is included, each urban labourer requires about 20,000 yuan (about US$2,400)government investment (Hou and Zhang, 1989: 17). Other estimates show a similar result (Xu andothers estimated that each urban labourer requires approximately 12,000 yuan (US$1,440) (Xu, 1987:35)). Considering about 20 million new labourers were released from the rural sector each yearduring the decade of 1985-95 (Leeming, 1993: 153; Lei, 1990: 30-32), China would require about240 billion yuan (US$28 billion) to 400 billion yuan (US$48 billion) each year to relocate all its ruralsurplus labour in existing urban centres. This is far beyond the government’s financial capacity.Fortunately, the rural township and village enterprises have already been absorbing rural surpluslabour for about 15 years. Township enterprises employed roughly 10 million of China’s rural surpluslabour each year (Hou and Zhang, 1989: 18). This has in some degree released the pressure onexisting large urban areas.A third argument is that the small city and town policy would reduce the pressure ofdevelopment on large cities, avoiding the growth of large cities and their associated urban problems.As experienced in many other developing countries (Girardet, 1991; Drakakis-Smith, 1981).4.3.2. The ‘Large City’ ApproachIn contrast to these views, some Chinese scholars challenge the existing government policyand argue that “to develop large cities (with population over 500,000, for details see State Council,1984) is the major trend of world urban development policy .... large cities are acting as the supertreasury .... [and] large cities are the ‘locomotive’ that brings about rapid development” (Zong, 1988:13-21). These arguments are based on the evidence that the economic agglomeration of scaleeconomies and economic efficiencies can best be captured in very large cities, which in generalperform at much higher levels of productivity than the medium and small ones. Those who favourthe fhrther growth of large cities argue that China’s large cities are not over-developed and, in fact75Rural-to-Urban Transition in China - Changing Policiesthey have been largely neglected since 1949. Therefore, they urge the government that additionalinfrastructure and investments in existing large cities would improve their efficiency and yield betterresults. They further point out that Chin&s transport and communication networks are still inefficientand fragmented except in the very large cities. Consequently, so it is argued, economic investmentsin large cities would take advantage of these efficiencies and increase overall national productivity.A further criticism of the small city and town approach is that it wastes both farmland and energyresources. Thus it has been found that the township and village enterprises consume more energy andproduce more pollution than state industries in large cities, as well as perform at a lower economicinput/output ratio (Zong, 1988).Several Chinese scholars have contributed to this debate. Thus Zong (1988) used 12economic indices and calculated their values according to conditions in 324 cities. He divided thecities into five categories as follows: extra-large cities with a population of 2 million and above; largecities with a population from 1 to 2 million; large-medium-sized cities with a population of 500,000to 1 million; medium-sized cities with a population of 200,000 to 500,000; and small cities with apopulation ofless than 200,000. The results showed that for the ten indices measuring outputs andprofits, the larger cities consistently performed better than medium and small cities. Zong thereforeconcluded that ‘the larger the cities, the more the industrial output value or the total volume of profitsand tax payments were transferred to the state° (Zong, 1988, 17). To support his argument, he listedhis evidence from the research as following: First, in terms of economic benefits, those derived fromextra large cities were more than double those from small cities; second, in terms of profits and taxpayments, for every 100 yuan input the yield from extra large cities was twice as high as from smallcities; third, in terms ofprofits and tax payments to the state derived from every square kilometre ofland, the value for extra large cities was seven times higher than that for small cities. Finally, in termsofper worker public investment, the results of the analysis showed that it cost 1,827 yuan per workerin small cities yet only 1,721 yuan in extra large cities.An interesting implication of Zong’s analysis is the relative appeal to the government of76Rural-to-Urban Transition in China - Changing Policiesencouraging the growth ofmedium and large-medium-sized cities (ie. those with population between200,000 and one million). According to Zong, these “large-medium-sized cities have importanteconomic functions ... [and that] they would be developed further with the help of their knownfacilities.” The rational development of these cities requires their closer linkage with small cities andtowns on their peripheries, regional planning schemes that define their relationship with large andextra large cities, and linkages with their rural hinterlands. The appeal of developing medium-sizedcities lies in their relatively small requirements of per capita investment and per worker investment,when compared to extra large cities and the almost equal requirement by small cities.Another scholar, Fan, proposed several criteria for trying to determine the optimum city sizefor China’s urban development policy (Fan, 1988: 24-32). Among them were optimum economicreturns to investment; optimum social returns; and the degree of comfort enjoyed by the people inthe city. He conceived ofthe relationship between investments and economic returns on the one handand urban scale on the other as a ‘U-shaped’ curve, arguing that when the urban scale was too small,it would not create many economies of scale; with the expansion of the city, the economies of scalewould grow. However, Fan concluded that when a city expands to a certain scale, then ‘spill-overeffects’ would occur consisting of economic, environmental and social problems such as trafficcongestion, shortages of housing, a drop in the quality of service, the rise of production costs andenvironmental pollution. Fan analyzed data from 324 cities in 1985 and calculated such values as theaverage net output value per worker at current prices, the profit tax of original value for every 100yuan in fixed assets, profit tax from every 100 yuan of government investment, and all-personnellabour productivity measured in yuan per person. The results ofFan’s calculations showed a directand positive relationship between city size and the output values (Fan, 1988).In another study, Laquian suggested that the problem with Fan’s analysis was that he did notprovide figures on the cost of providing urban services. Using only ‘output’ figures, the directrelationship between the city size and amounts of output naturally tended to be positive all the time.Yet the costs of pollution, over-crowding housing, congested traffic and other negative aspects of77Rural-to-Urban Transition in China - Changing Policieslarge city size were omitted and should have been included in such an analysis (Laquian, 1989: 11).Zhou of Beijing University has been one of the most outspoken supporters of the large-city/metropolitan growth strategy. According to his approach, an emphasis should be placed on largecoastal cities which would be allowed to grow rapidly. His argument is based on the relationshipbetween increased investment in large cities and the resulting greater efficiency and productivitywhich are believed to result. Implicit in this strategy is the increased mobility of population from ruralhinterland areas and from other parts of China to these coastal cities in response to greater perceivedopportunity for higher paying jobs in coastal cities (Yeung and Hu 1992).In yet another study, Guo and Wang challenged the existing government policy and provideddetailed quantitative analysis comparing the economic performance of large cities with medium andsmall-sized ones. Their analysis showed generally that the larger the city size, the relatively higherlevels of economic performance (Guo and Wang, 1988: 10-17).Besides the difference between the coastal and inland cities, Lou and Pannell found thatgenerally the relationship between higher industrial efficiency and larger city size was significant andpositive (Luo and Pannell, 1991: 48).4.3.3. The Medium-Sized City ApproachIfextra large cities are beset with pollution, over-crowding and other problems, and if smallcities and towns do not give fair returns to investments, then, some Chinese scholars have proposedthat medium-sized cities (with population of 200,000-500,000, details, see State Council, 1984)would probably be an ‘optimum’ city size for urban development policy.Thus, Liu proposed that medium-sized cities should be the government’s focus of urbandevelopment. He argued that a large city has better performance of agglomeration but with limited78Rural-to-Urban Transition in China - Changing Policiescapacities for further development. According to Liu, small cities had the least economic efficiencyand had only a limited performance in terms of agglomeration economies. By contrast, medium-sizedcities have satisfied agglomeration efficiency but needed support for further development of theircapacity (Liu, 1992: 142-145).Other scholars within this school have also argued that a medium-size urban policy has bettercomprehensive efficiencies. If large cities allow better economic efficiencies and small cities andtowns are close to the rural areas acting as efficient rural market centres, medium-sized cities wouldepitomize both these advantages. That is to say that medium-sized cities have, on the one hand,better social, environmental, and traffic congestion conditions than large cities, and, on the otherhand, their agglomeration effects are better than that of small cities and towns. Therefore, medium-sized cities have certain comprehensive advantages over both large cities and small cities and towns.What we can seen from this summary is that all these debates over an optimum urbandevelopment policy have been city size-oriented. Moreover, it can be argued that all theseapproaches, either small city, medium city or large city policies, are based on an underlyingassumption that further economic development will take place in cities, i.e. according to somewestern notions of the urban transition. As matter as fact, some scholars, such as Zhou (1989),question - not surprisingly - whether or not an optimum-size urban development model exists for thewhole China. Considering the poor level of available basic urban social infrastructure, a city-centredurban development approach is, by itself’ rather questionable. In fact, a survey conducted by theChinese government in 1985 shows that the rural surplus labour force reached as much as 30 to 50per cent oftotal rural labour force (Liu, 1990: 21). Other research indicates that between 1978-1990,China doubled its rural surplus labour force from 85 million in 1978 to 164 million in 1990 (Liu,1992: 53). Consequently, if all the rural surplus population should move to the existing urban centres(whether large, medium, or small), this would involve an estimated 270 million extra urbanpopulation. Such a large potential urban population would form a huge burden for existing urbancentres. For example, this is far beyond Chin&s current or foreseeable financial ability. If per capita79Rural-to-Urban Transition in China - Changing Policiesliving space in China’s urban area is assumed to be at the same level as it is now (about 7 squaremetres per capita (SSB, 1992), the additional 270 million new urban residents would require almost1.89 billion square metres of housing space, which would cost 1,894 billion yuan, assuming 1,000yuan construction cost per square metre (Liu, 1992: 54). This would be equivalent to the total annualcapital construction investment of 1992. The minimum requirement ofbasic infrastructure, such asschools, hospitals, and so on, for this potential urban population would be equivalent to China’s totalexisting fixed assets in all existing cities. That is to say, if China accepted the policy of a city-basedurban transition to transfer all its rural surplus population into urban centres, China would need todouble every city size and capacity (Liu, 1992: 54). It should also be noted that China’s existingurban infrastructure (either in large, medium, or small cities) has been overloaded for a long time asevidenced by the numerous studies of China’s inadequate urban infrastructure (Chang, 1983: 196-20 1)Therefore, the traditional city-based urban transition model would worsen an already over-loadedurban infrastructure.The situation in the near future is therefore not particularly optimistic, especially as one reportestimated there are likely to be around 440 million people - the total population of America andRussia combined - moving into Chinese cities by 2040 (Economist, 1994: 34-3 5). Therefore, bothin the present situation and in the future it may be impossible for urban-centred urbanization tobecome the major urban transition model. The reasons for this lies in the sheer size of China’s ruralsurplus labour and the insufficient capacity of urban infrastructure and government finance in theshort term. Therefore a city-centred urban transition policy by itselfwould be virtually impossibleto solve China’s potential urban population, and so eventually China has to search for alternativesolutions. The EMR paradigm proposed by McGee and others may provide a reasonable option. Thenext part ofthe thesis will show the applicability of the EIvIR model to the Shenyang-Dalian region.Considering the Shenyang-Dalian corridor’s development (full details are set out in the followingchapters), the extended metropolitan region concept (including the two city cores of Shenyang andDalian, and the surrounding rural areas along the major transportation lines) may be an ideal size ofarea to manage a new form of urban transition.80Rural-to- Urban Transition in China - Changing Policies4.4. SummaryThe previous material has proposed and explained a ‘three-stage’ approach to rural-urbantransition in China (Figure 2.2). Focussing on this approach, this part of thesis has also discussedChinese government policy changes towards rural-urban relations, and clarified Chinese concepts of‘urban’ and ‘rural’ embodied in the hukou system, as well as urban population and urban places, inorder to understand the Chinese experience since 1949 in terms of the urbanization process. Thischapter has shown that the period from 1978 represented a dramatic shift in urban developmentpolicies. The Chinese government has changed its policies towards rural-urban relation during thepost-reform period. During the Maoist period (1949-1978), a ‘self-reliance’ policy (or the doctrineof ‘walking on two legs’) in production positively encouraged the establishment of rural nonagricultural (as well as urban agricultural) activities. But it also advocated the mobilization and useof resources to this end, which tended to limit opportunities for wide-scale economic developmentin rural areas (Schran, 1993: 137). In addition, the policy’s emphasis on heavy industry productionin cities (‘material production’), as well as on austerity in consumption and the need to establish‘productive cities,’ had extremely negative effects on the provision ofmany services in urban areas andtheir surrounding regions.In open societies with market economies, people change locations as well as their jobs andskills freely to maximize their own personal advantage. The growth of the secondary (manufacturing)sector relative to the primary (agriculture), and the concomitant modernization of the tertiary(services) sector are therefore associated with a comprehensive process of urbanization, which hasproceeded at a similar pace. In China, strict migration policy and city-based industrialization createda model of industrialization without an accompanying growth of an urban population and anysegregated city-countryside relations, particularly in the period of 1960-1978 (Stage II).The reform program introduced in 1978 relaxed previous regulations over population mobilityand so encouraged the development of a rural non-agricultural economy and an urban service sector.81Rural-to-Urban Transition in China - Changing PoliciesThese changes led to a conflict between existing urban development policy (maintaining ‘small citiesand towns) and increasing rural-urban interaction. Most recently, in the post-1978 period (Stage ifi),a new form of settlement - Extended Metropolitan Regions (EMRs) have emerged in China. Existingresearch on this issue indicates a rapid change of rural-urban relations. However, Chinese policiesare still focused on the description of the magnitude of the rural urbanization phenomenon, ratherthan examining changes in the rural population and the processes of how rural peasants aretransferring to an urban life style. Moreover, very little has been said about the theoreticalimplications of the emergence of such a phenomenon and what the policy issues might be. Theemergence of mega-urban regions in China also raises a critical question. Are they a new form ofsettlement transition, and if so, what are the validity of EIV[Rs as distinct urban form and how do theyrepresent the on-going urban transition in Asia, as McGee and others proposed? The thesis nowturns to the empirical research conducted on the Shenyang-Dalian development corridor in Liaoningprovince. The following parts of this thesis provide detail and insight through an empirical study ofthe Shenyang-Dalian area, its history and contemporary development process and its spatial form.82The Regional ContextPART TWOCHARACTERISTICS OF THE SHENYANG-DALIAN REGIONThe second theme of this thesis concerns the emergence of an Extended Metropolitan Regionin the Shenyang-Dalian corridor. This part of thesis gives a broad analysis of the region’s spatialpatterns and post-1978 changes at a macro level (i.e. using county level data). Chapter 5 deals withthe developmental history of the Shenyang-Dalian corridor in order to understand why the EMRprocess has emerged in this particular region during the 1980s and the particular characteristics ofrural-urban integration. Chapter 6 deals with the spatial patterns of the Shenyang-Dalian EMR duringthe post-1978 period.CHAPTER 5THE REGIONAL CONTEXT5.1. IntroductionLiaoning province stands in the southern part ofNortheast China. Its surrounding provincesare Jim in the north, the Inner Mongolia Autonomous Region in the west, and Hebei province in thesouthwest. The province has geopolitical significance in China, as to the north lies the Russian FarEast, and to the east it borders the Korean peninsula. Across the sea to the southeast is Japan (seeFigure 1.2 and Figure 5.1). Northeast China is largely landlocked except for a passageway throughLiaoning and its major port on the Yellow Sea, Dalian. Liaoning’s territory is about 145,700 squarekilometres, accounting for 1.5 per cent of China’s land mass. The total population of the provincewas 38.68 million in 1992. The Shenyang-Dalian corridor is located at the southern part of the83The Regional ContextFigure 5.1Location of the Shenyang-Dalian Corridor84The Regional Contextprovince, with the Bohai sea to the west and the Yellow sea to the east. The corridor is roughly 375kilometres long and 100 kilometres wide (Figure 5.1) (the Shenyang-Dalian EMR will be defined anddiscussed in Chapter 6, see Figure 6.7) and contains the main activities of the province’s economy,foreign investment, population, large urban centres, and industry.The purpose of this chapter is to provide a background of the research region throughdiscussing its natural resource endowments as well as a review of its development history. This isnecessary to provide a temporal and regional context for the study of the Shenyang-Dalian EMR.5.2. Liaoning As China’s Industrial HeartlandThe Liaoning province has been considered one of China’s most important industrial basessince the 193 Os. Its economic profile and natural resource endowments sharply differ from othermega urban regions in China. For example, with limited natural resources, mega-urban regions suchas Shanghai-Nanjing-Hangzhou, Guangzhou-Shenzhen, and Beijing-Tianjin, act as reprocessingcentres where most of their industries crucially depend on the other provinces to supply rawmaterials. By contrast, Liaoning is only the industrialized region in coastal China with rich naturalresources (Wang, 1994: 45-61).5.2.1. The Natural Resource EndowmentLiaoning province is located in a rich geological area - the Pacific-Rim mineralization belt,which offers both a numerous assortment and abundant reserves of minerals (Li, 1988: 2 1-23; Zhao,1994: 44-45). By 1992, more than 110 different kinds of minerals had been found in this region (Luand Zhou, 1992). Table 5.1 shows that the reserves ofmany ofresources found in this province, suchas iron ore, magnesite, talc, borax, diamond, jade, solvent limestone, andalusite, and molybdenum,ranked first in China. Magnesite, talc, and boron accounted for about a quarter or more of totalworld deposits (Lu and Zhou, 1992: 178; LSB, 1993: 37; Zhao, 1992: 46).85The Regional ContextTable 5.1Major mineral deposits in Liaoning province, 1992types of deposit % of rank in types of deposit % of rank inresources China China resources China Chinacoal manganese 41,506 10.0 37,030 n.a. n.a(million ton) (1,000 ton)natural gas refractory clay38 25.7 n.a. 94,176 n.a. n.a.(billion m3) (1,000 ton)petroleum solvent imestone770 30.5 n.a. 1,680 16.6 1(million ton) (million ton)iron ore bentonite112,900 22.8 1 84,663* 19.0 5(million ton) (1,000 ton)magnesite oil shale2,350 84.8 1 369 11.6 3(million ton) (1,000 ton)talc silica43,386 47.0 1 98,542 10.6 2(1,000 ton) (1,000 ton)borax copper 255 n.a. n.a.24,935 58.0 1(1,000 ton) (1,000 ton)diamond lead11,935 54.5 1 348 17.4 n.a.(1,000 carat) (1,000 ton)zincjade 300 62.8 1 718 14.4 n.a.(1,000 ton) (1,000 ton)andalusite molybdenum 438 96.3 16,314 54.0 1(1,000 ton) (1,000 ton)Note: * Data in 1984; n.a.= not available.Sources: Lu and Zhou, 1992: 178-202; LSB, 1992, 1993: 37; Zhao, 1992: 46.86The Regional ContextMoreover, energy resources such as oil and coal, are also plentiful in this region (Table 5.1).For example, the Liaohe Oilfleld in the southern part of the province is China’s third largest,consisting of 15 per cent of national oil reserves and 10 per cent of natural gas reverses (Li, 1988).These abundant energy resources have been critical in supporting the province’s other majorcharacteristic, heavy industrial development (e.g. iron, steel, petroleum chemicals and machine tools).In addition, aquatic resources are also quite plentiful in this region. The nearby Yellow seaand Bohai sea provide Liaoning with abundant supplies of various kinds of aquatic products, e.g.prawns, abalone, sea slugs, sea urchins and shellfish. Also, many agricultural products in Liaoningprovince are of national significance such as maize, rice, beans and wheat in north Liaoning; andagribusiness in southern Liaoning, such as tussah (75 per cent of China’s total), and apples (65 percent of China’s total) (Chen, 1985: 14-16; Liaoning Foreign Affairs Office, 1992: 14) (see Figure 5.2).5.2.2. Concentration Of Heavy IndustryTogether, these abundant natural resources have offered Liaoning a material base for thedevelopment of heavy industry (manufacturing and resource-based mining industry) and high-valueagriculture based on local specialty products. But ofgreatest significance is that today the ShenyangDalian corridor contains China’s largest heavy industrial centre (Hao, Yu and Li, 1985). Thismanufacturing belt is located in the central part of the province, lying within a 60 kilometre diameterof Shenyang city. It includes a variety of heavy industrial cities with over 3 million population, suchas Shenyang (the capital city of the province) and a number of heavy industrial cities over 2 millionpopulation (such as the coal mining city ofFushun, and the coal and iron mining city ofBenxi).2°Theregion also contains the iron-steel and petro-chemical industrial city of Liaoyang which has over ahalf million people (Figure 5.1). Chinese scholars refer to the Shenyang-Dalian region as China’s20Here, urban population includes non-agricultural population in urban districts (see thetype 2 definition of China’s urban population discussed in Chapter 3).87The Regional ContextFigure 5.2Major Agricultural Production Districtsin the Shenyang-Dalian RegionRice, Maize±. and SoyBean•::::::. : . • Shenyang Fisiiuno 2Marine Products Liaoyang__•.•±____J_ -. . .anjrn .j . . . . -• ....•...- —1- . .±_ ±- . -. -Haicheng :.:.Yingkou L --•-±-——2Dash1q1ao.-• --±- .