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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 SHENYANG DALIAN EXTENDED METROPOLITAN REGION OF CHINA, 1978-1992 by MARK YAOLIN WANG B. Sci., Shanxi Teachers’ University, 1982 M. Sci., Changchun Institute of Geography, Chinese Academy of Sciences, 1985 A THESIS SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE DEGREE OF Doctor of Philosophy in THE FACULTY OF GRADUATE STUDIES (DEPARTMENT OF GEOGRAPHY)  We accept this thesis as confirming to the required standard  THE UNIVERSITY OF BRITISH COLUMBIA  October 1995  © Mark Yaolin Wang, 1995  r  7/  .  /  .  .  .  _____  ________  for an advanced In presenting this thesis in partial fulfilment of the requirements Library shall make it degree at the University of British Columbia, I agree that the sion for extensive freely available for reference and study. I further agree that permis the head of my copying of this thesis for scholarly purposes may be granted by tood that copying or department or by his or her representatives. It is unders d without my written publication of this thesis for financial gain shall not be allowe permission.  Department of The University of British Columbia Vancouver, Canada Date  DE.6 (2/88)  1—/  (‘  /77J  ABSTRACT  China’s post-1978 reform programs have been responsible for the release of over 100 million  rural labourers from farming activities. The experience of western countries suggests that this rate of development 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 that  some distinctive features of China’s Extended Metropolitan Regions (EMRs) including high population densities, the persistence of agriculture and a strong decentralization of decision-making for economic enterprises offer the possibilities of a different form of urbanization. This thesis assesses which of the recent processes of socioeconomic and spatial transformation in the Shenyang-Dalian region of Liaoning province China’s major industrial heartland are producing such an extended -  -  urban region. The purposes are first to examine China’s rural-urban relationships as a general background to description and analysis of the spatial patterns and processes of the Shenyang-Dalian EMR; 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 the validity ofthe EMR conception as a distinct urban form, and to assess the degree to which this model fits the contemporary Shenyang-Dalian growth corridor.  The analysis of secondary data shows dramatic demographic and labour changes in the Shenyang-Dalian corridor since 1978. The corridor’s rich natural resource endowment, the special conditions of historical development, and recent administrative changes and transportation improvements have led to a spatial pattern which conforms with the EMR model  -  albeit with  characteristics that clearly distinguish this region from other mega-urban zones in China and elsewhere. In-depth case studies of three villages along the corridor show that the impacts of the reconfiguring of settlement and economic patterns vary; yet there was sufficient commonality to indicate that a kind of ‘invisible urbanization’ has occurred since 1978 in the rural areas of the corridor. It is concluded that the measurement of underlying urbanization along the Shenyang-Dalian corridor is far more difficult than is officially recognized by the Chinese government.  11  The rapid urbanization of the countryside and increasing rural-urban interaction has broken down the stark pre-1978 rural-urban divide in the Shenyang-Dalian region. Spatial and sectoral segregation of rural and urban areas have been replaced by growing levels of integration and interaction. This increased integration has been fuelled primarily by improvements in infrastructure and favourable government policies.  For the Shenyang-Dalian corridor, new government policies, such as the creation of open zones, emphasis on industrial decentralization and rural industrialization, changes in administrative systems, and the establishment ofmodem transport infrastructure have been driving forces in creating new forms of rural-urban integration. Yet the state is not the sole architect of the regional transformation. Much of the change one finds on the ground is driven by local enterprises and initiative. It is this local dynamism which gives the region its vibrancy and marks the path of change as mercurial but not predefined. The pace and indeterminacy ofregional socioeconomic changes pose a number of problem for the government, such as deteriorating environment, infrastructural needs and conflicting landuses. This thesis argues that the Chinese government will need to further modify its policies to cope with the emergence of the Extended Metropolitan Regions.  111  TABLE OF CONTENTS  ii .ii xi xiii xiv  Abstract List of Tables List ofFigures List ofAbbreviations Acknow1edements  .  PART ONE: CONCEPTUALIZING EMRS IN CHINA A TIllORET1CAL REVIEW OF ChINA’S RURAL-URBAN RELATIONS -  1  Chapter 1. Introduction 1.1. Introduction 1.2. The Shenyang-Dallan Region 1.3. Research Framework and Methodology 1.4. Rationale ofData Sources  1 1 7 9 12  Chapter 2. The Chinese Urbanization Process In A Comparative Context 2.1. Introduction 2.2. Previous Western Models ofRural-Urban Relations 2.3. The Changing Context ofUrbanization 2.4. The Asian Extended Metropolitan Region (EMR) Model 2.5. China’s Special Case 2.6. EMR research in China 2.7. A Stages Approach to Rural-Urban Transition in China 2.8. Summary  13 13 14 19 21 24 28 30 42  Chapter 3. The Rural-Urban Divide Chinese Definitions 3.1. Introduction 3.2. The Household Registration System (Hukou) 3.3. Changes in Statistical Definitions of Urban and Rural Areas 3.4. Changes in Statistical Definitions ofUrban and Rural Population 3.5. Summary  43 43 45 52 56 60  Chapter 4. The Rural-To-Urban Transition In China Changing Policies 4.1. Introduction 4.2. Changes in Government Policies Towards Urban Development 4.2.1. Pre-1978 Policy (Stages land II) 4.2.2. Post-1978 Policy (Stage ifi) 4.3. The Search for Optimum Urban Development Policies-Debates over City Growth 4.3.1. The ‘Small City And Town’ Approach  62 62 62 63 69 72 74  -  -  iv  4.3.2. The Large City Approach 4.3.3. The Medium-Sized CityA Approach 4.4. Summary  PART TWO: CHARACTERISTICS OF TIlE SRENYANG-DALL4N REGION  .75 78 81  83  Chapter 5. The Regional Context 5.1. Introduction 5.2. Liaoning as China’s Industrial Heartland 5.2.1. The Natural Resource Endowment 5.2.2. Concentration ofHeavy Industry 5.3. Characteristics ofthe Urban System 5.4. The Historical Development of the Shenyang-Dalian Corridor 5.4.1. The Early Stage ofDevelopment (The Period Before 1840) 5.4.2. The Period of 1840-1930 5.4.3. The Japanese Colonial Period (1930-1945) 5.4.4. The Enhancement of Heavy Industrialization during 1949-1978 5.4.5. The Region in Reform (Post-1978) 5.5. Summary  83 83 85 85 87 91 93 93 95 97 102 106 112  Chapter 6. The Emergence Of The Shenyang-Dalian EMR, 1978-1992 6.1. Introduction 6.2. The Emergence ofthe Shenyang-Dalian EMR 6.3. The Concentration ofPopulation and Wealth 6.3.1. Concentration ofPopulation 6.3.2. Concentration Of Wealth 6.4. Spatial Patterns within the Corridor 6.5. Characteristics of the Shenyang-Dalian Corridor The Coexistence ofAgricultural and Non-Agricultural Activities, 1978-1992 6.5.1. Non-Agricultural Activities 6.5.2. A Well-Developed Agricultural Economy 6.6. Summary  113 113 113 123 123 124 126  PART TE[REE: TOWARDS GREATER SPATIAL INTERACTION, 1978-1992  140  Chapter 7. Changes In Administrative Systems And The Emergence OfPeasant Workers 7.1. Introduction 7.2. Changes In Administrative Systems And Their Implications 7.2.1. Establishment of a City Listed Separately in the Plan 7.2.2. The Central City Administering Surrounding Counties 7.2.3. Implications  142 142 142 144 145 147  -  132 132 136 138  V  7.3. The Rise ofPeasant Workers 7.4. Summary  .148 154  ChapterS. Industrial Decentralization And Rural Industrialization 8.1. Introduction 8.2. Establishment of Growth Poles along the Corridor 8.3. Urban Industrial Decentralization and Rural Industrialization 8.4. Changing Patterns in the Local Spatial Economy 8.5. Summary  155 155 155 158 162 166  Chapter 9. Improvement In Transportation Infrastructure And Time Space Convergence 9.1. Introduction 9.2. Improvement of Transportation Infrastructure 9.3. Informal Transportation Sectors 9.4. Population Flows 9.5. Patterns of Commodity Flows 9.6. Summary  168 168 168 176 178 188 190  PART FOUR: CASE STUDY VILLAGES ACTWE INCORPORATEON IN TIi1 EMERGENCE OF THE E11k  193  -  Chapter 10. Hunhebu Village A ‘Near Suburban’ Village Case Study 10.1. Location and Natural Resource Endowments 10.2. Processes ofEconomic and Social Changes 10.2.1. Changing Ownership Structure 10.2.2. Diversifications of Agricultural Products 10.2.3. The Growth of Tertiary Sectors 10.3. Occupational Transition 10.4. Rural-Urban Linkages Subcontractor Firms and their Impacts on Rural Technology Transformation 10.5. Summary  195 195 198 198 200 201 202  Chapter 11. Houshi Village A Rich Resource Village Case Study 11.1. Location and Natural Resource Endowments 11.2. Processes ofEconomic and Social Changes 11.2.1. Diversifications ofAgriculture 11.2.2. Changes in Collective Ownership 11.2.3. Formation ofLocal Specialty Productions 11.3. Occupational Changes 11.4. Rural-Urban Linkages 11.5. Summary  211 211 213 213 215 218 221 223 224  -  -  -  208 210  V  Chapter 12. Tuchengzi Village The Chicken Raising And Leather Bags Village 12.1. Location and Natural Resource Endowments 12.2. Processes ofEconomic and Social Changes 12.3. Occupational and Income Changes 12.3.1. Income Changes and Distribution 12.3.2. Occupational Change 12.3.3. Gender Issues 12.4. Summaiy  225 225 226 232 234 235 240 240  Chapter 13. Common Features Of Socioeconomic Transformation 13.1. Introduction 13.2. The Accessibility and Location Factors 13.3. Access to Sources ofInvestment Capital 13.4. Fully-Employed Rural Labour 13.5. Income Growth and Income Equality 13.6. Internal Differential of Income and the Emergence ofNew Socio-Economic Groups 13.7. The Changing Role of Women 13.8. Common Problems 13.9. Towards Invisible Urbanization in the Three Villages 13.10. Summary  242 242 243 246 247 250 255 259 260 262 267  PART FLVE: RESULTS AND CONCLUSIONS  268  Chapter 14. Conclusions 14.1. Summary ofMajor Findings 14.2. Theoretical Implications 14.3. Implications for Public Policy 14.4. Suggestions for Further Research  268 268 274 278 281  APPENDIX Appendix 1. Field Work in China Appendix 2. The Major Stages of China’s Post-1978 Reform Program Appendix 3. Calculation of Invisible Urbanization Level in the Three Case Study Villages Appendix 4. Peasants’ Per Capita Net Income inLiaoning Province, 1978-199 1 Appendix 5. The Share Holder System in Hunhebu Case Study Village Appendix 6. China’s ‘Comparatively Well-off (xiao kang) Indices for 2020 and Hunhebu Village’s Indices in 1992 Appendix 7. Survey Result for the ‘What Families Become Rich’ in 1992  284 284 286  293 294  BIBLIOGRAPHY  295  -  289 291 292  Vii  LIST OF TABLES  Table 3.1. Urban growth and Industrial Development in Different Eras in Liaoning and China  44  Table 3.2. China’s Subsidies in 1981  47  Table 5.1. Major Mineral Deposits in Liaoning Province in 1992  86  Table 5.2. Selected Industrial Production in Liaoning, 1991  90  Table 5.3. The Urban System in the Shenyang-Dalian Region, other EIv1Rs and China, 1991  92  Table 5.4. Major Heavy Industrial Production in Liaoning, 1932-1944  100  Table 5.5. Selected City Population in Shenyang-Dalian Region, 1930-1945 (‘000)  101  Table 5.6. Capital Investment in Liaoning (billion yuan)  103  Table 5.7. Economic Growth Rate in Liaoning Province (%), 1949-1991  105  Table 5.8. Major Industrial Sectors in Selected Cities of Shenyang-Dalian Region  106  Table 5.9. Utilized Foreign Investment in Selected Coastal Provinces of China, 1984-199 1  111  Table 6.1. Selected Socioeconomic Indices in the Shenyang-Dalian Corridor, 1991  125  Table 6.2. Rural Counties’ Economic Growth Levels between EMR and Non-EMR in Liaoning  127  Table 6.3. Rural Labour Force and Gross Domestic Product Structure by Major Industries in the Shenyang-Dalian Mega-Urban Region (1991) (%)  134  Table 6.4. Agricultural and Industrial Output Value by Suburbs and Counties in the Shenyang-Dalian Region, 1978-92 (million yuan in 1980 fixed prices)  137  Table 7.1. Critical Processes and Spatial Outcomes in the Shenyang-Dalian Corridor, 1978-92  141  Table 8.1. Industrial Output Value by City core, Suburbs, and Rural Areas in Major Metropolitan Regions ofthe Shenyang-Dalian Corridor 1978-92 (million yuan)  163  Table 8.2. Population by City Cores, Suburban Districts, and Rural Areas of the Shenyang-Dalian Region, 1984 and 1992 (million)  165  Table 9.1. Major Developments of Transportation Infrastructure in Liaoning Province  170  VIII  Table 9.2. Travel Time between Shenyang and Dalian  .173  Table 9.3. Passengers’s Travel Purposes (by Bus) (%)  182  Table 9.4. Floating Population ofMajor Cities ofthe Shenyang-Dalian Region (‘0,000)  184  Table 9.5. Amount of Water Supply Per Capita Urban Resident With and Without Floating Population (Litre/Per Person Per Day)  186  Table 9.6. Migration as Percent of total Population in Selected Counties and Suburban Regions, 1990 (per thousand)  187  Table 10.1. Land use in Hunhebu Village in 1991  196  Table 10.2. The Output Structure ofHunhebu Village  199  Table 10.3. Labour Occupation Structure inHunhebu Village in 1978 and 1991  203  Table 10.4. Ratio of Non-agricultural and Agricultural Index in Hunhebu Village in 1992  205  Table 10.5. The Labour Structure by Gender in Hunhebu Village in 1991 (persons)  207  Table 11.1. Land Use inHoushi Village in 1991  212  Table 11.2. The Output Value Structure in Houshi Village (10,000 yuan)  214  Table 11.3. Village-Collective Shares of Labour, Income Sources, and Per capita Income in Houshi Village, 1984-92  216  Table 11.4. Labour Structure inHoushi Village, 1978-1991 (persons,  %)  222  Table 12.1. Economic Structure in Tuchengzi Village, 1978, 1986, and 1992 (‘000 yuan)  227  Table 12.2. Change in Occupational Structure in Tuchengzi Village from 1978-1992  233  Table 12.3. Per Capita Income Group in Tuchengzi Village, 1986 and 1992 (%)  236  Table 12.4. Household Occupation Structure and Income Level in Tuchengzi Village in 1992  237  Table 12.5. The Relationship Between Occupation and Input/output Ratio in Tuchengzi, 1992  239  Table 13.1. Summary of Location Advantages and Major Rural-Urban Linkages in Three Selected Villages in the Shenyang-Dalian Corridor  245  x  Table 13.2. The Capital Sources of Village Enterprises in Selected Villages in the Shenyang-Dalian Region in 1990  248  Table 13.3. Summary of Survey Results of’Seriousness of Your Village Surplus Labour’  249  Table 13.4. Rural Per Capita Income ofLiaoning Province and Three Selected Villages  252  Table 13.5. The Comparison of Rural-Urban Income Gaps between National Average and Three Selected Villages in the Shenyang-Dalian Region (yuan)  254  Table 13.6. The Survey Results for ‘Who Earns More Income’ in the Case Study Villages, 1991 (%)  256  Table 13.7. Peasants Taxes and Net Income in Tuchengzi (yuan/person), 1986-92  261  Table 13.8. Living Standard of Selected Villages in the Shenyang-Dalian Region (1990)  264  Table 13.9. Summary of Calculations for Invisible Urbanization Index in Three Selected Villages in the Shenyang-Dalian Region, 1990  266  x  LIST 01? FIGURES Figure 1.1. China’s Major Mega-Urban Regions  6  Figure 1.2. Location ofthe Shenyang-Dalian Corridor  8  Figure 1.3. Thesis Framework and Data Sources  10  Figure 2.1. China’s Major Urban Clusters  29  Figure 2.2. China’s Rural-Urban Transfontiation Model  32  Figure 2.3. Rural-Urban Linkages and Major Influencing Factors  38  Figure 3.1. Urban/Rural Areas in Dalian Metropolitan Region, Liaoning, 1992  55  Figure 3.2. Different Population Statistics in Dalian Metropolitan Region, Liaoning, China, 1992... .57 Figure 5.1 Location ofthe Shenyang-Dalian Corridor  84  Figure 5.2. Major Agricultural Production Regions in the Shenyang-Dalian Region  88  Figure 5.3. Historical Events Impact Space Economy in Liaoning Province, 1840-1992  94  Figure 5.4. Cities ofthe Shenyang-Dalian Corridor, 1980-1992  108  Figure 6.1. Index 1: Share ofNon-agricultural Labour in total Labour Force (by County), Liaoning, 1991  115  Figure 6.2. Index 2: Per Capital Rural Non-Agricultural Output Value (by County), Liaoning, 1991  116  Figure 6.3. Index 3: Per Capita Agricultural Output Value (by County), Liaoning, 1991  117  Figure 6.4. Index 4: Population Density by Counties in Liaoning, 1992  118  Figure 6.5. Index 5: Per Capita Net Income (by County), Liaoning, 1991  119  Figure 6.6. Index 6: Per Capita GDP (by County), Liaoning, 1992  120  Figure 6.7. The Shenyang-Dalian Extended Metropolitan Region in Liaoning  121  xi  Figure 6.8. Industrial Output Value of Village-Run and Private Rural Industries Per Land Area by County in Liaoning Province in 1992  129  Figure 6.9. Foreign Investment (by County) in Liaoning, 1992  130  Figure 6.10. Exported and Imported Goods by Metropolitan Region, Liaoning Province, 1991  131  Figure 7.1. Comparison of Administrative Structure: Contemporary Liaoning and Traditional China  143  Figure 7.2. Three Categories ofPeasant Workers in the Shenyang-Dalian Region  150  Figure 8.1. Direction of Industrial Development and Special Open Zones in Liaoning Province  156  Figure 9.1. Transportation Networks and Cities in the Shenyang-Dalian Region, 1992  171  Figure 9.2. Automobiles and Motorcycles Per 1,000 Population by Metropolitan Regions in Liaoning Province, China, 1991  173  Figure 9.3. Frequency ofTravel Times Per Capita inLiaoning Province, 1990  179  Figure 9.4. In-ward and Out-ward Migration Patterns by Counties inLiaoning in 1990  181  Figure 9.5. Commodities Transported by Train and Truck inLiaoning, 1990  189  Figure 9.6. Commodities Transported Along the Major Highways inLiaoning Province (1990)  191  Figure 10.1. Location ofthe Case Study Villages in the Shenyang-Dalian Region  196  Figure 11.1. Local Specialty Production Lines in Houshi Village  219  Figure 12.1. Leather Bag and Suitcase Production and Raising Chickens in Tuchengzi Village, Liaoning, China  229  Figure 13.1. Rural Labour Transition in the Shenyang-Dalian Region  251  xli  LIST OF ABBREVIATIONS  EMRs  Extended Metropolitan Regions  GDP  Gross Domestic Product  HHB  Hunhebu  HS  Houshi  LRSEST  Liaoning Socioeconomic Survey Team  LRSEST-]]HB  Liaoning Socioeconomic Survey Team, HunHeBu village  LRSEST-HS  Liaoning Socioeconomic Survey Team, HouShi village  LRSEST-TCZ  Liaoning Socioeconomic Survey Team, Tuchengzi village  LSB  Liaoning Statistical Bureau  LSYB  Liaoning Statistical Year Book  LYB  Liaoning Year Book  PRC  People’s Republic of China  SEZs  Special Economic Zones  SSB  State Statistical Bureau  TCZ  Tuchengzi  X1ll  ACKNOWLEDGMENTS  I am deeply indebted to Dr. David Edgington, my thesis supervisor, for his comprehensive guidance in the completion of this dissertation. I am especially grateful to Dr. Edgington for his critical comments on my research proposal and detailed comments on my draft. The completion of  this thesis and my doctoral program would also not have been possible without the valuable support and wise guidance ofProfessor Terry McGee. His inspiration and encouragement are critical for me to 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 to improve earlier version of this thesis. My appreciation also goes to Dr. Francis Yee and Dr. Scott MacLeod 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 the Changchun Institute of Geography, Chinese Academy of Sciences, for their letters of introduction which greatly facilitated data collection in the field. Also, special thanks to Mr. Chenjun Pan at the Liaoning 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, Sherry Wang for the romanization of Chinese names into Pinyin. My eight-year daughter is learning Chinese Pinyin 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.  xiv  Introduction  PART ONE CONCEPTUALIZING EMRS IN CHINA -  A THEORETICAL REVIEW CHINA’S RURAL-URBAN RELATIONS  CHAPTER 1. INTRODUCTION  1.1. Introduction  Since the economic reforms of 1978, China has experienced dramatic socioeconomic changes and has moved towards becoming a kind of hybrid known as a ‘socialist market economy with Chinese characteristics’ (Bell, Khor and Kochhar, 1993: 4). The establishment of the ‘economic open areas’ along the coast has brought China wealth, industrial power, foreign exchange earnings, and economic 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 million rural labour force are viewed as ‘surplus labour’). 1 Within this matrix of changes, some focus must be directed to China’s country-side.  China’s rural reform programs and the rapid growth of rural industrialization are critical to the success of current changes. The changes in many rural areas may be summarized as ‘China’s silent  revolution due to the goal of developing the Chinese economy as rapidly as possible within the basic framework of socialism and the existing political system. 2 Data presented below outline the 1 1 n 1994, among 440 million rural labour force, 110 million of 440 million rural labour force 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 and Kochhar, 1993: 4. 1  Introduction tremendous scope of this revolution. In particular, changes in lifestyles, economic activities and patterns of movement which one might well call urban are coming to the country-side of the Shenyang-Dalian corridor. In these changes, the region of concern has much in common with other areas 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 Beijing Tianjin corridors and the ‘growth triangles’ of Shanghai-Nanjing-Hangzhou and Guangzhou Shenzhen-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 coastal  conurbations 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 the world economy due to the changes in the capacity and structure of the essential transport and communication infrastructures which weld cities and mega-regions within the Pacific Economic Zone together (Rimmer, 1994; Rimmer, 1993).  The dynamism of change found in these emergent regions has led too easily to generalization; the rampant pencilling-in of zones, corridors and triangles of hyper-growth along China’s coast. Such exuberance has perhaps clouded urban geographers’ judgements as to what is really happening ‘on the ground.’ Consequently the many interpretations of coastal China’s spatial fhture appear to have moved 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 changes occurring within China’s settlement systems. Such studies may begin to answer a number of critical questions. Will rapid industrialization in China result in an increasing concentration of population in existing large cities as the conventional wisdom of the urban transition might have it? Or will rural industries 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 remained 2  Introduction  in rural areas. 3 Answers to these questions must come from a consideration of China’s unique geo historical path and recent changes in the government’s approach to managing the nation’s development trajectory.  Conventionally, a socialist nation is understood as being dominated by a powerful state which not 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 the reforms? Will urban residence be tightly controlled and mobility constrained in favour of the growth of small cities and towns? Moreover, what will happen to the rural communities surrounding large cities? We need to reflect on what has occurred since 1978 at a micro-level in order to understand  the critical processes involved in changes affecting the residence and livelihood of China’s population as a whole. This study of the Shenyang-Dalian corridor of northeast China 4 is intended to achieve this 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 moved to high levels ofurbanization over a period of one hundred years are of limited help in assessing the reality of a reforming socialist China. Thus, there is a need to formulate a more suitable urban settlement model which explains China’s condition in the post-reform period. Within Asia, China has a unique role as the largest socialist nation.  Many scholars argue that the developing socialist countries have common characteristics, of  3 1 n 1994, of 110 million rural surplus labour force, only a quarter of them migrated to the coastal and other relatively developed areas. The majority of the rural surplus labour were employed (fully or partially) in rural areas (People’s Daily Overseas Edition, April 4, 1995). -  Northeast China is called “Manchuria” in English. In China, the term “Manchuria” is 4 viewed as a colonial term. Some Chinese scholars suggest that this term should not be used in the English-speaking world (Zhao 1994: 183-184). Chinese people refer to Manchuria as Dongbei (meaning Northeast China). In this thesis, “Northeast China” includes the provinces of Liaoning, Jilin and Heilongjiang. 