__gdianPu1andian-—DalianSources: Feng and Luo, 1985: 284-28 5; Liang and others,1990.88The Regional Context‘Ruhr industrial zone’ because heavy industry in this region has long been the backbone ofLiaoning,and Liaoning comprises about 10 per cent of the nation’s share of this sector (Zhao, 1992: 200; 187-188).As will be shown shortly, Liaoning’s ‘smoke stack’ image was formed in the pre-WWL[ period.But since the establishment of the PRC in 1949, the Chinese government has concentrated itsinvestment in this region on the heavy industrial sectors, which comprised 88.2 per cent of totalprovincial industrial investment during the 1949-1991 period (LSB, 1992: 185). This has led to theshare ofheavy industrial output value in total industrial output to account for more than 72 per centin this region by 1991, compared with 55 per cent in Beijing-Tianjin, 53 per cent in Jiangsu, 50 percent in Shanghai, and just 36 per cent in Guangdong province (LSB, 1992: 453).Accordingly, many heavy industrial sectors in this province are extremely significant to China’stotal heavy industrial output (Table 5.2). For example, the products of Liaoning’s iron and steel,petroleum, ferrous metal, and sodium carbonate industries accounted for over 15 per cent of thenational total, compared with its 1.5 per cent of the national territory and 3.5 per cent of the nationalpopulation. Despite the rather low overall percentage share, all these heavy industrial products, aswell as non-ferrous metal products produced in this province, ranked first in all China’s provinces andmunicipalities in 1991. Other major heavy industrial production, such as generated electricity, crudesalt, and plate glass, ranked second in China. Yet other indicators reveal the industrial nature of thisprovince. Thus large enterprises’ output, as well as capital construction investment ranked secondin 1991, slightly after the province of Jiangsu, Shanghai, and Guangdong, respectively (Table 5.2).89The Regional ContextTable 5.2Selected industrial production in Liaoning, 1991 (billion yuan)indicator total % of rank in indicator total % of rank inChina China China Chinaheavy industrial 112 9.2 2 generated electricity 45 6.6 2output (billion kwh)ferrous metal 25 16.0 1 natural gas 2 12.8 3products (billion m3)non-ferrous 6 9.7 1 sodium carbonate 71 18.0 2metal products (10,000 ton)petroleum 12 17.2 1 crude salt 240 10.0 2products (10,000 ton)steel 10 17.4 1 capital construction 13 6.2 2(million ton) investmentiron 12 18.2 1 plate glass (million 10 11.7 2(million ton) standard box)crude oil 14 9.7 3 large enterprises’ 79 10.0 2(million ton) outputSource: LSB, 1992.90The Regional Context53. Characteristics Of The Urban SystemThe Shenyang-Dalian region’s cities were all major industrial locations in the pre-WWIIperiod. Rapid industrial development in the post-1949 period further expanded the range of citiesand the scale of the urban system in Liaoning province. Although, like the rest of China, rapidincrease in urbanization levels during Stages I and III (Figure 2.2) and stagnation ofurban growthduring Stage II were major features ofurban growth, the urban system in Liaoning province is ratherdistinctive in China as it is dominated by very large cities. Thus, as noted above, Shenyang has anurban population ofover 3 million, and is the fourth largest city in China (after Shanghai, Beijing, andTianjin). Three other large cities (Dalian, Anshan, and Fushun) are all over one million in population,and are also located in the Shenyang-Dalian corridor (see Figure 5.1). Together they account forone-ninth of the nation’s population in cities over one-million population. Shenyang, Anshan, andFushun all grew to their present size due to their proximity to valuable mineral resources, whereasDalian was developed due to its strategic seaport location. Besides these four, there are also severallarge cities of 500,000-1,000,000, lying either near or in the reserves of nearby mineral resources (e.g.Benxi, Liaoyang, Yingkou).Table 5.3 provides further statistical data on the urban system (SSB, 1992: 18-31). The urbanpopulation of cities over one million accounted for more than 56 per cent of the total urbanpopulation in Liaoning, compared with 41 per cent in China, 37 per cent in Beijing-Tianjin, and 49per cent in Shanghai-Nanjing-Hangzhou. The urban population of large cities (i.e. those cities over50,000) accounted for more than 78 per cent of the total urban population in Liaoning, comparedwith 54 percent in China, 45 per cent in Guangdong, and 65 per cent in Shanghai-Nanjing-Hangthou(Table 5.3). The number oflarge cities in this province accounted for about 41 per cent of total urbancentres, compared with less than 13 per cent in China as a whole, and only 9 per cent in Guangdong,and 14 per cent in Shanghai-Nanjing-Hangzhou. Describing these patterns, Laquian has called thelarge city-dominated urban system in Liaoning as China’s ‘poly-nucleated urban region’ (Laquian,1989: 20). As will be shown shortly, development of these large cities, especially their urban91The Regional ContextTable 5.3The urban system in the Shenyang-Dalian region, other major EMRs and China, 1991Liaoning Shanghai-Nanjing-HangzhouCity-size(1,000) number of cities urban population number of cities urban populationtotal % total % total % total %> 2000 1 4.6 365.5 26.6 2 3.6 964.4 44.51000-1999 3 13.6 416.8 30.3 1 1.8 111.2 5.1500-999 5 22.7 302.2 22.0 5 9.1 347.4 16.0200-499 7 31.8 212.1 15.4 12 21.8 350.2 16.2<200 6 27.3 79.7 5.8 35 63.6 393.9 18.2Total 22 100.0 1,376.3 100.0 55 100.0 2,167.2 100.0Guangdong ChinaCity-size(1,000) number of cities urban population number of cities urban populationtotal % total % total % total %>2000 1 4.76 295.32 37.55 9 1.9 3,475.8 22.51000-1999 0 0.0 0.0 0.0 22 4.6 2,858.7 18.5500-999 1 4.8 59.6 7.6 30 6.3 2,030.2 13.1200-499 10 47.6 284.5 36.2 121 25.3 3,776.2 24.4<200 9 42.9 146.9 18.7 297 62.0 3,322.6 21.5Total 21 100.0 786.4 100.0 479 100.0 15,463.5 100.0Note: Urban Population here include non-agricultural population in urban districts.Source: Adapted from SSB (China Urban Statistical Year Book), 1992: 18-31.92The Regional Contextinfrastructure was shaped by their colonial experience (mainly from Japan) in the 1930s and the early1940s, as well as the communist government industrial policies of the 1950s (Li and Shi, 1988: 147-155).5.4. The Historical Development Of The Shenyang-Dalian CorridorHaving briefly sketched those geographical features of Liaoning, the chapter continues witha review of the historical development of the Shenyang-Dalian corridor. Figure 5.3 shows thechronology ofLiaoning’s economic development (LSB, 1992). It indicates that over a time span ofabout 300 years - between 1660 and the present - there were five different stages of development,each based on particular sources of economic growth. These five stages include self-sufficientagricultural economy (pre-1840), colonial investments, especially the construction of transportationfacilities and seaports (1840-1930), large scale development of both modern industries andtransportation facilities by colonial powers (mainly Japan) (193 0-1940s), further enhancement of city-based mining and heavy industry by PRC (1949-1978), and increasing rural-urban interaction duringthe post-1978 economic reforms.5.4.1. The Early Stage Of Development (The Period Before 1840)The first and longest period of development extended roughly from 1660 to the Opium Warin 1840. During this period, this region was virtually an ‘empty land’ on the northern periphery ofChina with low population levels and small-scale agricultural development (Jiang and Gao, 1990).However, as early as the Liao Dynasty (11th century), some skilled farmers from the north Chineseprovinces ofHebei, Shanxi, and Shandong migrated and settled along the banks of Liaohe river inLiaoning province, which marked the beginning of significant agricultural development in this region(Liang, 1990: 254). The settlement policy for Liaoning during the regime of the Qing (Ch’ing)emperor (1616-1911), as with the rest part ofNortheast China, was aimed at the preservation of thenorthern frontier’s political and cultural status quo. In fact, Chinese immigration to this region was93The Regional ContextFigure 5.3Selected Historical Events Impact Space Economyin Liaoning Province, 1660-1992PERIOD MAJOR MAJOR DOMINANTEVENTS INFRASTRUCTURE PATTERW OFECONOMICDEVELOPMENTEarly 1660 Emergence of the cities Seif-sufficentStage of Liaoyang & Shenyang agricultural economyA1840 The Opium War Some agriculturalwith Britain Yingkou port open products exportedThe Dalian port open (soybean, tussah silk)Period 1900 Japanese constructed Rapid expansion of urbanof Large-scalemajor railways andrailway population; export of1840- foundation of South industrial raw materials &1930 constructionManchurian Railwaymainly agricultural products; theA emergence of the heavyThe 1931 Japanese controlled by Japanese heavy industrial cities ofJapanese Manchuria, foundation Anshan, Benxi, Fushun,of ManchukkuoColonial and Shenyang; LiaoningPeod becomes China’s largest1945 Civil war industrial centreThe Period 1948 Communists in powerof Enhan-1953 First and Second City-based Further enhancementcementFive-Year-Plan industrialization of city-based miningof Heavyand heavy industryIndus- 1966 Third and Fourthtriization Five-Year-Plan1978 Rural reform Rapid rural1984 Relaxation of Coastal Open City program development;regulations on designates Dalian & Liaodong diversification ofpopulation Peninsula as Coastal rural and urbanThemobility Economic Open Areas economy; ruralReform industrialization;Period 1988 Establishment integratedof three specialrural-urbanopen zoneseconomy1990 Opening ofA Shenyang-Dalianexpressway; Dalianand ShenyangInternational AirportsSources: Based onLiang, 1985 and Liaoning Year Book, 199294The Regional Contextprohibited in pursuit ofthis objective until 1840 (Sun, 1969: 5), although some Chinese settled in thisfrontier region through the period of Qing (Ch’ing) rule up to 1860 (Fairbank, Reischauer, and Craig,1965: 4). Therefore, the pre-1840 period of development mainly involved the opening of the northernfrontier, and the settlement of a new region. During this period, economic development was smallscale and self-sufficient and there was no regional economic centre - only two small urban centres,Liaoyang and Shenyang, emerged (Liang and others, 1990: 253-254).5.4.2. The Period of 1840-1930Following 1840, the entire Northeast China region (comprising Liaoning, Jilin, andHeiongjiang provinces) became a region of very intense geopolitical contest between Japan, Russia,and China as each of the three powers involved tried to strengthen its position in the region.Militarily, China was most important, and Beijing reversed its previous policy by actively encouragingmigrants to settle in Northeast China in order to fill the ‘vacant land’ before it could be occupied byforeigners (Sun, 1969: 19). Yet after the Opium Wars in 1840 between China and Britain, this regionwas forced to open its borders to foreign investors. The year of 1860 represents a logical startingdate for the study ofLiaoning’s modern economic growth as this was when the Sino-Russian TreatyofPeking (Beijing) was signed, which included the opening ofNewzhuang (now the city of Yingkou),the first treaty port in Northeast China (Fairbank, Reischauer, and Craig, 1965: 173), which was thisregion’s foreign trade centre in the 19th century. Later, the opening of three ports - Luda (nowDalian), Antung (now Dandong), and Dadonggou - clearly marks the beginning of a continuous andsustained rise in the volume of regional exports, such as agricultural products (soybean and tussahsilk) (Liang and others, 1990: 20-2 1).Meanwhile, railway construction was commenced and lines were built by both Russia and theJapanese. In the late 19th century, the Liaodong peninsula was ceded to Japan as a result of the SinoJapanese war of 1894, but in 1895 European powers led by Russia forced Japan to return this areato China (Pauley, 1946). Further conflict of interests between Russia and Japan in the Far East led95The Regional Contextto the Russo-Japanese War in 1904. The treaty of Portsmouth in 1905, ending this war, gave theRussians certain rights in the Liaodong peninsula (mainly over the Shenyang-Dalian corridor),especially that part of the railway running from Changchun south to Port Arthur (i.e. Lusong nearDalian) (ibid: 16). The development of the Shenyang-Dalian region accelerated in the early 20thcentury after the completion of two major railways in 1903 and 1907, respectively. The ChineseEastern Railway, built by Russia, cut across Northeast China from west to east and linked the TransSiberian Railway with Vladivostok, a total length of 1,780 km. The South Manchuria Railway thenlinked Chinese Eastern Railway to the seaport ofDalian, a length of about 1,145 km. At the sametime the Beijing-Shenyang (Mukden) Railway, which was built by China with English finds, wascompleted. As Sun’s research indicates, these construction activities could not have failed tostimulate the local economy (Sun, 1969: 19-20).However, during this time, modem industry was still limited and consisted ofvery small-scaleiron ore mining in the Anshan and Liaoyang areas, which was the beginning of exploitation of theregion’s natural resources. At the turn of the century, the economy in Northeast China comprisedofthree main traditional industries. The first of these extracted oil from local soybeans. Originallythe residue was used in Northeast China as cattle feed, but later it was also exported to be used asagricultural fertilizer. The second traditional industry ground wheat into flour, while the third distilleda famous and very potent liquor from kaoliang (red sorghum) (Sun, 1969: 61). Other industriesmeeting local needs also developed on a small scale. To quote a foreign traveller who visitedNortheast China near the close of the nineteenth century:“Mcrnufacturing in Manchuria is not advanced... There is but little weaving, and thecotton cloths which are in universal wear are imported from China, but dyingestablishments were numerous. Capital furniture, boxes, and coffins are made,elegantlypainted and lacquered, as well as a kind ofparquetry, and the carpentersare unrivalled in the manufacture of carts and cartwheels. Tanning and thepreparation of the fur reached a very high pitch ofexcellence, and the leatherforshoes is good There is a little carving ofmarbles” (James, 1888: 14-15).96The Regional ContextThis quotation reveals the economic features of Liaoning during second half of the 19thcentury. At that time, development in this region was triggered on one hand by the simultaneousopening of the seaports to foreign trade and on the other hand by the construction of the tworailways. These twin developments took place in parallel with higher levels of population, throughin-migration, and the development of agricultural development. The expansion of population and theextension ofagriculture under cultivation were reinforced by market growth for agricultural exportsin foreign trade. In the absence ofoutput data for this period, it is uncertain whether or not this wasa clear case of export-led growth. However, as Fairbank’s study shows, export expansion outpacedthe rate of increase in the principal inputs (i.e. land under cultivation and labour) (Fairbank,Reischauer, and Craig, 1965: 4).5.4.3. The Japanese Colonial Period (1930-1945)The Japanese colonial period (1930-1945) witnessed large scale modern industrialdevelopment. During the early part of the 20th century, Japan invested heavily in Northeast China,and the construction of railway infrastructure during the pre-1930 period provided the basicfoundation for large-scale modern industrial development, particularly mining and manufacturingindustries. The opening of treaty ports combined with the start of railway operations lowered thecost ofinland transport on the one hand and facilitated access to foreign markets on the other. Thesechanges dramatically accelerated the pace of development in Liaoning and the rate of export growth(Yue, 1992).The development of the railway network in particular was crucial to this region’s growth inthe inter-war period and the development of the Shenyang-Dalian corridor. In 1935, the Sovietgovernment sold their rights in the Chinese Eastern Railway to the Japanese Government. Byrestrictive legislation and other activities Japan managed to exclude most other foreign interests inNortheast China, leaving it in complete control (Zhang, 1992: 107-119; Pauley, 1946: 17-18). Japanhad fought two wars in this area- one against China and the other against Russia - before it could97The Regional Contextobtain a foothold in Northeast China and so did not intend to waste the opportunity. Modemindustry in the northern part ofNortheast China (nowadays Heilongjiang province) was very limited,but industrial development in the southern part ofNortheast China (Liaoning province) showed rapidprogress. This difference in growth between the north and south of the wider region was partly dueto the southern part ofNortheast China’s proximity to seaports. Insofar as possible, the Japaneseadministration wanted Northeast China to be kept as an area of rich resources for Japanesemanufacturers. During this period, Northeast China’s raw materials exports were handled largely byJapanese merchants and shippers, and Northeast China’s natural resources were developed for Japansbenefit (Sun, 1969: 63). The South Manchuria Railway (SMR) was chosen as one of the majorinstruments by which the administrations’ policies were to be carried out. The company was formedby a Japanese imperial ordinance of June 7, 1906, “for the purpose of engaging in railway traffic inManchuria,” but subsequently broad powers were conferred on the SIVIR to engage in subsidiaryenterprises, including mining, water transportation, electrical enterprises, sale on commission of theprincipal goods carried by the railway, warehousing, real estate transactions within the railway zoneand, in addition, any business for which government permission had been given (Sun, 1969: 63-64).Annual coal production in Liaoning rose from about 10 million tons in 1929 to over 25 milliontons by 1944. Additional mines, supported by fresh capital, new methods and machinery, were allresponsible for this increase. Iron and steel production also made remarkable strides. For instance,the production of pig iron reached a peak of 1.7 million tons in 1943, of which half was used inNortheast China and the balance exported to Japan for processing (Pauley, 1946: 17). During the1937-45 period, the Japanese considered Northeast China as an integral part of their empire, and toa much larger degree than in other conquered areas, Japan developed Northeast China as one of themost important economic centres in China (Zhang, 1992: 107-119; Pauley, 1946: 18). The basicindustries, particularly, mining, transportation, and electric power generation, received primeattention.98The Regional ContextTable 5.4 shows that during the Japanese colonial period of 193 1-1945, the value of industrialoutput in Liaoning grew at an average annual rate of 11.9 per cent, and the industrial output valuein 1945 was 4.3 times that in 1931 (Yue, 1992: 9). Major industrial products such as iron, coal,electricity, cement, and sulphuric acid grew at an annual rate of 10-18 per cent (Table 5.4).The development ofmining industries expanded population in the existing urban areas, suchas Shenyang, Fushun, and Benxi, and also new urban centres, such as Anshan, emerged. These citieswere close to, or on, the sites of mining resources. All large urban centres were dominated by oneor two primary heavy industrial sectors. By way of illustration, the city of Benxi grew around thecoal mining industry, the city of Anshan, Liaoyang, and Benxi expanded due to iron ore mining,Shenyang developed machinery and non-ferrous metal industries and Dalian developed chemicalindustries (Wu, 1985: 7). With the development of mining industries and the expansion of thetransportation system, more and more people migrated from surrounding rural areas and nearbyprovinces of Shandong and Hebei to these urban centres. As a result, the cities’ population in theShenyang-Dalian corridor increased dramatically. Table 5.5 shows the rapid growth of selected citiesinLiaoning province during the period of 193 0-1945. For example, the urban population ofAnshangrew at an annual rate of 20.8 per cent, as it expanded from only a small town with a population ofseveral thousand in 1930 to a city with around 250,000 persons in 1945. The city ofBenxi grew atan annual growth rate of 17.1 per cent. Along with population, the size of industry also increased.Thus, Anshan’s annual steel-making production capacity reached 133 million tons, which at that timewas one of Asian largest iron and steel works (Wu, 1985: 165; Song, 1987: 50).99The Regional ContextTable 5.4Major heavy industrial production in Liaoning, 1932-19441932 1935 1938 1940 1942 1944 Growth#Total(millionton) 0.4 0.6 0.9 1.1 1.6 1.2 9.5%Exported 0.3 0.4 0.2 0.4 0.7 0.3 8.3%*toJapan(1)N - as % of Japan’s 49.6 35.1 19.6 50.5 81.4 52.0 --total import(1) as % of Japan’s 31.9 20.1 8.2 12.3 16.7 10.3 --total productionCrude Coal(millionton) 6.6 10.4 12.6 13.9 13.6 13.1 5.9%Electricity(l0millionkwh) 46.5 92.5 176.1 192.1 274.8 322.4 17.5%Cement(10,000 ton) 10.9 36.4 79.9 73.7 116.2 85.5 18.7%Sulphuric Acid(1,000 ton) 26.0 115.6 142.5 103.1 125.3 80.6 17.0%*Notes: #-Average annual growth rate between 1932-1944; *_Average growth rate between 1932-1942.Source: Yue, 1992: 9.100The Regional ContextNotes: * Data from Manchuria. Average annual growth rate;Source: Song, 1987, P. 50.Table 5.5Selected city population in Shenyang-Dalian region, 193 0-45 (‘000)City Name 1930 1935* 1941 1945 Growth Rate(%) (1930-45)Shenyang 612 527 1,130 1,8812 83Dalian 292 362 7201 7962 74Fushun 109 n.a. 210 2052 4.6Anshan 17 33 224 287 20.8Benxi 20 n.a. 120 1862 17.1Liaoyang 74 n.a. 103 119 3.2Yingkou 96 n.a. 135 213 5.01: data in 1942; 2: data in 1944.101The Regional ContextIn addition, agriculture continued to be one of the most important means of livelihood inNortheast China. The Japanese established agricultural experimental stations, to increase crop yieldsand to introduce new crops, at a time when the Chinese population were exploited and used as asource of cheap farm labour (Teng, 1992: 171-191).The above data indicates that Japanese colonial power played a most important role in theformation of the present industrial pattern and urban system in Liaoning. It also is true that thecolonial experience assisted the establishment of strong infrastructure facilities, particularly railwaysand urban infrastructure such as a water supply system, roads, and streetcars. This process wasaccompanied by city-based industrialization, and at this time the cities ofLiaoning attracted peoplefrom the surrounding countryside, as depicted in the traditional urban transition model.5.4.4. The Enhancement Of Heavy Industrialization During 1949-1978After the China-Japan war (193 8-1945) and the Chinese civil war (1945-1949), the economyand urban growth in Liaoning province registered sharp gains, especially the case in heavy industry,following the founding of the People’s Republic in 1949. Not surprisingly, this was due to theregion’s history and relatively well-developed urban and industrial facilities established during thecolonial period. The government’s plans for economic growth and urban development for Liaoningin the 1950s were designed with the assistance of the Soviet Union. Those key cities in mineral-richlocations with convenient transportation facilities (such as Anshan, Benxi, Fushun, Shenyang) weregiven priority for heavy industrial development by the Liaoning province and the central governments(Lu and others, 1990: 215-218). Table 5.6 shows that during 1952-1980, more than 60 per cent ofthe province’s total capital construction investment was concentrated in the heavy industrial sectors.The only exception was the post-war recovery period of 1949-195 1 when about 30 per cent of totalcapital investment in Liaoning went to heavy industrial sectors while 64 per cent of the totalinvestment were used for the reconstruction of urban facilities and other buildings damaged by thewar (see Table 5.6).102The Regional ContextTable 5.6Capital investment in Liaoning, 1949-1980 (billion yuan)Total Heavy Light Agriculture OthersPeriod Investment Industry IndustryTotal % Total % Total % Total % Total %1949-1.44 100.0 0.44 30.6 0.06 4.2 0.01 0.7 0.93 64.519511952-6.50 100.0 4.36 67.1 0.28 4.3 0.25 3.8 1.61 24.819571958-8.27 100.0 5.69 68.8 0.54 6.5 0.45 5.4 1.60 19.319621963-2.26 100.0 1.40 61.9 0.09 4.0 0.27 11.9 0.50 22.219651966-3.35 100.0 2.03 60.6 0.13 3.9 0.52 15.5 0.67 20.019701971-11.04 100.0 6.94 62.9 0.57 5.2 0.99 9.0 2.53 22.919751976-14.08 100.0 8.84 62.8 1.30 9.2 0.86 6.1 3.08 21.919801949-46.94 100.0 29.71 63.3 2.96 6.3 3.38 7.2 10.89 23.21980Source: LSB, 1992: 184-185.103The Regional ContextAs the central government emphasized new construction projects during Stage I as well asnew equipment in this province, both industrial output and the size of major urban areas increased.During Stage II, the government promoted ‘industrialization without urbanization,’ and a largenumber ofurban people in the major cities in Liaoning were sent down to the countryside. Althoughthere is little data which records the numbers ‘sent-down for each individual city, the urbanizationlevel in Liaoning declined from 39 per cent in 1960 to 30 per cent in 1978 (see Chapter 3).Meanwhile, city-based industrialization in the Shenyang-Dalian region continued and China’s ‘Ruhrindustrial base’ was extended during this period. Table 5.7 shows that the average growth rate ofheavy industrial output value in Liaoning was as high as 42.2 per cent during the 1950s. Otheranalysis indicates that total output in 1960 was 48 times that in 1949 (LSB, 1992: 34 and 64-65).Consequently, up to 1978, the cities in Shenyang-Dalian region performed as major heavy industrialcentres for the nation (Table 5.8).However, of significance for this study, rural-urban relations were artificially kept distinct andseparated. City-based industrialization was segregated from surrounding rural areas where selfsufficient agricultural development policies were implemented.104The Regional ContextTable 5.7Economic growth rates in Liaoning province (%), 1949-9 1Period GDP Agri. and Agriculture Industry (a) Heavy (b) LightIndustry (a)+(b) Industry Industry1949- 18.2* 27.0 8.8 34.0 42.2 23.419601961- 6.7 8.4 5.0 8.8 8.9 8.619781979- 13.1 9.0 5.6 9.4 8.2 11.81991Note: * Growth rate between 1952 and 1960.Sources: LSB, 1992: 34 and 64-65.105The Regional ContextTable 5.8Major industrial sectors in selected cities of Shenyang-Dalian region1991City City size Major Economic Sectors Formed before 1978(million)Shenyang 4.5 an industrial city with complete array of industries, particularlymachine building and processing; an economic centre in ManchuriaDalian 2.4 ship industry and chemical industry; seaportAnshan 1.4 Anshan Iron and Steel Corporation, the largest iron and steel complexof ChinaFushun 1.3 coal miningBenxi 0.9 a city majoring in iron and steel, coal and building materialsYingkou 0.6 a good foundation of light and textile industries; seaportLiaoyang 0.6 new petro-chemical industrySource: Liaoning Foreign Affairs Office, 1992: 9-11.106The Regional Context5.4.5. The Region in Reform (Post-1978)Since the reform period, the Shenyang-Dalian region became one of the coastal openeconomic zones in China, which were given priority by the Chinese government in terms ofdevelopment and economic growth as well as trade and foreign investment (Yeung and Hu, 1992;Ho and Huenemann, 1984; Johnson, 1992: 185-220; LSB, 1992). After 1978, the Shenyang-Daliancorridor received several privileges. First was the establishment of the Liaodong Peninsula EconomicDevelopment Zone2’in 1984. This economic development zone includes 9 cities and 16 counties anddistricts and it covers an area of 53 thousand square kilometres (about 36.1 per cent of province’sarea). In 1991, the population ofthe zone was about 22.1 million, accounting for some 56.4 per centofthe province’s total. In line with the open door policy, the objectives of this economic developmentzone have been to promote an export-oriented economy and establish a window to the outside worldfor the whole ofNortheast China (Japan-China Northeast Development Association, 1991).The second privilege that the Shenyang-Dalian corridor received from the government wasthat metropolitan governments were permitted to upgrade several rural-based settlements intocounty-level cities along the corridor in order to promote rural-urban linkages and to fhrther developthe middle (mainly rural) part ofthe corridor between Shenyang and Dalian (Figure 5.4). The impactof establishing new county-level cities along the Shenyang-Dalian corridor was to reinforce thegrowth corridor’s economic status, as the corridor between the two urban poles could receive higherlevels ofurban services (eg. technological consultancy, financial services) and closer accesses to urbanmarkets.A major consequence has been that these new county-level cities have been transformed intosites for the relocation ofurban-based industries (Dashiqiao and Gaizhou, for example, become the21Liaodong Peninsula Economic Development Zone covers the Shenyang-Dalian corridoras well as the coastal parts of Jinzhou, Jinxi and Dandong metropolitan regions (for details, seeJapan-China Northeast Development Association, 1991 and Figure 8.1 in Chapter 8).1071980Shenyang:::...Fus un• Liaoyang• : : :Panjm Anshan• :: : ::::Yingkqu:Dalian1992Si1yaIgTiexiEconomic . •Fushunand Technological. LiaoyangDevelopment Zone BenxiPanjm•Ansian1-Taicheng...Yingkou• :Dashiqiao.Bayuquan :. GizisoüSpecial—j. :: : :EconomicZone : :Wafangdian.. Zhuanghe• PulandianTuho O Dajian Economic• and Technological- : . Development ZoneDahanSources: Liaoning Statistical Year Book, 1993; Liang, Xixing, 1990: 259;Sketch of Liaoning Urban Development 1985-90, 1991.108The Regional ContextFigure 5.4Cities of the Shenyang-Dalian Corridor, 1980-19921985Shènyang:Fushun:LiaoyangdPanjinHaioheng:-Yrngkou:Wafangdian:.‘3DalianCity Size(million population)2.00 or more•1.00 - 1.99• 0.50 -0.99• 0.20-0.49• below 0.29 50 100kmThe Regional Contextsites for the relocations of urban industries from the cities of Shenyang, Anshan, and Benxi)(discussed in detail in Chapter 9).As Figure 5.4 shows, there was no county-level city in this corridor at all in 1980. Yet by1985, two county-level cities, each with a non-agricultural population over 200,000 in 1992, seeLSB, 1992: 353) had been established along the corridor. One of them, Wafangdian, is locatedbetween the cities of Dalian and Yingkou. Another one, Haicheng, is a county-level city halfwayfrom Shenyang to Yingkou (Figure 5.4). By 1992, another five county-level cities were establishedDashiqiao, Gaizhou, Pulandian, Zhuanghe, and Jinzhou - an outer suburb ofDalian city). All thesenewly-established county-level cities are located in the corridor between two urban poles - Shenyangin north and Daiian in south. Such upgrading ofthe status of counties was aimed initially at providingmore urban-type functions and services to the surrounding rural areas in the middle part of thecorridor. Interestingly, the establishment of county-level cities has changed the spatial pattern of theurban system along the corridor. The dominance of the two urban poles (the urban clusters centredon Shenyang in north and Dalian in south) in 1980 was reduced by an increasing number of small andmedium-sized cities between them (Figure 5.4).The third economic initiative granted was the establishment of several foreign investmentzones. As already noted, the city ofDalian was designated in 1984 as one of China’s 14 coastal opencities and three national level special economic and technological development zones (the DalianEconomic and Technological Development Zone, Shenyang Tiexi Economic and TechnologicalDevelopment Zone (sometimes called Tiexi Industrial Transformation Zone), and Bayuquan SpecialEconomic Zone (sometimes called Yingkou Economic Development Zone)) were developed in theShenyang-Dalian corridor in an attempt to attract foreign investment and technology (Figure 5.4).There is no doubt that the post-1978 open door policy has benefited Liaoning’s economicdevelopment. From 1991, Liaoning became China’s second largest foreign investment region after109The Regional ContextGuangdong province in the south. Table 5.9 shows the total utilized foreign investment and thegrowth rates in the major coastal province during the period of 1984-199 1. The average annualgrowth rate of foreign investment during the period of 1984-199 1 was over 80 per cent, which wasmore than three times China’s average (Table 5.9).Among foreign investors, Japanese firms have been the largest (LSB, 1992), mainly becauseofLiaoning’s historical connection with Japan, and the Shenyang-Dalian corridor is familiar to manyJapanese businesspeople alive today who lived in Liaoning before WWII. As noted earlier, thisregion, and the wider area ofNortheast China, was originally the beachhead for Japans invasion ofChina in the 1930 and early 1940s, and was the home to hundreds of thousands of Japanese beforethe war (Abegglen, 1994), Dalian is a comfortable location for many Japanese, and has a Japaneseschool, a mayor fluent in Japanese, and a joint Japan-China Industrial Park which in 1992 was beingexpanded by a Japanese-led consortium (ibid).The Japanese in Dalian and elsewhere in Liaoning have focused on high value-added orcapital-intensive investments rather than low value-added products, such as luggage or toys. Theyinclude Onoda Cement, Toshiba, Canon, Nisshin Oil, along with many Japanese banks and tradingcompanies. That Liaoning is a familiar territory to many senior Japanese is evidenced by the remarksofPresident Tasuku Takagaki ofthe Bank ofTokyo about his grammar school days in Dalian. Othercurrent Japanese leaders shared his experience, including the late Foreign Minister Saburo Ohkita,who was another prominent Japanese leader born and raised in Liaoning (Thornton, 1994: 56-58;Abegglen, 1994).Yet another group of foreign investors have come from South Korea. Increasingly, SouthKorean businesses are becoming linked with local ethnic Koreans living in Liaoning (Liaoning has thesecond largest group of ethnic Koreans in China, after Jilin province) (SSB, 1992b).110The Regional ContextTable 5.9Utilized foreign investment in the selected coastal provinces, China 1984-199 1 (1.JS$ million)1984 1991 Annual GrowthRegion Rate 1984-91 (%)Total % of China Total % of ChinaLiaoning 15.2 0.6 971.6 8.4 81.1Guangdong 643.8 23.8 2,583.7 22.4 22.0Shanghai 41.9 1.5 330.2 2.9 34.3Shandong 16.4 0.6 373.1 3.2 56.3Fujian 61.7 2.3 570.5 4.9 37.4Jiangsu 93•3* -- 314.7 2.7 27.5Tianjin 0.6* -- 260.9 2.3 237.0China Total 2,705.0 100.0 11,554.0 100.0 23.0Sources: Data in 1984 from People’s Daily (Overseas Edition, Jan. 23, 1992), Data in 1991 fromLSB, 1992: 465. * Data in 1986.111The Regional ContextLiaoning appears to have become one of the most attractive places in China for foreigninvestors. Thus the Japan External Trade Organization (JETRO), evaluating the economic potentialofChina’s provinces, rated Liaoning above all other provinces in attractiveness, including the majorinvestment centres ofGuangdong, Shandong, and Shanghai. Liaoning was rated especially highly interms of its industrial base, and matched Shanghai in terms of infrastructure, which, like those ofTaiwan and Korea, was originally put in place by the Japanese (Abegglen, 1994).5.5. SummaryFrom the analysis of this chapter, it is clear that Liaoning’s rich mineral resources and itsfavourable location attracted the attention of both the formal colonial powers and the Chinesecommunist government. Liaoning has been a major focus of development and economic growth inChina for many years. In the period between 1900-1945, many migrants moved into this region,particularly from the rural areas to the major industrial cities. After the establishment of the People’sRepublic, Liaoning’s urbanization process was accelerated by the city-based industrialization of StageI (1949-1960) (accompanying with large number of rural-to-urban migrants). After, then, city-basedindustrialization was carried out without rapid urban growth during Stage II. Stage Ill witnessedmany economic and administrative reforms and special privileges, as well as open door policies.These reforms, together with the special connection to Japan due to its colonial experience, haveincorporated this region into the contemporary global economy. The administrative reforms have alsoled to changes in rural villages which will be addressed in Chapter 7. These changes have reshapedthe Shenyang-Dalian corridor’s rural-urban relations and facilitated the emergence of an EMRstructure in this particular location. The study now turns to the investigation of the spatial form ofthe Shenyang-Dalian EMR.112The Emergence of the Shenyang-Dalian EMRCHAPTER 6THE EMERGENCE OF THE SHENYANG-.DALIAN EMR, 1978-19926.1. IntroductionAsian EMRs, as McGee (1987a, 198Th, 1990) and Zhou (1991) described, are typically largeurbanizing regions, sometimes stretching over hundred or more kilometres, often located betweenand including two existing major urban centres. ElviRs are characterized by intense concentrationsand flows ofboth people and commodities, highly-mixed agricultural and non-agricultural activities,and an intense interaction between rural and urban areas. The purpose of this chapter is to reveal thatthe Shenyang-Dalian corridor has taken on the form of an EMR (albeit one with Chinesecharacteristics), and to describe, by analyzing county-level data, the major features of its spaceeconomy as it has evolved from 1978-1992. The region today constitutes a complex accumulationofpeople and wealth with highly-mixed agricultural and non-agricultural activities, high levels of ruralindustrialization, and an increasing growth of non-rural occupations.6.2. The Emergence of The Shenyang-Dallan EMRIn order to investigate the detailed patterns of the recent spatial economic transition in thisregion, the following six indices were collected which define the Shenyang-Dalian EMR. The firsttwo indices are the proportion of the non-agricultural labour force in the total labour force and percapita rural industrial output value. These indices reflect the levels of the intensification andproductivity of rural non-agricultural activities along the Shenyang-Dalian corridor. The third indexis per capita gross agricultural output value, which indicates the agricultural production level. Index4 is population density. Using per capita net income and per capita GDP, indices 5 and 6 indicate the113The Emergence of the Shenyang-Dalian EMRliving standards and economic development levels in the Shenyang-Dalian corridor.All data for indices 1 to 6 were collected at the levels of counties (xian) and the suburbs ofthe largest cities. For Liaoning province, these data involve 33 counties, 11 county-level cities, and30 suburbs ofmajor cities. The spatial patterns of the economic activities are illustrated by Figures6.1-6.6 (each is discussed in detail in the following sections). According to the classificationstandards22 in Figure 6.7, counties, suburban districts and city cores were grouped into four maintypes, which are a result that the six indices together were used to classify the spatial patterns of theeconomic transition in the Shenyang-Dalian corridor. The four main types are as follows:Type I comprises those areas with the most intensive mixture of agricultural and nonagricultural activities. It included the 10 city suburban districts (Dongling, Xinchengzi, Yuhong, andSujiatun in Shenyang, Shuncheng in Fushun, Jiubu in Anshan, Laobian in Yingkou, Ganjingzi,Lushunkou, and Jinzhou in Dalian) and the two county-level cities ofHaicheng and Wafangdian. Thetype I counties and suburban districts recorded the highest levels of all the indices mentioned above,which means a higher degree of economic and labour transformation in these areas. For example,non-agricultural labour accounted for about one third to two thirds of the total labour force and thepopulation density was over 400 persons per square kilometres. In particular, the Dalian suburbanEach index is classified into four levels (Types). The lowest level for each index wasequivalent to Liaoning province’s average in 1990. The ranges of other indices’ values weredetermined by the distribution of the data itself. For example, the dividing line between Types ifiand IV for Index 1 (share of non-agricultural labour in total labour force) is 20 per cent (see Typeiv in Figure 6.7), considering Liaoning’s avearge level was 22 per cent in 1990. The dividing linebetween Types II and III was 25 per cent because the non-agricultural population in China’s totalpopulation was 26 per cent in 1990. Similar considerations were applied to other indices. TypesIII and IV were basically considered as non-EMR counties and their indices were generallyequivalent to Liaoning’s average level. For example, in 1990, the average level of per capital ruralindustrial output value (Index II) in Liaoning province was 1470 yuan/person; per capita grossagricultural output value was 1290 yuan/person; population density in rural Liaoning was 160person/per sq. km; per capita net income was 875; and per capita GDP was 3010 yuan/person(Sources: LSB, 1992; LSB and Liaoning Rural Investigation Team, 1992).114The Emergence ofthe Shenyang-Dalian EMRFigure 6.1Index 1: Share of Non-Agricultural Labourin Total Labour Force (by County), Liaoning, 1991::::: <20%N20-25% i::::::: /25-30%>30% f ç/%.,J%N, :u(’ ‘ -1 \ } ‘ ‘‘L ‘‘ ‘ - .—‘1(:::\ A’ .:.% ‘ ‘ — :::LI:::::) (••\‘ ‘ — ‘ ‘1 T”V.’ — 1tr’ — ‘/ —../::::2 “ — A,/:•:::c ‘&I (( t. ‘I •1” h”N: : : : : : : : :. : : :/ / ‘ ‘ ‘).::::: , ,,/‘‘ — / ‘‘‘- ‘/: : ,•, ,,‘— /: .::: : :: — — , —<-z’j’:: : ::: : %‘ - / ‘.7----: : ytw’ - - ‘ /‘I‘‘a’‘zzz./’:.>çI- ‘ —...,_,•large city ‘ / /• medium-sized city — ‘• small city or town ‘ v(site of countygovernment)50 100kmDalianNote: Population data for Benxi’s suburban districts (Pingshan, Xihu,Mingshan, and Nanfen) include city core populationSource: Liaoning Agricultural Economic Statistical Year Book, 1992.115The Emergence of the Shenyang-Dalian Ei’YIRFigure 6.2Index 2: Per Capita Rural Non-Agricultural Output Value(by County), Liaoning, 1991(yuan/person)<800, ,800-12001200-1600 : :>200: / . - /• . •. . •. •,/,• . .. .,,,,,.,,,,,, ,//,•,, ,,————‘• : : ::.... .::•::: ... / .•....,,,,,.o 50 100km ‘‘dNote: Population data for Benxi’s suburban districts (Pingshan, Xihu,Mingshan, and Nanfen) include city core populationSource: Liaoning Agricultural Economic Statistical Year Book, 1992116The Emergence of the Shenyang-Dalian EMRFigure 6.3Index 3: Per Capita Agricuirual Output Value(by County), Liaoning, 1991ETE: (yuan/person)7/17::::::: <1000- ‘‘ 1000-12001200-14001400-1600 - - .>1600,, ,::.:.— ‘ ‘ ‘ — — ‘ — ‘‘,,,,,,344:::./.:::‘ ‘‘ / : - ‘ - / :::::::::::::::::.—‘, ::“ . , : •‘ .‘ ../aa•_a50 100km,,,Note: Population data for Benxi’s suburban districts (Pingshan, Xihu,Mingshan, and Nanfen) include city core populationSources: Liaoning Statistical Year Book, 1992; Liaoning Year Book, 1992117The Emergence of the Shenyang-Dalian EM)?Figure 6.4Index 4: Population Density (by County), Liaoning, 1992, (person/sq. 1cm)<150,,—150200200-250250-300 - - ->300 .::::::.,,, , ,,,, :..:,, ,,,—....,.,,::::..:::: — , —‘ - ,.-, •,,,,,,,....- / — ‘ . :::: :::;::::::::‘ ‘ ‘:::‘...0 50 100kmV4Note: Population data for Benxi’s suburban districts (Pingshan, Xihu,Mingshan, and Nanfen) include city core populationSource: Liaoning Statistical Year Book, 1993118The Emergence of the Shenyang-Dalian EMRFigure 6.5Index 5: Per Capita Net Income (by County), Liaoning, 1991Per Capitaj::::Net Income:....:. <750 (yuan/person)‘ /- 750-900 ) >, ,-900-10501050-1200>1200- -‘ N’ ‘2Y7 27 ..,,,, -- /////-//j7 /\ / LcJ‘-1I ii ‘“—.‘ — — — —:-: : : : :,>“, — ‘, .,:-•• 7 •/., / ( - , 7••_ 4.L—c •A, l•1 / r/z/,//ffL/t..::o.Th , iH&4 ±Zt J J—.’--.‘-C ‘W’,— /3—. . 1,,--_-,4gj / /1c ,-‘ 7 / / r I7 •, / / /,‘.___ .f . !‘ — 1I /;‘ z-y.a p ,. ,f//7/J•_ 1/ 7 7 7 c7 A / / / J/J ‘4i+i+flW. • V / /;_:‘ ‘Sf77/f - 1 .‘ - .‘ A 7. . ..,,, /} I I(7/f )‘ — Aif ,-‘• ‘-./ f 1i14i . . . . J ftl+ftV7,_o 50 100km E’ — —Note: Population data for Benxi’s suburban districts (Pingshan, Xlhu,Mingshan, and Nanfen) include city core populationSources: Liaoning Statistical Year Book, 1992; Liaoning Year Book, 1992119The Emergence of the Shenyang-Dalian EMRFigure 6.6Index 6: Per Capita GDP (by County), Liaoning, 1992(uan 4Sö?J’.I ‘P0fl 30002000 jL210011 A‘°.LNoj hi j• ioi j °jk 4 :j i_, /I..-.I. IA A j 050 100km‘:1•City0 CountyGovernmentNotes: Data for suburbs of Benxi, Liaoyang, and Jinzhou nearDalian are per capita agricultural and industrial output value;Population data for Benxi’s suburban districts include city core populationSource: Liaoning Statistical Yearbook, 1993120The Emergence of the Shenyang-Dalian E4JRFigure 6.7The Shenyang-Dalian Extended Metropolitan Region in Liaoning, 1991:.: : : . :•./j. )\/ r—’ i.....,..:........... .,. ..• SmailCityOrTowno 50 100km• Secondary City•Major Metropolitan CentreType Index I Index 2 Index 3 Index 4 Index 5 Index 6—Type I >30% >2000 >1600 >300 >1200 >4500Typell 25-30% 1600-2000 1400-1600 250-300 1050-1200 3000-4500Type III 20-25% 1200-1600 1200-1400 200-250 900-1050 2000-3000Type IV : : : : <20% <1200 <1200 <200 <900 <2000Notes: Classification is based on county-level data derived from Figures 6.1 to 6.6.Index 1: share of non-agricultural labour in total labour force (%); Index 2: percapita rural industrial output value (yuan/person); Index 3: per capita grossagricultural output value (yuan/person); Index 4: population density(person/square km); Index 5: per capita net income (yuan/person); Index 6: percapita GDP (yuan/person).121The Emergence of the Shenyang-Dalian EMRdistrict of Ganjingzi and the Anshan suburban district of Jiubu reached over 1000 persons per squarekilometre.The areas of type II were also characterized by high agricultural productivity and intensivenon-agricultural activities. Non-agricultural labour accounted for about a quarter to one third of thetotal labour force in the rural counties. Type II covered those rural counties around the city ofShenyang and the counties between the cities of Anshan and Yingkou, as well as suburban districtsof Benxi, including the counties of Xinmin, Liaozhong, Dengta, and Dawa, and county-level citiesofDashiqiao and Ganzhou.The rural counties of type III were located around the areas of both type I and type II andcomprised those counties at a transitional stage between type II and type IV. Thus their indices werelower than those for type I and II, but higher than type IV, where the share of the non-agriculturallabour force in the total labour force, agricultural productivity, and income levels, as well aspopulation density, were lower (Figure 6.7). Type IV predominantly agrarian counties are in thewestern, northern and eastern parts of the province.In summary, Types I and II together comprised the main body of the Shenyang-Dalian EMRand form the area which will be used for further investigation. It constitutes the city cores andsuburban districts of Shenyang, Dalian, Anshan, Fushun, Benxi, Yingkou, Liaoyang, the county-levelcities ofHaicheng, Wafangdian, Dashiqiao, Gaizhou, and Pulandian, and the rapidly urbanizing ruralareas between city of Shenyang and Dalian (see Figure 6.7). In the past 15 years, this region hasexperienced rapid socioeconomic change. In particular, those areas within the transport corridorbetween the large metropolitan centres - which were defined traditionally as rural areas up to the1970s-are now increasingly characterized by urban features, such as diverse consumption patterns,a predominantly non-rural employment structure, and non-agricultural sources of income, andgenerally higher income levels. However, for the purposes of official government policy, these areasare still considered as rural by the Chinese government. As covered in Chapter 3, they are not truly122The Emergence of the Shenyang-Dalian EMRurban according to any official government definitions. For instance, neither the number of theofficially-defined non-agricultural population nor the size of settlement in the rural areas of theShenyang-Dalian corridor fit into any ofthe standards set up by the Chinese government. Yet as willbe shown later in this thesis they are not purely rural areas. The socioeconomic features of theseareas lying between Shenyang and Dalian have long departed from their traditional ruralcharacteristics. In fact they are a rural-urban mixture, and so their major characteristic may be called‘invisible urbanization’ (defined in detail later in Chapter 13). This blurring of the rural-urban interfacealong the Shenyang-Dalian corridor is therefore a complex social, spatial, and economic process.Moreover, the Shenyang-Dalian mega-urban region as a whole is an incubator of economic and socialchange and cannot be simply characterized as the urban expansion of existing cities into theintervening rural districts. Rather, this region represents a new type of settlement pattern in China’sspace economy.6.3. The Concentration of Population and WealthThe economic role of the Shenyang-Dalian EIvIR is that of a ‘main Street’ of China in termsoforganizing socioeconomic activity. As outlined in Figure 6.4 and the following sub-sections, it isan area with an enormous and powerful concentration of people, wealth, and economic activities.6.3.1. Concentration of PopulationOne ofthe major features ofthe Shenyang-Dalian mega-urban region is the high concentrationofpopulation. The very highest population density, outside the cities, is found in areas surroundingthe major urban centres, such as the outer-urban-districts of Shenyang, Anshan, Benxi, Yingkou andDalian cities (see Figure 6.4). The adjoining counties ofLiaozhong, Denta, Haicheng, and Dashiqiao(the location and counties’ names of the EMR and non-EMR are shown in Appendix 3) are alsoamong those with the highest population density. The counties ofWafangdian, Pulandian, Gaithou,and Liaoyang generally have higher population density than other counties outside the corridor. Such123The Emergence of the Shenyang-Dalian EMRspatial juxtaposition has created much higher population densities which are frequently much higherthan the suburban areas oflarge Western cities. For instance, compared with the population densityof 580 persons per square kilometre in Great Vancouver Regional District (GVRD, StrategicPlanning Department, 1994), the population density in Ganjinzi- a suburb ofDalian city, was 976persons per square kilometre in 1992 (LSB, 1993). In other suburbs (Sujiantun and Dongling ofShenyang’s suburbs, Lushunkou, Jinzhou ofDalian’s suburbs), the density was above 400 persons persquare kilometre. The county of Yingkou had population density as high as 433 persons per squarekilometre and most counties in the corridor had population densities over 250 persons per squarekilometre (ibid) (Figure 6.4). In fact, with 34,987 square kilometres of land area, which accounts for24 percent ofthe provincial land, the Shenyang-Dalian corridor contained about half of the provinc&spopulation, and about 66 per cent of the province’s non-agricultural population (Table 6.1).6.3.2. Concentration Of WealthThe corridor is not only a centre of population concentration but also a centre of denseeconomic activities. Data in Table 6.1 show that in 1991 the mega-urban region covered only 24 percent of the provincial area, but produced two thirds of the provincial GDP and agricultural andindustrial output; contained 66.5 per cent of the non-agricultural population; and generated morethan 70 percent of rural industrial output value (village-run enterprises), foreign investment andcommodity flows. Compared with China’s total, this region, which covers only 0.4 percent of theland area, contained 1.8 per cent of China’s population and 3.8 per cent of the non-agriculturalpopulation. The share ofGDP, industrial output as well as foreign investment ranged from 3.6 to 6.6per cent of China’s total. The degree of concentration for various economic indices23 of theShenyang-Dalian corridor in both Liaoning province and China was very high, based on a comparisonHere, the degree of concentration is measured by the Shenyang-Dalian EMR’ share of acertain index in Liaoning province/China divided by the Shenyang-Dalian EMR’s land share inLiaoning province/China.124The Emergence of the Shenyang-Dalian FJv1RTable 6.1Selected socioeconomic indices in the Shenyang-Dalian EIVIR’, 1991S-D %of DCin %of DCinEMR’ Liaoning Liaoning2 China China2Land area(thousand square ) 350.0 24.0 1.0 0.4 1.0Population(million persons) 19.6 49.8 2.1 1.8 5.0Non-agriculturalpopulation (million) 11.1 66.5 2.8 3.8 10.6GDP(billionyuan) 71.6 66.7 2.8 3.6 10.0Agricultural and industrialoutput (billionyuan) 148.4 68.6 2.9 4.7 13.1Industrial outputvalue (billionyuan) 135.3 72.7 3.0 5.9 16.4Village industrialoutput (billion yuan) 11.8 73.8 3.1 4.5 12.5Utilized foreigninvestment (million US$) 763.3 78.6 3.3 6.6 18.3Long-distancepassengers (million) 300.0 64.3 2.7 n.a. n.a.Commoditiestransported (million ton) 568.1 71.9 3.0 n.a. n.a.Notes: Output value in 1991 current price; 1. S-D EMR: Shenyang-Dalian EMR as defined above;2. Degree of Concentration (DC) = (the Shenyang-Dalian EMRs percentage of certain index inLiaoning province (China)) I (the Shenyang-Dalian EMR’s percentage of land in Liaoning province(China)); 3. excludes Baoyuqiuan district of Yingkou and the three suburban districts ofDalian.Sources: LSB, 1992a and LSB, 1992b.125The Emergence of the Shenyang-Dalian EMRwith the share of the corridor’s land area in both the province and China. Table 6.1 also indicates arelatively high degree of concentration of both economic activities and flow of commodities andpopulation. For example, the concentration index of agricultural and industrial output, industrialoutput value, village industrial output, and utilized foreign investment in this corridor was over 3 and10, compared with Liaoning province and China as a whole, respectively (Table 6.1).6.4. Spatial Patterns Within The CorridorIt may be argued that the significant concentration of economic activities in the ShenyangDalian EMR has been mainly due to the contribution of the large urban centres, such as Shenyang,Dalian, and Anshan. It is true, as discussed in Chapter 5, that these large cities concentratedimportant economic activities. In Liaoning province, the spatial patterns of the rural economictransition in the EMR differed from those in the non-EIVIR regions. In other words, the EMR ruralareas and the surrounding suburban regions of the large city centres are sharply distinguished fromthe non-EMR rural areas. For example, Table 6.2 compares the economic growth levels betweenEMR and non-EMR counties. It shows higher average levels of socioeconomic indices in ElVIRlocation than in the non-EMR regions of Liaoning province. The population density in the EMRaveraged 355 persons per square kilometre, compared with only 151 persons per square kilometrein non-EMR parts ofLiaoning province (see Table 6.2). Many of the indices of labour productivityand land productivity were double those (and sometimes even seven times) in the non-EMR region,such as non-agricultural output value per capita per land area. The average output values ofboth thenon-agriculture industry per county in the EMR comprised more than three times of that in the nonEMR areas (Table 6.2).This higher degree of population and wealth concentration can be further portrayed by thespatial patterns of per capita GDP and per capita net income by rural county level and suburbs,illustrated in Figures 6.5 and 6.6. In general, the spatial distribution patterns were characterized by126The Emergence of the Shenyang-Dalian EMRTable 6.2Rural county’s economic growth levels between EMR and Non-EMR in Liaoning*, 1992II’DEX S.D EMR Non-EMR (1)/(2)(1) (2)Land (squarekm) 31,633 128,101 25%Total population (million) (1992) 11 19 58%Non-agr. population as % of total population # 33 23 145%Population density (jersonIper square km) 355 151 235%Per capita rural GDP (yuan/person) 2,336 1,704 137%GDP per land area (yuan/sq. km) 830 258 322%Per capita non-agr. output (yuan/person)** 2,825 965 293%Non-agr. output per land area (yuan/sq. km)** 1,004 146 688%Indus. output per non-agr. popul. (yuan/person)** 7,189 3,175 226%Industrial output value per land area (yuan/sq. km)** 852 111 769%Merchandised agric. value per capita (yuanlperson)** 1,091 737 148%Land area/per county (square km/county) 1,216 2,668 46%GDP/average per county (million yuan) 101 68 149%Non-agric. output/average per county (million yuan)** 122 39 313%Industrial output/average per county (million yuan)** 103 29 355%Notes: *Rur counties refer to counties, county-level cities, and suburbs of the large cities (includingvillages, market towns, and designated towns). * *Data in 1991. #Non-agricultural labour forceexcluded those peasants engaged in both farming and non-farming activities. Non-EMR refers to allrural counties and suburbs outside the Shenyang-Dalian EMR.Sources: LSB, 1992a, 1992b and 1993a.127The Emergence of the Shenyang-Dalian EMRhigher values along the Shenyang-Dalian corridor compared with other parts of the province. Thusthose areas with higher rural industrial productivity were those which lay within the corridor. Theoutput value of the village-owned and private industries per land area, as indicated by Figure 6.8,demonstrated higher values in the areas both around the large cities of Dalian in the south, andShenyang, Anshan in the north and adjoining regions.Exports and Foreign Investment:As a centre ofeconomic activities, the corridor has very strong external linkages with the restofthe world. As indicators of this process it was found that foreign investment and exported goodswere extremely concentrated in the corridor areas. As noted earlier in Chapter 5, in terms of foreigninvestment, Liaoning emerged as the second largest centre of foreign investment in China. Japan isthe largest foreign investor in Liaoning (followed by Taiwan, US, South Korea, and Hong Kong).In 1991, Japanese direct investment reached US$246 million, accounting for 45.6 per cent oftotalforeign direct investment (LSB, 1992: 204). The major sectors of foreign investment in 1992 weremanufacturing (82.9 per cent), real estate (8.2 per cent), and construction (5.9 per cent), while theremaining sectors accounted for only 3 per cent (LSB, 1992: 582).Within the province, cities and their suburban districts of the Shenyang-Dalian corridorreceived the largest share offoreign investment. As Figure 6.9 shows, the two largest host locationsto foreign investment in 1992 were the city cores and the suburban areas of Shenyang and Dalian.Fushun, Anshan and Yingkou also accounted for quite a significant share of the total.The commodities