3  Introduction which the most common is the slower rate of urban growth compared with many other developing countries (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 countries such as China the state is the main agent determining the rates and patterns of growth and regional change (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 population movements, and the economies and dis-economies of agglomeration tend to be regulated by market forces, with pricing mechanisms playing a dominant role. Contemporary capitalist space-economies have been marked by an apparent trend towards increased movements of people and other resources  within thickening ‘transactional webs’ (e.g. the spaces of flexible accumulation). Yet in China, the planned economic system (particularly before the 1978 economic reforms) generally excluded market forces and their economic requisites from explicitly shaping the emergent space economy. Settlement  and enterprise patterns were determined by the state according to its own priorities. Restructuring of circulatory or transactional environments was largely carried out via administrative measures. This is no longer filly the case. Market regulation is increasingly coming to characterize the evolution of  Chinas 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-Dalian corridor, is the need to add to consider a more general literature which seeks to conceptualize how the rural-urban transition is evolving in post-reform China. Central to any such project must be a consideration of the model of Extended Metropolitan Regions (EIVIRs).  Urbanization and the growth of metropolitan regions in Asia over the last several decades has been shown to possess different features which clearly separate them from the growth trajectories of Western cities (McGee 1989: 93-108; McGee 1991: 3-26; Ginsburg 1991: xiiixviii; Pannel and Veeck 1991: 133). There are already several studies on the emergence of China’s EMR.s (Yeung 1992; Zhou 1991). For example, Zhou identified four such mega-urban regions in the coastal area 4  Introduction  (Shenyang-Dalian in northeast China, Beijing-Tianjin in north China, Shanghai-Nanjing-Hangzhou in Yangtze delta, and Guangzhou-Shenzhen in the Pearl river delta) and argued that these mega-urban regions 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 spatial distribution 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 which address, for example, the driving forces of contemporary change and what the broader policy implications might be. Moreover, the emergence of mega-urban regions in China raises a critical question. Are they a new form of settlement transition? If so, what is the validity of the EMRs described by Zhou as a distinct urban form and how well do they match the current models of the urban 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 well as geographical changes in the distributions of population and workforce. These require an empirical investigation, partly because the processes and outcomes are likely to vary widely over such a large country as China. The present research focuses on the Shenyang-Dalian corridor as just one of China’s major urban concentrations.  The purpose of this research is to examine rural-urban  relationships in China and test the validity of a new form of urban settlement the mega-urban region -  or ElviRs in a specific setting. The unique contribution of this thesis is to use both field research and ‘internal’ material 5 to investigate the fascinating dynamism of socioeconomic and settlement changes occurring in the Shenyang-Dalian corridor over the last few years. In addition, I was born and raised in north China and I worked in northeast China for many years. This has been a major positive contributing factor to the successful gathering of data.  1n China, many data sources are defined as ‘internal materials’ or ‘confidential’. Foreign 5 scholars, even most Chinese scholars, cannot access such data and information. 5  Introduction  Figure 1.1 China’s Major Mega-Urban Regions  (Source: Adapted from Zhou, 1991)  6  Introduction  1.2. The Shenyang-Dalian Region The 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, the Shenyang-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 reflected in a dominance of heavy industrial sectors and high population concentrations in the large cities of the region. This is an ideal region in China to investigate the emerging regional space economy for a number of reasons. First, the Shenyang-Dalian corridor is the best example to test how the pre 1978 city-based industrialization have affected mral-urban relations in China; this is because the cities in 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 stateowned enterprises. Even today, state-owned enterprises, such as machine tools, iron and steel, machinery, coal, petroleum, shipbuilding, chemical industry and building materials form the largest share 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 colonial territories in the 193 Os and the early 1 940s, which in part accounted for its form of development Liang, Zhao and Wang, 1990; Lu, 1990; Teng, 1992; Li and Shi, 1988). Consequently, it is also a  useful region to delineate how China’s colonial experience has affected more recent socioeconomic transformations.  Third, to date very little research has been conducted on the Shenyang-Dalian region. Some other 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-analyzed region.  7  _____________________  ________  Introduction  Figure 1.2 Location of Liaoning Province and the Shenyang-Dalian Corridor Mongolia  Autonomou:Regoj  Province  Tiefa Tiding  .  Fuxin.  Shenyang  Belpiao  •  Chaoyang•  yang  Bnxi  Lmgyuan flZhOUPJm ilaiche g •  Jinxi Xingcheng.  Skenyang-Daluui Corridor  Bayuquan Dandong  Hebei Province  North Korea  Zhuanghe ,  . l’ulandian Jurisdictional Area ofCentralCity  Boha, Sea Dalian  Yellow Sea  0  100 km  8  Introduction  1.3. Research Framework and Methodology  The thesis attempts to examine rural-urban relationships in China, document rapid socioeconomic 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 of the urbanization process in China. The second is to document the emergence of an EMR in the 6 Shenyang-Dalian corridor. The third is to examine time-space collapse processes in the region. Finally, this thesis aims to explore recent socioeconomic changes along the Shenyang-Dalian corridor at the local level and to show how sectoral and structural shifts of economic activities in certain villages of the region (including changes in occupation, income, and enterprise ownership) affect rural-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. In  particular, this study will critically evaluate the practice ofthe PRC government in keeping rigid ruralurban divisions in administrative and allocative practices.  The discussion will unfold in four parts (see Figure 1.3). Part One examines theoretical and definitional issues. It looks at the urbanization process in reforming socialist China and suggests a more suitable ‘three-stage’ approach to explaining the contemporary rural-urban transition in China is proposed. This model forms the framework for research contained in the remaining parts of the thesis.  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’).  J this thesis, the terms of “time-space collapse” and “time-space compression” are used 6 interchangeably to capture the reduction in transaction and travel time made possible by improved communication technology. 9  Introduction  Figure 1.3 Thesis Framework and Data Sources TRESIS SECTION  Part One and  Introduction (Chapters 1,2, 3,4)  Part Two (Chapter 5)  Part Two and Part Three (Chapters 6,7,8,9)  Part Four (Chapters 10, 11, 12)  Part Four (Chapter 13) and Part Five (Chapter 14)  TUESIS FRAMEWORK RESEARCH QUESTION: How mpid socioeconomic transformations impacted on the rural-urban transition in the Shenyang-Dalian growth corridor  DATA SOURCES  Publications and Research Papers  Provincial level data: statistical yearbooks and research papers Municipality and County level data: statistics, and government documents  Village level data: Interviews and Surveys under takenbyboththe author and the Liaoning Rural Socio-Economic Survey Team  10  Introduction Part Two of the thesis outlines the empirical research on the rural-urban transition in the Shenyang-Dalian corridor since 1978. The first half of Part Two describes the broader regional context and its historical development. The thesis then identifies the emergence of an Extended Metropolitan Region along the Shenyang-Dalian corridor and outlines its major social and economic characteristics.  Part Three examines in detail the processes which have shaped the rural-urban transition in the Shenyang-Dalian corridor during the 1978-1992 period. This is done by investigating the contribution 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 study examinations of the rural transformation in three villages along the Shenyang-Dalian corridor. The initial purpose of this part is to provide a close look at the lowest level of settlement hierarchy rural -  villages. A phenomenon termed ‘invisible urbanization is defined through a broad analysis of village level change. Part Four ends with a summary of the common experiences and problems in each case study area.  Part Five then concludes the study by examining the validity of the EMR model at a more general level as distinct urban form, and assesses the degree to which EMRs in China represent an on-going form ofMcGee’s theory of settlement transition in Asia. It draws the analysis together and tries to show what has been unique about the Chinese experience and what is special about the Shenyang-Daiian EMR compared with developed and other Asian countries. Implications for theory and public policy and suggestions for further research are also given.  11  Introduction  1.4. Rationale of Data Sources  It always problematic for scholars to interpret Chinese statistical data. Some of the statistical data are incomparable between regions and over time and some are not accurate. The reliability of the 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 factors influencing research concerning China’s socioeconomic development. Data for this dissertation include first-hand investigation (sight surveys, meetings, and interviews), analysis of secondary data (statistical materials, research papers, government documents and publications), and various other materials, such as government survey materials. Data for the three case study villages were collected in two ways. First, a field trip from November 1992 to May 1993 made it possible to conduct interviews directly with village heads, accountants, and family heads in 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 first hand 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 that the case study data used in Part Four are reliable and accurate. Secondary data and information for the macro level studies at the provincial and county levels, carefully used with my clarification, were mainly collected from the Statistical Bureau of Liaoning province, and its municipalities, as well as from various academic institutions.  12  The Chinese Urbanization Process in a Comparative Context  CHAPTER 2 THE CHINESE URBANIZATION PROCESS IN A COMPARATIVE CONTEXT  2.1. Introduction  The relevance of utilizing urban transition models based on the historical experience of developed 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 in urbanization associated with economic growth will be repeated in all developing countries. They argue 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 of McGee (1987a, 1987b, 1991) and others to a framework as a broader conceptual context for the empirical research on contemporary rural and urban transition in the Shenyang-Dalian corridor. This review will appraise the applicability of previous western models to the Asian situation and examine new 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 three stage Chinese rural-urban transitional model will be introduced which will be tested in the remainder of this thesis.  In Chapter 3, Chinese statistical definitions related to rural-urban relations will be discussed in order to avoid conceptual confusion over China’s rural-urban tradition issues. Chapter 4 will review changing Chinese government policies related to rural-urban activities.  13  The Chinese Urbanization Process in a Comparative Context  2.2. Previous Western Models of Rural-Urban Relations In general usage, urbanization is associated with the concentration of population into towns and cities and an increase in the level of urbanization. In the developed countries, it has been associated with economic growth and structural change with the movement of the labour force from agriculture to non-agricultural occupations and structural change in the various sectors of the economy with industry and services becoming more important. This process is associated over time with a large movement of population from rural to urban areas (McGee, 1967).  As a demographic phenomenon, urbanization is interpreted as a process involving the absolute and 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 living in the largest cities increase.  Some works indicate that there is also a third phase in which  intermediate 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 several forces. 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 has been viewed a universal ‘push’ force encouraging urban migration, and the ‘bright lights’ of the city is obviously an example of a ‘pull’ force, attracting rural migrants into cities. While all cities in developing countries cannot provide enough jobs or economic opportunities, Todaro (1978) argues that migration from rural areas to the city is often decided upon by migrants’ perceptions as to the value of expected earnings. Although there is debate over timing and extent, this form of rural to urban migration, leading to eventual rural de-population (eventually the rural population dropped in absolute as well as relative terms), was a widespread phenomenon in developed countries (Brigg, 1973; Connell and others, 1976; Haque, 1984; Yap, 1975). 14  The Chinese Urbanization Process in a Comparative Context Linked to the demographic process is the structural change in society consequent upon the development of industrial capitalism. Geographers have broadened this emphasis on population change 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 exchange processes and the optimum location for many production fUnctions. The search for an increase in productivity leads to the development of urban factories to use the economies of scale that they gained from the processes of concentration and centralization. Therefore, the major economic characteristics of developed countries were variously associated with occupation shifts from the agricultural 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 eventually lead to tightly defined urban areas, where most industrial jobs were surrounded by non-industrial rural areas. Here, we can see that the urbanization process in developed countries was correlated with urban economic growth and the population decline of rural areas. Thus, as farming became more and more capital intensive, the ability of agriculture to absorb rural labour fell. Therefore, assuming sufficient growth in the industrial sector, non-agricultural sectors in urban areas became major labour employment absorbers for the surrounding rural population.  Urbanization is also said to induce changes in behaviour, and urban centres, especially large cities, have also been identified as centres of social change. Attitudes, values and behaviour patterns are modified in the particular milieu of the urban place, characterized by its size, density, and the heterogeneity ofits inhabitants (Wirth, 1938) and then spread to the rest of population by processes of 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 in inducing positive social changes is also said to reinforce industrialization as the western urbanization experience indicated. The city is also considered to be the centre of social change, introducing new social patterns and breaking down the traditional patterns; and social changes occurring in cities are also considered to spread eventually outwards to rural areas (Richardson, 1978).  15  The Chinese Urbanization Process in a Comparative Context This model of the urban transition based on the experience of developed countries has been challenged on several grounds. From the perspective of this thesis, the most important challenge is  directed at the assumption of the model that rural-urban differences remained clearly demarcated during the urban transition. It is now realized that the rural-urban distinction falsely represented reality 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) urban bias book, the whole rural-urban debate has been evaluated with much more emphasis on rural-urban linkages Koppel, 1991). However, Lipton’s (1977 and 1984) urban bias theory regards urban and rural societies as dichotomous entities and has portrayed the behaviour of urban elites versus the rural population as representing the most important conflict in developing countries. Recently, a group of scholars, such as Potter and Unwin (1989) and Baker (1990), emphasize the increasing importance of urban-rural relationships rather than their differences, and argue that a theoretical reappraisal is needed to analyze the rural-urban transition. Accordingly, urban-rural linkages have sprung again into the limelight of many development studies.  Urban Corridors and Mega Urban Regions:  Also relevant to the Shenyang-Dalian EMR are studies on the spatial patterns of industrialized metropolitan 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 concepts of ‘dispersed metropolis’ (Ginsburg, 1961: 631-640; Hayes, 1976: 3), and recently ‘extended metropolitan regions’ (EMR) (McGee, 1991 a; Ginsburg, 199 ib) (The last two concepts are based on 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 exist essentially for the convenience of the inhabitants and businesspeople of the largest urban places. 16  The Chinese Urbanization Process in a Comparative Context Although urban areas depend on surrounding rural areas for food and water, Whebell argues that rural dependency on urban places is more prevelant, reflected by the fact that the problems of economic life become more and more concentrated in the metropolitan areas, where stresses occur from the very rapidity of growth. Whebell hypothesizes five stages of the spatial development of a corridor 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 development of the urban system. Apart from the importance of changes in transportation links to this study of the Shenyang-Dalian corridor, is Whebell’s most advanced form of urban transition the metropolitan -  stage. With relatively high levels of population mobility and no lack of labour-saving machinery, he postulated that the agricultural population would decline, and rural to urban migration would involve mainly young people. This would lead to strong contrasts between young urban and elderly rural populations, 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 outside Ontario and from its rural areas (Whebell, 1969: 12).  Other approaches to the development of urban corridors, and so relevant to this thesis, are the studies of mega-urban regions in developed countries. Mega-urban region studies in the developed countries were enhanced by Gottmann’s study of ‘megalopolis’, a belt of cities which extends some 800 kilometres from southern New Hampshire to the Virginia suburbs of Washington and with a width between fifty and a hundred kilometres (Gottmann, 1961). Megalopolis areas, such as Boston-Washington, Toronto-Montreal, and Tokyo-Osaka as well as the metropolitan belts of Great Britain and Germany demonstrate a remarkable degree of concentration of people, skilled labour, wealth, knowledge, and economic opportunity (Gottmann and Harper, 1990).  Their  locational advantages (such as port facilities) have certainly contributed greatly to their respective regional development. Of importance to this study of the Shenyang-Dalian corridor is that the land use pattern within a megalopolis is characterized by ‘a new mixture of urban and rural.’ The symbiosis ofurban and rural can be expressed by the understanding that many people living in the ‘rural’ areas 17  The Chinese Urbanization Process in a Comparative Context (classified as rural population) are often in reality ‘city folks’ commuting to the cities to work, often due 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 shrinicing world’ (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 the spatial 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 concentrated urban growth would be replicated “in slightly different but not too dissimilar version in many regions of a rapidly urbanizing (developing) world” (Gottmann 1961: 257).  To summarize, it should be emphasized that the traditional models of urban transition (at least up to the 1960s), predicted the eventual decline of the rural population due to rapid migration, and the concentration of industry within the boundaries of the cities’ proper. Hence, it was assumed that the distinction (both clear spatial and occupational differentiation) between rural and urban would persist as the urbanization process advances.  More recent work on developed countries’ urban growth has focused upon the process of urban expansion which are summarized by Bourne (Bourne, 1991). This research places great emphases upon the processes of residential shifts from city cores to the suburbs and the movement ofindustry and service firms into the outer-rings ofthe cities often motivated by the cheapness of land and the growing labour pool. In the United States, this process has been described in “Edge City” (Garreau, 1991) and in Soja’s study of Los Angeles (Soja et al, 1983). While some similar processes are occurring in China, they are not as advanced as in the United States and it will be argued that the particular features of the Chinese urbanization process are quite different.  18  The Chinese Urbanization Process in a Comparative Context  2.3. The Changing Context of Urbanization  The changing context of urbanization in developing countries is important when comparing their experience with developed countries. As McGee argues, “there are distinctive facets of the phenomenon in the Asian context which reflect the different patterns of development and incorporation ofthe (Asian) countries into the international system” (McGee 1989: 93). It can also be argued that several dramatic socioeconomic changes in Asia within the last few decades have made the 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 initial urbanization which occurred in western countries in the early to mid49th century, a great number of new concepts have been created to describe how transport and telecommunication innovations facilitate the spatial reorganization of human activities (Janelle, 1969: 353). We frequently speak about the ‘shrinking world’ (Brunn and Leinbach, 1991, xviii). For example, because of improvements in transport and communications more people are able to move often and much more rapidly than ever before. In a general sense, therefore, distance and time have diminished and location has become much less relevant than ever before. Compared with earlier periods, more activities are peripatetic on 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 more rapidly in Asia than that in the developed countries at comparable period of early urbanization. The greater freedom of movement has loosened the urban fabric, and activities have become more scattered over the rural areas around the major large cities and modem urban-type activities such as production and commerce are no longer tied to compact urban areas.  The importance of  transportation technology to these differences is a key feature in this study of the Shenyang-Dalian region.  19  The Chinese Urbanization Process in a Comparative Context  Different Historical Experiences:  Another important factor which differentiates the Asian urban transition from the developed countries is its distinct historical experience. The prevailing paradigm of the urban transition draws its rationale from the historical experiences of urbanization which occurred in Western Europe and North America in the 19th and 20th centuries. Clearly, this is not neatly transferable to the urbanization process in Asia. Most Asian countries, as McGee (1 987a) argues, have been unevenly incorporated into the world economic system from the 15th century onwards due to the different experiences 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 the metropolitan countries. Furthermore, the uneven incorporation of these Asian countries into a world economic system created divergent patterns of urbanization, which reflect the different interactions between 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, such  as direct foreign investment and international financial flows, have greatly accelerated the transitional processes oflarge cities in developing countries, and this aspect was largely missing or at least much -  less evident  -  at the time of urbanization in Western Europe and North America. Large cities in  developing countries play dual roles. They are both participants of the global system as well as metropolitan centres of a nation (Armstrong and McGee, 1985). The great cities in the developing countries are no doubt part of a global system, but they are in most part also expressions of their own distinctive cultures. As Jones has indicated, the large cities of developing countries became points of contact between indigenous and intrusive cultures during the colonial period. Today these cities have considerable elements of a ‘global culture’ which bring them into the world orbit, but more importantly they are part of an overwhelmingly indigenous society and culture. Not all these cities share in the transitional network which is the essence of a ‘world city,’ but they are metropolises in their own right 20  The Chinese Urbanization Process in a Comparative Context because they embody the achievements of distinctive local cultures, exercise political and social control 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 to emergence of a world economic system. Here, what is specific to Asian countries is their role in the world system (Armstrong and McGee, 1985). The way the Shenyang-Dalian region has been incorporated into the world economy is a key feature of this study (the Shenyang-Dalian corridor’s incorporation into the world economy both the Japanese colonial period and the post-1978 reform period 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 divergent patterns of urbanization together suggest that the conventional view of clearly defined rural-urban differences and the process of transition, which were mostly based on the western experiences, can not neatly fit the Asian reality and so needs to be reevaluated. Moreover, although an awareness of the importance ofthe urban-rural transition and urban-rural relationships in Asia has attracted more  and more attention, the bulk of research in this field has still been devoted to the analysis of urban and rural development as separate issues. Increasingly, it is argued that rural and urban change should be seen not as processes in themselves, but rather as the products of deeper structural economic and social transformation, which together involve both rural and urban areas. This reorientation of attention, particularly in developing Asia, has enabled different kinds of research agenda to be formulated (McGee, 1989) and is a particular focus of the present study of the Shenyang-Dalian region.  