exported overseas from this province ranked second in China (behindGuangdong), reaching US$ 5,770 million in 1991 (LSB, 1992: 638). Considering either exportedgoods by original places or imported goods by receiving places, the corridor was the major tradingregion ofLiaoning province. Figure 6.10 shows the exported and imported goods by metropolitanregions ofLiaoning province. It indicates that the metropolitan regions of Shenyang, Anshan,128The Emergence of the Shenyang-Dalian E44RFigure 6.8Industrial Output Value of Village-Run and Private Rural IndustriesPer Land Area (by County), Liaoning Province, 1992Note: in 100,000 yuan/square kilometre (in current price)Source: Liaoning Statistical Year Book, 1993129The Emergence of the Shenyang-Dalian EMRFigure 6.9Foreign Investment (by County), Liaoning, 1992Source: Liaoning Statistical Year Book, 1992 and 1993.130The Emergence of the Shenyang-Dalian EMRFigure 6.10Exported and Imported Goods (by Metropolitan Region), Liaoning, 1991Source: Liaoning Statistical Year Book, 1992131The Emergence of the Shenyang-Dalian EM!?Yingkou, and Dalian dominated provincial trade patterns.The above analysis indicates that the Shenyang-Dalian corridor has evolved as a region ofintense socioeconomic activities in northern China. Of importance to this thesis, the analysis alsoindicates that since 1978 not only the urban centres but also the rural areas along the corridor haveacted as core economic regions.6.5. Characteristics Of The Shenyang-Dalian Corridor-The Coexistence of Agricultural And Non-Agricultural Activities, 1978-1992The discussion now turns to the analysis of other features of the spatial and socioeconomicchanges, that have characterized the Shenyang-Dalian corridor during the post-1978 period, inparticular an intensive mixture of agricultural and non-agricultural activities. The coexistence andintermix of agricultural and rural non-agricultural activities within the same economic region compriseone of more important spatial and economic factors that separates the pattern of rural and urbansettlement transition in the Shenyang-Dalian region from that found in urban areas of most Westernindustrialized nations. The rich mix of both agricultural and non-agricultural activities, which hasevolved since 1978, may be exemplified by examining indicators of the changing spatial economy,such as occupational structure and income sources and so on. This section reveals the intensivenessof both agricultural and non-agricultural activities in the corridor.6.5.1. Non-Agricultural ActivitiesThe transition of the rural labour force from farming to non-farming activities, and thetransition of the workforce from full-time farming to engagement in both agricultural and nonagricultural activities, are very recent phenomena, which started in China only from the mid-1980s(Leeming and Powell, 1990: 148-149). While this is a national phenomenon, such a transition hastaken place in the Shenyang-Dalian mega-urban region at a tremendous pace following the rural132The Emergence of the Shenyang-Dalian EMRreforms of 1978. As Figure 6.1 indicates, the Shenyang-Dalian corridor was characterized by a highproportion of the labour force engaged in non-agricultural activities. By 1991, for the ShenyangDalian region as a whole, about 71 percent of rural GDP came from non-agricultural activities, and33 percent of the rural labour force was engaged in non-farming activities, such as rural industry,transportation, construction, and other rural services (Table 6.3). It should be noted that the actualnumber of the rural non-agricultural labour force in the Shenyang-Dalian EMR is likely to be muchmore than the number recorded by the official city Statistics Bureau (City Statistical Bureau collectsrural migrants mainly from city Public Security Bureau). This is because some of them engaged innon-agricultural activities can not be recorded by the public security bureau.24 In addition, somepeasants engaged in both farming and non-farming were still recorded in the census as belonging tothe agricultural labour force.The Evolution of Rural Enterprises in the Shenyang-Dalian Corridor:Although national policies confer a legal status for rural non-agricultural enterprises tooperate throughout China, the highly supportive local conditions in this corridor, especially in theareas oftypes I and II, have contributed to more a rapid proliferation of non-agricultural enterprisesthan the rest of the province. The initial development of rural-based industries in the ShenyangDalian corridor can be traced to the early 1 970s. At that time, most rural industry was agriculturallyoriented, together with the small-scale rural industries discussed in Chapter 5. After 1978, ruralindustries which provided services to the large cities were promoted by the central government, suchas free markets, repair industries, construction, transportation, restaurants, retailing and otherservices.24Some of the migrants stay in their relative houses or shared accommodation with theirfriends. Some of them were provided food and housing by the employees (such as constructionteam heads, restaurant owners) and the public security bureau might record only these employeesor restaurant owners.133The Emergence of the Shenyang-Dalian EM)?Table 6.3Rural labour force and gross domestic product structureby major industries in the Shenyang-Dalian Region, 1991 (%)SECTOR LABOUR GDPAgriculture 66.7 28.9Rural Industry 20 59.9Construction 4.0Transportation 10.1 3.3Catering Trade 3.9Working in Other Places 3.2 0TOTAL 100 100Note: Data in this table only includes labour force and GDP in rural areas.Source: LSB and Liaoning Rural Investigation Team, 1992.134The Emergence of the Shenyang-Dalian EMRRural enterprises in the Shenyang-Dalian corridor has particular characteristics due to thefundamental resource endowments ofthe region, as dealt with in Chapter 5. First, the mining industryis developed in the areas along the Shenyang-Dalian corridor based on its rich natural resourceendowment as discussed in Chapter 5. Large scale mineral reserves are operated by the governmentsector, while small scale mineral production is sometimes operated by local townships or villageadministrations. The author visited several rural mining sites in 1992 and 1993 and found that whilesome ofthem were operated with legal permission from the government, others were even operatedillegally by village enterprises or individuals, without permission. In order to understand why thisoccurred, the author interviewed one of the officials in the Rural Township and Village EnterpriseOffice ofLiaoning provincial government in Shenyang. His explanation was that mineral resourcesare officially owned by the state, yet certain rural peasants mined some small-scale mineral reserves,without permission for their own private gain. As these ventures provided employment opportunitiesthe official felt that the local government turned a blind eye to this issue25 (interview with DemianWang, Officer of Rural Township and Village Enterprise Office of Liaoning province, Shenyang,December 1992).Second, rural enterprises have often been established, since 1978, with the direct assistanceofurban-based factories located in large cities such as Shenyang, Dalian, and Anshan. Thus, manyrural enterprises were established in the 15 years or so to engage in subcontracting relationships withurban-based industries (Gu and Ren, 1985: 35). Rural subcontracting flourished in the ShenyangDalian corridor because of the large number of nearby industrial cities. The motivations ofurban-based industries in initiating or strengthening their ties with rural enterprises is fundamental tounderstanding the continued growth of the rural industrial enterprises along the corridor (This issuewill be discussed in next part of the thesis).These two types of rural non-agricultural activities have together brought about large25His viewpoint was expressed in private and was not an official comment.135The Emergence of the Shenyang-Dalian EMRincreases in rural personal incomes and significant shifts in the structure of the rural labour force.6.5.2. A Well-Developed Agricultural EconomyTraditional urban transition theory assumes that rapid industrial development in urban areasis accompanied by the eventual decline of surrounding rural populations. Yet this has not happenedin the Shenyang-Dalian corridor. As a matter as fact, a major feature of the Shenyang-Dalian regionis that rapid development of non-agricultural economies in the rural areas has been accompanied bythe continuing increase of the productivity of the agricultural economy and population. On the onehand, the corridor’s rural counties had higher per capita agricultural output value (over 1,500 yuanper capita, compared with less than 1,000 yuan per capita in rural counties located in the western andeastern parts of the province) (see Figure 6.3). On the other hand, the rapid development of nonagricultural economies in rural areas neither is at the cost of the agricultural economy nor isparalleled with a decline of the rural population. Although the share of the purely agriculturaleconomy in total rural GDP did not increase during 19781992,26 it has risen in absolute terms.Table 6.4 shows the growth rates of industry and agriculture in the counties and surroundingsuburban districts of the major metropolitan regions of the Shenyang-Dalian corridor. From 1978to 1992, the industrial annual growth rate in the Shenyang-Dalian corridor as a whole was 22.7 percent, while agricultural registered a 5.5 annual growth rate. At a micro-level, all counties and suburbsin the corridor had much higher industrial growth rates than agricultural growth, ranging from 11.2per cent to 33.5 per cent, while agricultural growth rate ranged from 2 per cent to 7.3 per cent. Thefirst halfofthis 14 year period (1978-1984) witnessed exceptionally rapid growth ofboth agricultureand industry, and the annual growth rate was 7.2 per cent and 11.3 per cent respectively. From 198426Since 1984, the output value from processing of agricultural products was included inrural industry.136The Emergence of the Shenyang-Dalian EMRTable 6.4Agricultural and industrial output value by suburbs and countiesin the Shenyang-Dalian region (million yuan in 1980 fixed price)Growth rate* (%)1978 1980 1984 1986 1990 1992 78-84 84-92 78-92Shenyang agr 333 382 572 509 712 890 9.4 5.7 7.3Suburbsmd 201 251 504 -- -- 7,187 16.6 39.4 29.1Shenyang agr 280 326 544 381 602 721 11.7 3.6 7.0Countiesmd 134 147 219 339 1,521 2,010 8.5 31.9 21.3Dalian agr 413 381 513 613 -- 1,018 3.7 8.9 6.7Suburbsmd 288 374 536 -- -- 7,078 10.9 38.1 25.7Dalian agr 449 498 588 631 -- 862 4.6 4.9 4.8Countiesmd 348 411 557 1,219 -- 5,040 8.1 31.7 21.0Anshan agr 56 52 63 64 75 86 1.8 4.1 3.1Suburbsmd 50 65 108 -- -- 783 13.8 28.1 21.7Anshan agr 204 235 386 414 545 488 11.2 3.0 6.4Counties#md 207 224 506 800 3,149 4,544 16.1 31.6 24.7Yingkou agr 41 39 49 47 67 86 3.0 7.3 5.4Suburbsmd 175 184 265 ---- 777 7.2 14.4 11.2Yingkou agr 414 423 555 476 506 562 5.0 0.2 2.2Countiesmd 389 399 551 848 2,201 2,685 6.0 21.9 14.8Liaoyang agr 39 37 47 47 60 52 3.4 1.2 2.1Suburbsmd 6 12 31 ---- 319 33.3 33.6 33.5Liaoyang agr 235 287 429 362 454 438 10.6 0.3 4.6Countiesmd 48 116 186 266 1,234 1,905 25.5 33.7 30.2TOTAL agr 2,465 2,660 3,747 3,544-- 5,203 7.2 4.2 5.5md 1,845 2,184 3,515 ---- 32,327 11.3 32.0 22.7Notes: Agricultural Output Value between 1978-1984 included part of village industrial output value.#: Haicheng county-level city only. *: Average annual growth rate; 1-Growth rate between 1984-92.Sources: LSB, 1985, 1987, 1992a, 1992b and 1993.137The Emergence of the Shenyang-Dalian EIv1Rto 1992, however, industrial growth rate reached 32 per cent while agricultural growth remained amere 4.2 per cent (Table 6.4). Still, it is important to note that the rapid growth of industry in thecorridor during this period was not maintained at the cost of the agricultural economy, which alsocontinued to grow. In fact, the agricultural economy increased its productivity (LSB, 1992). Thiswas all the more remarkable in the light of more and more peasants changing their occupation fromagricultural to non-agricultural activities over this period. Such a situation, where both agricultureand industry increased output in the same period, is a significant departure from Western experiencewhere industrialization has often been accompanied by a decline in the agricultural economy (Schran,1993).6.6. SummaryThis chapter has defined the spatial features of the Shenyang-Dalian EMR and revealed thatit includes the city cores and their surrounding suburbs, as well as the rapidly urbanizing rural areaalong the Shenyang-Dalian transportation corridor. The Shenyang-Dalian EMR was characterizedby a high concentration ofpeople, wealth and activities. Within the corridor, the analysis pointed tothe high mix of agricultural and non-agricultural activities indicating a blurring of rural and urbanactivities and suggesting increased interaction between rural and urban areas. This discussion revealsthat the Shenyang-Dalian corridor comprises an EMR as described by McGee and others, but onewith particular Chinese characteristics. In particular, in contrast with the market-based economiesofElviRs in Thailand, Taiwan, and Indonesia, the Shenyang-Dalian EIvIR was taken place in a mixedfarming system (plantation ofboth rice and other crops) and, more specifically, its evolution was dueto a strong role of governments (both central and local governments).In summary, this part of the thesis discussed natural resource endowments and developmentprocesses of the Shenyang-Dalian corridor, as well as major features of industry and urban systemsin the region. These features assist in the understanding of the emergence of a new space economyinthe Shenyang-Dalian corridor following 1978. It is argued that this evolution has been the result138Administrative Systems andPeasant Workersofthe interaction between national socioeconomic transformation in China and local conditions. Thespecific driving forces for the spatial integration between the rural and urban areas in the ShenyangDalian corridor form the major topic for the next part of the thesis.139Administrative Systems and Peasant WorkersPART THREETOWARDS GREATER SPATIAL INTERACTION 1978-1992As noted earlier in this thesis, particular characteristics of the EMR style of settlement changeinvolves the notion of ‘time-space collapse’ (Harvey, 1989) and increasing interaction between ruraland urban areas (McGee, 1991) (see Figure 2.2). This issue of spatial integration in the ShenyangDalian conidor comprises the third theme addressed in this thesis and is vital to understanding howthe corridor has evolved since 1978. This issue is covered in this part of the thesis, which focuseson some of the processes shaping the emergence of the EMR along the Shenyang-Dalian corridor.Increasingly spatial integration in the corridor draws its vitality from rising levels of dynamiceconomic interaction between rural and urban areas, together with higher levels of populationmobility and flows of capital and commodities.This part ofthesis extends the analysis of Shenyang-Dalian thus far by focussing on importantcausal processes leading towards greater spatial interaction as well as the macro-level spatial patternsidentified. As shown in Table 7.1, Chapter 7 of this thesis will discuss changes in the role of thegovernment, particularly how the rural reforms of 1978, and changes in administrative systems haveled to the emergence of ‘peasant workers’ in the rural areas. Chapter 8 will look at industrialdecentralization from the cities and rural industrialization as well as spatial changes in economicgrowth patterns along the corridor. Finally, Chapter 9 will address the role of improvements intransportation and the impacts upon increased levels of population and commodities flows within thecorridor.140Administrative Systems andPeasant WorkersTable 7.1Critical processes and spatial outcomes in the Shenyang-Dalian corridor, 1978-92IMPORTANT CAUSAL PROCESSES SPATIAL PATTERNSAND OUTCOMESShenyang and Dalian designated as greater integration of rural-urbanChp. Adminis- cities ‘listed separately in the plan’; activities7 trative and all central cities commencepolitical administration of surroundingreforms countieschanges in peasants’ occupations coexistence of agricultural andand rise of peasant workers non-agricultural activitiesurban industries decentralized to the overall growth rate ofChp. Industrial rural parts of the corridor; growth industrial output value was much8 decentra- poles established within the higher in the surroundinglization and corridor suburban, rural areas of the largerural increasing rural industrialization cities; and higher in the ruralindustna- counties along the comdor thanlization those in non-corridor regionimprovement of transportation more frequent mobility of theChp. Transpor- infrastructure population and commodity flows9 tation within the corridorinfrastruc-emergence of an “informal” more flexibility in the flows ofture transportation sector people and commodities within thecorridor141Administrative Systems andPeasant WorkersCHAPTER 7CHANGES IN ADMINISTRATWE SYSTEMSAND THE EMERGENCE OF PEASANT WORKERS7.1. IntroductionThere has been much discussion about China’s rapid socioeconomic transformation since 1978and its impact on rural-urban relations (Blecher, 1985: 2 19-245; Leeming, 1993; Leeming and Powell,1990: 133-159; Saith, 1987; Zweig, 1987: 43-58). However, changes in the formal administrativesystem have not drawn much research interest. This is perhaps surprising, particularly consideringhow administrative reforms have impacted on the integration of rural and urban economies. Thischapter will show that changes in the administrative system of Liaoning province, in particularchanges in administrative boundaries, have indeed had a direct impact on rural-urban relations in theShenyang-Dalian corridor. This chapter will also discuss the emergence of ‘peasant workers,’ a newoccupation enabled by the post-1978 rural reforms.7.2. Changes In Administrative Systems And Their ImplicationsThe administrative geography of Liaoning province, as in other provinces of China, isorganized along hierarchical lines (Figure 7.1). Three major levels of administrative organizationaccount for China’s major organizational units for political and economic activities. These are: (1)the provincial government which reports to the central government ministries in Beijing; (2) fourteencentral cities (including urban areas and their adjacent counties); (3) 100 county-level governments(26 counties, 10 autonomous counties of minority nationalities, 8 county-level cities, and 56 urbandistricts). All cities and counties report to the provincial government (Figure 7.1). As discussed bymany scholars, such an administrative system is essentially hierarchical in the sense that the central142Administrative Systems andPeasant WorkersFigure 7.1Comparison of Traditional and ComtemporaryAdministrative Structures in LiaoningCentral CentralGoverment GovermentProvincial Provincia1’‘‘>ShenyangGovernment Government and Dalian_____ecflire;\County Rural County RuralSuburbs I SuburbsTowns Areas Towns AreasTraditional Administrative Current Administrative SystemStructure (Pre-1984) in Liaoning (Post-1984)Shenyang City Boundary.• ...........XinchengziXinmin ( ShenyangCounty City CoreShenyang City And ItsCurrent Administrative ...Boundary (Jncludmg DonglmgLiaozhong •.... .7The City Core; Two C un’’ SujiatiuCounties; And Four 0 •Suburban Districts)25 50kmSource: Liaoning Year Book, 1993143Administrative Systems andPeasant Workersplanned economy required local administrative units to follow orders from upper level administrativeunits. The state set targets for the local units, distributed their products, assigned their personnel,allocated their equipment, took over their profit, and covered all their deficits (Ogden, 1992: 77-79;and 102-103). However, recent changes in the affiliation of administrative units have had veryimportant impacts on rural-urban relations. In particular, since the mid 1980s, there have been somechanges in administrative systems which aim at encouraging more horizontal linkages between ruraland urban areas, rather than the traditional vertically-based hierarchical links.7.2.1. Establishment Of A City ‘Listed Separately In The Plan’The hierarchical administrative system in Liaoning has developed in a somewhat differentmanner from that of China’s other provinces and this has had a distinct outcome for the ShenyangDalian corridor. First, Liaoning’s two central cities, Shenyang and Dalian, including the countiesunder jurisdiction of these cities, have been classified since February 1984 as ji hua dan lie shi’meaning, literally, ‘listed separately in the plan’ (Solinger, 1993: 211). This reform was meant to freethe cities from the restrictions ofthe province and allow them to escape from the province’s patronageand power. Thus, these city governments were granted economic powers equal to those of aprovince, and so are listed separately within the state plan, rather than, as it had been the case fordecades, treated as a component in a hierarchical system under the province’s jurisdiction. In otherwords, the city government authorities of Shenyang and Dalian since 1984 have had a similareconomic decision-making power to that ofLiaoning province. Significantly, the city authorities ofShenyang and Dalian can now directly cooperate and trade with the rest of the province and theoutside world. For example, starting from 1985, the central government has given Dalian city anannual foreign exchange allocation of about US$100 million as well as provincial status for foreigntrade enterprises (Lai and others, 1992: 25-85). That is to say, Dalian can directly export its ownproducts to foreign market without permission from the Liaoigng province.Originally, the province’s patronage and power control over the cities extended as far as144Administrative Systems and Peasant Workerssupplying funds and electricity to the city, managing its financial income, and allocating industrialproduction and the distribution ofmajor raw materials. Along with these activities, the province alsohad the privilege ofcollecting the major portion ofthe wealth accumulated from the city’s productionand redistributing it to other cities throughout the province. The large cities were therefore, oftenin practice, neglected in terms of new urban infrastructure, and forced to maintain dilapidated urbanutilities for whose upkeep they had quite minimal or even no funds of their own. Neither could thecities work out any comprehensive urban plan, since their management powers were far too restrictedby the myriad of vertical bureaucracies among which the arrangement of its activities was divided(Solinger, 1993: 211).The special designation of Shenyang and Dalian in 1984 overturned these old arrangementsand allowed these cities to set up their own development plans and organize their production bythemselves. The central government became the only level the government to whom they wereresponsible for following orders. The provincial government’s power was limited to controllingeconomic development, in these two cities as well as their administrative areas (ibid.).7.2.2. The Central City Administering Surrounding CountiesA second set of reforms established in the early 1 980s was the shi dai xian system (centralcity administering counties or city leading counties), which erased the jurisdictional lines that had keptcentral cities isolated from their rural hinterlands. Within the previous administration system, counties(xian) were subdivided into townships and/or towns, while city districts were subdivided intoresidents’ committees or townships and/or towns. The province was divided in cities and prefectures(diqu), with the prefectures being further subdivided into counties. The administration of cities andtheir surrounding counties, accordingly, converged at the provincial level without many horizontallinkages between major cities and their surrounding rural areas. The reform of the administrativesystem was aimed at placing both rural (county) and urban (city) planning and administration undera unified jurisdiction in the so called ‘central cities’ (zhongxin chengshi) (Figure 7.1). For example,145Administrative Systems andPeasant Workersall the central cities ofthe Shenyang-Dalian corridor, e.g. Shenyang, Dalian, Anshan, Fushun, Benxi,Liaoyang, and Yingkou, became empowered after 1984 to incorporate about a half dozen countiesand suburban districts in their environs. So, within the new borders these cities can now deploy theresources ofthe entire area under their jurisdiction, and thereby create new economic linkages. Forinstance, as Figure 7.1 shows, the Shenyang metropolitan region stretches across a 100 km radius andtoday includes the Shenyang city core (i.e. the built-up area), four suburban districts (which are ruralin nature), and two rural counties. The initial objective of such new urban-rural ties has been to“promote an overall urban network [while) urbanizing the village” (Solinger, 1993: 211). This wouldovercome the flaws ofthe original administrative system which, as already noted, caused a split after1949, so that cities only managed industrial development, and rural areas alone were responsible foragricultural development. This separation had negative impacts for the development of an integratedrural-urban economy. Rural areas could not receive technological and financial assistance from urbanareas and neither could urban enterprises establish subcontracting connections with rural areas wherecheap labour and natural resources were available. By contrast, the new system has facilitated thecombination of urban and rural planning, the rational deployment of resources, and a generalizedreadjustment of regional-based industrial structures. It should be noticed that Liaoning is one ofChina’s few provinces to fully adopt such a new system, apart from Beijing, Tianjin, Shanghai,Jiangsu, Guangdong and Hainan (Institute for the Study of Chinese Communist Problems, 1992: 135;Ma and Cui, 1987: 380-38 1).The concept of rural counties fulling under city jurisdiction requires further comment. Thebasics of such administrative reform are that certain counties should be tied economically to particularcities, as these cities were suitable to provide much of the motive force for development in thecounties, particularly development outside the agricultural sector (see Kojima, 1987). Each ruralcounty area which fails under the jurisdiction of a large city is around 3,300 square kilometres in area.The distance from the town or village to the far reaches of its jurisdiction, therefore, will typically146Administrative Systems andPeasant Workersbe more than 56 kilometres.27 A large portion of the population in these counties under urbanjurisdiction probably lives within 20 to 30 kilometres of their major urban centre. This is closeenough to have regular contact with the urban area by bus or motorized vehicle along the ShenyangDalian corridor.7.2.3. ImplicationsThere are many implications of these administrative reforms for rural-urban interactions.First, in practical terms, the erasure ofadministrative boundaries has encouraged subcontracting fromurban factories to rural locations, product and technology diffusion, as well as joint urban-ruralinvestment schemes, all of which have helped induce rural development while enabling urban firmsto use cheaper and less sophisticated factories in the countryside to turn out less sophisticated partsand components. This reform also offered cramped or capital- and material-short city plants a chanceto expand their operations into rural areas. Moreover, it has enabled the hiring of cheaper, less-skilled labour from the countryside, thus giving jobs to surplus workers from the fields, and sendingimportant equipment and technical personnel into the rural areas. The reform therefore generates newrural-based jobs because ofthe rise ofindigenous rural industries creating employment opportunitiesbut also due to the decentralization of urban factories searching for cheaper cost of living and lessstrict population registration regulations in rural areas. The case study villages in Part Four of thisthesis demonstrate this emerging relationship between rural villages and their central cities withdetailed examples.Second, the administrative integration in Liaoning province has undoubtedly assisted furthercomprehensive planning and a convergence of the rural and urban economy. To begin with, it makes27The area ofLiaoning province is 145,900 square kilometre. Each of 44 counties andcounty-level cities has average land area of 3,315 square kilometres. Each of 14 central citiesadministers 3 counties, which means that the farthest distance between villages or towns to theircentral city is less than 56 kilometres.147Administrative Systems andPeasant Workersit possible for central city governments to incorporate rural and urban developments and relax therigid regulations designed to prevent peasants’ mobility (Department of Personnel, 1991) and sofacilitate economic links between rural and urban areas. The negative side of this new system forChina’s rural areas is that some central city governments overemphasize development priority in thecentral cities and use their authority to force the rural-based county governments to financiallysupport construction in the central city. The county governments complain of such central city-biased attitude. They ridicule the system as not “city leading counties” (shi dcii xian) but “city eatingcounties” (shi clii xian) (Comtois, 1995) or “city extorting/exploiting counties” (shi gua nan) (Bao,1991: 455). Based on the author’s field work, such problems were not considered serious in theShenyang-Dalian region.As shown later in Chapter 8, in the Shenyang-Dalian corridor the core cities have also beenable to organize and relocate economic activities, such as the decentralization ofurban industry, tosurrounding rural areas, i.e. from the central urban places to all surrounding counties. This has ledto a greater integration between the urban core and its administered rural areas. Finally, many ruralproducts, such as cash crops, vegetables, fresh meat and fish, are more easily sold in city markets thanbefore the administrative reforms. These changes have, in turn, resulted in the emergence of moreprosperous rural areas, strong rural-urban linkages and an integrated rural-urban economy.7.3. The Rise Of Peasant WorkersThe term ‘peasant worker’ (nongmin gong) refers to those peasants who are currently engagedin non-agricultural activities either in urban, town or local villages, but whose registration status isstill agricultural. Even though they reside in officially designed urban areas for an extended periodoftime they are still classified as agricultural persons for official purposes. As discussed more thulyin Chapter 4, this is because peasant workers are still administratively tied to a rural district and notentitled to receive commodity grains and other subsidized urban rations from the state (Blecher, 1985:109-123).148Administrative Systems andPeasant WorkersThe rise ofpeasant workers is a relatively new phenomenon in the Shenyang-Dalian corridor.They are quantitatively as well as qualitatively important in the development of rural-based non-farming and the development of small towns. They contribute significantly to the growth of the ruralnon-farming sector, which is a major source of economic viability for small towns and rural areas ingeneral. Moreover, precisely because they are ‘both farmers and workers,’ their choice and level ofactivities simultaneously affect both the farm and the non-farming sectors. They hold the key tounderstanding the dynamics that link the growth processes of agricultural and non-agriculturalactivities as well as understanding the mix of agricultural and non-agricultural activities that coexistside by side in the same localities, as revealed in the earlier analysis in Chapter 6.In China, there are two major policy objectives for the promotion of rural industry.28 The firsthas been the subsidization of agriculture by industry’ (yigongbunong). In other words, village andtownship industries are expected to help modernize the agricultural sectors through the modernizationofvillage and small township infrastructure, the provision of agricultural machinery, and the provisionof services related to agricultural production. The second objective has been to help preventexcessive rural-to-urban migration guided by the principle of ‘leave the land but not the rural area’ (iitu bull xiang) (Liu et. al., 1990: 23-25). In this way, policy makers have expected rural enterprisesto help retain the surplus and displaced rural labour force, and so limit urban congestion through theprovision of non-agricultural jobs in rural market towns and villages.Under such circumstances, the peasant workers have emerged as a special occupational groupin rural China. According to their place of residence, peasant workers can be classified in three majorsub-groups. The first (group (1) in Figure 7.2) includes those peasants who reside in their villagesbut who have found work (often part-time or seasonal) in non-agricultural activities. The second subgroup ofpeasant workers are those who have found jobs in non-agricultural activities in nearby small28Rural industry here includes township enterprises and village enterprises as well asindividually-owned (or private) enterprises.149Administrative Systems andPeasant WorkersFigure 7.2Three Categories ofPeasant Workers in the Shenyang-Dalian Region(2) Rural Area -I Daily Commutingto TownsSecond Occupation Place of Main Residence First Occupation150Administrative Systems and Peasant Workerstowns and commute daily to and from their rural villages to engage in some farm work (group (2)in Figure 7.2). Peasant workers of these two types - (1) and (2) - have transferred their occupation(either full-time or part-time) from agricultural to non-agricultural jobs, but without changing theirofficial residential place to any substantial urban area. They are called ii tu bu ii xicrng (leave the landbut not the rural areas). The ii tu bu ii xiang peasant workers have a very special identity becausethey retain a dual status in terms ofoccupation. In other words, while most of their time is occupiedby non-agricultural activities, such as working at state enterprises or self-employed in urban servicesectors, they still work as part-time farmers.The third sub-group can be called ii tu you ii xiang (leave the land and also leave the ruralareas), and thus refers to peasant workers who both work and reside in urban centres (group (3) inFigure 7.2). Their occupational transformation is completed and has occurred along with change oftheir residential places (Blecher, 1988: 109-123). Their links to their previous rural work is weak.Yet, this does not means, however, that this group ofpeasant workers are totally separated from theirprevious rural work.Interestingly, peasant workers have not just been employed by urban employers; some havestarted their own businesses in urban areas (mainly in service sector). The output value of peasant-run urban businesses was about 1,169.7 million yuan in the Shenyang-Dalian mega-urban regionduring 1991. About 56 per cent of this output was from construction and 32 per cent from otherindustries. The significance of this output value was that while peasant workers in urban areasaccounted for 3.2 percent ofthe total rural labour, their business output value amounted to 17.4 percent of total rural farming output (Liaoning Rural Economic Statistics, 1992). Much of this incomewould be remitted back to rural villages along the Shenyang-Dalian corridor.Another link with their previous rural work is that they still retain their rural land and workas part-time farmers. It is important to realize that few rural households leave their villages entirelyto work full time in urban-based industrial and service occupations. Even in these cases, peasant151Administrative Systems andPeasant Workersworkers often retain title to part or all of their contracted farmland and usually ask their non-li tu (notleave the land and the rural areas) family members and relatives to help cultivate their land in theirabsence. During the busy harvesting and planting seasons, e.g. summer sowing and autumnharvesting, they may temporarily leave their non-farming positions to return to work alongside theirfamilies in the fields (Liu and others, 1990).According to the survey conducted by the provincial government’s Project Team ofResearchon Floating Population Management in 1990, about 60 per cent of migrants in Liaoning made at leastone trip to their home villages per year. Among these, about 18 per cent were to help farming in thevillage during the busy season (54 per cent went back home to celebrate Chinese New Year; 10 percent to visit home regularly; 8 per cent went back home due to no job in Shenyang; and 10 per centfor other reasons) (Project Team ofResearch on Floating Population Management 1992: 25).It may be asked why would a peasant worker who has a non-farming occupation still wish tomaintain a share of the farmland. Some analysts believe that this is due to the Chinese peasants’traditional conservative attitude which has prevented them from giving up their contracted‘responsibility farmland,’ which many consider as their private property (Mu, 1985: 62).Apart from this factor there are several important economic concerns which heavily influencea rural worker’s decision to retain a piece of farmland while opting for a non-farming job. Liu (1990:23-25) suggests the following reasons. First, a peasant labourer who works in the rural nonagricultural sector is required by law, in almost all cases, to maintain his/her agricultural householdstatus. As noted earlier, such a worker is not entitled to receive subsidized commodity grain andother food supplies from urban areas and townships, so any peasant worker naturally wishes to keepa share ofthe land for subsistence farming. In other words, she/he prefers usually to grow grain forhome consumption rather than to buy food on the open market. Second, keeping part or all of thecontracted farmland allows Chinese peasants some security against unexpected economic down turnsin non-farming activities. Peasant workers are hilly aware that the rural non-farming sector in urban152Administrative Systems andPeasant Workersor rural industries, unlike the state sector, does not guarantee stable income or year-long employment.Therefore, they are naturally conservative and reluctant to cut all of their ties to the land. Third, thefamily members of a peasant may stay on the farm, while the household head moves to town forwork, and they are generally capable of cultivating the extra land kept by the peasant worker. Fourth,peasant workers obtain certain government subsidies if they continue to retain their rural land. Thisis because tax revenues derived from the profits of rural industries are diverted by local governmentback to the agricultural sector to help in its future development. Since the establishment of thehousehold responsibility system, these subsidies are distributed to the peasants according to the sizeoftheir contracted responsibility land. Yet another factor is the seasonal nature of farm work (busyin summer sowing and autumn harvesting, as opposed to the rest of year) which allows some peasantworkers in the Shengyang-Dalian region to conduct non-agricultural activities during the non-busyfarming seasons and then help their family during the busy farming seasons. All these factors haveeffectively persuaded the ‘ii tu’ peasants to keep their farms rather than sell them for development.The above description applies to a greater or lesser degree to rural areas virtually everywherein China. The rise of peasant workers in the Shenyang-Dalian corridor resulted from bothadministrative changes, as discussed above, and more general rural reforms instituted in 1978 andthereafter. It is important to note that the rural reforms facilitate a new role for peasant workers inthe corridor, and so allow them to engage in new forms of economic activities, as well as allowinga limited amount ofmobility to the cities (Mallee, 1988: 12-22; Department ofPersonnel, 1991), bothofwhich were denied to rural areas prior to 1978. Therefore, the government policy has had a strongimpact on the rapid rural occupation transition in the Shenyang-Dalian corridor through increases inagriculture and the emergence of a rural surplus labour outside the major city cores. The governmenthas promoted rural industrial development in order to provide jobs for the large rural surplus labourforce released from traditional agricultural production.In the rural areas of the Shenyang-Dalian corridor there are many households concurrentlyinvolved in both agriculture and industry or other trades. Although there is no data at the county153Administrative Systems andPeasant Workerslevel to show how many peasant workers belong to this group, the case studies presented in Part 5ofthis thesis will give detailed categories for peasant workers at the village level. It seems reasonableto argue that the ‘to leave the land but not the rural areas’ policy is an important force behind theemergence of spatial and economic change along the Shenyang-Dalian corridor. Many of the farmersliving in this region are rural folks but since the early 1980s they have had dual occupations. Theirworking schedule is flexible, and whenever the peasants have spare hours they can work on theirsmall non-agricultural enterprises. The vitality of such dual occupations lies in the seasonality offarming activities and the ability of peasants to combine both agricultural and non-agriculturalactivities in the same region. Specific case studies from three villages will be given in Part Four ofthis thesis to show how non-agricultural activities complement traditional farming and so offer betteropportunities to earn higher incomes.7.4. SummaryPost-1978 changes in administrative boundaries of the Shenyang-Dalian region have includedthe establishment of cities of Shenyang and Dalian ‘listed separately in the plan,’ and all central citiesin the Shenyang-Dalian corridor administering surrounding counties. These changes have createdpowerful mechanisms for rural-urban integration. Moreover, one of the important elements behindrural-urban integration in the region has been the emergence of ‘peasant workers’ who are bothfarmers and workers. This group have contributed significantly to the growth of the rural nonfarming sector in the Shenyang-Dalian region, which is a major source of economic vitality for smalltowns and rural areas along the corridor. These important political and administrative changes andthe rise of peasant workers, have combined with industrial growth and transport changes which, aswill be shown in the next two chapters, have also contributed to the emergence of the ShenyangDalian EMR.154Industrial Decentralization andRural IndustrializationCHAPTER 8INDUSTRIAL DECENTRALIZATION AND RURAL INDUSTRIALIZATION8.1. IntroductionApart from administrative changes, the growth of industry outside the major urban areas hascontributed to the ‘blending’ of urban and rural activities along the Shengyang-Dalian corridor. Thisdevelopment has been motivated by two factors. One is the decentralization ofurban-based industry,and another is the rise of a distinct type of rural industrialization. Decentralization has been one ofthe immediate outcomes of administrative reforms and cities, such as Shenyang and Dalian, are ableto shift part of their urban industrial production to surrounding rural areas. A consequence has beenthat rural development has benefitted through the transfer of urban capital and technology to theserural areas as well as providing employment opportunities. However, the development of ruralindustry in the Shenyang-Dalian corridor has not only been dependent on urban difihision and thedecentralization ofurban industry. Local resource-based and indigenous technology-oriented ruralindustrialization has also played a significant role. In order to help understand the economictransformation process and rural-urban transition in this corridor, this chapter will first discuss urbandecentralization policy and government initiatives to set up three new development poles along thecorridor. This will be followed by an examination of the role of rural industrialization.8.2. Establishment Of Growth Poles Along The CorridorIn addition to the establishment of the coastal open city of Dalian and Liaodong PeninsulaEconomic Development Zone in 1984 (see Chapter 5), another three development poles weresubsequently established along the corridor in order to promote development of an export-orientedeconomy (Figure 8.1). These three new ‘open zones’ were expected to act as the windows for the155Industrial Decentralization andRural IndustrializationFigure 8.1Direction of Industrial Development and Special Open Zones in Liaoning ProvinceTiefaFuxin ::::::: OTielingShenyangBeipiao .. . FushunChao3 g0...J:. .:1’IO3 • Liaodong— (Th Pemnsu10 Jinzhou Panjm U LI flXI &onucLingyua.n ,‘Q::::::::.: . Anshan.,/ . : Haichengj .. Development/ . . H . ZoneJinXI YitlgkOu .. Shtnyarig-”.Xingche’g . Daiian‘ qiao Corridor©.OouDandongWgcthm Zhuangh9’ PulDirection of Industrial VJDecentrialization . - j50 00km - :: 1 1: Dalian Special Economic Zone1:: - 2: Bayuquan Special Economic Zone- Dalian 3: Tiexi Special Economic ZoneSource: Adapted from Lu, 1990: 14.156Industrial Decentralization and Rural Industrializationhinterland of the whole northeast China (Japan-China Northeast Development Association, 1991).At the southern part of the corridor, the Dalian Economic and Technological Development Zone(I)ETDZ) was established in 1984, aiming at fostering technology-intensive enterprises and attractingforeign capital and investment. In 1992, it occupied about 11 square kilometres and included a 1.6square kilometre tax-free zone, a 2.17 square kilometre Japanese-enterprise zone, and a 8.14 squarekilometre high-technology enterprise zone (see Figure 8.1) (LSB, 1992: 58).Foreign investors establishing solely foreign-owned enterprises, joint ventures, or other formsof cooperative projects in the DETDZ are eligible to enjoy preferential treatment, such as thereduction of income tax. Profits, after income tax reductive, are exempted from tax when beingremitted out ofChina and products manufactured in the zone are exempted from export tax, as wellas offering industrial and commercial taxes (Lai and others, 1992: 38). In 1991, total joint ventureswith foreign investors reached 272 and total investment in these three zones amounted to US$1.24billion, with US$850 million comprising foreign investment (LSB, 1992: 57). The major sources ofoverseas investment were from Japan, followed by South Korea, Taiwan, and Hong Kong. OtherChinese provinces also invested their capital in these zones, such as the provinces of Jim,Heiongjiang, Henan, Hebei, and Shanxi, as well as the rest Liaoning province (LSB, 1992: 58). Thepopulation in the DETDZ increased from 13,000 in 1986 to around 40,000 in 1990 (Lai and others,1992: 36). This zone lies only 33 kilometres away from Dalian city, and 6 kilometres away fromJinzhou, a 100,000 population urban centre. It borders on the multi-purpose deep-water modernDayaowan Bay port, whose annual handling capacity reaches 60 - 80 million tons and lies only about2 kilometres from a 800,000 kw Thermal Power Plant, 12 kilometres from Dalian Seaport, 30kilometres from Zhoushuizi International Airport, and 8 km from the Shenyang-Dalian Expressway(Liaoning Foreign Affairs Office, 1992: 39). Since 1994, the DETDZ has been upgraded to a city -New Dalian - which is expected to reach one million population over the next 30 years.The city ofNew Dalian is being designed by a Vancouver firm (for details, see“Vancouver firm gets its shot at designing entire city” The Vancouver Sun, November 16, 1994).157Industrial Decentralization andRural IndustrializationAt the northern part of the corridor, the provincial government set up the Tiexi Economic andTechnological Development Zone (TETDZ) in 1988 and this is located within one of Shenyang’surban districts. The TETDZ occupies a land area of 65.9 square kilometres. The machine-buildingindustry forms the mainstay of this zone which also includes metallurgy, the chemical industry,electronics, multi-purpose machine building, pharmaceutics, and machine building, as well as thetextile and food industry (Liaoning Foreign Affairs Office, 1992: 40-4 1). The major purpose forestablishing the TETDZ was to relocate state-owned large heavy industrial enterprises from thecentral of Shenyang and then to improve performance with foreign capital, technology, andmanagement. This area now comprises Chin&s largest industrial cluster and in 1992 contained 855enterprises, 112 ofwhich were large-scale factories (ibid).In the middle part of the corridor, yet another important development pole - the YingkouExporting and Processing Zone (YEPZ) was established in 1984 at Bayuquuan district, Yingkou city,bordering on the Liaodongwan bay ofthe Bohai sea. This zone occupies about 140 square kilometresand lies about 45 kilometres from Yingkou city. The YEPZ was designed to promote export-orientedindustry. Here, industrial enterprises are mainly engaged in knowledge-intensive production throughimport-substitution and labour-intensive production (Liaoning Foreign Affairs Office, 1992: 42).Of importance to the corridor’s development is that these new zones provide windows orchannels for the corridor as well as other parts of the province. These open zones are expected tofacilitate both urban export-oriented production and rural industrial production in the middle partsofthe corridor between Shenyang and Dalian which are, as discussed in following section, the majordestination of decentralized urban industries.8.3. Urban Industrial Decentralization and Rural IndustrializationThe decentralization of urban industry from the major cities has also been a major factorpromoting urban-rural interaction in this region. Starting from the early part of 1980s, the provincial158Industrial Decentralization andRural Industrializationgovernment decided on two important steps to develop rural industry. The first was to relocatewhole or parts of urban-based heavy industrial enterprises to the corridor between Shenyang andDalian, and the second to encourage urban enterprises to subcontract to rural enterprises within thecorridor (Figure 8.1). Along with the development of the three special growth centres describedabove, the middle part ofthe corridor has been targeted since the early 1980s to receive decentralizedurban industry from Shenyang, Anshan and Dalian. The rationale behind this policy is partly to limitcongestion in the traditional urban-based industrial areas. The heavy industrial-oriented urbanclusters lying in the central part of the province (including the cities of Shenyang, Fushun, Anshan,Benxi, and Liaoyang) and the large port city ofDalian in the southern part of the province have hadgovernment limitations (placed in the early 1980s) on the further development of heavy industry, suchas manufacturing and machine tool making. Consequently, new sites have been chosen for theexpansion of these industries, including the small towns and villages around Yingkou and Panjin,which lie about 100 kilometres away from Shenyang, and the rural areas around Wafangdian andZhuanghe, which lie 50 to 100 kilometres away from Dalian (see Figure 8.1).These government policies have conferred a legal status for new rural industrial enterprisesto operate which had been limited prior to 1978. This has contributed to the rapid proliferation ofrural growth, as many town- and village-enterprises, established with the direct assistance ofurban-based state factories. Rural-urban links have been sustained by subcontracting relationships withurban industries in the Shenyang-Dalian region (Shenyang Economic Technological CooperationOffice, 1991: 227-234). For example, in 1990 Shenyang city had 484 urban enterprises which hadsubcontracting relationships with rural enterprises in its surrounding areas. The output of thesesubcontracted rural industries constituted 630 million yuan and about 10 percent of total ruralindustrial output (Yue, 1992: 35).The general motivation of urban industries in initiating or strengthening their ties withtownship and village industrial enterprises has been explained for China as a whole by Lee (1991:143). He summarized three major reasons for urban industry moving to surrounding rural areas. The159Industrial Decentralization and Rural Industrializationfirst, which is part of the ‘push’ factors forcing urban industries to subcontract, concerns the overallshortage of labour and the limited number of full-time workers that can be hired in urban-basedenterprises. The government has imposed stringent hiring rules on urban industries to control the sizeofthe urban population and to ease the financial burden of its urban subsidies for housing, food, andtransportation expenses. By setting up economic linkages with township and village industrialenterprises, many urban factories can circumvent the state’s limit on the size of their work force andyet fulfil their production quotas (Lee, 1991). The second reason for cooperating with ruralenterprises is that some urban industries are short of the necessary financial capital to expandproduction. In such cases, urban industries may agree to locate some of their manufacturing activitiesin rural communities if the latter can provide free land and can promise to share the burden ofinvestment costs (Li and Li, 1985: 35). A third, but less discussed, consideration covers urbanindustries which have moved all or parts of their operation to rural areas because they wished toevade pollution-control expenses (Lee, 1991: 137-156). It is true that in these circumstances urbanpollution is often being exported cheaply to the countryside and the rural economy proletarianized,but neither the officials or the rural people apparently see much harm in this (Leeming, 1993: 104).Some urban factories cannot often officially expand in urban areas due to the polluting nature of theirindustry (e.g. metal foundry shops). Rural locations, by comparison, are much less restrictive withrespect to pollution controls, as well as having the advantages of much lower land rents and labourcosts (interview with Mr. Demin Wang, Officer ofRural Township and Village Enterprise SectionofLiaoning province, Shenyang, December 1992).In addition, industrial work continues to enjoy more prestige in rural areas than farming, partlybecause it is thought to be cleaner; and factory work often requires a shorter working day thanfarming. Shortages of land, labour, and capital are, therefore, the most obvious and commonlymentioned reasons for many urban industries to establish subcontracting and other cooperativearrangements with the township and village industrial enterprises (interview with Mr. Born Qian,ChiefEditor of China-Liaoning Peninsula International Exchange, Shenyang, February 1993).160Industrial Decentralization andRural IndustrializationRural Industrialization:Besides policies favouring the decentralization of industry away from large cities, indigenousrural industrialization has also been encouraged by the provincial government. In particular, since1978, a series of strategic measures have been implemented in the countryside involving theencouragement of a more diversified rural economy through the establishment of assistance totownship and village enterprises, the opening of rural trade fairs, and agricultural-industrial-commercial combinations (Leeming, 1993). These measures have generally been welcomed by thepeasantry and have contributed to the economic growth of both small towns and the village. Thesuccess of