2.4. The Asian Extended Metropolitan Region (EMR) Model  As a result of the interaction of the processes identified earlier in this chapter, McGee and others have recently identified new and distinctive regions of economic interaction and growth in  21  The Chinese Urbanization Process in a Comparative Context Asia. 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), the Bangkok 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 between  the large cities in various Asian countries. In fact, the EMR phenomenon concerns the emergence of large urbanizing regions, sometimes stretching over one hundred kilometres, typically located between and including two existing large urban centres. These EMRs are characterized by intense concentrations and flows ofboth people and commodities. McGee (1987) and Ginsburg (1988) have identified and documented a general model for this process, and they conclude that the traditional urban-rural divide in many Asian countries is becoming blurred. Moreover, as the EMRs become incorporated into the global economy, McGee and Ginsburg have argued that these mega-urban regions may offer an alternative spatial form as well as a different way of understanding the urban transition process in Asia to that provided by older models such as those provided by Gottmann and Whebell.  According to McGee’s (1991b) EMR. model, these mega-urban regions reflect a new and distinctive pattern of settlement transition. The major features of such regions emerging in Asia are briefly summarized as follows:  First, these regions are mostly in wet rice areas where paddy cultivation correlates positively with high population density. The density of rural population in these EMRs is sometimes higher than in western urban suburbs. One of the results of this high density is the freeing of labour for non agricultural activity due to electrification, irrigation improvement, and increased mechanization  -  which leads to lowering the labour absorption capacity ofthe land. Therefore, large numbers of rural workers in these areas are available to be employed. Considering the case in the Shenyang-Dalian  7 T he concept of desakota is coined by T. G. McGee from Indonesian kota town, and desa village. For details, see T. G. McGee, 1991a: 7. 22  The Chinese Urbanization Process in a Comparative Context EIVIR, high density is one ofthe major characteristics of this region, but rice-growing agro-economic  niches is not necessarily one ofprerequisites of growth in the Shenyang-Dalian EMR It is postulated in 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, the EMRs in Asia have already had a well-developed infrastructure of roads, canals, and information  networks. These have assisted in speeding up the circulation of commodities, people, and financial activities as well as information. The availability of relatively cheap transport facilitates the quick movement between the core city and the remainder of the region along major transport routes. One ofthe 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, certain members might actually be living inside the core cities or their suburban satellites, and be remitting portions oftheir incomes to remaining members of the family who may be still involved in agriculture on the city fringe. Rural households therefore can increasingly earn more income from non agricultural activities and create a multiplicity of income sources within the same household. This often leads to household income figures that are much higher than in other non-urban regions in the nation as a whole (Ginsburg, 1991a; McGee, 1991b). Interestingly, within the Asian EMRs, not all rural 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 many weeks at a time). There is supporting evidence which shows that the urbanization process within the EMRs does not require a massive rural-urban migration. This unique rural-urban transition pattern  significantly distinguishes the Asian experience from other developing regions (as also argued by Dwyer, 1972). The implications for this study are not only the frequent population mobilities between the rural and urban areas within the corridor, but also the peasants’ involvement in both farming and non-farming activities.  Finally, these mega-urban regions are also characterized by an intensive mixture of settlement 23  The Chinese Urbanization Process in a Comparative Context  and economic activity with agriculture, industrial estates, and suburban development, and other uses existing side by side. The fringes ofthese regions are to some extent ‘grey’ zones from the viewpoint  ofthe 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 phenomenon has emerged in the Shenyang-Dalian region due to the non-urban areas approaching urban levels of  occupations, living standards, and consumption patterns.  Overall, the Asian EMR model has demonstrated that these regions tend to dominate the national space economy ofthe countries concerned. They involve a juxtaposition of the agricultural and non-agricultural economy and functions between cities and the surrounding countryside. Now  the question is how these Asian EMR features fit into the Chinese case. Therefore, the thesis turns to examine each of these EMR features in the Shenyang-Dalian analysis by taking into account the special ‘Chinese characteristics’ of the urbanization process.  2.5. China’s Special Case Within Asia, Chinese cities are both Third World cities and Socialist cities. China’s ruralurban transition has been rather special due to its strong government interventions both before and -  after the 1978 economic and political reform. To begin with, the strong centralized control of the economy since 1949 has impacted on the space economy, rural-urban relationships, and urbanization patterns (Chan, 1992b: 275-305; Chang, 1981: 202-219; Kirkby, 1994: 128-155; Kwok, 1981: 147-  8 S avage and Warde classify five prominent urban types (Third World Cities, Global Cities or 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 in capitalist world. They have tended to grow more slowly than their capitalist counterparts. Many socialist regimes have been explicitly anti-urban and the immediate post-revolutionary period tended to freeze, and in some cases reduce, urban population growth. These cities have been subject to greater levels of planning and zoning (Savage and Warde, 1993: 39-40). 24  The Chinese Urbanization Process in a Comparative Context 193; 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 important socioeconomic 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 contemporary rural-urban transition, it is necessary to analyze the changing role of the Chinese government.  In another context, Musil’s research in the socialist countries of Eastern Europe indicates that the nations’ urbanization and settlement strategies had some permanent features in common that were due to a socialist style of government, namely a ‘planned’ or ‘managed’ urbanization (Musil, 1980: 6). Managed urbanization presupposes the working out of a general strategy embracing both goal-setting and the instruments to be used. The central issue common to all the socialist countries is how to integrate the social and economic goals of socialist ideology. The search for the optimal synthesis concerns both regional policy and urbanization strategy, especially in efforts to regulate the concentration processes. Research in the socialist countries is concerned, then, not only with analyzing the urbanization process itself but also with formulating normative principles for its advance. Therefore, central to urbanization process in the socialist countries is the significant role which the government plays in terms of control of production and distribution within a communist society (Forbes and Hamilton, 1987).  Literature on the Chinese-type socialism based on the pre-1978 available information supports the idea of a distinctive Chinese model of giving priority to agricultural development as attacking the problem of development at its root, and thus offering greater promise as a unique, alternative approach for other underdeveloped societies (Oksenberg 1973: 1-16; Maxwell 1979; Weisskopf 1980: 283-318). Such a ‘pro-rural’ position believes that the Maoist ‘anti-urban’ development strategy  was characterized by policies that favoured the countryside over the city which aimed at ultimately eradicating 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 take Mao Tse-tung’s explicit anti-urban and pro-rural policies into consideration” (Ma, 1976: 114). 25  The Chinese Urbanization Process in a Comparative Context The major features of Chin&s urbanization policies include the transformation from consumer to producer cities; establishing industrial enterprises in rural communes, and improving services in rural areas; limiting the growth ofurban population by controlling inflows to cities, especially to large cities; resettling urban intellectuals and youth in the countryside to promote rural development; and developing 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 are intrinsically dissimilar” due to the different concepts of urbanism and sectoral priorities adopted by the 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 have  increasingly questioned and refuted many of the past assertions and presumptions about the Maoist development model (Prybyla, 1982: 38-42; Leung and Chan, 1986; Stone, 1986: 63-72). In the field of economic development, careful research by Lardy (1983) and others (e.g. Tang, 1984) argue that the Maoist strategy was indeed heavily skewed in favour of industry. Kirkby’s (1985) work on urbanization has made an important advance in the field. He refutes the argument that the Chinese government 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 of high rates of industrialization and accumulation rather than any ideological ‘anti-urbanism.’ This is an important dimension of China’s urbanization patterns and policies. This argument was further advanced by Chan and Xu (1985: 583-613), Perkins (1990), and Zhang (1991), as well as in studies focusing on the impact ofthe Household Registration System 9 on migration (Christiansen, 1990: 78-  9 T he Household Registration System (hukou) divides Chinese citizens formally either into part of the agricultural population or ‘urban residents.’ For details see Chapter 3. 26  The Chinese Urbanization Process in a Comparative Context 91; 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 the recent work of Chan (1994) argues while the Maoist approach was certainly not in favour of rural development, neither can one categoricafly label the post-Mao policy as ‘pro-urban.’ Chan argues that the reality is more mixed and fI.ill of apparent contradictions (Chan 1994: 13). Although post-Mao leaders have abandoned previous urban-biased practices, many Maoist legacies have continued to play an important role. For example, as far as urbanization is concerned, the Maoist policy of restricting large urban in-migration to control urbanization costs is called an ‘invisible wall’ and is a continuing policy theme (Chan, 1994: 136).  While China adopted this ‘managed’ approach to urbanization, leading to restriction on rural to urban migration between 1949-1978 and leading to only a 17.9 per cent national urbanization rate by 1978 (Chinese Academy of Social Sciences, 1991), this government orientation involving strict control is no longer so true. China’s reform programmes, starting from 1978, have gradually relaxed the regulation controlling population mobility (Christiansen 1990: 78-91; Li 1992). This does not necessarily say the post-1978 period is an ‘un-managed’ era. The Chinese government still keeps urban growth under its control. As long as migration causes problems, such as congestion of major transportation stations, potential social insecurity in major large urban centres, the peasant migrants are often forced back to their home towns.  Nevertheless, the post-1978 period witnesses a relaxation of regulation towards population mobility control and some parts of China, e.g. the coast region, have experienced rapid socioeconomic transformations. One of the most important changes for this study, which has emerged after the reform, is the ‘new’ occupation category of ‘peasant worker’ (yigongyinong or  nongmingong, 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) 27  The Chinese Urbanization Process in a Comparative Context were among the first scholars to study these ‘farmers-and-workers’ migrants, and suggested that their emergence was leading to a special form of urbanization, one based on the integration of rural and urban activities in rural areas (This complex issue will be discussed fully in Chapter 7).  This brief summary of existing literature has argued that state government policies have been integral to understanding the urbanization process in China and that it is not adequate to view China’s  post-1949 process ofurbanization as uniform. Neither can one ignore the fact that since 1978 China’s urban 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’s urbanization 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 regions in China including rural, urban, and suburban areas in close proximity along the pattern envisaged -  in the EMRs model discussed earlier. The EMR research by Chinese scholars is merely at a stage of macro-level description, such as the location of China’s major EMRs and their major socioeconomic features. In 1989, Zhou commenced research on China’s mega-urban regions. The term he used to describe the rapid socioeconomic changes in the urbanizing corridors along the coastal China was Metropolitan Interlocking Regions’ (MTRs). The dimension of each MIR is about 50 kilometre radius around incorporated cities located on major transportation corridors (Zhou, 1991: 89-112). He identified four MIRs and two ‘pre-MIRs.’ Located along the east coast of China, these four MIRs are Shenyang-Dailan in central and southern Liaoning province; Beijing-Tianjin-Tangshan in northern China Naijing-Shanghai-Hangzhou in the Yangtze Delta and Hong Kong-Guangzhou-Macao in the Pearl River Delta. Two pre-MIRs are the Shandong Peninsular and the seaboard of Fujian province from Fuzhou to Xiamen (Figure 2.1) (Yao, 1992).  28  The Chinese Urbanization Process in a Comparative Context  Figure 2.1 China’s Major Urban Clusters  (Source: Adapted from Yao, 1992: 24)  29  The Chinese Urbanization Process in a Comparative Context Other Chinese scholars classifj China’s ElviRs into different groups based on their size and region ofinfluence. For example, Yao (1994: 24) and others have identified up to 13 urban clusters. According to the size of urban cluster, Yao recognized three major classifications, namely ‘large and super-large scale urban clusters,’ ‘medium scale urban clusters,’ and ‘small scale urban clusters’ (see Figure 2.1). The ‘large and super-large scale urban clusters’ include Shenyang-Dalian, Beijing-Tianjin Tangshan, Shanghai-Nanjing-Hangzhou, and Guangzhou-Shenzhen-Hong Kong in the Pearl River delta. 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 level which make them possible to connect with, and deliver their services, nationwide. The daily direct service 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 medium cities and have accessible local transportation networks. The daily direct service radius of the cities within urban clusters can reach as far as 80-100 kilometres. The ‘small scale urban clusters,’ such as Zhengzhou, 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 rural economies, has eroded the traditional urban-rural dichotomy which existed in China. Rapid ruralurban interaction, and the integration of the rural-urban economy within these EMRs, represent a new spatial economy and demonstrate a new form of rural-urban transition. As will be shown later in this thesis, there are many ramifications for urban-rural planning and management.  2.7. A Stages Approach To Rural-Urban Transition In China  At this time, a reinterpretation of rural-urban relations is required: one which draws on previous literature but which recognizes the contemporary trends leading to a new spatial paradigm based on the EMR construct. Moreover, so far, most studies of China’s EMRs have been largely 30  The Chinese Urbanization Process in a Comparative Context descriptive. 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 phenomenon represents an ongoing urban transition process, what the broader policy implications. A new framework is therefore necessary to guide further empirical research on the contemporary urban transition. Accordingly, this thesis proposes a three-stage rural-urban transformation model, one which covers the last four decades of the postwar period (It is shown that changes of political ideology and government policies towards urban-rural relations are most critical ). These three 10 stages are briefly described here, and will be used in Chapters 4 and 5 to organize more detailed information on the hukou system and its impacts on urbanization and rural-urban relations as well as policy changes towards rural-urban transition.  Stage I covers the period of immediate post-revolutionary reconstruction (from 1949 to the mid-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 stage has its own characteristics in term of degree of involvement in the global system, unique urban-rural linkages, role of the government, and specific patterns of the spatial economy.  This model  incorporates the following components, which are both sensitive to China’s post-war history and important features in later parts of this thesis: 1) the development of a distinctive government policy on human settlements (including the household registration system); 2) external relations (i.e. economic connection with the world system, such as the open cities and special economic zones and rapid growth of foreign investment); 3) structural changes in ownership patterns in both the urban (i.e. heavy industry, light industry, and tertiary sectors) and rural economy (including agricultural and non-agricultural  10 following essential components, which reflect the Asian macro-spatial framework, The are important for the establishment of the model: external relations, urban formal and informal sectors, rural export sector, and rural peasant economy, and are suggested by Lo, Salih and Douglass, 1981: 7-43. 31  State  Collective  State  Collective  Stage II (1960-1978)  State, Private and Collective  Private, Collective  Stage III (post-1978)  Notes: LI=Light Industry; HI=Heavy Industry; TS=Tertiary Sector, A=Agriculture; NA=Non Agriculture; 1-contmlled production and distribution system; 2 & 3-surplus transfer mechanism fmm rural agriculture to urban industry; 4-mobility of population  Ownership  Economic Structure  Government  Links to the World Market System  Stage I (1950s)  Figure 2.2 China’s Rural-Urban Transformation Model  I  I  I  The Chinese Urbanization Process in a Comparative Context components); and 4) rural-urban migration; and rural-urban division.  These components have been chosen to illustrate that China’s rural-urban transition is different not only from western patterns but, as indicated earlier, different also from general urbanization processes 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 self determination in rural areas only recently (after 1978), and recent promotion of rural industry and industrial 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 the relationship between industrialization and urban growth. Thus, during the first stage, there was no clear policy in the PRC to limit rural-to-urban migration. Actually, the rapid industrialization plan of the 195 Os, especially the Great Leap Forward, favoured city-based industrialization. Large numbers ofthe rural labour force were called upon to move to China’s major coastal and inland cities to meet the need of rapid expansion of heavy industry (Chan, 1994). Thus, this stage was characterized by massive rural-to-urban migration, resulting a pattern of industrialization with rapid urban growth.  The Great Leap Forward (1958-60) was launched on the premise that rapid  modernization could be accomplished better through mobilization of the unskilled masses than through the introduction ofnew technology, in other words, better through ideology and politics than economic planning. This was a two-pronged attack, with the Chinese people told that they must learn to ‘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 system from 1958 onward which was designed to stimulate self-sufficiency and independency in the cities and in rural areas. This radical campaign ended in failure by the late 1950s and the early 1960s due to unrealistic campaigns, combined with natural disasters (e.g. a famine in 1960-1962, see Dando, 33  The Chinese Urbanization Process in a Comparative Context 1983: 262-280 and Ashton, 1984: 6 13-645).  The failure of Great Leap Forward caused the Chinese decision makers to select an alternative development plan focusing on de-urbanization. Thus, the features of Stage II were the direct outcome of this policy and urbanization processes were characterized by a ‘zero-growth’ of urbanization level (Tang and Jenkins, 1990). This was achieved due to a strict enforcement of the Household Registration System (hukou) (commenced in 1958) combined with the ‘sendt-down’ of tens of millions of urbanites to the countryside (Chan, 1994; Chen, 1972).  Although, the  commencement of agro-processing in rural areas served agricultural production (Sigurdson, 1977), most industrial projects were urban-oriented (Chan, 1992a: 4 1-63). Therefore, industrialization without 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 development strategy.’ Though it varied in degrees in different sub-periods, the Maoist strategy dominated China’s industrialization efforts until it gradually faded out in the late 1970s. It relied on heavily redistributive measures in an attempt to equalize regional economic development, emphasized extensive rather than intensive 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 the central 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 two stages from 1949 to 1978 (Ogden, 1992: 75-117). The regional development policy was dominated by a ‘self-reliant’ strategy. On the one hand, the government controlled production and set up production quotas for producers, and factories, or production teams in villages, followed these orders 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-based industrialization. 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 lower 34  The Chinese Urbanization Process in a Comparative Context  wholesale price for agricultural products brought to the cities while forcing peasants to pay high prices for industrial goods (Cheng, 1990: 65-77; Chen, 1982:  5574).h1  During Stages I and II there  was a clear distinction between urban and rural areas, characterized by a dual spatial economic structure, i.e. the urban economy was dominated by manufacturing industry and the rural economy was dominated by agriculture (mainly grain production) (Schran, 1993: 135-136; Kwok, 1992: 6585).  Urban-based industrialization was possible only because of the government transfer of  agricultural 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 the government. 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 to the 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. This period was characterized by an industrialization process that entailed ‘zero’ growth in China’s urbanization levels (for details see Chapter 3). However, at a broader level, the urbanization policy during 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 were characterized by a dual structure of the national space economy in both sectoral and geographical terms. In summary, China’s dualistic economy was characterized by a rural economy dominated by agriculture (mainly grain) contrasting with city-based heavy industry (Kwok, 1992: 65-85). Some scholars argue that China’s urban areas were protected by an ‘invisible wall’ of administrative measures set up against any possible in-migration (Chan, 1994: 143; Cheng, 1990: 65-77; Xue, 1979). Such urban-rural dualism was much stronger in Maoist China than in many other Third World countries in similar development stages, mainly because the former was both structural and state-policy initiated  ‘ T 1 his issue is discussed in detail in Chapter 3. 35  The Chinese Urbanization Process in a Comparative Context (Chan, 1994).  