these measures has relied on the considerable number of rural peasants who continue tobe tied to the land. As noted in the previous chapter, in the last 15 years or so they have substantiallyaltered their mode of labour and gradually changed their life style away from merely farming. Newsmall-scale industries in towns and villages have transformed the structure of the rural economy andaccelerated the process of urbanization in the countryside.In the Shenyang-Dalian corridor, compared with the large-scale plants decentralized from thelarge cities, local resource-based and agro-processing-oriented rural industries have developed basedmainly on indigenous technology and resources. By way of illustration, in the southern part of thecorridor around Dalian, such industries often involve the processing of fish products and fruit. In thenorthern part of the corridor around Shenyang and Anshan, rural industries are oriented towardslabour-intensive processing of clothing and other daily articles (Yue, 1992).In summary, the industrial development in the Shenyang-Dalian corridor in the post-1978period has experienced two major processes. On the one hand, industrial decentralization hasmotivated industrial development in the middle part of the corridor. On the other hand, not inopposition but in parallel, indigenous rural industrialization has also significantly contributed to ruraldevelopment. These two parallel processes have led to the emergence of new spatial patterns in thelocal economy in the corridor.161Industrial Decentralization andRural Industrialization8.4. Changing Patterns in the Local Space EconomyThese new developments in the industrial sector have reordered the space economy of theShenyang-Dalian mega-urban region since 1978. The major beneficiaries have been the villages andtownships in the region surrounding the cities along the Shenyang-Dalian transportation corridor.As shown in Chapter 6, the economic growth of the corridor has been much faster than any otherregion of the province since 1978. This section examines patterns of industrial development in theShenyang-Dalian mega-urban region between 1978-1992 and the implications for spatial change.Industrial Growth Patterns:Industrial growth patterns in the Shenyang-Dalian corridor are characterized by faster growthrates in non-urban areas than major urban centres. Table 8.1 shows that during the period of 1978to 1992, overall the growth rate of industrial output value was much higher in the suburban and ruralareas ofthe corridor (33.5 per cent and 26.1 per cent respectively) than in the city core areas (9.8 percent). The second half of this period (1984-1992) saw more urban industry move to suburbs andrural areas than the first half(1978-1984). This is reflected in the 10 per cent gain of industrial outputshare in rural and suburbs between 1984-1992, compared with a gain ofjust 2 per cent during theperiod of 1978-1984. One of the reasons for this was due to the implementation of decentralizationpolicies by the Liaoning province government which commenced in the early 1980s. Since then, ruralareas in the middle part ofthe corridor (i.e. around Liaoyang, Anshan, and Yingkou) and the northernpart ofthe Dalian metropolitan region (the rural areas and suburbs ofDalian) became the major hostlocalities for relocating urban industry (see Figure 8.1). As Table 8.1 shows, these rural areas gaineda larger share of industrial output from 1978 to 1992. For example, the percentage growth over thistime period in industrial output value in the rural areas ofLiaoyang and Anshan (34 per cent and 28per cent respectively), as well as rural areas and the suburban region ofDalian (28 per cent and 33per cent, respectively) was much higher than that recorded for city core areas, and other rural areas.162Industrial Decentralization andRural IndustrializationTable 8.1Industrial output by city core/suburb/rural areain the Shenyang-Dalian regions, 1978-92 (billion yuanRegion 1978## 1984 1992 Change Grthoutput % (i) output % (ii) output % (iii) ui-u ui-i (°‘)!Shenyang 111.0 100.0 133.7 100.0 403.1 100.0 -- -- -- 11.3-city core 107.6 96.9 126.5 94.6 299.8 74.4 -2.3 -20.2 -22.5 8.9-suburbs 2.1 1.9 5.0 3.8 80.7 20.0 +1.9 +16.2 +18.1 35.5-rural 1.3 1.2 2.2 1.6 22.6 5.6 +0.4 +4.0 +4.4 26.9Dalian 67.2 100.0 91.8 100.1 341.1 100.0 -- -- -- 14.5-city core 61.6 91.6 78.6 85.6 200.6 58.8 -6.0 -26.8 -32.8 10.3-suburbs 2.0 3.1 5.4 5.8 66.5 19.5 +2.7 +13.7 +16.4 33.6-rural 3.6 5.3 7.9 8.6 74.0 21.7 +3.3 +13.1 +16.4 28.7Anshan 55.1 100 68.6 100.0 220.6 100.0 -- -- -- 12.3-city core 52.1 94.6 61.6 89.8 162.8 73.8 -4.8 -16.0 -20.9 10-suburbs 0.5 0.9 1.1 1.6 8.6 3.9 +0.6 +2.3 +3.0 26.8-rural 2.5 4.4 5.9 8.6 49.2 22.3 +4.2 +13.7 +17.9 28.4Yingkou 16.4 100.0 25.0 100.0 77.4 100.0 -- -- -- 13.8-city core 12.1 73.7 18.5 74.0 44.3 57.2 +0.3 -16.8 -16.5 11.4-suburbs 0.3 2.0 1.0 4.0 5.4 7.0 +2.0 +3.0 + 5.0 26.6-rural 4.0 24.3 5.5 22.0 27.7 35.8 -2.3 +13.8 +11.5 17.5Liaoyang 16.8 100.0 25.9 100.0 71.7 100.0 -- -- -- 12.9-city core 16.2 96.3 24.7 95.3 54.9 76.5 -1.0 -18.8 -19.8 10.7-suburbs 0.1 0.3 0.3 1.2 0.1t 0.2 +0.9 -1.0 -0.1 4.9-rural 0.5* 3.4 0.9# 3.5 16.7 23.3 +0.1 +19.8 +19.9 34.0TOTAL 266.5 100.0 345.1 100 1113.9 100.0 -- -- -- 12.7-city core 249.6 93.7 309.9 89.8 762.4 68.4 -3.9 -21.4 -25.3 9.8-suburbs 5.0 1.9 12.8 3.7 161.3 14.5 +1.8 +10.8 +12.6 33.5-rural 11.8 4.4 22.4 6.5 190.2 17.1 +2.1 +10.6 +12.7 26.1Notes: *: Dengta county only, Liaoyang data not available. !: 1978-92 annual growth rate. #: OnlyLiaoyang county. A: Only Gongchangling district. @: Data in 1979 (excluding village industry).Definitions ofcity core, suburbs and rural areas are based on existing administrative boundaries. Alldata in 1980 fixed prices.Sources: LSB, 1985: 542-573; 1993: 470-471.163Industrial Decentralization andRural IndustrializationCity cores in the corridor’s 4 major urban areas dominated over 90 per cent of the total metropolitanindustrial output in 1978 (Yingkou over 73 per cent) (Table 8.1). Yet by 1992, rapid ruralindustrialization and decentralization policies caused this level of domination to decline to less than60 per cent for Dalian and Yingkou and to 75 per cent for Shenyang, Anshan, and Liaoyang.The industrial output value in the corridor’s suburbs and rural areas grew at an annual rate ofabout 25 per cent during 1978-1992 (Table 8.1). The only exception was the suburban region ofLiaoyang city where the industrial growth rate was just 6.7 per cent, causing its share of industrialoutput value in the metropolitan total to remain constant. This low figure may be explained by thefact that the suburbs of Liaoyang city are the sites of mining (Gongchangling and Taizihe).Consequently, their ability to take decentralized manufacturing industries has been severely restricted.It should be noted that the rapid growth rate and increasing share of industrial output in thesurrounding suburban and rural areas of the city cores has not necessarily resulted in any industrialdecline or stagnation in the city cores. Rather, the city cores still registered an annual growth rateofabout 10 per cent from 1978-1992 (Table 8.1). This indicates that the policies of decentralizationand rural development have been successfully implemented without affecting the economic vitalityof the major urban areas.Population Growth Patterns:It might be thought that these new industrial growth patterns have led to substantialpopulation redistribution. Table 8.2 analyzes the changes of the population share of the city cores,suburban areas and rural areas in each metropolitan region of the Shenyang-Dalian corridor, andindicates whether the new industrial growth patterns led to a spatial redistribution of the corridor’spopulation. Surprisingly, the results show that general pattern of the population distribution in theShenyang-Dalian corridor had changed very little between 1984-9 1. Thus, all city cores, as shown164Industrial Decentralization and Rural IndustrializationTable 8.2Population by city cores/suburban districts/rural areasin the Shenyang-Dalian corridor, 1984 and 1992 (million)Region 1984 1991 (ii)- Region 1984 1991 (ii)total % (i) total % (ii) (j) total % (i) total % (ii)Subtotal 16.0 100.0 17.5 100.0 -- Arishan 2.6 100 2.8 100.0 ---city core 5.6 35.0 6.0 34.3 -0.7 -city core 1.1 41.7 1.1 39.3 -2.4-suburbs 2.9 18.2 3.4 19.4 1.2 suburbs* 0.2 7.5 0.3 10.7 3.2-rural 7.5 46.8 8.1 46.3 -0.5 -rural 1.3 50.8 1.4 50.0 -0.8Shenyang 5.3 100.0 5.7 100.0 -- Yingkou 1.9 100.0 2.1 100.0 ---citycore 2.8 52.8 3.0 52.6 -0.2 -citycore 0.4 19.2 0.3 14.3 -4.9-suburbs 1.4 26.4 1.5 26.3 -0.1 suburbs* 0.1 5.5 0.2 9.5 4.0-rural 1.1 20.8 1.2 21.1 0.3 -rural 1.4 75.3 1.6 76.2 0.9Dalian 4.8 100.0 5.2 100.0 -- Liaoyang 1.6 100.0 1.7 100.0 ---city core 1.0 20.8 1.2 23.1 2.3 -city core 0.4 27.0 0.4 23.5 -3.5-suburbs 1.1 22.9 1.2 23.1 0.2 suburbs* 0.1 8.9 0.2 11.8 2.9-rural 2.7 56.3 2.8 53.8 -2.5 -rural 1.0 64.1 1.1 64.7 0.6Notes: Population data ofcity core are based on officially registered population including permanenturban residents and long-term migrants in the city core. City core, suburbs and rural areas are basedon 1992 administrative division. . Suburban districts’ population in 1984 were calculated fromLiaoning Rural Economic Sketch, 1985: 251-258, 719-724, and 847-854. Suburban district’population = total population ofshUiao (city cores and suburban) - population of suburban district.ShUiao population from Liaoning Economic Statistical Yearbook, 1985: 507, 532, and 542.Sources: LSB, 1985 and 1992a.165Industrial Decentralization andRural Industrializationin Table 8.2, for instance, maintained a slight increase in population, but the share in the region’s totalpopulation slightly declined, while in the suburban districts as well as some rural areas increased dueto the migrants from other rural areas of the non-EMR. Dalian was an exception as its city coreincreased its population share by 2.3 per cent of total population over the study period. One ofreasons for this increase was mainly due to an establishment of new city - New Dalian (iizVancouver Sun, November 16, 1994) - in the north ofDalian city core along the coast. Yet this isonly a mere fraction of the total population which Dalian’ suburban and rural areas possess. Theslight increase in population ofthe suburban districts and rural areas in the Shenyang-Dalian corridorindicates an ability of these non-city core areas to maintain their population share, rather than anestimate ofall rural inhabitants moving to city cores. This will be further confirmed by the fact thatmost ofthe illegal migrants (migrants without official registration statuses in their destination places)tended to move to suburban districts and rural areas (for details, see Chapter 9).8.5. SummaryThis chapter has delineated two important development processes which have helped totransform the surrounding areas of the major urban centres in the Shenyang-Dalian corridor. On theone hand, industrial decentralization policies and the establishment of three growth poles have turnedtraditional rural localities into minor industrial centres in the middle part of the corridor and thenorthern areas of the Dalian metropolitan region. In addition, rural industrialization has grown at amuch faster rate than industry in the surrounding areas of large cities and the city core. This wasfurther confirmed by the study ofthe spatial growth patterns within the corridor. In the last 15 years,the rural areas and region outside the ‘city cores’ have experienced much faster growth rate than theurban cores themselves. However, this did not lead to a parallel decline of the corridor’s metropolitancentres. In fact, all metropolitan centres gained impressive growth during the post-reform period.Such a changing pattern of the space economy resulted in higher growth rates of industry but notmuch population (as Table 8.2 indicated). This indicates a slowdown in the traditional pulling forceofurban centres to new migrants. This may be explained by the fact that new industrial development166Industrial Decentralization andRural Industrializationpatterns have caused new jobs to occur in the suburban and rural areas along the Shenyang-Daliancorridor. This in turn has helped to keep the local population ‘down at the thnn’ rather thancontribute to mass migration to the industrial cities, as predicted by the traditional urban transitionmodel.167Transportation and Time-Space ConvergenceCHAPTER 9IMPROVEMENTS IN TRANSPORTATION iNFRASTRUCTUREAN]) TIME SPACE CONVERGENCE9.1. IntroductionYet another factor in the emergence of the Shenyang-Dalian EMR has been the laying downof advanced transport infrastructure almost continuously over the last five decades, involving boththe Japanese colonial government and the PRC government. One of the direct outcomes of suchtransportation improvement, as well as the rapid growth of the informal transportation sector, hasbeen a dramatic increase in population and commodity flows along the Shenyang-Dalian corridor.McGee and Lin (1993) have shown that increased spatial interaction is a key element ofEMRs, andso its growth in the Shenyang-Dalian corridor is an important component of this study. Spatialinteraction within the corridor may be reflected by movement of goods, passengers, migrants, money,information, as well as ideas, between the rural and urban areas. This chapter will discuss howimproved transportation facilities have promoted ‘time-space convergence’ in the study region andhow this has impacted on flows of commodities and mobility of population within the corridor.9.2. Improvement Of Transportation InfrastructureAs mentioned in chapter 5, this region has had a well developed road and railway system aswell as water transportation, compared with many other areas in China. This was due to its singularcolonial experience in the 193 Os and 1 940s under Japanese occupation, as well as the priority givento Liaoning province during the communist period. The acceleration of investment in ports, railwayand road construction, both in the colonial period and in the post-independence period, created thenecessary linkages to allow economic growth to flourish.168Transportation and Time-Space ConvergenceComprehensive data on spatial interaction at the county level in the Shenyang-Dalian corridoris lacking. For example, data on flows of commodities, population, and capital among the countiesare not available. Nevertheless, Table 9.1 documents the tremendous growth of transportationfacilities put in place in Liaoning province by both central and provincial governments over the last35 years or so, as well as the substantial increase in transportation volumes. For example, the totalroad length in the province as a whole was extended from 11,680 km in 1957 to 40,300 km in 1991.A highway linking Shenyang and Dalian was not available before the 1970s, but the length of highwaygrade road reached 11,470 kilometres in 1991. The spatial configuration of the Shenyang-Daliancorridor transport infrastructure is shown in Figure 9.1. As noted by Liang and others (1990: 199),this corridor has been one of China’s major transportation axes, and it has had the densest railwaynetworks in the country, with double-trailed railways.The newly developed transportation systems enhance relatively developed transportationnetworks in the Shenyang-Dalian corridor. Open to traffic of the Shenyang-Dalian expressway in1990° (China’s longest) fhrther reduces the travel time within the corridor. With a four-laneexpressway, a maximum speed of over 100 km/hr, this highway passes through five large industrialcities and eleven counties and has reduced the travel time from Shenyang to Dalian (375 1cm) fromeight hours in the early 1980s to about 4 hours in 1990 (LSB, 1992). Consequently, the roadtransport has overtaken the railway’s top position for long-distance passengers since the middle1980s. In 1990, passengers transported by road amounted to 2.1 times as many as those transportedby railway, compared with a more or less equal share passengers transported by road and railway inChina as a whole (260 billion kilometres total trips by road and 261.6 billion kilometres by railway)(S SB, 1991b). Airline routes now connect the cities of Shenyang and Dalian with Hong Kong,Tokyo, and Osaka in Japan, and Moscow and Vladivostok in Russia (Li, 1994: 9).30The construction of the Shenyang-Dalian Expressway started in 1984. The officialopening to traffic was in 1990, but most parts of it had been opened to traffic since 1985.169Transportation and Time-Space ConvergenceTable 9.1Major developments of transportation infrastructure in Liaoning province1957 1978 1985 1991Railways(lOOkm) 26.4 35.9 48.8 49.4RoadTotal(lOOkm) 116.8 303.5 330.1 402.0Highways(lOOkm) 0.0 46.0 65.7 114.7Pipe line (100 km) 0.0 12.2 14.3 14.2Airline Routes (1,000 km) 0.0 17.6 38.0 136.0-Domestic (1,000 km) 0.0 17.6 36.9 129.2-International (1,000 km) 0.0 0.0 1.1 4.0Civil car and truck (1,000) 7.9 89.6 205.4 407.6Other vehicles (1,000)* n.a. n.a. 84.4 262.3Commodities (million ton) 102.9 452.7 685.3 790.6Total passengers (million) 62.2 263.6 395.8 466.4-by railway (million) 50.2 175.4 187.3 147.3-byroad(million) 11.9 87.9 205.5 314.8-by water (million) 0.1 0.2 2.7 3.6Note: * Excluding scooters and other small engine motor vehicles.Sources: LSB, 1992: 555-559; Yue, 1992: 660-661.170Transportation and Time-Space ConvergenceFigure 9.1Transportation Networks and Citiesin the Shenyang-Dalian Region, 1992To Moscowvia Harbin—• : ::: ::: : : : : ? / ToJilinFushunShenyang..::.:Liaoyan/• :Anshan’ .enxtI••::::::::::: Shenyang—[Iaicheng.DalianCorridorDashlqlao\Gaizhou:Single Track RailroadHighwaySeaport Airport171‘IFBayuquanSpecialOpen ZoneDouble Track RailroadLocal RoadPipe Line0 50kmTransportation and Time-Space ConvergenceThe high utilization of automobiles and motorcycles in various metropolitan regions inLiaoning is shown in Figure 9.2. This pattern indicates that more vehicles are used within thecorridor than other parts of the province. For example, the levels of automobile use and motorcyclesper 10,000 population in this corridor were as much as twice or more times higher than levels in theremaining parts of the province (Figure 9.2).Time-Space Convergence Within The Shenyang-Dalian Corridor:Advances in transportation facilities have linked the corridor region in a network of trade andtravel hardly envisioned 20 years ago. One immediate outcome of improving transportation facilitiesis a reduction of travel time from one place to another. For instance, the average travel time fromShenyang to Dalian has been reduced tremendously within the last 40 years (Janelle, 1969). Table9.2 indicates that by using transport modes which are affordable to ordinary people (e.g. accordingto the regular income ofworkers and farmers), travel times between Shenyang and Dalian have beenreduced from about 2 weeks in the 1900s, to 1 day in the 1950s, and to just 8 hours in 1989. After1989, the average travel time between Shenyang and Dalian has shrunk to only four hours, mainlybecause of the opening of a high-speed highway between two cities (Liaoning Year Book, 1992).Beyond normal highway transport, the travel time between Shenyang and Dalian for business peopleand other elites is now only about half an hour by airline (Yue, 1992: 193) (Table 9.2).The impact of such time-space compression can be seen in a number of ways. First, since1978, commuting peasant workers have been able to work, or operate their own business, in urbanareas along the corridor such as Shenyang, Dalian, Anshan, Yingkou, Benxi, and Fushun. In 1991,the Shenyang-Dalian corridor recorded more than 105,000 rural labours working in urban areas,which was more than 3 per cent ofthe total rural labour force in the corridor (Liang and others, 1990:199). Some of these stayed in urban areas and remitted income to their families, while some weremere daily commuters bringing agricultural products to sell at urban markets. This was possible172Transportation and Time-Space ConvergenceFigure 9.2Automobiles and Motorcycles Per 1000 Population(by Metropolitan Regions), Liaoning, 19910 50 100km___N: Tie1ing ....Fw ô__ __ShenyangChaoyang• .::..—...:; ::. . .. .Llaoyang ..JIL-Jinzhou PaIU1fl BenxiAnshanJima...: ShenyangDalianYlngkQU : Corridor*DandongDian50 100 150Automobiles and motorcyclesper 1000 populaflonSource: Liaoning Statistical Year Book, 1992173Transportation and Time-Space ConvergenceTable 9.2Travel time between Shenyang and Dalian, 1900-19921900 1930 1950 1980 1989 1992Major routes simple simple road; railway; railway; highway;road, road; railway road highway; railway;waterway railway airline airlineAffordable Modes walking water; train train train; train;for donkey bus busordinarypeopleTravel time 2 weeks 1 week 1 day 12 hrs 8 hrs 4 hrsFor elites* Modes water; train train car plane; planedonkey carTravel time 1 week iday 12 hrs 8 hrs 1 hr 30 mmNotes: * For business people and other elites. Travel times in 1900 and 1950’s are based on author’sestimation. Travel time between 1980 and 1992 were estimated based on the author’s field research.174Transportation and Time-Space Convergencebecause ofthe more convenient transportation links which were set up during the 1980s and the riseofvehicle ownership among the rural peasants.Second, the improvement oftransportation facilities has also made it possible for some cropssold in urban markets (such as vegetables and milk dairy products, which were traditionally plantedonly in suburban districts) to be planted in the rural areas farther away from the city core. Forexample, agricultural products from distant rural areas, such as vegetables, and dairy product, cannow be transported to urban markets in Shenyang, Dalian, Anshan, Benxi, and Fushun. Often thisis stimulated as land in nearby suburbs becomes more and more taken over by urban activities, suchas large scale construction of housing, making it difficult to sustain market gardening in the city’simmediate suburban areas. Therefore, over time, relatively remote rural areas have developedvegetable farming oriented to supply urban markets (Yue, 1992).Third, the increased use of highways in the corridor has also facilitated subcontractingactivities in rural areas, as noted in Chapter 8. This is because rural subcontractors have been ablesince 1 980s to deliver their products to urban ‘parent’ factories (for assembling or delivery to finalmarkets), and have been able to receive the materials they need for production without delay(Interview with Demin Wang, Officer ofRural Township and Village Enterprise Section ofLiaoningprovince, Shenyang, December 1992).Finally, transportation improvements have indirectly facilitated the diffusion of technology andnew information and skills into rural areas. Due to the shortening of rural-urban commuting times,some urban technicians now carry out part-time consultant work for rural industrial enterprises or forspecial cash farming enterprises. These technicians and engineers can commute at the weekend whenthey are not working on state jobs, and are often called ‘Sunday technicians’ or ‘weekend technicians’(Bao, 1991: 101). This term refers to those urban technicians whose secondary jobs are engagedin either consulting or teaching local employees to learn specific skills in rural areas. Although thereis no official data available to show either the actual number of this group working in this way, or the175Transportation and Time-Space Convergenceoccupation of their second job in rural areas, it is considered that numbers have been increasingbecause of the rise of the rural economy, both in the industrial and agricultural sectors, within thecorridor. For all the above reasons, the considerable advance in transportation networks along thecorridor and the further development ofthe former treaty ports ofDalian and Yingkou, have hastenedthe mobility and circulation of commodities, people, and capital, and facilitated the transfer ofurbantechnology and know-how throughout the wider region.9.3. Informal Transportation SectorsBesides the growth of formal transport links, developed or assisted by government, thedevelopment of regional mobility has also benefitted from the emergence of new informaltransportation sectors in both rural and urban areas. This refers to non-state and low-costtransportation such as motor cycles, bicycles, tractors, a variety of pedal bikes, and horse or donkey-drawn carriages, as well as carts pulled by people. While traditional low-technology transportationsuch as carts and bicycles have always been prevalent in communities along the Shenyang-Daliancorridor, new forms ofinformal transportation have been developed since 1978 to address problemsofinadequate formal modem transport and the increasing demands for mobility. It should be notedthat modem transportation, such as new highways and railways, requires massive capital investmentthat government authorities cannot easily make. Informal transportation modes, by comparison,require far less capital. Although the informal transportation sectors operate outside officialrecognition, they have served to increase the mobility of people and goods between rural and urbanareas in the Shenyang-Dalian region. They normally operate over short distances, and as such aremainly used for commuting between nearby urban and rural areas. The popularity of suchtransportation modes is also due to their flexibility in congested roads. Although there is little reliablestatistical data for such categories, partial evidence suggests that these modes now play a veryimportant role in the corridor’s regional interaction. By way of illustration, data available from theLiaoning Yearbook indicate that in this province the number ofprivate-owned tractors increased fromjust a small number in 1978 to 73,900 in 1991, and that motor cycles increased from 79,860 in 1986176Transportation and Time-Space Convergenceto 236,000 in 1991 (LSB, 1992). Such a form of transport ‘take-off since 1978 is because ofbothincreases in household income and changes in the central government regulation towards privateownership of various vehicles. There is also no reliable data to indicate the exact pattern ofuse ofother informal transportation modes, such as bicycles and carts. It should be noted, however, thatthe rural labour force engaged in the transportation sector increased from 20,000 in 1978 to 246,000in 1991 (i.e. an annual growth rate of 21 per cent), and the output of this sector increased from10,000 yuan in 1981 to 283,000 yuan in 1991 (LSB, 1992). The rising significance of informaltransportation is reflected by the fact that ‘private-run’ transportation services accounted for 39.5 percent oftotal provincial transported passengers and 29.5 per cent of total commodities in 1990 (ibid,1991).Increased use ofthis type of transportation has tended to congest the urban road network inthe Shenyang-Dalian corridor. Field surveys conducted by the author in 1992 and 1993 found thatclose to Shenyang, Dalian and many other metropolitan areas in this corridor, the major highwayswere utilized by a mixture ofmodern transportation vehicles (cars, buses, trucks) together with horse-drawn-carriages, carts, bicycles or tricycles often with fully loaded goods, motorcycles, and tractorsfully loaded with passengers or goods.One of the important results of recent growth of informal transportation modes is theexpansion ofpeople’s activity space in the corridor. In China as a whole, Chang and Kwok’s researchindicates that rural villagers regularly commute to work by bicycle an average of 10 kilometres (abouta 20 minute ride) (Chang and Kwok, 1990: 140-157). Other research indicates that peasant workerscommute daily by bicycle from one to five kilometres between their jobs in towns and their homesin nearby villages (Zhang, 1986: 206). It is likely that these patterns also occur in the ShenyangDalian corridor, and with the growth ofvarious other kinds of informal transportation modes, peoplehave the means to travel between rural and urban areas in the corridor more frequently. Indeed, bymotor cycles and tractors, the commuting distance may reach as far as 30 kilometres (about half anhour distance). An implication of the low cost and flexible informal transportation modes is that177Transportation and Time-Space Convergencepeasant workers in the Shenyang-Dalian corridor can continue to maintain a dual status: i.e. workingin urban areas during the day and returning home to the village at night, or during the busy harvestseason as noted in Chapter 7. Also, informal transport allows shipments of rural products to urbanmarkets to be more affordable. Moreover, ‘weekend technicians,’ as mentioned above, who residein urban areas can now frequently conduct producer services to rural businesses utilizing motorcycles, and this, in turn, has greatly hastened technological diffusion into rural areas.Rural-urban interaction in the Shenyang-Dalian corridor has become more and moreinfluenced by informal transportation. The coexistence of such unique dual transportation systems(both formal/modem and informal transportation sectors) has created a special driving force for rural-urban integration in the Shenyang-Dalian corridor.9.4. Population FlowsGenerally speaking, the intensity and patterns of population flows are influenced by thetransportation lines, available transportation modes, and numbers of people involved. The populationmobility in the Shenyang-Dalian corridor is measured by the number of passengers, travellingfrequency, and the purpose of their travel.The highly developed transportation facilities in this region, together with the high demandfor frequent rural-urban and inter-city interaction, has led to higher levels of mobility in this regionsince 1978. Thus in 1991, the number of trips per capita per year on formal transportation modes inLiaoning was 11, which was the highest in China (the overall China average was 6.9 (SSB, 1992)).Not surprisingly, within Liaoning province, the Shenyang-Dalian EMR registered a much high rateof travel frequency. Figure 9.3 shows, for example, that the region within the Shenyang-Daliancorridor, as well as the southeastern coastal region, had a larger number of trips per capita than therest ofthe province. Each person within the corridor travelled on average about 15-30 times a year,compared with 5-10 times in other regions of the province.178Transportation and Time-Space ConvergenceFigure 9.3Frequency of Travel Times Per Capita in Liaoning Province, 1990Number of Trips/Person Per Year* ***5 10 20 30 ********* Shenyang *** •** * * *** ***** **** H’V...%Shenyang—DahanCorridor** * * ** **o so 100km‘I —DalianSource: Based on Liaoning Statistical Bureau and Liaoning UrbanSocioeconomic Investigation Team, 1991: 52 and 108179Transportation and Time-Space ConvergenceAs might be expected, the spatial pattern of migration in and out of Liaoning provincerevolves around the Shenyang-Dalian corridor due to the high density of economic opportunities andtransportation facilities. As it is growing more strongly than other parts of the province, theShenyang-Dalian corridor experienced a net inflow of migrants since 1978. The degree of in-migration along the corridor is estimated by examining the ratio between ‘in-migration’ and ‘outmigration for each county. Figure 9.4 shows that higher levels of both in- and out-migrants occurredalong the corridor than other parts ofthe province. The analysis reveals that places with higher thanthe provincial average in/out migration ratios were the suburban areas of the central cities (such asthe city suburbs of Shenyang, Anshan, Fushun, Benxi, Yingkou, and Dalian), as well as the rural areasalong the corridor. This confirms that the corridor has been the major destination for the migrantsfrom other parts of the province.The pattern of high population mobility in the corridor reflects strong regional economicinteractions and rural-to-urban linkages. Partial data suggests that more and more people travel‘within the corridor for economic reasons rather than for social reasons (such as visiting relatives, orvisiting to a hospital). Thus, Table 9.3 shows the long-distance bus passengers’ travel purposes -through results of surveys conducted in the cities of Shenyang and Dalian (both within the corridor)and Chaoyang (out-side the corridor). The passengers travelled between rural and urban areas, townsand major urban centres, as well as between large cities. In terms oftrip analysis by purpose of travel,economic activities (including government official business, conferences, training, private business,seeking for job, and for daily work commuting) were the major reason for travelling by bus inShenyang and Dalian. In contrast, ‘visiting relative& was the major reason for travel in Chaoyang -a city in the non-EMR region, lying in the western part of the province. Passengers travellingbetween rural and urban areas in Shenyang and Dalian accounted about 40 to 44 per cent of the totalrural-to-urban travellers, compared with just 29 per cent in Chaoyang. In particular, about 14 to 25per cent ofpassengers in the Shenyang-Dalian region travelled for ‘economic reasons’ between ruraland urban areas (i.e. rural-to-urban and township-to-urban area trips) in contrast to about 6 per centin the non-EMR region of Chaoyang region (Table 9.3).180Transportation and Time-Space ConvergenceFigure 9.4Inward and Outward Migration Patterns(by County), Liaoning, 1990Source: Chinese Academy of Social Sciences,Population Research Institute, 1993: 370-3 75181Transportation and Time-Space ConvergenceTable 9.3Bus passengers’s travel purposes,Results of survey conducted in Dalian, Shenyang, and Chaoyang, 1986 (%)EMR Non-EMRReason for Travel Dalian Shenyang ChaoyangU-U R-U T-U U-U V-U T-U R-U T-UTotal 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0Economic 58.5 40.0 39.0 49.9 44.7 52.4 29.2 39.6Reasons-on official 34.3 10.8 10.7 32.5 21.3 22.7 14.3 19.9business-conference, 14.7 4.3 4.3 6.9 1.8 2.3 2.0 3.9training-business 4.8 14.1 21.5 8.2 19.2 24.6 6.7 5.8-exported 2.7 6.8 1.8 1.4 2.4 2.3 4.0 3.6labour-commuting 2.0 4.0 0.7 0.9 0.0 0.5 2.2 6.4Social 40.5 60.0 61.0 49.9 54.7 44.6 66.8 56.5Reasons-tourism 17.7 9.0 13.7 26.9 16.0 10.5 2.6 2.6-hospital 2.9 6.8 4.8 3.2 6.3 3.3 6.4 5.7treatment-visit 19.9 44.2 42.5 19.8 32.4 30.8 57.8 48.2relativesOthers 1.0 0.0 0.0 0.2 0.6 3.0 4.0 3.9Notes: U-U: Between Urban Centre and Urban Centre. R-U: Between Rural and Urban Centre. T-U:Between Town and Urban Centre.Source: Liaoning Transportation Bureau, 1990: 57 (Survey conducted in November 20-26, 1986).182Transportation and Time-Space ConvergenceWithin the category of ‘travel for social reasons’, both Shenyang and Dalian had a higherpercentage ofpassengers who made trip for tourism (ranging from 9 per cent to 27 per cent), than inChaoyang (3 per cent). This may be explained in two factors: one is the available tourist attractions,such as beaches in Dalian and large city landscapes in Shenyang; the second reason could be thehigher than family average incomes found along the corridor than in Chaoyang (see chapter 6), whichmay have enabled people to have more money to spend on tourism. Travel in Chaoyang has moretraditional patterns and motives, such as visiting relatives. The higher numbers of economic andtourism-oriented bus travellers in the Shenyang-Dalian corridor suggest a wider level of economicinteraction in this region than adjoining counties. In fact, the extent of travel for economic reasonsin the Shenyang-Dalian corridor may be much higher than recorded in Table 9.3 if we calculatepassengers transported by airplane, and cars used by business people and government officials.Floating Population:Another phenomenon in the Shenyang-Dalian corridor that has resulted from increased levelsof population mobility is the so called ‘floating population.’ As noted in Chapter 3, this term refersto the large number of peasants who leave the farm each year in search for jobs in cities and towns,as well some prosperous rural areas, without changing their original registration status. Thiscomponent of rural-urban interaction is peculiar to the EMRs in China. Some commentators referto this phenomenon as the blind flows (mongliu), but most refer it as the ‘floating population’ (Ma andNoble, 1986: 279-290).Table 9.4 shows a rapid increase in the proportion of population that is floating in selectedcities along the Shenyang-Dalian corridor between 1981-1989. Whereas the floating population inmajor cities accounted for about 4 to 6 per cent of these cities’ population in 1981, by 1989 it was14 per cent in Anshan, 22 per cent in Fushun, 16 per cent in Shenyang, and 22 per cent in Dalian.183Transportation and Time-Space ConvergenceTable 9.4Floating population of major cities of the Shenyang-Dalian region (‘000)Shenyang Dalian Fushun AnshanCity City City CityFloating 190.0 60.0 70.0 40.0population (‘000)1981As%ofcity 6.5 5.0 6.9 4.0populationFloating 600.0 170.0 250.0 160.0population (‘000)1986As%ofcity 18.0 12.0 22.1 14.3populationFloating 538.0* 38.0 n.a. n.a.population (‘000)1989As%ofcity 16.6 22.6 n.a. n.a.populationNote: * data in 1988.Source: Li, 1991: 97-98.184Transportation and Time-Space ConvergenceThe impact ofthe floating population on large cities has both positive and negative attributesOn the positive side, the floating population provides cheap labour, reduces urban enterprises’ welfareburdens, eases urban labour shortages, and allows urban enterprises, particularly labour intensiveindustry, to adopt a more flexible employment system. The floating population contributes to variouskinds ofurban services (babysitting, housekeeping, fast food service in the streets, carpenter, repair,et al). The negative effects include an increase in security costs reflected by increase of crime ratesin urban areas (Chan, 1994). Thus, in 1988, the Shenyang floating population accounted for about69.8 percent oftotal criminal cases (Li, 1991: 4 and 49). China’s rigorous family planning policy maybe under jeopardy due to the floating population, as it is difficult for the government to monitor thesecond or third children per couple of the floating population. Yet another negative effect of theincrease in size of the floating population has been the increase in pressure on urban infrastructure.The pressure ofpublic transport in all large cities ofthe corridor increased about 16.6 per cent during1987 because of the increase of the floating population (ibid: 65). Moreover, the water supplysituation has deteriorated in China’s urban areas due to the increase of the floating population. Table9.5 shows that the floating population caused the cities of Shenyang, Fushun, and Anshan in 1991to have about 12 to 18 percent less water supply per capita compared with a situation without anyfloating population.The ‘floating population’ in the rural areas of the Shenyang-Dalian corridor is more difficultto monitor. It should be noted that the official population data of the rural areas excluded short-termmigrants and long-term illegal migrants (i.e. those without official registration status). In fact, sincethe late 1980s, population migration into the corridor from remaining parts of the province hasincreasingly moved to the rural areas along the corridor and the suburban areas around the cities.Table 9.6 shows that in 1990 the population census ofLiaoning province recorded a higher sharesofin-migrants in the total population within the Shenyang-Dalian corridor than in other parts of theprovince. Thus, in-migrants in most of the counties and suburbs in the corridor accounted for about3 to 11 per cent of total population, while those in the non-corridor region accounted for only 1 to185Transportation and Time-Space ConvergenceTable 9.5Amount ofwater supply per capita urban residentwith and without floating population (Litre/per person per day)City Shenyang Fushun AnshanWithoutFloating 195.0 106.1 137.0Population (i)With Floating 165.8 86.9 120.4Population (ii)Reduced* 14.97% 18.10% 12.12%Note: Per capita water supply reduced due to floating population is calculated by* 100%.Source: Adapted from Li, 1991: 65.186Transportation and Time-Space ConvergenceTable 9.6Share of migrants in total population in selected counties and suburban districts, 1990 (%)Within Shenyang-Dalian EMR Outside Shenyang-Dalian EMRRegion % Notes Region % NotesShenyang 3.65 Shuang- 2.66 urban district of Chaoyangcity core tai cityDalian 3.12 Gutai 2.79 urban district of Jinzhoucity core cityBayu- 11.63 new economic zone Long- 2.63 suburb of Chaoyang cityquan near Yingkou city chenJiubu 4.61 suburb of Anshan city Jiping 1.04 county in western part ofcounty provinceDonglin 5.97 suburb of Shenyang Panshan 6.91 near China’s third largestdistrict city county oil fieldJinzhou 3.23 outer suburbs of Beizhen 1.08 in western part ofDalian city county provinceHaicheng 2.68 county-level city near Liaoning 2.78Anshan TotalWafan- 2.80 county-level city indian the north ofDalianSource: Calculation based on Llaoning Population Census-1990: 3 70-373.187Transportation and Time-Space Convergence2.5 per cent per cent. This is especially obvious in the newly developed economic zones such asBayuquan District of Yingkou city (one of the corridor’s growth poles (see chapter 8)) (in-migrantsaccounted for 11 per cent of total population), as well as in Panshan county lying near the corridor(migrants accounted for 6.9 per cent oftotal population), where the oil field has expanded to the thirdlargest in China (Table 9.6). Interestingly, counties and suburban districts within the Shenyang-DalianEIvfR have same level, or even higher in-migration rates than the non-EMR city cores.The ‘floating population’ prefers to reside in the outer-lying suburbs and the rural areas alongthe corridor rather than in the major urban centres, as discussed in previous chapters. This is mainlydue to the fact that most long-term migrants living in rural areas did not register with governmentagencies because controls there are generally much looser and not so strictly enforced as in the citycore areas. Another obvious reason is economic, i.e. the lower living costs and increased jobopportunities and general prosperity of the economy in the outlying suburban and rural areas of thecorridor since 1978. Therefore, even those who work in the city core prefer to live in the out-suburbsdue to the lower living expenses such as rent and food.9.5. Patterns Of Commodity FlowsApart from population and migration flows, another indicator of time-space convergencewithin the corridor concerns commodity flows. The provincial total commodity flows in Liaoningincreased from 545 million ton/km in 1980 to 791 million ton/km in 1991 (Lu, 1990: 233; LSB,1992: 557). Interestingly, the spatial pattern of the commodity flows in Liaoning province wascharacterized by the majority of goods being transported along the corridor between the cities ofShenyang and Dalian. Thus, Figure 9.5a shows the intensity of flows of commodities transportedfrom Dalian to the rest of the province in 1990. The major destinations from the Dalian region(including its surrounding counties and suburban districts) were the corridor cities of Anshan, Fushun,and Shenyang. Conversely, the strongest flows of commodities from the large urban cluster in the188Figure9.5CommoditiesTransportedbyTrainandTrunkinLiaoning,1990Source: LiaoningTransportationBureau,1991,“LiaoningTransportation2000”,pp.45-48.00tTransportation and Time-Space Convergencecentral part ofthe province (including cities of Shenyang, Anshan, Fushun, Benxi, and Liaoyang andcounties and suburban districts of Shenyang) were dominantly transported to Dalian (Figure 9.5b).The rest of the province had small shares of total commodities transported either from Dalian regionor the central part ofthe province. An analysis ofcommodity flows by major roads also demonstratesthe same pattern (Figure 9.6), namely that the roads around Shenyang and between Shenyang andDalian carried the largest flows of commodities.9.6. SummaryThis chapter has highlighted the important role of improved transportation systems - bothformal and informal - in the Shenyang-Dalian corridor in terms of shrinking time-space dimension andintegrating urban-rural activities. Since 1978, higher levels of flow of commodities and the increasedmobility of population and migration have brought a new vitality to the Shenyang-Dallan regionmega-urban region. In summary, Part Three of the thesis has delineated the macro processes ofspatial integration in the Shenyang-Dalian EMR. In part these processes confirm the general modelofEMR development. However, there are particular Chinese and regional characteristics involved.These included the importance ofgovernment policy changes (e.g. changes in administrative systemsand industrial development policies), and a well-developed transportation network stemming fromthe specific history of Japanese colonial control in the 193 Os and 1940s. Changes in theadministrative system (allowing the central cities to have jurisdiction over the surrounding counties,and the raise of the status of Shenyang and Dalian to cities listed separately in the plan) by thegovernment created a mechanism for rural-urban integration. Rural industrialization processes andindustrial decentralization from urban areas formed two driving forces for the rapid development ofrural-based industry. Higher flows of commodities and population within the Shenyang-Dalian EMRwere the direct outcomes of frequent rural-urban interaction and major dynamic indicators of theformation of a new space economy.However, all these discussion are based on macro-level (county) analysis. The thesis now190Transportation and Time-Space ConvergenceFigure 9.6Commodities transported along the major highwayin Liaoning province (1990)10 million tons5 million tons1 million tons• TielingChaoyangJØ9LIaOyBenxiSHENYANGLingyuan N DALIANHcheng CORRIDOR‘Yingkou••DasluqaoDandongZhuangt—J’•afan.• ul ndian 0 100kmSource: Liaoning Transportantion Bureau, 1991,“Liaoning Transportation 2000.”191Transportation and Time-Space Convergenceturns to a discussion of the evolution of the Shenyang-Dalian EMR and its impact on localcommunities, including rapid socioeconomic transformation of the corridor villages. This will bedone by investigation of a number of case studies in Part Four.192Hunhebu VillagePART FOURCASE STUDY VILLAGES- ACTIVE INCORPORATION IN THE EMERGENCE OF THE EMRThe documentation of recent changes along the Shenyang-Dalian corridor now shifts to themicro scale with an examination of socioeconomic transformation in three villages during the reformperiod. As noted earlier in Chapter 6, the Shenyang-Dalian corridor is in the midst of at least twomajor transformations. First, in the rural areas along the corridor, both the occupational andeconomic structures are shifting from being predominantly agricultural to a mix of agricultural andnon-agricultural activities. Second, the rural towns and villages in the corridor are changing frompredominantly rustic fabric to a settlement pattern containing more urban land use functions, such asmanufacturing, major roads, and intensive agriculture using green-houses.At the macro-level, the post-1978 reform programmes have attracted a large amount ofresearch on China’s rural transformation. Leeming (1993) refers to this period of agriculturaldevelopment as a ‘golden age’ characterized by an impressive increase in grain production, as well asdiversification and specialization in the rural economy (i.e. a move away from traditional grain or riceproduction towards pigs, cotton, and vegetables) (Leeming, 1993: 89-103; Leeming, 1990: 153;Sainth, 1987). Since 1978, the most impressive achievement of the rural economy has been theemergence ofrural-based industries, which have acted as a new engine for rural growth. During thefirst decade of economic reforms, it has been estimated that as many as 80 million non-agriculturaljobs were created, and about half of these were in township and village enterprises (Far EasternEconomic Review, Feb. 8, 1989: 46-47). However, there has been limited research on the impactofthese transformations on rural life and consumption patterns at the village level (Johnson, 1989).193Hunhebu VillageThis part ofthe thesis analyzes transformations in detail at the village level. For each villagethe study will follow a similar format. First, the village location along the corridor will be describedfollowed by its major natural resource endowments. Then the processes of economic and socialchange will be discussed. Next, the labour market changes, including demographic and occupationalcharacteristics, will be presented, which in turn will be followed by an examination of each village’smajor linkages with the urban areas. Different geographical forces have produced differentdevelopment outcomes. The villages selected as the case studies in this section were chosen by theauthor to represent three types of locations along the Shenyang-Dalian corridor, and three types ofactive incorporation in the emergence of EMR that have occurred in the rural economy. Theirlocalities represent three different settlement types including a ‘near suburb’ village, an ‘out-lyingsuburb’ village, and a village located on the rural periphery halfway between two major urban places(Shenyang and Dalian). As will be seen, the natural resource endowments and economic structuresofeach settlement, as well as the key economic sectors, vary widely among the three villages. Thuswhile the socioeconomic transformation in each village is characterized in each case by a sharpdeparture from the traditional rural economy, the thesis shows how the different geographicallocations of these three villages within the corridor have intersected with the general transitionprocess and resulted in quite different social and economic outcomes, as well as three distinct typesof linkages with the core cities and other parts of the corridor.194Hunhebu VillageCHAPTER 10RUNHEBU VILLAGE - A ‘NEAR SUBURB’ VILLAGE CASE STUDY10.1. Location And Natural Resource EndowmentsHunhebu village, is a suburban village lying near a large urban area in the corridor (5kilometres away from Shenyang city). Since the administrative reforms of 1984 (see Chapter 8), itis now administrated by the Shenyang city suburban district ofDongling (Figure 10.1).As a ‘near suburb’ village type, Hunhebu village has a relatively higher population density andlower land-person ratio than the other two cases. In 1991, Hunhebu village had a total populationof 6,114 in 1,707 households (Liaoning Rural Socio-Economic Survey Team, Hunhebu (LRSESTHHB), 1992: 22). The village’s population density was 2,370 persons per square kilometre withina land area of3,870 mu (2.58 square kilometres), which was even higher than the average populationdensity of China’s cities of over ‘2-million’ and their suburbs (2,054 persons per square kilometre)(SSB, 1992b: 30). In Hunhebu, the land-person ratio was very low and per capita farmland was only0.423 mu (282 square meter), which was only about 22 percent of the national average level (1,233square meter per agricultural population). All this attests to the ‘urban’ character of this villagebecause of its close proximity to Shenyang.The agricultural land use pattern of Hunhebu is dominated by vegetables and rice. As Table10.1 shows, about 23 per cent of land was used for rice fields, 43.5 per cent for vegetable planting,and 31.7 per cent for other uses (including roads, housing, irrigation, and unusable land) as well as1.5 per cent for garden plots.195Hunhebu VillageFigure 10.1Location of the Case Study Villages in the Shenyang-Dalian Region196Hunhebu VillageTable 10.1Land use in Hunhebu village in 1991LAND USE Mulsq.km % LAND USE Mulsq.km %1. Farmland 66.82 1.452,586/1.72 2.Gardenplot 56/0.04-Paddyfield 23.31 31.73902/0.60 3. Others* 1,228/0.82-Vegetable planting 43.51 100.001,684/1.12 TotalLand 3,870/2.58Note: *Other land uses including irrigation, roads, unusable land, and housing.Source: LRSEST-HHB, 1992: 2-3.197Hunhebu Village10.2. Processes of Economic and Social ChangesAs with other rural areas, the national economic reforms of 1978 produced great opportunitiesfor residents of Hunhebu village. As of 1978, agriculture was the major rural economic activitycreating more than 60 per cent of village GDP (Table 10.2). Since then, the dominant ruralagricultural economy has been replaced by new valued-added rural industries, such as themanufacture ofmini electric motors, electric wire, chemical engineering products, plastic products,and so on. The share of industrial output in this rural area increased from 15 per cent in 1978 to 64per cent in 1991. By 1991, the rural industrial and service sectors together became the major sourceofthe Hunhebu village economy (Table 10.2). However, this did not necessarily lead to a decline ofthe agricultural output. In fact, the absolute value of agricultural output increased from 750,000 yuanin 1978 to 4,930,000 yuan in 1991 or just 9 per cent of village output (Table 10.2).10.2.1. Changing Ownership StructureAnother important economic characteristic of this village was that ownership of the villageeconomy was shared by both individual households (including families and individuals, and the so-called ‘backyard economy’) and the collective (village-run economy). Table 10.2 indicates that at thebeginning of the economic reform period in 1978, the productive structure was fhlly owned by thecollective (i.e. the village), yet since then, particularly after the introduction of the householdresponsibility system in 1982 (LRSEST, 1991: 92), the household sector and the individual economynow produce more than one third of the total output (Table 10.2). By 1991, the total output fromcollective ownership declined to 63.9 per cent of total village output. Family-run and individual(private)-owned economy accounted for 36.1 per cent.198Hunhebu VillageTable 10.2The output structure of Hunhebu village, 1978-199 1Year 1978 1984 1986 1988 1990 1991Total output 123 771 1,519 3,133 4,497 5,482(‘000 yuan)Collective ownership 100 56 60 64 66 641(%)*Family ownership 0 44 40 36 34 361(%)**From agriculture 75/61 138/18 181/12 313/10 405/9 493/9(‘000 yuan/%)From industry 18/15 308/45 961/63 2,005/64 2,743/61 3,509/64(‘000 yuan/%)From tertiary 30/24 285/37 377/25 815/26 1,349/30 1,480/27(‘000 yuan/%)Notes: * Output from collective (village-mn) operation; ** Output from family or private operation.Source: LRSEST, 1991: 101-103; LRSEST-HHB, 1993: 108; 1 From LRSEST-HHB, 1993: 3.199Hunhebu Village10.2.2. Diversification of Agricultural ProductsThe rapid socioeconomic transformation from farming to a more diverse array of activitiesin this village has greatly benefited from its favourable location viz a viz Shenyang. This locationfacilitates the development of agricultural production and a tertiary sector oriented to the large city’smarket. In particular, the proximity of this village to Shenyang enables the rapid development ofvegetable and fresh agricultural production (such as vegetable, meats, fish, and so on) and the gradualdecline in rice production (interviews with Mr. Wanlin Liu, head of Hunhebu village, Hunhebu,January 18-2 1, 1993). The supply of these fresh agricultural products to Shenyang has formed animportant feature of agricultural production in this village since 1978. Among them, vegetableproduction has now emerged as the key agricultural sector. Close proximity to markets and highprices obtained for vegetables throughout the 1980s has led to the conversion of about 65 per centofvillage farmland into vegetable plots since 1982. In 1992, vegetable production amounted to 2.77million yuan output, which accounted for more than half of total agricultural output (LRSEST-HHB,1993: 39).This pattern of production can be contrasted with the period of 1950-1985 when a “statemonopoly for purchase and marketing” (tonggou tungxiao) system was in force (Shi, 1990: 55-58).Under that system, the village had to sell all its vegetable and meat to state-run-stores in the cities atfixed low prices. Due to an arbitrary price mechanism, there was little advantage for