Another common feature during stages I and II was the very limited involvement of China in the world system. In the 1950s this was mainly confined to its links with the former Soviet Union and other 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 comparative  advantage, accepted regional disparities as inevitable, encouraged foreign investment and international interaction, and sought to foster technological innovation (Yeung and Ru, 1992: 1-24; Ho and Huenemann, 1984; Denny, 1991: 186-208). An important spatial development has been the shift in Chinese 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 coastal development would serve as a catalyst for the modernization ofthe whole country (Yang, 1990). The notion of regional comparative advantage is central to understanding the post-1978 regional development policy. The government advocated that each region specialize in its comparative advantage. That is to say that the regional division of labour was in the national interest, even if one region moved ahead of the others in terms of economic development.  To further this aim, the coastal region, including the five Special Economic Zones (SEZs) and Coastal Economic Development Zones, such as the Shenyang-Dalian open economic zone (Liaoning Peninsula Economic Development Zone) were granted in 1984 special administrative and economic powers (Fincher, 1990: 35-44; Phillips and Yeh, 1990; Yee, 1992). Firms located within these special zones, now enjoy tax privileges and other benefits (Naughton, 1987: 5 1-80). For example, from 1984 city officials such as in Tianjin could approve joint venture projects with capitalizations of up to 36  The Chinese Urbanization Process in a Comparative Context US$30 million (Edgington, 1986, Laquian, 1989). The reduction of bureaucratic formalities  everywhere greatly accelerated development in the coastal region (Laquian, 1989). Arguably, these reforms have invigorated Chin&s economy. In the past decade for instance, its GNP averaged a 9.3 percent increase annually. China’s GNP, National Income, and State Revenue have all more or less doubled since 1980 (SSB, 1991). As might be expected, urban-rural relations and China’s patterns of spatial economy have changed tremendously.  In fact, the third stage of China’s rural-urban transition is an outcome of the recent economic reform 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 the world economy and trade with Japan, Hong Kong, USA, Taiwan, and other countries has increased rapidly (Phillips and Yeh, 1990). China is no longer an isolated country but has integrated its economy with the world economic system. Of importance for this thesis is the fact that rural-urban relations have now become more integrated (Putterman, 1992: 467-493), and the strict divide between them is now becoming blurred in many places. This is particularly the case in the four Extended Metropolitan Regions along the coast (such as Shenyang-Dalian in northeast China, Beijing-Tianjin in north China, Shanghai-Nanjing-Hangzhou in Yangtze delta, and Guangzhou Shenzhen 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 changes brought about by the reform policies (both rural and urban reforms), and other administrative changes  related 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 the household registration system), and policies for the establishment of’open areas’ (such as open coastal cities and open zones along the coast), as well as encouraging development of rural free markets (Byrd, 1991) (Figure 2.3). 37  The Chinese Urbanization Process in a Comparative Context  Figure 2.3 Post-1978 Rural-Urban Linkages and Major Influencing Factors  38  The Chinese Urbanization Process in a Comparative Context The most fundamental reforms that swept China during the 1980s were those in the rural areas. These included the implementation of the ‘household responsibility system,’ the lease of land  to households, and the push for economic diversification, including in particular the encouragement ofrural enterprise, which involved the rapid growth ofthe small enterprises and other non-agricultural activities in rural areas (Fincher, 1990: 35-58; Leeming, 1993). The responsibility system was a clear break from past practice when the income of members of work-terms and brigades was based on the average income generated by the entire brigade or commune. In this period, the more productive teams 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 their combined field. Thus those who preferred to engage in non-agricultural activities were allowed to sublease their plots to be worked by others. Such arrangements often included a guarantee to supply the original lessee with rice or wheat at government-set prices, thus enabling the original lease holder to pursue non-agricultural activities with the certainty that low-price staples would be available (Wu and Xu, 1990: 133). The most important outcome of these new arrangements was that while the responsibility system greatly enhanced agricultural productivity, it was also necessary to diversify the rural economy to promote growth and to provide employment opportunities for the vast under utilized 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 branches of agriculture 12 fisheries, forestry, and husbandry but also the formation of large numbers of new -  -  rural enterprises provided employment opportunities for those displaced from growing monoculture crops.  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 1n China, “Agriculture” includes both farming (grain and cash crops) production in a 2 ‘ narrow sense and farming, forestry, animal husbandry, fishery, and sideline productions in a broad sense. 39  The Chinese Urbanization Process in a Comparative Context  enterprises assisted in supporting the policy of’containing’ the rural population, especially the surplus rural labour force, within existing rural areas and small towns. This containment policy refers the socalled litu bu lixiang (leaving the land without leaving the villages) program, which sought to combine a spatial policy of population containment with the diversification of the rural economy. It commenced nationwide in the early 1980s and involved expanding the capacity of rural industry to either facilitate local production or to expedite the decentralization of urban industries. Since 1980, urban industries have been encouraged to establish branches and workshops to produce complete lines or components through direct investment or joint ventures with village or township workshops (Li and Li, 1985).  An important outcome of this new diversification of economic activities in rural areas has been  a 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 grain production) has gradually moved to a more diversified spatial economy, involving the development of rural industries and other non-agricultural activities. Such a structural shift can be traced most clearly in both absolute and percentage declines in the agricultural labour force of rural areas, and concomitant increase in service sectors within urban areas (S SB, 1992). Such a diversification of rural economic activities and the rapid increase of rural industries has also reduced the pre-1978 urban-rural gap in income and other measures of the quality of life. Thus, nationwide, the urban-rural household 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 areas of certain large cities in coastal areas, some rural districts have equivalent or even higher income and living standards than urban areas (Bao, 1991).  With spectacular production increases in agriculture post-1978, together with the rapid diversification 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 could 40  The Chinese Urbanization Process in a Comparative Context prove that they had the resources to establish a new enterprise or were employed, were permitted to move to the towns and cities either temporarily or permanently. This substantially freer mobility of population began to promote greater rural-urban interaction. For example, in the Shenyang-Dalian conidor, people began to increasingly commute between the rural and urban areas, and starting from the late 1 980s, many peasants moved from the rural areas from outside the corridor to work either in 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 under the jurisdiction of a central core city, and the establishment of open cities and open economic zones in China’s major EMRs (Solinger, 1993: 75-81).  All these policy changes have largely broken down the old spatial rigidities of the communist economy, and have transformed urban-rural relations in many parts of China. Although the post-1978 reforms themselves can be subdivided into several different stages (see Appendix 2), rural-urban economic linkages in China have been gradually integrated due to the generally smooth and incremental features of the reform program (Bell, Khor, and Kohhar, 1993: 75-8 1). The important characteristics of this gradual reform program are the transformation of both the rural and urban economies without dramatic social and political instability (except of course the 1989 Tiananmen incident and its aftermath). That is to say that the role of the government has been crucial in providing a stable framework to the on-going rural-urban transition.  The above review reveals that the major features of stage III constitute an increasing integration of China into the world economy; the central government gradually decentralizing its economic decision making power to local authorities and individual operators; a rural economy characterized by a mixture ofboth agricultural and non-agricultural activities; and intense rural-urban interaction reflected by massive migration from rural areas to urban regions and the emergence of urban capital and know-how diffusing into rural areas. Each feature has assisted in breaking down the former severe rural-urban division in the Chinese space economy.  41  The Chinese Urbanization Process in a Comparative Context  2.8. Summary  This chapter has examined previous western models of rural-urban relations, the changing context of urbanization and the Asian Extended Metropolitan Region (EMR) model as well as the processes of urbanization in China. The review suggested that there were distinctive elements in the Chinese experience which are leading to a growth of Extended Metropolitan Regions at an earlier stage than that characterized in many developed countries.  The rapid socioeconomic transformations during the post-1978 reform period in China have greatly reshaped the nation’s space economy and rural-urban relations. A three-stage rural-urban transition model was proposed to guide further empirical research work on the contemporary urban transition in China and form a research framework for the rest of the thesis and a detailed investigation of changes in the Shenyang-Dalian region. However, before the empirical research can take place, it is first necessary to explain aspects of China’s rural-urban transition in a broader context in order to adequately interpret the research results. Consequently, the following two chapters provide a background for some of China’s on-going rural-urban transition issues. Chapter 3 aims to claril’ some Chinese definitions, and Chapter 4 aims at understanding the nation’s changing policies related to the rural-urban transition since 1978.  42  The Rural-Urban Divide Chinese Definitions -  CHAPTER 3 TILE RURAL URBAN DiVIDE CHINESE DEFINITIONS -  3.1. Introduction  The aim of this chapter is to examine the first major theme of the study, which is that China’s rural to urban transition has followed a rather singular trajectory. China’s three stages of urban transition (Figure 2.2) have each witnessed distinct urbanization processes (Chan and Xu, 1985: 583613; Kirkby, 1985, Ma and Cui, 1987: 373-395). Liaoning province (where the Shenyang-Dalian corridor is located) has experienced similar processes. Table 3.1 shows that both China and Liaoning province have shared a common experience of urban growth since 1949, although the urbanization level in Liaoning has been much higher than China as a whole’ . During Stage I, both Liaoning 3 province and China almost doubled their urbanization levels primarily because the rapid industrialization. Stage II exhibited a special feature which was characterized by industrialization without rapid urban growth. In fact, urbanization levels declined from 19 and 39 per cent in 1960 to 17 and 30 per cent in 1978 in China and Liaoning, respectively. This second stage is an example of’development without urbanization’ (Koshizawa, 1978: 3-3 3). During Stage III, the urbanization process once again accelerated both in Liaoning and China. Further analysis of the components of urban growth shows that during these three stages of the urbanization processes, the average annual natural increase kept the same population size at approximately 2.1 to 2.5 million for China, but the net in-migration was very different. Stage III recorded the highest at 7.6 million net in-migrants into cities per year, compared with 4.8 million for China during Stage I and about 1 million decrease during Stage II (Table 3.1).  ‘ T 3 he reason for higher urbanization levels occurring in Liaoning than China as a whole will be discussed in Chapter 5. 43  The Rural-Urban Divide Chinese Definitions -  Table 3.1 Urban growth and industrial development in different eras in Liaoning and China  Stage I (1949-1960)  Stage II (1960-1978)  Stage III (1978-1992)  China  Liaoning  China  Liaoning  China  Liaoning  10.6/1949 19.7/1960  23.4/1952 39.6/1960  19.7/1960 17.9/1978  39.6/1960 30.7/1978  17.9/1978 26.2/1990  30.7/1978 42.3/1990  7.5  10.3  1.5  0.0  4.7  6.9  by natural increase (%)  30  n.a.  2.4#  n.a.  25  n.a.  by net inmigration (%)  70  n.a.  -1.0#  n.a.  75  n.a.  12.2  26.5  3.0  3.4  4.0  9.2  urbanization level (%Iyear) urban pop. growth rate  industrial growth rate  (%)  (%)  Notes: Data for urban growth from 1950-1960, and for industrial growth rate from 1952-1960. Stage Ill covers 1978-1990; #: cannot be computed due to negative net migration, which was mainly due to 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.  44  The Rural-Urban Divide Chinese Definitions -  Official definitions are important in order to understand China’s urbanization process because they 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 the outset that the wide range of different definitions of urban population in China creates misunderstanding over China’s urbanization levels. This is because analysis and research about China by many foreigners is confused by Chinese statistical definitions (Pannell, 1990: 218; Orleans and Burnham, 1984: 788-804). Therefore, before any attempt can be made to examine urban-rural relations 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 urban  and rural areas and measured change. Central to these questions is the need to define the concept of Household 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 drivers licence). This will help us understand the nature of population mobility and the urbanization processes in China, particularly during Stages II and III. Associated with the hukou system is the issue 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 part of the ‘agricultural population’ (nongyc renkou) or ‘urban residents (chengshi jumin renkou). All citizens are registered as a member of a hukou, a household with local policy offices, and every family has a ‘Household Registration Book(let)’ (hukou bu). The booklet lists the members of each registered 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 for everybody as the hukou registration determines whether or not a person can receive subsidized food  and public services. For instance, if one happens to be registered as an ‘urban resident,’ then such a citizen is entitled to a number of rationed goods at subsidized prices, as well as work allocation 45  The Rural-Urban Divide Chinese Definitions -  determined by the government’s Labour Bureaus (normally this involves work in a state-owned or collective-owned enterprises). Urban residents are also entitled to free or low-fee schooling for children together with Medicare, housing and thel. The hukou registration also has a significant impact, therefore, on public resource allocation. Thus in 1981, national urban subsidies for these services totalled 48 billion yuan, about 33 per cent of expected current revenue, of which approximately 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 billion yuan, 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 other team 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 main social division line between rural peasants and urban residents, and so is fhndamental in understanding changes in the Chinese urban-rural divide. Essentially, the transfer of hukou status in China is very difficult, both across the agricultural and urban resident classification and also between localities within any class. Local police offices maintain a register of all known inhabitants within their jurisdiction 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 a decisive tool for the distribution of public goods and services. The following analysis will mainly  Actually, the urban labour force’s employers or working units (danwei) also provide an 4 ‘ additional list of subsidies, such as subsidies for bathing, haircuts, transportation, and so on. 46  The Rural-Urban Divide Chinese Definitions -  Table 3.2 China’s subsidies in 1981 (billion yuan) Item 1. Subsidies directly to urban residents  Amount  %  26.8  55.8  12.2  25.4  2.8  5.8  5.0  10.4  6.8  14.2  10.2  21.3  3. Industrial goods for agricultural production  2.2  4.6  4. Imported agricultural products  8.8  18.3  48.0  100.0  food grain cooking oil  housing others 2. Subsidies for enterprise  Total (1-4)  Source: Cheng, 1990: 72.  47  The Rural-Urban Divide Chinese Definitions -  focus on its impacts on the nature of population mobility, and this is followed by a discussion of its  changes during the post-war period, broken down by the three stages of Chinese socialist urbanization discussed in Chapter 2.  Stage I (1949-60):  During the first decade of the Peopl&s Republic, the hukou system was not a major element for the urbanization process because people were free to migrate until 1958, when the hukou system was introduced (Zhang, 1989). In fact, the government actually encouraged rural-to-urban migration in the early period. As discussed in previous chapter, urban-based industrialization called for large  numbers of rural labourers to work in urban factories. Due to rural to urban migration, the annual urban growth rate averaged 7.2 per cent during the period of 1952-57, which was more than twice the natural urban increase (about 3 per cent) (Chan, 1994: 36). This was accelerated in the radical industrialization campaign of the ‘Great Leap Forward’ (1958-60), averaging 9.1 per cent over and above the previous annual urban growth rate. The result was a rapid increase of China’s urbanization level 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 there was an insufficient supply of food, urban housing and other infrastructural facilities. Thus the hukou system 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 a strict 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 national 48  The Rural-Urban Divide Chinese Definitions -  migration goals. First, rural to urban population movements were strictly controlled, especially rural movements 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 suburbs were 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 urban to rural places, were encouraged. Such strict household registration regulations officially required that any migrant to a city had to register with the Local Police Station (Paichushiao) in order to stay for more than three days (Laquian, 1989: 5). This system of migration controls operated through the household registration system and was enforced through differential access to grain rations, jobs, and housing (Goldstein and Goldstein, 1985: 17-44). As noted earlier, migration without a proper Household Registration status was viewed as illegal. Therefore, it was virtually impossible for peasants to move to cities.  This period also witnessed net urban outflows, particularly of urban youth. It was reported that the migratory flows generated by ‘rustication” 5 of 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 level dropped from 19.7 per cent in 1960 to 17.9 per cent in 1978. A similar process took place in Liaoning where the urban intellectual and youth in Shenyang, Dalian, Anshan, and other large cities were sent down to the countryside, and their hukou status was changed from urban to agricultural residents. Eventually the urbanization level in Liaoning declined from 39.6 per cent in 1960 to 30.7 per cent in 1978 (see Table 3.1). It was easy to understand how the hukou system restricted those rusticated 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  Rustication refers to the campaign of sending urban residents to the countryside. For 5 ‘ more details see Chen, 1972: 361-386; Bernstein, 1977. 49  The Rural-Urban Divide Chinese Definitions -  for 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 to understanding the very unique rural-urban transition processes involved in Stage II the successful -  fulfilment 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, the liberalization offree markets, and various urban economic reforms, the large population of the rural surplus 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 a greater urge for migration among China’s rural peasants, who desired to search for new economic opportunities outside their villages (Blecher, 1984:110-112; Shan and others, 1984: 36-37; Wang and Cal, 1986: 58). In response to the increasing mobility of farmers away from agriculture, the central government decided to allow, or to turn a blind eye to rural-to-urban migration after 1978. A new type of registration was introduced. The first policy change was carried out in 1983, when the state council allowed rural households, without changing their residence, to take up cooperative ventures in market towns. In 1984, the policy was further relaxed and peasants were officially permitted to  work or do business in cities and towns provided they could raise their own funds, arrange their own food rations and find a place to live. This policy was called the ‘self-supplier household’ status (zili hukou) (Wong, 1994: 337). Although, their ‘urban resident’ hukou status would be different from the normal ‘urban resident’ hulcou, in that the state grain authorities would not supply them with subsidized grain, rural peasants with this status would be allowed to work legally in urban areas while obtaining grain at the negotiated price through free markets.  On September 6, 1985, the Twelfth Meeting of the Standing Committee of the Sixth National People’s Congress promulgated the People’s Republic of China Residents’ Identity Card Regulations. 50  The Rural-Urban Divide Chinese Definitions -  These required all citizens over sixteen to apply for a personal identity card and empowered all police to make identity checks. No doubt useful as a tool of law enforcement, the ID card system also encouraged mobility and business transactions. In place of a letter from one’s work unit or village official, 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). The introduction of the ID system therefore triggered spontaneous migration to medium-sized and large cities; a phenomenon referred to as the ‘floating population’ (liudong renkou). Consequently, in the last ten years or so, rural migrants have entered China’s big cities in growing numbers. This has been especially the case for the coastal regions, such as the Pearl river delta, the Yangtze river delta, and the corridors of the Beijing-Tianjin and Shenyang-Dalian regions. Here, large scale employment  opportunities have arisen, including construction projects in Special Economic Zones, Open Coastal Cities, and Open Areas along the coast (Yee, 1992). These prosperous areas attracted significant numbers ofrural workers both legally and illegally (Wang, 1994). Ample supplies of grain in urban areas facilitated this movement, as the state monopoly on grain distribution, and the rationing of other basic consumer goods, have mostly disappeared (see Appendix 2). A new free market trade makes it possible to obtain the most important food commodities to stay in large cities, rendering life there easier for non-residents. Therefore, peasants can stay, practically, as long as they want, and some of them may never register at the local authority offices (as field work in the Shenyang-Dalian corridor indicated, see Chapter 10).  The reasons for this new surge of rural to urban immigration are varied. Some people either leave their village to earn extra money in order to meet increasing expenses for agricultural production materials and living costs, while others travel around China purely to visit big cities and other prosperous regions for pleasure. Still others leave their homes in those districts struck by natural disaster, and during times of food grain shortage, in order to ease the burdens on the family economy (Christiansen, 1990: 31). This new migration phenomenon in China therefore should be considered natural, given income differences between rural areas and large cities (or prosperous rural areas), and the seasonal character of rural production. Christiansen argues that rural-to-urban 51  The Rural-Urban Divide Chinese Definitions -  migration can, by way of remittances, contribute to the transfer of capital to the less prosperous countryside and so be conducive to rural development (ibid: 23-42).  The breakdown of the hukou system since 1978 represents then one of significant forces in contemporary rural-urban relations in China. The impact of the reformed hukou system is that rural peasants may now change their occupation from farming to non-farming, even though the government still recognizes them officially as part of the ‘agricultural population.’ Thus more and more peasants turned into non-agricultural workers in rural collectives, private, and individual enterprises during the reforms. For the purposes of this thesis, it is important to note that the term ‘agricultural’ hukou is not 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 Chinese population into strictly defined rural and urban areas and occupations, as well as monitoring and controlling rural-to-urban migration. The hukou system also contributed to the formation of two distinct occupational divisions  -  workers and peasants. As far as life styles and governance are  concerned, 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 transition process in Stage II (of Figure 2.2) could achieve city-based industrialization without parallel urban growth. Moreover, the change in the hukou system after 1978 was an important factor leading to increasing rural-urban interaction during Stage III of China’s rural-urban transition.  3.3. Changes In Statistical Definitions Of Urban And Rural Areas Apart from the hukou system, this thesis also has to consider the Chinese definition of “urban places,” as this is an important concept in shaping rural-urban transition processes in the last four  decades. In general, the Chinese definition of urban places has not been solely related to population size in any given locality, or the percentage of individuals engaged in non-agricultural activity, has been affected by a unique Chinese perspective on the notion of’urban.’ This is based largely on the 52  The Rural-Urban Divide Chinese Definitions -  political decision whether the state has accepted responsibility for providing the population’s grain needs under the hukou system. As we have seen, only these people with official urban residence status could enjoy urban-type subsidies and job allocations. So, the first order of business before any serious effort at rural-urban transition analysis can begin is to establish, from a Chinese census perspective, what constitutes an ‘urban place’ and what constitutes 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 (see Orleans, 1982: 268-302, Orleans and Burnham, 1984: 788-804).  Scholars studying China have been puzzled about the actual size of China’s total urban population, the actual level of China’s urbanization, and the conflicting figures for the sizes of individual Chinese cities (Orleans and Burham 1984; Ma 1983: 206-207). These problems are confusing even to Chinese scholars. For example, according to the 1982 Statistical Yearbook of China published by the China State Statistical Bureau (S SB), the percentage of total population categorized as ‘urban’ was 13.9 per cent for 1981. Later in the same book, the percentage was changed to 20.2% for the same year (SSB, 1982: 89). In another example from the SSB data, the percentage ofthe total population deemed to be ‘urban’ was 20.8 per cent for 1982, 23.5 per cent for 1983, 39.5 per cent for 1984, and 49.9 per cent for 1989 (SSB, 1990). Yet the data for 1990 was shown as 26.2 per cent in the China Population Year Book (SSB, 1991). Why do such discrepancies exist?  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, urban -  settlements in China consist oftwo administrative levels city (s/il) and designated town (zhen). Yet -  the term ‘town’ actually includes two broad groups: a designated town (jianzhizhen), whose official town status has been approved by the appropriate provincial authority; and a market town (fizhen), 53  The Rural-Urban Divide Chinese Definitions -  which refers to these not having official town status (Ministry of Internal Affairs, 1986). The accepted definition of an urban area in China includes only designated cities and towns. Thus a small  market town does not belong to any of these urban categories and so is excluded. Consequently, the ‘real’ urban population is underestimated in official reports. For example, Dalian metropolitan region refers 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 square kilometres). The area of this metropolitan region amounts in total therefore to 12,574 square kilometres (see Figure 3.1). Dalian city itself includes a built-up area (137 square kilometres) with 3 urban districts, which are officially defined as urban areas, and 3 suburbs (non-urban) (2,238 square kilometres). It is important to bear in mind that the Chinese definition of the city proper extends to an area which is much larger than the actual urban built-up area. Consequently, the administrative area of Dalian city consists of two parts: the three urban districts and three suburban or non-urban districts. Large areas (about 87 per cent of Dalian city) which are classified as the suburban regions ofDalian city are really market towns or villages in terms of the official definition, even though they are counted as parts of Dalian city’s administrative units. This is the classic problem of ‘over bounding’ in defining urban areas.  All the officially designated towns, consisting of suburbs, county-level cities and counties are treated as urban areas (see Figure 3.1). They usually comprise seats of governments; that is government either of county-level cities, counties, suburb administrations, or township governments. However, the market towns (un-designated) are not listed as urban areas. Such an artificial spatial divide between rural and urban places leads to the question of how to define the urban population for analytical purposes. Moreover, not all residents living in areas defined as urban by the government are 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 in urban suburbs and even urban built-up areas. This mix of farmers and town folk co-existing in the fringe of built-up areas makes it difficult therefore to define the ‘true’ urban population of China.  54  __________  __________  __________  __________  __________  The Rural-Urban Divide Chinese Definitions -  Figure 3.1 Urban/Rural Areas in Dalian Metropolitan Region, Liaoning, 1992 Dalian Metropolitan Region (with total aiua of 12,574 km ) 2 C  M  Dalian city (2,415 km ) 2  .•1  [ Four county-level  Others*  (343 kn )  One county  Lties(9,664km2)  Others* (4Okm2)____  Three  Three  :::  Suburb  Lricts (137  Districts (2,238 ) 2 1cm  :y 2 :kjn  Desig: ::nated::: towns: : (130 ::kk})::.  :Desig-: nated towns (280 ::kju:):::  Market towns & villages  (9,384 ) 2 1cm  :1)csig-: nated towns (14 ::kj:y::  Market towns &  villages (138  ) 2 1cm  Market towns& villages (2,108 2)  Notes: Only the shaded units within  the metropolitan region are officially  recognized as urban aiuas (*: mainly includes land use for military-oriented pmjects and facilities)  [S. D.=Suburban District; C. L C.=County-Level City]  Sources: Liaoning Yearbook, 1992: 6 14-629; Sketch of Liaoning Urban Development 1950-90, 1991: 58; Sketch of Liaoning Small Towns: 20-26; and Stekctch of Liaoning Statistics, 1992: 380 -  55  The Rural-Urban Divide Chinese Definitions -  3.4. Changes In Statistical Definitions Of Urban And Rural Population Yet another important issue when attempting to examine urbanization levels in China concerns changes in the definition of the urban population over time. Since the establishment of the People’s Republic, 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 given time, and in part because the definitions have changed over time (Goldstein, 1990: 673-702). A further complication is the result of definitions based on the hukou status, rather than by using spatial units per se. According to Ding’s research, there are at least four major definitions currently used in Chinese statistics (Ding, 1993: 16-23).  1). The Non-agricultural Agricultural Division Based on the Hukou -  One of the definitions for urban population includes all non-agricultural population in both urban areas and mral areas. This definition of urban population is not based on any spatial units, but rather is wholly grounded on the official hukou registration status of the Chinese population without considering residential location. Based on this particular definition, the nation’s urbanization level was 19.43 per cent in China in 1990. This definition produced an urbanization level of 44.6 per cent in the Dalian metropolitan region in 1992 (see Figure 3.2). However, a serious problem exists, which is that the urban population based on the definition of the hukou system cannot actually indicate a persons occupation status. Rather, it refers only to an eligibility or qualification for access to urban type subsidies and other welfare benefits available from the government. Consequently, it is not suitable to show changes over time between agricultural and non-agricultural occupations.  56  _  _  ____  ____  _ __ _  The Rural-Urban Divide Chinese Definitions -  Figure 3.2 Different Population Statistics in Dalian Metropolitan Region, Liaoning Province, China, 1992  (an Metropolitan Re’ (5.195)  Ar  1i I  Dahan City  Five Counties  I  & County- Level  I  (2.415)  Cities (2.780)  CD Three  Thr Suburbs l.229) [ 3.66%]  Urban I Disthcts 1186) I 283%])  INon-Agri. I  Popui. O.55l) I  Ajncul. ropul. 2.229) [2.91%]  IJ  I  Ii  j[22.68%]I [).l5%J  J  j  Non-a r  Agric.  [11.32%] [12.34%]  (Data in parentheses are total population in million and data in square bracket are share of 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 population 2.Totai non-agricultural population of 3 urban districts (G), which was 22.7% of Dalian Metmpolitan population 3.Total population of 3 urban districts and 3 suburbs and rural non-agricultural population (C+D+E), which was 57.1% of Dalian Metropolitan population 4.Total population of 3 urban districts (G+H), which was 22.8% of Dalian Metropolitan population  Sources: Liaoning Year Book, 1993: 431-468  57  The Rural-Urban Divide Chinese Definitions -  2). The Urban Non-agricultural Rural Division -  Another definition often used by the government to measure the urban population is based on a classification which only includes the non-agricultural population in urban districts. That is to say, this definition ofthe urban population includes neither all residents in a city proper (as it misses out 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, naturally enough, believes that such a definition of urban and rural is too narrow (Ding, 1993: 16-23).  3). The Non-Rural-Agricultural Division  Yet another way of delineating Chin&s urban population is to include all the population of a metropolitan region except the rural agricultural population. Here, the urban population includes agricultural and non-agricultural population in the cities proper, as well as designated towns, and the non-agricultural population in rural villages and market towns. Based on this definition, the urbanization level of China was 70.9 per cent in 1990, and the urbanization level in Dalian metropolitan region was 57.1 per cent in 1992 (Figure 3.2). Ding argues that this classification may too broad, but he also argues that the non-agricultural population in rural areas, particularly in market towns, are ‘semi-qualified’ urban population (Ding, 1993: 16-23). This definition then may be helpful for the government to predict potential urbanized population.  4). The Urban-Rural Division The 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 urban hukou registration and those stay in urban areas without the official urban hukou registration are all calculated as part ofthe urban population. It should be noted that persons are not counted as urban 58  The Rural-Urban Divide Chinese Definitions -  population if they are absent on the night of the Census even their hukou registration lies in urban area. Under this definition, the city population includes the total population of either urban districts or the population of a city street community (jiedao renkou) if a city has no urban districts. The town population includes the total population of the residential areas of a designated towns, including towns of urban suburbs, towns which serve as seats for county government, and towns directly controlled by county governments. Based on this definition, China’s urbanization level was 26.2 per cent in 1990 and the Dalian metropolitan region was 43.2 per cent (LSB, 1992: 463). This classification is now well-accepted both by the Chinese government and academics as showing the most valid level of urbanization (Qiao and Li, 1990: 22-28).  The complexity oftreating urban areas and the urban population outlined above has led to an individual city having several sets of data concerning urban population in any Chinese statistical yearbook. For example, in the Dalian metropolitan region, at least 4 official urban population data  can 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 population ofthree urban districts and three suburbs and total rural non-agricultural population were calculated as its urban population. By contrast, the urbanization level would be only 46.5 per cent ifjust the urban population of Dalian metropolitan region, including the total population of its urban districts and suburbs were considered. Moreover, it would be just 44.6 per cent if the urban population included only the total non-agricultural population of the metropolitan region. At a more extreme level, it would be as low as 22.7 per cent if the urban population included merely the total population ofurban districts. Therefore, it can been seen that it is very important to define exactly which urban population 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 in attempting to determine the true urban population. Thus the first three classifications all suffer a common problem in that they are based on a rigid rural-urban division the hukou system. As shown -  59  The Rural-Urban Divide Chinese Definitions -  earlier, the hukou system cannot any more actually indicate any persons occupation. During the post1978 reform periods, the central government allowed rural peasants to work in urban industrial or service sectors, even though their household registration status was agricultural and their official residence was in a rural area (Teng, 1988: 23). Moreover, as shown earlier, there has been an increasing number ofrural labour force engaged in non-agricultural sectors in rural areas. Yet these two categories are still excluded from the first three official definitions of the non-agricultural population.  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 for urban places excludes some outlying market towns and villages, such as those located within the definition 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, the population 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 empirical analysis of the Shenyang-Dalian corridor contained in Part Four of this thesis.  3.5. Summary  This chapter has discussed the urbanization processes and Chinese definitions ofurban places and 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 can not easily move from rural to urban areas. A further peculiarity ofthe Chinese urban transition relates to how the Chinese government can successfully monitor and control population mobility. Accordingly, the relationship between the hukou system and the implementation of urban development policies, and how such policies have impacted on rural-urban relations, form the topic 60  The Rural-Urban Divide Chinese Definitions -  of the next chapter.  61  Rural-to-Urban Transition in China Changing Policies -  CHAPTER 4 THE RURAL-TO-URBAN TRANSITION IN CHINA -  CHANGING POLICIES  4.1. Introduction  The question of whether or not urbanization is an inevitable trend in development has generated lively debates within China (Yeung and Zhou, 1987: 9). Associated with this concern has been the issue as to what should appropriate Chinese government policies be towards urban development in China. As shown in Chapter 2, over the years the Chinese government favours the development of ‘small cities and towns’ as a national urban development strategy and in the late  1950s 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 challenged by many Chinese scholars due to changes in both urban and rural economies. As part of the necessary context for discussing changes in the Shenyang-Dalian urban corridor, this chapter will review Chinese government policies towards rural-urban relations in the post-war period.  4.2. Changes In Government Policies Towards Urban Development  In industrialized countries of the west, as well as many developing countries employing Western models for economic development, it has been generally recognized that urbanization is either a pre-requisite or an essential by-product of modernization. For example, “the relationship between urbanization and economic development is often as virtually invariant, both historically and cross-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 Chinese urbanization policy has reflected divergent views about the role of urbanization in the development 62  Rural-to-Urban Transition in China Changing Policies -  process and the extent to which urban growth should be controlled (Zhou, 1990). Thus the policies of 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 the development of small cities and towns,” during the post-1978 period form the two major attitudes towards 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 have developed since 1949, particularly in the period up to 1978. A thoughtfhl analysis of the linkage between socialism and city development may be found in Demko and Regulska (1987: 289-292) and French and Hamilton (1979: 1-2 1). For example, Demko and Reguiska provide a discussion of the anti-urban bias that characterized the Marxist approach to cities and urban development between 1949-1978. This stance is best reflected in ‘sent-down’ movement, including the transfer of urban youth to the countryside between 1966-1976 (Ma and Hanten, 1981).  In assessing the role and impact of Marxism-Leninism-Maoism on China’s urban development prior to 1978, two salient points stand out. First, there exists an ideological/theoretical commitment to equity and egalitarianism that is inherent in a Marxist/socialist system. Secondly, there is a strong commitment to central planning and policy making that undergirds the system and which provides the operational 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 an explanation 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 the notion of ‘rural industrialization.’ As will be shown in Parts II and III of this thesis, each is fundamental to this study of the post-1978 changes in the Shenyang-Dalian corridor. 63  Rural-to-Urban Transition in China Changing Policies -  (a). Productive Labour And Non-Productive Labour  The classification of labour into primary, secondary, and tertiary industrial sectors has been a common practice in western social sciences. Yet, before 1978 the Chinese government only recognized its labour force as either ‘productive labour’ or ‘non-productive labour.’ The former referred to that part of the labour force engaged in primary and secondary industries, such as manufacturing 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 and -  urban areas, as discussed above. Finally, of equal importance has been its affect on development of the urban service sector. In the first three decades of the People’s Republic, the service sector was viewed as unproductive and so its development was strictly restricted, leading to critical shortages of 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 the Chinese 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 Cities  Closely associated with the ideological need to transform China’s labour force from non productive to productive sectors, the ftinction of Chinese cities has been viewed differently by the Chinese governments than those in western society. Thus all traditional Chinese cities, such as Beijing, Shanghai, and Dalian, with a large number of people engaged in administrative work and in service industries during the pre-war period, often in colonial enclaves, were labelled ‘consumer 64  Rural-to-Urban Transition in China Changing Policies -  cities.’ 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 gave serious ideological and political problems to the communist government in 1949 due to their former commercial and service sector status associated with the presence of foreigners. ‘Producer cities,’ on the other hand, were those associated with the newly established inland industrial cities, such as Daqing city in Heilongjiang province, and Panzhihau city in Sichuan province with a dominant economic 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 to transform 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 the economy.  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 the  infrastructure and the labour force of the old ‘consumption cities’ to the full, these larger traditional cities tended to gain industrial functions without careful consideration as to whether or not they were suitable sites for large-scale modem industrial locations (Chang, 1983: 194). For the purpose of the present research it is important to note that the cities in the Shenyang-Dalian region, such as the administrative city of Shenyang and the port city of Dalian, were transformed into heavy industrial centres 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 implemented throughout Stages I and II, some differences in application can be seen in the two periods. Especially due to a dramatic shift in government policies, China’s urbanization and rural to urban migration patterns were very different between the 195 Os and 1960-1978. The period of the 1950s was characterized, as indicated in Figure 2.2 in Chapter 2, by a massive rural-to-urban migration due to  65  Rural-to-Urban Transition in China Changing Policies -  large-scale city-based industrial construction in both the first five-year plan as well as the development plans of the Great Leap Forward. Consequently, the urbanization level rose from 10.6 per cent in 1949 to 19.7 per cent in 1960 (Li 1988: 2 1-25). However, this pattern dramatically changed during the 1960s and the early part of 1970s. Following Mao’s orders, large number of urbanites were sent to the countryside due to the economic failure of the Great Leap Forward as well as increasing population pressure in urban areas and for other ideological reasons. 16 Kirkby calls such strong control over urbanization and industrialization, as well as directing the urban population out of the industrial cities as unique attributes of the Chinese road to urbanization (Kirkby, 1986). The result was that China’s overall urbanization level dropped from 19.7 per cent in 1960 to 17.9 per cent in 1978 (Li 1988: 21-25). This was accomplished by sending down millions of urbanites to the countryside during this period (Bernstein, 1977).  (c). Policies Towards Rural Industry  As the empirical part of this thesis (in Part II and III) will discuss changes along the 400 kilometre Shenyang-Dalian corridor, we must also consider some of the important policy shifts in the field of rural-based industries. During the 1950s, particularly during the Great Leap Forward period (1958-1960), government policies towards rural industrial development were characterized by an encouragement given to massive rural industrialization. At the time of the formation of rural communes in 1958, most ofthe labour force in rural industries was engaged in building and operating small-scale industries, including the famous ‘Backyard Furnaces.’ The number of female labour force  The reasons for the ‘sent down were (1) to reduce the rural-urban differences the ‘three 6 ‘ great differences’ (the difference between urban and country; between workers and peasants; between mental and manual labours); (2) to provide urban youth a re-education opportunity among the poor and lower-middle peasants (Ma, 1977); (3) to avoid the urban problems emerging in the cities of other developing countries, such as serious social, economic and political problems related to congestion and crowding (Calcutta and Djakarta are two of the frequently cited examples). For details, see Ma, 1977; Murphey, 1980: 44; Naughton, 1988: 35 1-386; and Bernstein, 1977. -  66  Rural-to- Urban Transition in China Changing Policies -  participants 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 correct the negative effects of the previous policies and the commune movements (such as ignorance of the agricultural sector and the unrealistic plan of the Great Leap Forward). Thus during the early part of the 1960s, Chinese leaders turned towards supporting agricultural development. In Liaoning province, the provincial government stipulated in 1962 that •‘communes and villages are not encouraged 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 on Developing Rural Non-farm Production,” which made recommendations for the promotion of nonfarm activities under the management of production brigades.  One ofthe reasons to encourage the development of small-scale and community-based nonfarm 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 the reasons for this problem was low agricultural productivity resulting from a low level of farm mechanization. It was therefore decided by the central government to improve the mode of cultivation, irrigation and drainage through mechanization within ten years (Editorial Group of the Chinese People’s University, 1979: 46). The central government announced that the target of agricultural mechanization could be reached by ‘walking with two legs,’ i.e. by combining indigenous technical knowledge with urban technology. Therefore, the central government suggested that all  rural 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 developed mainly to serve local agricultural production (Editorial Group of the Chinese People’s University, 67  Rural-to-Urban Transition in China Changing Policies -  1979: 46). These small-scale industries and extension services in rural areas were set up under the banner of ‘self-reliance’. The goods and services provided by the small enterprises somehow supplemented or supplanted more traditional local inputs, which had been less effective than anticipated, 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 serving local farming oriented and the government had no specific plans to organize rural industry. It was not until 1976 that a new government organization the Department ofEnterprise Management was -  -  established at the central level under the Ministry of Agricultural and Forestry to manage new rural enterprises. Later, similar offices were opened at the provincial and county levels. The establishment of this government organization indicated that the government had finally relaxed its ideological differentiation between ‘workers’ and ‘peasants’ and recognized the importance of village and township enterprises in rural China (Wickramanayake and Hu, 1993: 21).  In summary, before 1978 the Chinese government emphasized an urban development pattern based 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 city were reduced and reorganized so that its role as a centre to transfer new technology and innovations to the hinterland was diminished. Although rural industries were developed, most of them were small-scale, self-reliant, and served agricultural activities. These were only intended to improve productivity in agriculture by making farmers’ tools and other supplies (Howard, 1990), and were oriented primarily towards the adoption of indigenous technology for agri-feed and agro-processing such as the ‘five small industries’ as indicated above (Lo, Salih and Douglass, 1981: 42). Consequently, a dualist economic development strategy (city-based industrialization and farming dominant rural economy) formed the main feature of China’s space economy in this period (Chan, 1994).  68  Rural-to-Urban Transition in China Changing Policies -  4.2.2. Post-1978 Policy (Stage 111) Since the economic reforms of 1978, the growth of rural industry (which requires urban service for markets and technological assistance), increases in agricultural productivity (and extra agricultural products need urban markets), and released rural surplus labour force (which needs urban employment markets) challenged the closed urban door. Chinese scholars have argued that the urbanization is “a necessary consequence of the economic development of society, whatever the country, 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 ruralurban interaction. The 1980 National Conference on Urban Planning Work continued to reiterate the earlier urban settlement policy of controlling the growth of large cities and developing smaller urban places. Yet by this time, the focus had already shifted to finding out how to go about developing the urban 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 more developed coastal regions, a greater role in China’s spatial economy (Yeung and Ru, 1992). Among them, the following four factors are very important. First, urban centres are now viewed not merely as centres of manufacturing and administration, but more as multi-functional centres containing commercial activities, technological innovation, financial services, and centres of education. As one official commentary has put it, large cities possessed “high technology  ...  a strong material base, and  modern management expertise,” all of which were essential but scarce resources for China’s modernization (Renmin ribao, 1981, March 3). Second, as discussed in Chapter 3, restrictions were relaxed in the early 1980s to allow higher levels of population mobility (e.g. the relaxation of the household registration system). The third factor was that the government changed its policy to encourage more outward-oriented economies in rural China. Fourth, permission was given to develop so-called ‘free markets’ (i.e. most of prices were determined by market demands), both in rural and urban areas (Leeming, 1993). Since these reforms, the formal distinction between the agricultural population and the urban resident population became, in practice, less important. 69  Rural-to-Urban Transition in China Changing Policies -  Rural Industrial Development Policy:  In contrast to the pre- 1978’s rural industrialization, the post-1978 goals of rural industrial  development were designated to absorb surplus rural labour, raise farmers’ incomes, and so prevent migration to the cities. Consequently, rural industrial policies have become more oriented toward assisting the production of consumer goods for the towns, and supplying components to urban industry (Howard, 1990). Its growth has therefore been a feature mainly of urban peripheries.  Since the economic reforms of 1978, the environment for the further development of the non agricultural economy in rural areas has been strengthened, and rural industries have received a new impetus because they absorbed large number workers who left farming in the 1980s. The previous policy for developing rural industries, which encouraged localities to become self-sufficient by producing goods for all their needs instead of specializing in what they did best, has been replaced since 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 township  enterprises have not limited themselves to the ‘five-small’ industries, and many individual and private enterprises 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 even the export market.  During the 1979-1983 period, central government policies towards rural industries were illustrated by Document No 1 issued by the central government on January 1, 1984 (Research Department of Secretariat, Central Committee of Communist Party of China, 1987). This document recognized 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 the commune system disintegrated and eventually dissolved in 1984, towns and townships as well as  70  Rural-to-Urban Transition in China Changing Policies -  villages and households  -  individually or in new ‘economic associations’ t7  -  also became freer to  undertake all kinds of non-agricultural activities of their own choosing. In particular, outwarddirected industrial production for a larger market with deregulated inputs emerged as a profitable alternative to farming, and one which attracted a growing share of the rural labour force and contributed a growing share of the rural product.  In March 1984, the central government agreed to the suggestion from the Ministry of Agriculture, Animal Husbandry, and Forestry to change the name of ‘Commune and Brigade Enterprises’ to ‘Township Enterprises’ to reflect a departure of these enterprises from the direct control oflocal government (previously the commune or village) to a more autonomous form in terms of decision making (Research Department of Secretariat, Central Committee of Communist Party of China, 1987: 195). The new term also indicated the new legal status of enterprise ownerships, such as township, village, multi-families (several family owned), and individuals (private). Moreover, other government departments, such as transportation, taxation, and banking, which were closely related to the development of rural industries, refurbished their policies and programs to support rural industries. Following these changes, Chinese rural industries since 1984 have experienced among the most 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 the occupation structure of rural areas, particularly in the open coastal zones. They have shifted from being predominantly agricultural to being more non-agricultural. Meanwhile, peasants are allowed to settle in towns or cities full-time to engage in industry, business, and service trade (Lee, 1992: 89118).  In summary, during the post-1978 period, urban areas are not viewed merely as locations for  ‘ E 7 conomic Association refers to a business operated in a cooperative manner by several families. 71  Rural-to- Urban Transition in China Changing Policies -  manufacturing, but rather as multi-function centres, providing services, markets, and technology for the surrounding rural areas. Meanwhile, policies have also encouraged the development of non agricultural activities in rural areas. Increasingly, a contradiction has grown between the existing urban development policy (favouring smaller towns and cities) and other reform policies such as the -  re-emphasis of development on the coastal cities of Open Cities, Special Economic Zones, and Economic Open Zones, as well as all capital cities of the provinces enjoying the same privileges as the Open Coastal Cities. Clearly, the focus on economic growth challenges the ‘small cities and towns’ urban development policy and its feasibility.  4.3. The Search For Optimum Urban Development Policies Debates Over City Growth -  Perhaps not surprisingly, small city and town urban development policy (Buck, 1981: 114146) has been increasingly questioned and challenged by academics and planners.  The policy is  premised on the belief that the close linkage of industry and agriculture in smaller cities and towns will allow fuller use of local natural resources, raw materials, and manpower. For instance, China’s basic 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 force resulting from the combined effects of population growth and the introduction of the responsibility system in agriculture 18 (Goldstein and Goldstein, 1990).  Such an urban development policy led to formal abandonment of the previous rural commune system (Ash, 1988: 529-555; Johnson, 1986: 12-13; 1982: 430-45 1) and between 1978 and 1992  the re-designation of existing settlements as small towns. The highest ranked level of towns are now the county-capital towns, which are the administrative, economic, and service centres for their counties. At the second level are other towns classified as urban, which have administrative jurisdiction not only for themselves but serve also as centres for their surrounding districts. At the  For details see Yamamoto, 1983: 129-157. 8 ‘ 72  Rural-to-Urban Transition in China Changing Policies -  lowest level are the rural towns including various market centres, and villages. Each of these types -  ofplaces 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 cities have not been successfully implemented, especially since the mid-i 980s, due to the large number of rural migrants finding their way into large cities (Wang, 1994). While the government wishes to restrict the growth of large cities, its basic urban policy stance also calls for various measures to improve the infrastructure of these cities for commodity circulation, including better provision of storage facilities, warehouses, transportation, and communication in large urban areas. Further, the government has recognized that large and medium-sized cities play a key role in rural development by providing convenient locations of free markets for peasants, by offering sites for wholesale markets for 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 with the relatively higher growth rates in China’s urban economies during the 1980s, led to a large number of rural migrants travelling to and working in urban areas, either permanently or temporarily. For example, in 1989, the ‘floating population’ ’ in Shanghai reached 2 million (17 per cent of the city’s 9 total 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 while their official registration status formally remained agricultural. This also indicates the inadequacy of the Household Registration System to truly reflect changes in the labour force’s employment status after 1978.  ‘ T 9 he floating population refer to those peasants who stay in a city without official urban registration status. 73  Rural-to-Urban Transition in China Changing Policies -  The debate over the ‘correct path’ to urban development overwhelmed the 1980s’ urban geography scholarly circles in China. The focus was which category of city size (small, medium or large) should be the optimum size, and which category should be given priority for further development. The Chinese policy makers and urban scholars challenged existing approaches to national urban development policy in recent years (Ma, 1988: 67-82). There now exists in China different viewpoints over the best or correct policy for city growth under conditions of structural shifts in the economy, and a large and growing redundant rural labour force.  4.3.1. The ‘Small City And Town’ Approach  The ‘small city and town’ (cities and designated towns with population less than 200,000; for details, 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, such as 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 expensively and can serve as ideal points of local urban development in an economy undergoing fundamental structural 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 be absorbed 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 200 and 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 overwhelmed -  by unemployed and underemployed residents, and due to existing infrastructure inadequacies there would be no room for further expansion.  Second, the cost of expanding existing large cities is too much. According to an estimate by 74  Rural-to-Urban Transition in China Changing Policies -  Hou and Zhang, each additional urban employed labour requires about 10,000 yuan (about US$1,200) fixed asset investment and approximately 5,000 yuan (about $600) for social welfare. If the 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 and others 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 year during the decade of 1985-95 (Leeming, 1993: 153; Lei, 1990: 30-32), China would require about 240 billion yuan (US$28 billion) to 400 billion yuan (US$48 billion) each year to relocate all its rural surplus 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 surplus labour for about 15 years. Township enterprises employed roughly 10 million of China’s rural surplus labour each year (Hou and Zhang, 1989: 18). This has in some degree released the pressure on existing large urban areas.  A third argument is that the small city and town policy would reduce the pressure of development 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’ Approach In contrast to these views, some Chinese scholars challenge the existing government policy  and 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 treasury  ....  ....  large cities are acting as the super  [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 scale economies and economic efficiencies can best be captured in very large cities, which in general perform at much higher levels of productivity than the medium and small ones. Those who favour the fhrther growth of large cities argue that China’s large cities are not over-developed and, in fact 75  Rural-to-Urban Transition in China Changing Policies -  they have been largely neglected since 1949. Therefore, they urge the government that additional infrastructure and investments in existing large cities would improve their efficiency and yield better results. They further point out that Chin&s transport and communication networks are still inefficient  and fragmented except in the very large cities. Consequently, so it is argued, economic investments in 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 energy resources. Thus it has been found that the township and village enterprises consume more energy and produce more pollution than state industries in large cities, as well as perform at a lower economic input/output ratio (Zong, 1988).  Several Chinese scholars have contributed to this debate. Thus Zong (1988) used 12 economic indices and calculated their values according to conditions in 324 cities. He divided the cities into five categories as follows: extra-large cities with a population of 2 million and above; large cities with a population from 1 to 2 million; large-medium-sized cities with a population of 500,000 to 1 million; medium-sized cities with a population of 200,000 to 500,000; and small cities with a population ofless than 200,000. The results showed that for the ten indices measuring outputs and profits, the larger cities consistently performed better than medium and small cities. Zong therefore concluded that ‘the larger the cities, the more the industrial output value or the total volume of profits  and tax payments were transferred to the state° (Zong, 1988, 17). To support his argument, he listed his evidence from the research as following: First, in terms of economic benefits, those derived from extra large cities were more than double those from small cities; second, in terms of profits and tax payments, for every 100 yuan input the yield from extra large cities was twice as high as from small cities; third, in terms of profits and tax payments to the state derived from every square kilometre of land, the value for extra large cities was seven times higher than that for small cities. Finally, in terms ofper worker public investment, the results of the analysis showed that it cost 1,827 yuan per worker in 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 of 76  Rural-to-Urban Transition in China Changing Policies -  encouraging the growth ofmedium and large-medium-sized cities (ie. those with population between 200,000 and one million). According to Zong, these “large-medium-sized cities have important economic functions  ...  [and that] they would be developed further with the help of their known  facilities.” The rational development of these cities requires their closer linkage with small cities and towns on their peripheries, regional planning schemes that define their relationship with large and extra large cities, and linkages with their rural hinterlands. The appeal of developing medium-sized cities 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 size for China’s urban development policy (Fan, 1988: 24-32). Among them were optimum economic returns to investment; optimum social returns; and the degree of comfort enjoyed by the people in the city. He conceived of the relationship between investments and economic returns on the one hand and 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 scale would grow. However, Fan concluded that when a city expands to a certain scale, then ‘spill-over effects’ would occur consisting of economic, environmental and social problems such as traffic congestion, shortages of housing, a drop in the quality of service, the rise of production costs and environmental pollution. Fan analyzed data from 324 cities in 1985 and calculated such values as the average net output value per worker at current prices, the profit tax of original value for every 100 yuan in fixed assets, profit tax from every 100 yuan of government investment, and all-personnel labour productivity measured in yuan per person. The results of Fan’s calculations showed a direct and 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 not provide figures on the cost of providing urban services. Using only ‘output’ figures, the direct relationship 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 of 77  Rural-to-Urban Transition in China Changing Policies -  large 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 largecity/metropolitan growth strategy. According to his approach, an emphasis should be placed on large coastal cities which would be allowed to grow rapidly. His argument is based on the relationship between increased investment in large cities and the resulting greater efficiency and productivity which are believed to result. Implicit in this strategy is the increased mobility of population from rural hinterland areas and from other parts of China to these coastal cities in response to greater perceived opportunity for higher paying jobs in coastal cities (Yeung and Hu 1992).  In yet another study, Guo and Wang challenged the existing government policy and provided detailed quantitative analysis comparing the economic performance of large cities with medium and small-sized ones. Their analysis showed generally that the larger the city size, the relatively higher levels of economic performance (Guo and Wang, 1988: 10-17).  Besides the difference between the coastal and inland cities, Lou and Pannell found that generally the relationship between higher industrial efficiency and larger city size was significant and positive (Luo and Pannell, 1991: 48).  4.3.3. The Medium-Sized City Approach  If extra large cities are beset with pollution, over-crowding and other problems, and if small cities and towns do not give fair returns to investments, then, some Chinese scholars have proposed that 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 urban development. He argued that a large city has better performance of agglomeration but with limited 78  Rural-to- Urban Transition in China Changing Policies -  capacities for further development. According to Liu, small cities had the least economic efficiency  and had only a limited performance in terms of agglomeration economies. By contrast, medium-sized cities have satisfied agglomeration efficiency but needed support for further development of their capacity (Liu, 1992: 142-145).  Other scholars within this school have also argued that a medium-size urban policy has better comprehensive efficiencies. If large cities allow better economic efficiencies and small cities and towns are close to the rural areas acting as efficient rural market centres, medium-sized cities would epitomize 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 other hand, their agglomeration effects are better than that of small cities and towns. Therefore, mediumsized 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 urban development policy have been city size-oriented.  Moreover, it can be argued that all these  approaches, either small city, medium city or large city policies, are based on an underlying assumption that further economic development will take place in cities, i.e. according to some western 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 the  whole China. Considering the poor level of available basic urban social infrastructure, a city-centred urban development approach is, by itself’ rather questionable. In fact, a survey conducted by the Chinese government in 1985 shows that the rural surplus labour force reached as much as 30 to 50 per 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 urban population. Such a large potential urban population would form a huge burden for existing urban centres. For example, this is far beyond Chin&s current or foreseeable financial ability. If per capita 79  Rural-to-Urban Transition in China Changing Policies -  living space in China’s urban area is assumed to be at the same level as it is now (about 7 square metres per capita (SSB, 1992), the additional 270 million new urban residents would require almost 1.89 billion square metres of housing space, which would cost 1,894 billion yuan, assuming 1,000 yuan construction cost per square metre (Liu, 1992: 54). This would be equivalent to the total annual capital construction investment of 1992. The minimum requirement of basic infrastructure, such as schools, hospitals, and so on, for this potential urban population would be equivalent to China’s total existing fixed assets in all existing cities. That is to say, if China accepted the policy of a city-based urban transition to transfer all its rural surplus population into urban centres, China would need to double every city size and capacity (Liu, 1992: 54). It should also be noted that China’s existing urban infrastructure (either in large, medium, or small cities) has been overloaded for a long time as evidenced 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-loaded urban infrastructure.  The situation in the near future is therefore not particularly optimistic, especially as one report estimated there are likely to be around 440 million people the total population of America and -  Russia combined moving into Chinese cities by 2040 (Economist, 1994: 34-3 5). Therefore, both -  in the present situation and in the future it may be impossible for urban-centred urbanization to become the major urban transition model. The reasons for this lies in the sheer size of China’s rural surplus labour and the insufficient capacity of urban infrastructure and government finance in the short term. Therefore a city-centred urban transition policy by itself would be virtually impossible to solve China’s potential urban population, and so eventually China has to search for alternative solutions. The EMR paradigm proposed by McGee and others may provide a reasonable option. The next 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 following chapters), the extended metropolitan region concept (including the two city cores of Shenyang and Dalian, and the surrounding rural areas along the major transportation lines) may be an ideal size of  area to manage a new form of urban transition. 80  Rural-to- Urban Transition in China Changing Policies -  4.4. Summary  The previous material has proposed and explained a ‘three-stage’ approach to rural-urban transition in China (Figure 2.2). Focussing on this approach, this part of thesis has also discussed Chinese 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, in order to understand the Chinese experience since 1949 in terms of the urbanization process. This chapter has shown that the period from 1978 represented a dramatic shift in urban development policies. The Chinese government has changed its policies towards rural-urban relation during the post-reform period. During the Maoist period (1949-1978), a ‘self-reliance’ policy (or the doctrine of ‘walking on two legs’) in production positively encouraged the establishment of rural non agricultural (as well as urban agricultural) activities. But it also advocated the mobilization and use of resources to this end, which tended to limit opportunities for wide-scale economic development in rural areas (Schran, 1993: 137). In addition, the policy’s emphasis on heavy industry production in cities (‘material production’), as well as on austerity in consumption and the need to establish ‘productive cities,’ had extremely negative effects on the provision of many services in urban areas and their surrounding regions.  