plantingvegetables or other agricultural products to meet the urban demand. Consequently, rice farming wasthe major industry in Hunhebu. Since 1985, however, the state monopoly of vegetable marketing wasabandoned (Leeming, 1993: 97) and a new system, called the ‘dual price system’ (shuangguizhi), wasintroduced. This now allows peasants to sell vegetables both under state contract at official prices,but also outside the contract system at roughly double the official prices (Shi, 1990: 55-58).Moreover, families growing vegetables under the contract system can now receive productionsubsidies. For example, vegetable farmers are able to purchase grain and coal at low prices. Theirrisks in production and marketing are virtually nil, being assumed in effect by the official marketing200Hunhebu Villagesystem. Since 1990, village farmers in Hunhebu can produce their vegetables with even more flexibly.They increasingly sell their best and earliest vegetables on the open market so to receive a higherincome, keeping only later and inferior crops for the state contract. Consequently, about 60 per centofthe vegetable market were estimated to be sold through the state-owned vegetable stores and 40per cent in the free market in Shenyang in 1990, as compared with almost 100 per cent by the state-owned vegetable stores pre-1978. Actually, the share of the vegetables sold in free markets is stillincreasing (interviews with Mr. Wanlin Liu, village head, Hunhebu Village, January 18-2 1, 1993).Targeted at the Shenyang market, newer agricultural products have become the mostimportant agricultural income in this village. In 1992, more than 90 per cent ofHunhebu village’snewer agricultural products, such as vegetables and meats, were sold in Shenyang’s city markets. Theoutput ofthese newer fresh and live products accounted for more than 90 percent of the village’s totalagricultural output in 1992 (LRSEST-HHB, 1993: 3).10.2.3. The Growth of Tertiary SectorsProximity to Shenyang has also allowed Hunhebu villagers better opportunities to developtheir service sectors, such as shops, hotels, and restaurants, since 1978. As shown in Figure 10.1,this village is located at the junction of two important transportation lines: the Shenyang-Dalianexpress highway and the Shenyang-Dandong transportation lines (both highway and railway). Dailytransit passengers and vehicle operators comprise the major customers for Hunhebu village’s servicesectors (interviews with Mr. Wanlin Liu, village head, Hunhebu, January 18-21, 1993). The tertiarysector was already an important part of village income before the economic reforms and in 1978, itaccounted for 24 per cent ofthe village output (Table 10.2). However, a major growth of the servicesector occurred after 1978 when Hunhebu village took advantage of the reforms, capitalized on itsprime location, and set up a variety ofnew services. Hunhebu’s comparative advantage in the tertiarysectors has been due to the lower costs of accommodation and food in this suburban village whencompared to the urban core. For instance, passerby travellers and vehicle drivers prefer to stay in its201Hunhebu Villagehotels, and eat and even be entertained in this village because of its lower price. Often travellers toShenyang conduct businesses in the city core but stay outside in this village because of its shortdistance from downtown Shenyang (interviewed with Mr. Wanlin Liu, village head, Hunhebu, January18-21, 1993). The ‘commercial street’ (shangye yi tiaojie) of this village was built along theShenyang-Dalian highway and consists of a wide variety of commercial enterprises, including hotels,retailer, catering and trading establishments, repair shops, tourism offices, and financial services,which are owned by either the village or by individuals. The total labour force employed in this mainstreet reached almost 1,000 persons in 1992 (including workers who had moved from other places),ofwhich 500 were engaged in hotels, restaurants, and tourist shops (LRSEST-HHB, 1993: 47-48).The orientation towards city consumers has also led to the emergence of a pet market in thisvillage which is patronized by visitors from Shenyang (a pet market is rare phenomenon in ruralChina). In 1992, the village leaders invested 100,000 yuan and built a pet market (the Shenyang PetFree Market) occupying 2,600 square meters. Thus was both a commercial outlet and recreationfacility. The economic profit for the first year was reportedly high due to the large number ofurbanconsumers who visited this facility (LRSEST-HHB, 1993: 49).10.3. Occupational TransitionBefore the 1978 rural reforms, as with most other coastal parts of rural China, the majorityofthe peasants inHunhebu were engaged in rice farming. Table 10.3 shows that in 1978, more than83 per cent of village labour force were engaged in agricultural activities. This was dramaticallyreduced to 21 per cent by 1991. Interestingly, among the agricultural labour force in 1991, about60 per cent were engaged in both farming and non-farm activities. Following the abandoning of therural commune movement in the early 1980s, Hunhebu’s rice paddies were planted by just a fewfamilies (compared with over 80 per cent of the labourers before 1978), and by 1992, all the ricefields were farmed by just five families with a total of 10 labourers. A large amount of this202Hunhebu VillageTable 10.3Labour occupation structure in Hunhebu village in 1978 and 1991Occupation 1978 1991Total % Total %TOTALLABOUR 1,198 100.00 2,094 100.001. Agricultural Labour 1,001 83.56 447 21.35----Agriculture Only 190 9.07----Farming first, others second 257 12.272. Village enterprises workers 158 13.19 1,035 49.43(peasant workers)3. Managerial personnel 39 3.25 134 6.40of village enterprises4. Individual or partnership- 302 14.42owned business----Individual-owned 162 7.74----Partnership-owned 140 6.695. Private enterprises owners 74 3.53----Single-owner 48 2.296. Village political officers 7 0.33(Cadres)7. Teachers, doctors, nurses 41 1.968. Others 54 2.58Subtotal 3-8 39 3.25 612 29.23Source: LRSEST-HHB, 1993: 48.203Hunhebu Villageagricultural labour later shifted to vegetable production. For example, in 1992 vegetable plots wereoperated by 340 employees who were former agricultural peasants. The remaining labour force wastransferred to the non-farming sectors. Most of them became employees in new village smallenterprises, such as metal wire factories, boric acid, machine tools, fireproof material, and automobileglass factories (LSEST-HHB, 1991: 119), or staff for individual or partnership-based industrial orbusiness enterprises. In 1992, about 78 per cent of the village labour force engaged in industrial andother service activities and this percentage excluded those agricultural labourers who were partlyengaged in non-farm activities. Those sectors outside farming which most rapidly absorbed thevillage labour force comprised the ‘peasant workers’ category as well as rural industrial sectors. Thecategory of’peasant workers’ rose from just 13 per cent of the total labour force in 1978 to 49 percent in 1991. The other rural non-agricultural category absorbed 3 per cent of the rural labour forcein 1978 and 29 per cent of the Hunhebu labour force in 1991 (Table 10.3).The dominance of non-agricultural activities in this village by the end of the study period isevident by the data contained in Table 10.4. This indicates that in 1992, the non-farming labour andvillage income obtained from non-agricultural sectors were 3.7 and 2.9 times of that from agriculture,respectively. Gross output and income from non-agricultural activities were about 10 times that fromagriculture and tax from the non-agricultural sector was 71 times of that from agriculture. Thesefigures reveal a dramatic contribution of non-agricultural activities in Hunhebu village’s economicdevelopment (Table 10.4).Women’s Participation:One ofcharacteristics ofAsian EMRs is the growth offemale employment in non-agriculturalactivities (see Chapter 3). This feature was not, however, typical during the pre-1978 period in mostrural villages in the Shenyang-Dalian corridor. Indeed, during the pre-1978 period, all labour (eithermale or female) had to participate in the collective economic activities of the commune or village,204Hunhebu VillageTable 10.4Ratio of non-agricultural and agricultural index in Hunhebu village, 1992Non-Agricultural Labour Input/Agricultural Labour Input 1647/447=3.7(Labour Days)Non-Agricultural Gross Output Value/Agricultural Gross 55.05/5.110.8Output Value(million yuan)Non-Agricultural Income/Agricultural Income 18.33/1.82=10.1(million yuan)Per Capita Net Income From Non-Agriculture/Net Income 2650/909=2.9From Agriculture (yuan)Taxes From Non-Agriculture/Taxes From Agriculture 2.63/0.37=71.0(million yuan)Source: LRSEST-HHB, 1993: 3.205Hunhebu Villagewhich at that time were mostly agriculture. Consequently females living in the village could be saidto be afready fully employed, although strictly in a non-market-economy.After the 1978 reforms, female participation has been characterized not so much by theincrease in absolute numbers, but by the increase in their engagements in non-agricultural and moremarket-oriented activities. It is well-known that since the rural reform, due to the householdresponsibility system, peasants have had a much freer choice over how long and how many hours theywould devote to production. In this environment, some women shifted from traditional farming tovarious kinds of non-farming activities. For example, some of them engage in the manufacturingsector, such as wickerwork making, metal wire, boric acid, machine tool, fireproof material, andautomobile glass. Others engage in service activities, such as working in restaurants, hotels, and retailoutlets (LSEST-HHB, 1991: 119). As Table 10.5 shows, female peasants were not left behind in thegeneral shift of the rural labour structure from farming to non-farming activities. The 1991 generalpattern of labour distribution in Hunhebu village was similar between males and females in the overalldistribution as between agricultural, peasant workers, and those employed in individual businesses.However, there was a stark difference in the relative distribution between women and men in certainother sectors. As Table 10.5 clearly shows, there were more males than females in the villagepolitical cadres (males accounted for 86 per cent, and females for 14 per cent), private-ownedbusinesses, monopoly-owned businesses (males 71 per cent, females 29 per cent), and villageenterprise management (males 72 per cent, females 28 per cent) (Table 10.5). This indicates thatalthough the communist political system formally promotes equality in the workforce, the post-1978reform has resulted in men still comprising the major decision makers in the village.However, by itself this distribution does not indicate that women have been left completelyout ofthe changes facilitated by post-1978 reforms. Thus, in certain occupations women are moreoften hired than men, e.g. village teachers and barefoot doctors (females 78 per cent, males 22 percent), partnership business (female 69 per cent, male 31 per cent), and in the dual occupation of both206Hunhebu VillageTable 10.5The labour structure by gender in Hunhebu village in 1991 (persons)Occupation Labour Male Female Male Female___________(%) (%) (%) (%)Total 2,094 53.4 46.6 100.0 100.0Agriculture 447 48.1 51.9 19.2 23.8-- Engaged entirely 190 56.3 43.7 9.6 8.5in agriculture--Primarily engaged in agriculture and 257 42.0 58.0 9.7 15.3secondarily in non-agriculturePeasant workers 1,035 55.9 44.1 51.7 46.8Village enterprise managerial 134 71.6 28.4 8.6 3.9Individual or 302 42.1 57.9 11.4 17.9partnership business---Individual business 162 51.9 48.1 7.5 8.0--Partnership business 140 30.7 69.3 3.9 9.9Private-owned business 74 63.5 36.5 4.2 2.8--Monopoly capital owned 48 70.8 29.2 3.0 1.4Village political cadres 7 85.7 14.3 0.5 0.1Teachers, barefoot doctors 41 17.1 82.9 0.6 3.5Others 54 77.8 22.2 3.8 1.2Source: LRSEST-HHB, 1993: 48.207Hunhebu Villagefarming and non-farm activities (females 58 per cent, males 42 per cent). The different patterns ofoccupation between men and women in Hunhebu village may be explained by the female labourforce’s other obligation - domestic housework and traditional gender-based value systems (interviewwith Mr. Wanlin Liu, village head, Hunhebu, January 18-2 1, 1993). Thus village teachers andbarefoot doctors are viewed as female-feasible occupations in the Chinese system ofvalues. Othermore female-oriented economic activities, such as partnership business and employees engaged inboth farming and non-farming occupations are more flexible occupations for married women andmore acceptable. This is because a combination of farming and certain non-farm activities, as wellas work in privately-owned partnership businesses offer female workers some flexibility in order tofulfil both the obligations of family housework and their more formal occupations at the same time.So, in this sense, although women still face discrimination, it may be said that female labourers werenot entirely left out of the process of labour transition.10.4. Rural-Urban Linkages: Subcontractor Firms and Their Impact on Rural TechnologyTransformationThe leaders of village enterprises located in suburban areas close to urban cores, such asHunhebu village, are able to negotiate contracts to supply state enterprises with parts or processedraw materials, and in this process gain valuable technical and financial help. As noted in Chapter 8,subcontracting has been a special form of rural-urban linkage based on the spatial division of labour.Thus, in the post-1978 period, the village enterprises became responsible for routine production andutilizing cheap labour and land, while urban-based enterprises provided capital, know-how(managerial, techniques, and technology), and some raw materials. Urban-based enterprises werealso responsible for searching out markets for products.In 1992, Hunhebu village had 8 enterprises which acted as subcontractors for urban-basedenterprises. Their combined total output amounted to 8.7 million yuan, which accounted for 31.6 percent of total village industrial output (LRSEST-HHB, 1993: 5). Examples of this form of208Hunhebu Villagesubcontracting included mini electric motor, electric wire, chemical engineering products, and plasticproducts (interview with Wanlin Liu, village head, Hunhebu, January 18-2 1, 1993). Hunhebu villagesubcontracting enterprises were set up according to the urban enterprises’ cooperative demands. In1992, the total sum ofindustrial products which were sold to urban areas (mainly Shenyang) reached25.67 million yuan, which was 14.3 times the amount sold locally (1.8 million yuan) (LRSEST-HIIB,1993: 3). It should be noted that the high dependency ofvillage industrial production on large urbanassembling enterprises was quiet different from that in other parts of rural China. In China as a wholein 1985, only about 15 per cent ofthe production value of rural industries was associated with urban-based factories and so included in national plans. Thus, nearly 85 per cent of the industrial productionin rural China depended on village enterprises organizing their own sources of raw materials and finalmarkets E[e and Li, 1985: 13-15). By contrast, a majority ofHunhebu village’s industrial productionwas associated with Shenyang-based enterprises.Besides the economic benefits obtained from subcontracting linkages, this form of rural-urbaninteraction also promotes the transfer of urban know-how and technology to Hunhebu villageenterprises, bringing direct benefits from the larger and more advanced urban enterprises. Forexample, in 1992, there were more than 35 urban technicians and engineers working in Hunhebuvillage (LRSEST-HHB, 1993: 14) and more than 347 technicians and engineers were invited asconsultants for 61 village enterprises in 1992. Some of these were retired technicians, engineers, andaccounting clerks from urban enterprises (ibid: 34). Their main benefit was to introduce newtechnological designs. In fact, some of these technicians found new markets for the products of theHunhebu village enterprises and brought in some orders from outside. For example, in 1992, 14technological projects and work orders were imported to Hunhebu from Shenyang, which stimulatedan additional 29 per cent in industrial output and 21 per cent in profits for this village’s industry asa whole (ibid: 34). The Hongqiao Chemical Enterprise company in Hunhebu village is an illustration.It produced glass putty, but before 1991, its products were not in high demand, so the gross annualoutput of this factory was only 600,000 yuan and the profit was only 100,000 yuan. In 1992,however, this enterprise invited engineers from the Shenyang Chemical Engineering College to209Hunhebu Villagedevelop machinery and equipment for a new product - cellulose. This new single product successfiullyfound lucrative markets and created an output value of 1 million yuan and a profit of 260,000 yuanin that year (ibid).Accompanying the introduction of engineering technology through the ‘weekend consultants,’the village in 1992 invested 350,000 yuan and set up its first village research institute - the tan BellApplied Technology Institute.’ By cooperating with two academic institutions in the nearby urbanarea (the Scientific Information Centre of Liaoning Province and the Shenyang Industrial College)(LRSEST-HHB, 1993: 48), the institute hired 10 faculty members and set about considering appliedresearch to assist village enterprises to upgrade their technological capacities. The new institute alsogives advice on engineering technology for enterprises in other regions. In 1992, this institutecompleted a beer production line for Faku county in the northern part of Liaoning province (ibid).10.5. SummaryIn summary, the Hunhebu case reveals a particular urban-suburban transformation processin the Shenyang-Dalian corridor focused on socioeconomic changes and subcontracting relations withShenyang city enterprises. Its subcontracting linkages with Shenyang city and the technologicaltransfer Shenyang as well as its urban-oriented services and agricultural products indicated strong andgrowing economic linkages. This case study shows that metropolitan centres play an important rolefor the economic ‘take-off of their surrounding regions. However, this is not to say that thesocioeconomic transformation throughout the Shenyang-Dalian EMR was predominantly dependenton the trickle-down activities from its urban centres. The following case study of another village willshow that rural areas with local specialty products can also achieve economic transition, groundedon the development of local resource-based processing activities.210Houshi VillageCHAPTER 11HOUSHI VILLAGE- A RICH RESOURCE VILLAGE CASE STUDY11.1. Location And Natural Resource EndowmentsHoushi is an example ofan ‘out-lying suburban’ village, located 60 kilometres away from themetropolitan centre ofDalian, and lying along the coast of the Bohai Sea in the southern part of thecorridor. Administratively, it is under the jurisdiction of Dawei Xiang (township, previouslycommune), Jinzhou district, an outer-suburban district of the Dalian Metropolitan administration (seeFigure 10.1). This village has the largest land area among the three selected case study villages andcomprises 22,408 mu (14.9387 square 1cm). In 1991 its total population was 3,167 and its populationdensity was 212 persons per square kilometre. Its person-to-land ratio was about 1 mu (663 squaremetre) famland per capita, which is higher than Hunhebu (0.423 mu) but lower than Tuchengzi (2.66mu). However, it differs sharply from the other two case study villages due to its highly diversifiednatural resource base, which comprises farmland, forests, garden plots, pasture land, lakes and, moreimportantly, marine products from its favourable coastal location. Table 11.1 shows its diverse landuse structure in 1991. Its forested land, lakes, garden plots, pasture land, and coastal beachesprovided a raw material base for the development of diversified local specialty products. Inparticular, because it is located along an 8 kilometre coastline of the Bohai sea, the villagers catch lotsrich marine products, such as prawns, scallops, and other fish. These, together with the specialtyproducts from the forest (eg. haws, chestnuts and walnuts), and fruits from garden plots, provideda wide variety and large quantity of local specialty products.211Houshi VillageTable 11.1Land use in Houshi village, 1991Land Use Area (mu) % Land Use Area (mu) %Total 22408 100.00 4. Garden Plots 3067 13.691.Farmland 3149 14.05 --OperatedBy 3058 13.65Village--Operated By 3005 13.41 --Operated by 9 0.04Village Family--Operated By 144 0.64 5. Pasture land 2053 9.16Family2. Forest Land Use 6229 27.80 --Operated by 2053 9.16Village--Forest Covered 5998 26.77 6. Coastal beach 1755 7.83--Suitable to 231 1.03 7. Others 3285 14.66Forest3. Water Surface 2870 12.81Source: LRSEST-HS, 1993: 1.212Houshi Village11.2. Processes of Economic and Social ChangeThe process of the post-1978 socioeconomic change in Houshi village involved theestablishment of a local resource-based production system (including diversification of agriculturalactivities and integrated rural industrial production systems) and changes in collective ownership.This section will emphasize the socioeconomic transformation based on its local resources.11.2.1. Diversification of AgricultureBefore 1978, Houshi was a traditional fishing village where the major economic sectorscomprised fishing and farming. As in other parts of rural China, the pre-1978 conditions in Houshivillage were characterized by the central government’s policy of ‘take grain as the key link’ (Leeming,1993; Cannon and Jenkins, 1990). In other words, an overriding emphasis was placed on grainproduction, with little or no investment placed in developing village fisheries or other non-agriculturalsectors. However, since the reforms of 1978, as with many other rural areas in the corridor, theeconomic structure of Houshi village was sharply transformed away from its prior dependence onagricultural and other primary sectors towards a more balanced structure which included bothmanufacturing and service activities.Table 11.2 shows the output value ofHoushi’s economy from 1978 to 1990, and reveals thatfarming has now lost its dominant position in the total economic structure and declined from 51 percent to just 9 per cent between 1978 and 1990. In addition, the total share of forestry and animalhusbandry in the total village output value declined from 14.6 per cent in 1978 to less then 2 per centin 1990. Meanwhile, non-agricultural sectors and fishery output (including marine productprocessing) became the dominant sources of village income. The share of non-agricultural productsmeasured in output value increased from 27.6 per cent in 1978 to 54.9 per cent in 1990, and fisheryoutput from 5.9 percent to 34.5 per cent. These two sections together accounted for almost 90 percent of village total output value (see Table 11.2).213Houshi VillageNote: *: Mainly includes catering trade (grocery) and services.Sources: LRSEST, 1991: 197; LRSEST-HS, 1993: 13-14.Table 11.2The output value structure in Houshi village (‘000 yuan)1978 1984 1986 1990output % output % output % output %Total 1,340 100.0 5,790 100.0 15,740 100.0 42,280 100.0Farming 690 514.9 1,110 191.9 2,560 162.6 3,680 87.0Fisheries 80 59.7 930 160.8 4,000 254.1 14,580 344.9Forestry 200 149.3 10 1.7 20 1.3 20 0.0Animal 510 88.2 420 26.7 780 18.4husbandryNon- 370 276.1 890 153.8 8,740 555.3 23,210 549.0agriculture-Industry 260 44.9 5,530 351.3 17,970 425.1-Construc- 10 1.7 870 55.3 680 16.1tion-Transpor- 370 27.6 190 32.8 1,260 80.1 3,260 77.1tation-Catering 30 5.2 70 4.4 690 16.3trade*Others 400 69.1 1,010 64.2 610 14.4214Houshi Village11.2.2. Changes in Collective OwnershipA distinctive feature of this village is its continuing strong collective economic ownership.Since the introduction ofthe household responsibility system in 1978, most parts of rural China havebeen dominated by either family or individual operations. However, in Houshi village, the majorityof production, resources, farmland, and other assets are still operated and owned by the villagecollective. The responsibility system is attached to working teams or groups, rather than individualfamilies. In other words, families work as transportation teams, fishery teams, shrimp catching teams,rice plantation teams, and vegetable production teams which control village enterprises. Moreover,the village farmland has not been distributed to individual families, as in other two case study villages,but remains operated by the village collective. Thus even though this village has adopted theresponsibility system in 1982, it appears to have evolved in a different way from many others. Overall, the village farmland continues to be operated by the village collective. The new responsibilitysystem practiced in Houshi village involved labourers being reorganized into small teams (severalfamilies or group of labours) to work directly for the village under contract. Thus, each team wascontracted to particular production lines or parts of production processes under the management andguidance of the village committee. When teams fulfil their production quota set up by the villagecommittee, they gain further income in the form of bonuses for extra output. Moreover, theresponsibility for the distribution and sale of the products manufactured by teams was also taken careof by the village.Table 11.3 shows the percentage share of Houshi village’s labour force and income whichcame from collective output. It indicates that between 1984 and 1992 the share of the village’s labourforce engaged in village-collective operations remained at over 90 per cent, and the share of othervillage income derived from village collective enterprises had even increased over the period (Table11.3).215Houshi VillageTable 11.3Village-collective shares of labour, income sources,and per capita income in Houshi village, 1984-92Year Labour Total income (‘0000 Yuan) Per capita incomeTotal from the % Total from the % Yuan from the %collective collective collective1984 1486 1484 99.9 687 498 72.5 1381 1029 751988 1705 1607 94.3 3315 2775 83.7 2397 1682 701992 1728 1716 99.3 10551 9746 92.4 2760 2186 79.0Note: Collective means village owned and operated.Source: LRSEST-HS, 1993: 6.216Houshi VillageWhy have peasants in this village preferred a collectively-owned economic system over a moreindividual or family-oriented structure? Field research found that this preference was mainly becausethe maj or wealth production sectors of this village were dependent upon local specialty products,such as fish ponds, fruits and garden plots. If products were managed by individual families, it wasthought that the households without production assets would feel discriminated against because theyhad no access to these highly profitable operations. By contrast, the operation of these localresources by the village collective allowed everyone to share in the profit (Interview with Mr. YuguiChen, village head, Houshi, March 8-19, 1993). As with Hunhebu village, Houshi’s villageenterprises have performed well under the collective system since 1978, and in 1992, produced about58.9 per cent of total village income. It was thought unlikely that alternative forms of managementwould emerge to replace the village collective ownership, especially as it was seen as difficult forindividual families to run these well-established enterprises with higher levels of economic efficiency(ibid).This style of collective-dominant economic ownership distinguishes Houshi from othervillages ofthe Shenyang-Dalian corridor in the post-1978 period. However, there are, indeed, severaladvantages accruing from such ownership. First, is the ability to accumulate a higher proportion ofprofit which then could be re-invested back into local resources. Thus between the years of 1