In open societies with market economies, people change locations as well as their jobs and skills 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 has proceeded at a similar pace. In China, strict migration policy and city-based industrialization created a model of industrialization without an accompanying growth of an urban population and any segregated city-countryside relations, particularly in the period of 1960-1978 (Stage II).  The reform program introduced in 1978 relaxed previous regulations over population mobility and so encouraged the development of a rural non-agricultural economy and an urban service sector. 81  Rural-to- Urban Transition in China Changing Policies -  These changes led to a conflict between existing urban development policy (maintaining ‘small cities and 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. Existing -  research on this issue indicates a rapid change of rural-urban relations. However, Chinese policies are still focused on the description of the magnitude of the rural urbanization phenomenon, rather than examining changes in the rural population and the processes of how rural peasants are transferring to an urban life style. Moreover, very little has been said about the theoretical implications of the emergence of such a phenomenon and what the policy issues might be. The emergence of mega-urban regions in China also raises a critical question. Are they a new form of settlement transition, and if so, what are the validity of EIV[Rs as distinct urban form and how do they represent the on-going urban transition in Asia, as McGee and others proposed? The thesis now turns to the empirical research conducted on the Shenyang-Dalian development corridor in Liaoning province. The following parts of this thesis provide detail and insight through an empirical study of the Shenyang-Dalian area, its history and contemporary development process and its spatial form.  82  The Regional Context  PART TWO CHARACTERISTICS OF THE SHENYANG-DALIAN REGION  The second theme of this thesis concerns the emergence of an Extended Metropolitan Region in the Shenyang-Dalian corridor. This part of thesis gives a broad analysis of the region’s spatial  patterns and post-1978 changes at a macro level (i.e. using county level data). Chapter 5 deals with the developmental history of the Shenyang-Dalian corridor in order to understand why the EMR process has emerged in this particular region during the 1980s and the particular characteristics of rural-urban integration. Chapter 6 deals with the spatial patterns of the Shenyang-Dalian EMR during the post-1978 period.  CHAPTER 5 THE REGIONAL CONTEXT  5.1. Introduction  Liaoning province stands in the southern part ofNortheast China. Its surrounding provinces are Jim in the north, the Inner Mongolia Autonomous Region in the west, and Hebei province in the  southwest. The province has geopolitical significance in China, as to the north lies the Russian Far East, and to the east it borders the Korean peninsula. Across the sea to the southeast is Japan (see Figure 1.2 and Figure 5.1). Northeast China is largely landlocked except for a passageway through Liaoning and its major port on the Yellow Sea, Dalian. Liaoning’s territory is about 145,700 square kilometres, accounting for 1.5 per cent of China’s land mass. The total population of the province was 38.68 million in 1992. The Shenyang-Dalian corridor is located at the southern part of the 83  The Regional Context  Figure 5.1 Location of the Shenyang-Dalian Corridor  84  The Regional Context province, with the Bohai sea to the west and the Yellow sea to the east. The corridor is roughly 375 kilometres long and 100 kilometres wide (Figure 5.1) (the Shenyang-Dalian EMR will be defined and discussed 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 through discussing its natural resource endowments as well as a review of its development history. This is necessary to provide a temporal and regional context for the study of the Shenyang-Dalian EMR.  5.2. Liaoning As China’s Industrial Heartland The Liaoning province has been considered one of China’s most important industrial bases since the 193 Os. Its economic profile and natural resource endowments sharply differ from other mega urban regions in China. For example, with limited natural resources, mega-urban regions such as Shanghai-Nanjing-Hangzhou, Guangzhou-Shenzhen, and Beijing-Tianjin, act as reprocessing centres where most of their industries crucially depend on the other provinces to supply raw materials. By contrast, Liaoning is only the industrialized region in coastal China with rich natural  resources (Wang, 1994: 45-61).  5.2.1. The Natural Resource Endowment  Liaoning 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 (Lu  and Zhou, 1992). Table 5.1 shows that the reserves ofmany ofresources found in this province, such as 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 total world deposits (Lu and Zhou, 1992: 178; LSB, 1993: 37; Zhao, 1992: 46). 85  The Regional Context  Table 5.1 Major mineral deposits in Liaoning province, 1992 deposit  % of China  rank in China  manganese (1,000 ton)  41,506  10.0  3  n.a.  refractory clay (1,000 ton)  94,176  n.a.  n.a.  30.5  n.a.  solvent imestone (million ton)  1,680  16.6  1  112,900  22.8  1  bentonite (1,000 ton)  84,663*  19.0  5  magnesite (million ton)  2,350  84.8  1  oil shale (1,000 ton)  369  11.6  3  talc (1,000 ton)  43,386  47.0  1  silica (1,000 ton)  98,542  10.6  2  borax (1,000 ton)  24,935  58.0  1  copper (1,000 ton)  255  n.a.  n.a.  diamond (1,000 carat)  11,935  54.5  1  lead (1,000 ton)  348  17.4  n.a.  jade (1,000 ton)  300  62.8  1  zinc (1,000 ton)  718  14.4  n.a.  andalusite (1,000 ton)  6,314  54.0  1  molybdenum (1,000 ton)  438  96.3  1  deposit  % of China  rank in China  7,030  n.a.  n.a  natural gas (billion m ) 3  38  25.7  petroleum (million ton)  770  iron ore (million ton)  types of resources coal (million ton)  Note:  *  types of resources  Data in 1984; n.a.= not available.  Sources: Lu and Zhou, 1992: 178-202; LSB, 1992, 1993: 37; Zhao, 1992: 46.  86  The Regional Context  Moreover, 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 major characteristic, 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 sea and 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 Liaoning province are of national significance such as maize, rice, beans and wheat in north Liaoning; and agribusiness in southern Liaoning, such as tussah (75 per cent of China’s total), and apples (65 per cent of China’s total) (Chen, 1985: 14-16; Liaoning Foreign Affairs Office, 1992: 14) (see Figure 5.2).  5.2.2. Concentration Of Heavy Industry Together, these abundant natural resources have offered Liaoning a material base for the development of heavy industry (manufacturing and resource-based mining industry) and high-value agriculture based on local specialty products. But of greatest significance is that today the Shenyang Dalian corridor contains China’s largest heavy industrial centre (Hao, Yu and Li, 1985). This manufacturing belt is located in the central part of the province, lying within a 60 kilometre diameter  of Shenyang city. It includes a variety of heavy industrial cities with over 3 million population, such as Shenyang (the capital city of the province) and a number of heavy industrial cities over 2 million ° The 2 population (such as the coal mining city ofFushun, and the coal and iron mining city ofBenxi). region also contains the iron-steel and petro-chemical industrial city of Liaoyang which has over a half million people (Figure 5.1). Chinese scholars refer to the Shenyang-Dalian region as China’s  Here, urban population includes non-agricultural population in urban districts (see the 20 type 2 definition of China’s urban population discussed in Chapter 3). 87  __  __  The Regional Context  Figure 5.2 Major Agricultural Production Districts in the Shenyang-Dalian Region ±.  Rice, Maize and SoyBean  :  •::::::.  o  .  •  . •  •±____J_  -.  anjrn  ....•...  .  .j  . .  . .  - —1±_  Fisiiun  2  Liaoyang  Marine Products  •  Shenyang  ±-  . . .  -  . .  -Haicheng  Yingkou L -- •-±2Dash1q1ao -  •  --±-  :.:. — —  .  .  gdian Pu1andian—  Dalian  Sources: Feng and Luo, 1985: 284-28 5; Liang and others, 1990.  88  The 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; 187188).  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 its investment in this region on the heavy industrial sectors, which comprised 88.2 per cent of total provincial industrial investment during the 1949-1991 period (LSB, 1992: 185). This has led to the share of heavy industrial output value in total industrial output to account for more than 72 per cent in this region by 1991, compared with 55 per cent in Beijing-Tianjin, 53 per cent in Jiangsu, 50 per cent 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’s total 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 the national total, compared with its 1.5 per cent of the national territory and 3.5 per cent of the national population. Despite the rather low overall percentage share, all these heavy industrial products, as well as non-ferrous metal products produced in this province, ranked first in all China’s provinces and municipalities in 1991. Other major heavy industrial production, such as generated electricity, crude salt, and plate glass, ranked second in China. Yet other indicators reveal the industrial nature of this province. Thus large enterprises’ output, as well as capital construction investment ranked second in 1991, slightly after the province of Jiangsu, Shanghai, and Guangdong, respectively (Table 5.2).  89  The Regional Context  Table 5.2 Selected industrial production in Liaoning, 1991 (billion yuan) indicator  total  % of China  rank in China  45  6.6  2  2  12.8  3  71  18.0  2  240  10.0  2  capital construction investment  13  6.2  2  1  plate glass (million standard box)  10  11.7  2  3  large enterprises’ output  79  10.0  2  total  % of China  rank in China  112  9.2  2  generated electricity (billion kwh)  25  16.0  1  natural gas (billion m ) 3  6  9.7  1  sodium carbonate (10,000 ton)  petroleum products  12  17.2  1  crude salt (10,000 ton)  steel (million ton)  10  17.4  1  iron (million ton)  12  18.2  crude oil (million ton)  14  9.7  heavy industrial output ferrous metal products non-ferrous metal products  indicator  Source: LSB, 1992.  90  The Regional Context  53. Characteristics Of The Urban System The Shenyang-Dalian region’s cities were all major industrial locations in the pre-WWII period. Rapid industrial development in the post-1949 period further expanded the range of cities and the scale of the urban system in Liaoning province. Although, like the rest of China, rapid increase in urbanization levels during Stages I and III (Figure 2.2) and stagnation of urban growth during Stage II were major features ofurban growth, the urban system in Liaoning province is rather distinctive in China as it is dominated by very large cities. Thus, as noted above, Shenyang has an urban population of over 3 million, and is the fourth largest city in China (after Shanghai, Beijing, and Tianjin). 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 for one-ninth of the nation’s population in cities over one-million population. Shenyang, Anshan, and Fushun all grew to their present size due to their proximity to valuable mineral resources, whereas  Dalian was developed due to its strategic seaport location. Besides these four, there are also several large 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 urban population of cities over one million accounted for more than 56 per cent of the total urban population in Liaoning, compared with 41 per cent in China, 37 per cent in Beijing-Tianjin, and 49 per cent in Shanghai-Nanjing-Hangzhou. The urban population of large cities (i.e. those cities over 50,000) accounted for more than 78 per cent of the total urban population in Liaoning, compared with 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 urban centres, 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 the large 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 urban 91  The Regional Context  Table 5.3 The urban system in the Shenyang-Dalian region, other major EMRs and China, 1991 Liaoning City-size (1,000)  number of cities total  %  Shanghai-Nanjing-Hangzhou  urban population total  number of cities total  %  urban population total  %  %  1  4.6  365.5  26.6  2  3.6  964.4  44.5  1000-1999  3  13.6  416.8  30.3  1  1.8  111.2  5.1  500-999  5  22.7  302.2  22.0  5  9.1  347.4  16.0  200-499  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  18.2  Total  22  100.0  1,376.3  100.0  55  100.0  2,167.2  100.0  >  2000  China  Guangdong City-size (1,000)  number of cities total  urban population  %  total  %  number of cities total  urban population  %  total  %  >2000  1  4.76  295.32  37.55  9  1.9  3,475.8  22.5  1000-1999  0  0.0  0.0  0.0  22  4.6  2,858.7  18.5  500-999  1  4.8  59.6  7.6  30  6.3  2,030.2  13.1  200-499  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  21.5  Total  21  100.0  786.4  100.0  479  100.0  15,463.5  100.0  Note: Urban Population here include non-agricultural population in urban districts. Source: Adapted from SSB (China Urban Statistical Year Book), 1992: 18-31. 92  The Regional Context  infrastructure was shaped by their colonial experience (mainly from Japan) in the 1930s and the early 1940s, as well as the communist government industrial policies of the 1950s (Li and Shi, 1988: 147155).  5.4. The Historical Development Of The Shenyang-Dalian Corridor  Having briefly sketched those geographical features of Liaoning, the chapter continues with a review of the historical development of the Shenyang-Dalian corridor. Figure 5.3 shows the chronology ofLiaoning’s economic development (LSB, 1992). It indicates that over a time span of about 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-sufficient  agricultural economy (pre-1840), colonial investments, especially the construction of transportation facilities and seaports (1840-1930), large scale development of both modern industries and transportation 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 during the 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 War in 1840. During this period, this region was virtually an ‘empty land’ on the northern periphery of China 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 Chinese provinces of Hebei, Shanxi, and Shandong migrated and settled along the banks of Liaohe river in Liaoning 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 of Northeast China, was aimed at the preservation of the northern frontier’s political and cultural status quo. In fact, Chinese immigration to this region was 93  The Regional Context Figure 5.3 Selected Historical Events Impact Space Economy in Liaoning Province, 1660-1992 PERIOD  Early Stage A  The Period of 18401930  MAJOR EVENTS  Seif-sufficent agricultural economy  1840 The Opium War with Britain  Some agricultural products exported (soybean, tussah silk)  1900 Japanese constructed major railways and foundation of South Manchurian Railway 1931 Japanese controlled Manchuria, foundation of Manchukkuo  1945 Civil war The Period 1948 Communists in power of Enhan1953 First and Second cement Five-Year-Plan of Heavy 1966 Third and Fourth IndusFive-Year-Plan triization  1978 Rural reform  The Reform Period  1984 Relaxation of regulations on population mobility 1988  1990 A  DOMINANT PATTERW OF ECONOMIC DEVELOPMENT  1660 Emergence of the cities of Liaoyang & Shenyang  A  The Japanese Colonial Peod  MAJOR INFRASTRUCTURE  Yingkou port open Dalian port open Large-scale railway construction mainly by Japanese  City-based industrialization  Rapid expansion of urban population; export of industrial raw materials & agricultural products; the emergence of the heavy heavy industrial cities of Anshan, Benxi, Fushun, and Shenyang; Liaoning becomes China’s largest industrial centre Further enhancement of city-based mining and heavy industry  Rapid rural Coastal Open City program development; designates Dalian & Liaodong diversification of rural and urban Peninsula as Coastal economy; rural Economic Open Areas industrialization; Establishment integrated of three special rural-urban open zones economy Opening of Shenyang-Dalian expressway; Dalian and Shenyang International Airports  Sources: Based onLiang, 1985 and Liaoning Year Book, 1992 94  The Regional Context prohibited in pursuit ofthis objective until 1840 (Sun, 1969: 5), although some Chinese settled in this frontier 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 northern frontier, and the settlement of a new region. During this period, economic development was small scale 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 1840-1930 Following 1840, the entire Northeast China region (comprising Liaoning, Jilin, and Heiongjiang 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 encouraging  migrants to settle in Northeast China in order to fill the ‘vacant land’ before it could be occupied by foreigners (Sun, 1969: 19). Yet after the Opium Wars in 1840 between China and Britain, this region was forced to open its borders to foreign investors. The year of 1860 represents a logical starting date for the study ofLiaoning’s modern economic growth as this was when the Sino-Russian Treaty of Peking (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 this region’s foreign trade centre in the 19th century. Later, the opening of three ports Luda (now -  Dalian), Antung (now Dandong), and Dad onggou clearly marks the beginning of a continuous and -  sustained rise in the volume of regional exports, such as agricultural products (soybean and tussah silk) (Liang and others, 1990: 20-2 1). Meanwhile, railway construction was commenced and lines were built by both Russia and the Japanese. In the late 19th century, the Liaodong peninsula was ceded to Japan as a result of the Sino Japanese war of 1894, but in 1895 European powers led by Russia forced Japan to return this area to China (Pauley, 1946). Further conflict of interests between Russia and Japan in the Far East led 95  The Regional Context to the Russo-Japanese War in 1904. The treaty of Portsmouth in 1905, ending this war, gave the Russians 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 near Dalian) (ibid: 16). The development of the Shenyang-Dalian region accelerated in the early 20th century after the completion of two major railways in 1903 and 1907, respectively. The Chinese Eastern Railway, built by Russia, cut across Northeast China from west to east and linked the Trans Siberian Railway with Vladivostok, a total length of 1,780 km. The South Manchuria Railway then linked Chinese Eastern Railway to the seaport of Dalian, a length of about 1,145 km. At the same time the Beijing-Shenyang (Mukden) Railway, which was built by China with English finds, was completed. As Sun’s research indicates, these construction activities could not have failed to stimulate the local economy (Sun, 1969: 19-20).  However, during this time, modem industry was still limited and consisted of very small-scale iron ore mining in the Anshan and Liaoyang areas, which was the beginning of exploitation of the region’s natural resources. At the turn of the century, the economy in Northeast China comprised ofthree main traditional industries. The first of these extracted oil from local soybeans. Originally the residue was used in Northeast China as cattle feed, but later it was also exported to be used as agricultural fertilizer. The second traditional industry ground wheat into flour, while the third distilled a famous and very potent liquor from kaoliang (red sorghum) (Sun, 1969: 61). Other industries meeting local needs also developed on a small scale. To quote a foreign traveller who visited Northeast China near the close of the nineteenth century:  “Mcrnufacturing in Manchuria is not advanced... There is but little weaving, and the cotton cloths which are in universal wear are imported from China, but dying establishments were numerous. Capital furniture, boxes, and coffins are made, elegantlypainted and lacquered, as well as a kind ofparquetry, and the carpenters are unrivalled in the manufacture of carts and cartwheels. Tanning and the preparation of the fur reached a very high pitch of excellence, and the leatherfor shoes is good There is a little carving ofmarbles” (James, 1888: 14-15).  96  The Regional Context  This quotation reveals the economic features of Liaoning during second half of the 19th century. At that time, development in this region was triggered on one hand by the simultaneous opening of the seaports to foreign trade and on the other hand by the construction of the two railways. These twin developments took place in parallel with higher levels of population, through in-migration, and the development of agricultural development. The expansion of population and the extension of agriculture under cultivation were reinforced by market growth for agricultural exports in foreign trade. In the absence of output data for this period, it is uncertain whether or not this was a clear case of export-led growth. However, as Fairbank’s study shows, export expansion outpaced the 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 industrial development. 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 basic foundation for large-scale modern industrial development, particularly mining and manufacturing industries. The opening of treaty ports combined with the start of railway operations lowered the cost ofinland transport on the one hand and facilitated access to foreign markets on the other. These changes 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 in the inter-war period and the development of the Shenyang-Dalian corridor. In 1935, the Soviet government sold their rights in the Chinese Eastern Railway to the Japanese Government. By restrictive legislation and other activities Japan managed to exclude most other foreign interests in Northeast China, leaving it in complete control (Zhang, 1992: 107-119; Pauley, 1946: 17-18). Japan had fought two wars in this area one against China and the other against Russia before it could -  -  97  The Regional Context obtain a foothold in Northeast China and so did not intend to waste the opportunity. Modem industry in the northern part of Northeast China (nowadays Heilongjiang province) was very limited,  but industrial development in the southern part ofNortheast China (Liaoning province) showed rapid progress. This difference in growth between the north and south of the wider region was partly due to the southern part of Northeast China’s proximity to seaports. Insofar as possible, the Japanese administration wanted Northeast China to be kept as an area of rich resources for Japanese manufacturers. During this period, Northeast China’s raw materials exports were handled largely by Japanese merchants and shippers, and Northeast China’s natural resources were developed for Japans benefit (Sun, 1969: 63). The South Manchuria Railway (SMR) was chosen as one of the major instruments by which the administrations’ policies were to be carried out. The company was formed by a Japanese imperial ordinance of June 7, 1906, “for the purpose of engaging in railway traffic in Manchuria,” but subsequently broad powers were conferred on the SIVIR to engage in subsidiary enterprises, including mining, water transportation, electrical enterprises, sale on commission of the principal goods carried by the railway, warehousing, real estate transactions within the railway zone and, 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 million  tons by 1944. Additional mines, supported by fresh capital, new methods and machinery, were all responsible 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 in Northeast China and the balance exported to Japan for processing (Pauley, 1946: 17). During the 1937-45 period, the Japanese considered Northeast China as an integral part of their empire, and to a much larger degree than in other conquered areas, Japan developed Northeast China as one of the most important economic centres in China (Zhang, 1992: 107-119; Pauley, 1946: 18). The basic industries, particularly, mining, transportation, and electric power generation, received prime attention.  98  The Regional Context Table 5.4 shows that during the Japanese colonial period of 193 1-1945, the value of industrial output in Liaoning grew at an average annual rate of 11.9 per cent, and the industrial output value in 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 of mining industries expanded population in the existing urban areas, such as Shenyang, Fushun, and Benxi, and also new urban centres, such as Anshan, emerged. These cities were close to, or on, the sites of mining resources. All large urban centres were dominated by one or two primary heavy industrial sectors. By way of illustration, the city of Benxi grew around the coal 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 chemical industries (Wu, 1985: 7). With the development of mining industries and the expansion of the transportation system, more and more people migrated from surrounding rural areas and nearby provinces of Shandong and Hebei to these urban centres. As a result, the cities’ population in the Shenyang-Dalian corridor increased dramatically. Table 5.5 shows the rapid growth of selected cities inLiaoning province during the period of 193 0-1945. For example, the urban population of Anshan grew at an annual rate of 20.8 per cent, as it expanded from only a small town with a population of several thousand in 1930 to a city with around 250,000 persons in 1945. The city of Benxi grew at an 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 time was one of Asian largest iron and steel works (Wu, 1985: 165; Song, 1987: 50).  99  The Regional Context  Table 5.4 Major heavy industrial production in Liaoning, 1932-1944 1932  1935  1938  1940  1942  1944  Total (millionton)  0.4  0.6  0.9  1.1  1.6  1.2  9.5%  Exported toJapan(1)  0.3  0.4  0.2  0.4  0.7  0.3  8.3%*  as % of Japan’s total import  49.6  35.1  19.6  50.5  81.4  52.0  (1) as % of Japan’s total production  31.9  20.1  8.2  12.3  16.7  10.3  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%*  N  -  Crude Coal (millionton)  Growth#  --  --  Notes: #-Average annual growth rate between 1932-1944; *_Average growth rate between 19321942. Source: Yue, 1992: 9.  100  The Regional Context  Table 5.5 Selected city population in Shenyang-Dalian region, 193 0-45 (‘000) City Name  1935*  1930  1941  1945  Growth Rate (%) (193045)  Shenyang  612  527  1,130  1,8812  83  Dalian  292  362  7201  7962  74  Fushun  109  n.a.  210  2052  4.6  Anshan  17  33  224  287  20.8  Benxi  20  n.a.  120  1862  17.1  Liaoyang  74  n.a.  103  119  3.2  Yingkou  96  n.a.  135  213  5.0  Notes:  *  Data from Manchuria. Average annual growth rate; 1: data in 1942; 2: data in 1944.  Source: Song, 1987, P. 50.  101  The Regional Context  In addition, agriculture continued to be one of the most important means of livelihood in Northeast China. The Japanese established agricultural experimental stations, to increase crop yields and to introduce new crops, at a time when the Chinese population were exploited and used as a source of cheap farm labour (Teng, 1992: 171-191).  The above data indicates that Japanese colonial power played a most important role in the formation of the present industrial pattern and urban system in Liaoning. It also is true that the colonial experience assisted the establishment of strong infrastructure facilities, particularly railways and urban infrastructure such as a water supply system, roads, and streetcars. This process was accompanied by city-based industrialization, and at this time the cities of Liaoning attracted people from the surrounding countryside, as depicted in the traditional urban transition model.  5.4.4. The Enhancement Of Heavy Industrialization During 1949-1978 After the China-Japan war (193 8-1945) and the Chinese civil war (1945-1949), the economy  and 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 the region’s history and relatively well-developed urban and industrial facilities established during the colonial period. The government’s plans for economic growth and urban development for Liaoning in the 1950s were designed with the assistance of the Soviet Union. Those key cities in mineral-rich locations with convenient transportation facilities (such as Anshan, Benxi, Fushun, Shenyang) were given 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 of the 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 total capital investment in Liaoning went to heavy industrial sectors while 64 per cent of the total  investment were used for the reconstruction of urban facilities and other buildings damaged by the war (see Table 5.6). 102  The Regional Context  Table 5.6 Capital investment in Liaoning, 1949-1980 (billion yuan)  Period  Total  Heavy  Light  Investment  Industry  Industry  Others  %  Total  %  Total  %  Total  %  Total  %  1.44  100.0  0.44  30.6  0.06  4.2  0.01  0.7  0.93  64.5  6.50  100.0  4.36  67.1  0.28  4.3  0.25  3.8  1.61  24.8  8.27  100.0  5.69  68.8  0.54  6.5  0.45  5.4  1.60  19.3  2.26  100.0  1.40  61.9  0.09  4.0  0.27  11.9  0.50  22.2  3.35  100.0  2.03  60.6  0.13  3.9  0.52  15.5  0.67  20.0  11.04  100.0  6.94  62.9  0.57  5.2  0.99  9.0  2.53  22.9  14.08  100.0  8.84  62.8  1.30  9.2  0.86  6.1  3.08  21.9  46.94  100.0  29.71  63.3  2.96  6.3  3.38  7.2  10.89  23.2  Total 1949-  Agriculture  1951 1952-  1957 19581962 19631965 19661970 19711975 19761980 19491980  Source: LSB, 1992: 184-185.  103  The Regional Context  As the central government emphasized new construction projects during Stage I as well as new 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 large number ofurban people in the major cities in Liaoning were sent down to the countryside. Although there is little data which records the numbers ‘sent-down for each individual city, the urbanization level 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 ‘Ruhr industrial base’ was extended during this period. Table 5.7 shows that the average growth rate of heavy industrial output value in Liaoning was as high as 42.2 per cent during the 1950s. Other analysis 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 industrial centres for the nation (Table 5.8).  However, of significance for this study, rural-urban relations were artificially kept distinct and separated. City-based industrialization was segregated from surrounding rural areas where self sufficient agricultural development policies were implemented.  104  The Regional Context  Table 5.7 Economic growth rates in Liaoning province Period  GDP  Agri. and Industry  Agriculture  Industry (a)+(b)  (%), 1949-9 1 (a) Heavy Industry  (b) Light Industry  19491960  18.2*  27.0  8.8  34.0  42.2  23.4  19611978  6.7  8.4  5.0  8.8  8.9  8.6  19791991  13.1  9.0  5.6  9.4  8.2  11.8  Note:  *  Growth rate between 1952 and 1960.  Sources: LSB, 1992: 34 and 64-65.  105  The Regional Context  Table 5.8 Major industrial sectors in selected cities of Shenyang-Dalian region  City  1991 City size (million)  Major Economic Sectors Formed before 1978  Shenyang  4.5  an industrial city with complete array of industries, particularly machine building and processing; an economic centre in Manchuria  Dalian  2.4  ship industry and chemical industry; seaport  Anshan  1.4  Anshan Iron and Steel Corporation, the largest iron and steel complex of China  Fushun  1.3  coal mining  Benxi  0.9  a city majoring in iron and steel, coal and building materials  Yingkou  0.6  a good foundation of light and textile industries; seaport  Liaoyang  0.6  new petro-chemical industry  Source: Liaoning Foreign Affairs Office, 1992: 9-11.  106  The Regional Context  5.4.5. The Region in Reform (Post-1978) Since the reform period, the Shenyang-Dalian region became one of the coastal open economic zones in China, which were given priority by the Chinese government in terms of development 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-Dalian corridor received several privileges. First was the establishment of the Liaodong Peninsula Economic ’ in 1984. This economic development zone includes 9 cities and 16 counties and 2 Development Zone districts and it covers an area of 53 thousand square kilometres (about 36.1 per cent of province’s area). In 1991, the population of the zone was about 22.1 million, accounting for some 56.4 per cent ofthe province’s total. In line with the open door policy, the objectives of this economic development zone have been to promote an export-oriented economy and establish a window to the outside world for the whole of Northeast China (Japan-China Northeast Development Association, 1991).  The second privilege that the Shenyang-Dalian corridor received from the government was that metropolitan governments were permitted to upgrade several rural-based settlements into county-level cities along the corridor in order to promote rural-urban linkages and to fhrther develop the middle (mainly rural) part ofthe corridor between Shenyang and Dalian (Figure 5.4). The impact of establishing new county-level cities along the Shenyang-Dalian corridor was to reinforce the growth corridor’s economic status, as the corridor between the two urban poles could receive higher levels ofurban services (eg. technological consultancy, financial services) and closer accesses to urban markets.  A major consequence has been that these new county-level cities have been transformed into sites for the relocation of urban-based industries (Dashiqiao and Gaizhou, for example, become the  21 Peninsula Economic Development Zone covers the Shenyang-Dalian corridor Liaodong as well as the coastal parts of Jinzhou, Jinxi and Dandong metropolitan regions (for details, see Japan-China Northeast Development Association, 1991 and Figure 8.1 in Chapter 8). 107  The Regional Context  Figure 5.4 Cities of the Shenyang-Dalian Corridor, 1980-1992 1980 Shenyang:::... • Liaoyang  Fus un  • : :: Panjm  Anshan  • :: : :::  Shènyang:  :Yingkqu: Fushun  :Liaoyang  d  Panjin  Haioheng  1992  :  Si1yaIg  -Yrngkou  TiexiEconomic .  Liaoyang  Panjm  :Wafangdian:.  •Ansian  1-Taicheng.. .Yingkou • :Dashiqiao  City Size (million population) ‘3  Fushun  Benxi  Development Zone  Dalian  2.00 or more  •  .  and Technological  . : Gizisoü :: : :  Bayuquan Special—j.  .  Economic  • •  1.00 1.99 -  Dalian  : :  Zone  0.50 -0.99  Wafangdian .  •  0.20-0.49  •  below 0.2  Tuho  9  50  100km  Zhuanghe  • Pulandian O  -  :  Dajian Economic  and Technological  • .  Dahan  Development Zone  Sources: Liaoning Statistical Year Book, 1993; Liang, Xixing, 1990: 259; Sketch of Liaoning Urban Development 1985-90, 1991.  108  The Regional Context  sites 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 by 1985, two county-level cities, each with a non-agricultural population over 200,000 in 1992, see  LSB, 1992: 353) had been established along the corridor. One of them, Wafangdian, is located between the cities of Dalian and Yingkou. Another one, Haicheng, is a county-level city halfway from Shenyang to Yingkou (Figure 5.4). By 1992, another five county-level cities were established Dashiqiao, Gaizhou, Pulandian, Zhuanghe, and Jinzhou an outer suburb of Dalian city). All these -  newly-established county-level cities are located in the corridor between two urban poles Shenyang -  in north and Daiian in south. Such upgrading ofthe status of counties was aimed initially at providing more urban-type functions and services to the surrounding rural areas in the middle part of the corridor. Interestingly, the establishment of county-level cities has changed the spatial pattern of the urban system along the corridor. The dominance of the two urban poles (the urban clusters centred on Shenyang in north and Dalian in south) in 1980 was reduced by an increasing number of small and medium-sized cities between them (Figure 5.4).  The third economic initiative granted was the establishment of several foreign investment zones. As already noted, the city ofDalian was designated in 1984 as one of China’s 14 coastal open cities and three national level special economic and technological development zones (the Dalian Economic and Technological Development Zone, Shenyang Tiexi Economic and Technological Development Zone (sometimes called Tiexi Industrial Transformation Zone), and Bayuquan Special Economic Zone (sometimes called Yingkou Economic Development Zone)) were developed in the Shenyang-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 economic development. From 1991, Liaoning became China’s second largest foreign investment region after  109  The Regional Context  Guangdong province in the south. Table 5.9 shows the total utilized foreign investment and the growth rates in the major coastal province during the period of 1984-199 1. The average annual growth rate of foreign investment during the period of 1984-199 1 was over 80 per cent, which was more than three times China’s average (Table 5.9).  Among foreign investors, Japanese firms have been the largest (LSB, 1992), mainly because of Liaoning’s historical connection with Japan, and the Shenyang-Dalian corridor is familiar to many Japanese businesspeople alive today who lived in Liaoning before WWII. As noted earlier, this region, and the wider area ofNortheast China, was originally the beachhead for Japans invasion of China in the 1930 and early 1940s, and was the home to hundreds of thousands of Japanese before the war (Abegglen, 1994), Dalian is a comfortable location for many Japanese, and has a Japanese school, a mayor fluent in Japanese, and a joint Japan-China Industrial Park which in 1992 was being expanded by a Japanese-led consortium (ibid).  The Japanese in Dalian and elsewhere in Liaoning have focused on high value-added or capital-intensive investments rather than low value-added products, such as luggage or toys. They include Onoda Cement, Toshiba, Canon, Nisshin Oil, along with many Japanese banks and trading companies. That Liaoning is a familiar territory to many senior Japanese is evidenced by the remarks ofPresident Tasuku Takagaki ofthe Bank of Tokyo about his grammar school days in Dalian. Other current 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, South Korean businesses are becoming linked with local ethnic Koreans living in Liaoning (Liaoning has the second largest group of ethnic Koreans in China, after Jilin province) (SSB, 1992b).  110  The Regional Context  Table 5.9 Utilized foreign investment in the selected coastal provinces, China 1984-199 1 (1.JS$ million)  Annual Growth  1991  1984  Rate 1984-91  Region Total  % of China  Total  (%)  % of China  15.2  0.6  971.6  8.4  81.1  643.8  23.8  2,583.7  22.4  22.0  Shanghai  41.9  1.5  330.2  2.9  34.3  Shandong  16.4  0.6  373.1  3.2  56.3  Fujian  61.7  2.3  570.5  4.9  37.4  Jiangsu  93•3*  --  314.7  2.7  27.5  Tianjin  0.6*  --  260.9  2.3  237.0  11,554.0  100.0  23.0  Liaoning  Guangdong  China Total  2,705.0  100.0  Sources: Data in 1984 from People’s Daily (Overseas Edition, Jan. 23, 1992), Data in 1991 from LSB, 1992: 465.  *  Data in 1986.  111  The Regional Context Liaoning appears to have become one of the most attractive places in China for foreign investors. Thus the Japan External Trade Organization (JETRO), evaluating the economic potential of China’s provinces, rated Liaoning above all other provinces in attractiveness, including the major investment centres of Guangdong, Shandong, and Shanghai. Liaoning was rated especially highly in terms of its industrial base, and matched Shanghai in terms of infrastructure, which, like those of Taiwan and Korea, was originally put in place by the Japanese (Abegglen, 1994).  5.5. Summary From the analysis of this chapter, it is clear that Liaoning’s rich mineral resources and its favourable location attracted the attention of both the formal colonial powers and the Chinese communist government. Liaoning has been a major focus of development and economic growth in  China 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’s Republic, Liaoning’s urbanization process was accelerated by the city-based industrialization of Stage I (1949-1960) (accompanying with large number of rural-to-urban migrants). After, then, city-based industrialization was carried out without rapid urban growth during Stage II. Stage Ill witnessed many 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, have incorporated this region into the contemporary global economy. The administrative reforms have also led to changes in rural villages which will be addressed in Chapter 7. These changes have reshaped the Shenyang-Dalian corridor’s rural-urban relations and facilitated the emergence of an EMR structure in this particular location. The study now turns to the investigation of the spatial form of the Shenyang-Dalian EMR.  112  The Emergence of the Shenyang-Dalian EMR  CHAPTER 6 THE EMERGENCE OF THE SHENYANG-.DALIAN EMR, 1978-1992  6.1. Introduction Asian EMRs, as McGee (1987a, 198Th, 1990) and Zhou (1991) described, are typically large  urbanizing regions, sometimes stretching over hundred or more kilometres, often located between and including two existing major urban centres. ElviRs are characterized by intense concentrations and 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 that the Shenyang-Dalian corridor has taken on the form of an EMR (albeit one with Chinese characteristics), and to describe, by analyzing county-level data, the major features of its space economy as it has evolved from 1978-1992. The region today constitutes a complex accumulation ofpeople and wealth with highly-mixed agricultural and non-agricultural activities, high levels of rural industrialization, and an increasing growth of non-rural occupations.  6.2. The Emergence of The Shenyang-Dallan EMR In order to investigate the detailed patterns of the recent spatial economic transition in this region, the following six indices were collected which define the Shenyang-Dalian EMR. The first two indices are the proportion of the non-agricultural labour force in the total labour force and per capita rural industrial output value. These indices reflect the levels of the intensification and productivity of rural non-agricultural activities along the Shenyang-Dalian corridor. The third index is per capita gross agricultural output value, which indicates the agricultural production level. Index 4 is population density. Using per capita net income and per capita GDP, indices 5 and 6 indicate the 113  The Emergence of the Shenyang-Dalian EMR living 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 of the largest cities. For Liaoning province, these data involve 33 counties, 11 county-level cities, and 30 suburbs of major cities. The spatial patterns of the economic activities are illustrated by Figures 6.1-6.6 (each is discussed in detail in the following sections). According to the classification 22 in Figure 6.7, counties, suburban districts and city cores were grouped into four main standards types, which are a result that the six indices together were used to classify the spatial patterns of the economic 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 non agricultural activities. It included the 10 city suburban districts (Dongling, Xinchengzi, Yuhong, and Sujiatun in Shenyang, Shuncheng in Fushun, Jiubu in Anshan, Laobian in Yingkou, Ganjingzi, Lushunkou, and Jinzhou in Dalian) and the two county-level cities of Haicheng and Wafangdian. The  type 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 the population density was over 400 persons per square kilometres. In particular, the Dalian suburban  Each index is classified into four levels (Types). The lowest level for each index was equivalent to Liaoning province’s average in 1990. The ranges of other indices’ values were determined by the distribution of the data itself. For example, the dividing line between Types ifi and IV for Index 1 (share of non-agricultural labour in total labour force) is 20 per cent (see Type iv in Figure 6.7), considering Liaoning’s avearge level was 22 per cent in 1990. The dividing line between Types II and III was 25 per cent because the non-agricultural population in China’s total population was 26 per cent in 1990. Similar considerations were applied to other indices. Types III and IV were basically considered as non-EMR counties and their indices were generally equivalent to Liaoning’s average level. For example, in 1990, the average level of per capital rural industrial output value (Index II) in Liaoning province was 1470 yuan/person; per capita gross agricultural output value was 1290 yuan/person; population density in rural Liaoning was 160 person/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). 114  The Emergence of the Shenyang-Dalian EMR  Figure 6.1 Index 1: Share of Non-Agricultural Labour in Total Labour Force (by County), Liaoning, 1991  :::::  <20%  N  i:::::::  20-25% 25-30%  >30%  ç/%.,J%  f N  1 \ } (:::\ A’ I:::::) (••\‘  ,  ‘ ‘  ‘‘L —  ‘  ‘1  :u(’ ‘‘  .:.% ‘ T”V.’  —../::::2 ,/:•:::c ‘ /  &I (( 1” h”N: : : : : : : t  ‘  —  1tr’  —  .  ::  .—‘1  -  ‘ ‘  “ —  /  :::L —  ‘  A  ‘I  •  .  / // ‘ ‘ ‘).::::: ‘ ‘ - ‘/: : ‘  —  /: .::: : ::  <-z’j’:: : ::: : %‘ - ‘.7 --: : /  :  ytw’  ‘I .>çI  — - -  ‘‘a’  -  ‘  —  — -  ,  ,  ‘  —  :::  ,  / ‘ ‘  ,•, , , ,  —  /  ‘  ‘zzz./’  ... ,_,  large city • • medium-sized city • small city or town (site of county government)  ‘  /  —  ‘  /  ‘  v  50  100km  Dalian Note: Population data for Benxi’s suburban districts (Pingshan, Xihu, Mingshan, and Nanfen) include city core population Source: Liaoning Agricultural Economic Statistical Year Book, 1992.  115  The Emergence of the Shenyang-Dalian Ei’YIR  Figure 6.2 Index 2: Per Capita Rural Non-Agricultural Output Value (by County), Liaoning, 1991 (yuan/person) <800 ,  ,  800-1200  >200:  •  .  •  .  •  .  .  .  ::•:::  .  /  . .,,,,,  •  .  .  :  :  1200-1600  - /  •,/,  ,,, ,•,,  ,/ ,,  ———  —‘  •  ...  ::  ::.  .  /  ...  .  •....  ,,,,, .  o  50  100km  ‘‘  d  Note: Population data for Benxi’s suburban districts (Pingshan, Xihu, Mingshan, and Nanfen) include city core population Source: Liaoning Agricultural Economic Statistical Year Book, 1992  116  The Emergence of the Shenyang-Dalian EMR  Figure 6.3 Index 3: Per Capita Agricuirual Output Value (by County), Liaoning, 1991  (yuan/person)  ETE:  ::::::: <1000  -  ‘ ‘  1000-1200  1200-1400 1400-1600 >1600  7/17 :::  -  -  ,,  ,  — ‘ ‘ ‘  —  .  ::.:.  —  ‘  —  ‘  ‘  ,,, ,,,  /.::: .  :::::::::.  ‘  ‘‘ / ‘,  :  -  ‘  -  .  ::“  —  ‘  .‘  / ,  :  •  ::::::::  ..  / a  a •_ a  50  100km ,,,  Note: Population data for Benxi’s suburban districts (Pingshan, Xihu, Mingshan, and Nanfen) include city core population Sources: Liaoning Statistical Year Book, 1992; Liaoning Year Book, 1992  117  The Emergence of the Shenyang-Dalian EM)?  ,  Figure 6.4 Index 4: Population Density (by County), Liaoning, 1992 (person/sq. 1cm) <150  ,,—  150200 200-250 250-300  -  >300  -  .::::::.,,,  ,  ,,  ,,,  -  ,,,, —  :..:  ,.,, ::::..::::  ‘ , ,, .-  /  —  ,, —  ‘  ,  — ,.-  •,,, ...  ‘  :::: :::;::::::::  .  ‘ ‘ :::‘. ..  0  50  100km V  4  Note: Population data for Benxi’s suburban districts (Pingshan, Xihu, Mingshan, and Nanfen) include city core population Source: Liaoning Statistical Year Book, 1993  118  The Emergence of the Shenyang-Dalian EMR  Figure 6.5  Index 5: Per Capita Net Income (by County), Liaoning, 1991  <750  :....:. ‘ / -  Per Capita Net Income (yuan/person)  >,  )  750-900  ,-  900-1050 1050-1200 >1200 j::::  N’  27 ‘2Y7 /////-//j7 LcJ - - ‘  .,,,,  \/  I  ii  :-  ::: :  ‘“—.‘ — — ‘,  c  — — —  :,>“,  o.Th C —.  3  .  , iH&4  .  r/z/,//ffL/t J  ±Zt  1,,--_-,4gj  7 /  / r  .f I /;‘ z-y.a f//7/J•_ A / / / J/J ;_:‘ ‘.___  7  ‘Sf77/f  .  •A  4.L—c  ‘W’, — /  ,-‘  .  ..,,,  ‘4i+i+flW.  /}  (7/f  • ‘-./ f  /  ‘-1  •/., / ( - , 7••_ l•1 /  ,  .  -  7  ,:-••  ..::  -  1i14i  ..  -  . .  J—.’--.  -  / /1 I7 •, / / /, — 1 , p ,. 1/ 7 7 7 c • V / / 1 .‘ - .‘ A 7 I I )‘ — Aif ,-‘ J ftl+ftV  !‘  .  ,_  o  50  100km  E’  — —  Note: Population data for Benxi’s suburban districts (Pingshan, Xlhu, Mingshan, and Nanfen) include city core population Sources: Liaoning Statistical Year Book, 1992; Liaoning Year Book, 1992  119  The Emergence of the Shenyang-Dalian EMR  Figure 6.6 Index 6: Per Capita GDP (by County), Liaoning, 1992  (uan  I  4Sö?J’. 3000  ‘P0fl  2000  0011 1 L2  j  A  ‘°  j  hi j °j k  .LNoj •  ioi  A  50  4 :j A  100km  I  _, .  j  I  i /  0  ‘:1 0  City County  Government  Notes: Data for suburbs of Benxi, Liaoyang, and Jinzhou near Dalian are per capita agricultural and industrial output value; Population data for Benxi’s suburban districts include city core population Source: Liaoning Statistical Yearbook, 1993  120  The Emergence of the Shenyang-Dalian E4JR Figure 6.7 The Shenyang-Dalian Extended Metropolitan Region in Liaoning, 1991  ::  :.:  .  :•.  /j.  /  )\i  r—’  .  .  .  . .  . . .  ..  .  ,. ..  • o  50  SmailCityOrTown  100km  • Secondary City • Major Metropolitan Centre Type  Index I  Index 2  Index 3  Index 4  Index 5  Index 6  >30%  >2000  >1600  >300  >1200  >4500  Typell  25-30%  1600-2000  1400-1600  250-300  1050-1200 3000-4500  Type III  20-25%  1200-1600  1200-1400  200-250  900-1050  2000-3000  <20%  <1200  <1200  <200  <900  <2000  Type I  Type IV  —  :: ::  Notes: 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: per capita rural industrial output value (yuan/person); Index 3: per capita gross agricultural output value (yuan/person); Index 4: population density (person/square km); Index 5: per capita net income (yuan/person); Index 6: per capita GDP (yuan/person). 121  The Emergence of the Shenyang-Dalian EMR district of Ganjingzi and the Anshan suburban district of Jiubu reached over 1000 persons per square  kilometre. The areas of type II were also characterized by high agricultural productivity and intensive non-agricultural activities. Non-agricultural labour accounted for about a quarter to one third of the total labour force in the rural counties. Type II covered those rural counties around the city of Shenyang and the counties between the cities of Anshan and Yingkou, as well as suburban districts of Benxi, including the counties of Xinmin, Liaozhong, Dengta, and Dawa, and county-level cities of Dashiqiao and Ganzhou.  The rural counties of type III were located around the areas of both type I and type II and comprised those counties at a transitional stage between type II and type IV. Thus their indices were lower than those for type I and II, but higher than type IV, where the share of the non-agricultural labour force in the total labour force, agricultural productivity, and income levels, as well as population density, were lower (Figure 6.7). Type IV predominantly agrarian counties are in the western, northern and eastern parts of the province.  In summary, Types I and II together comprised the main body of the Shenyang-Dalian EMR and form the area which will be used for further investigation. It constitutes the city cores and suburban districts of Shenyang, Dalian, Anshan, Fushun, Benxi, Yingkou, Liaoyang, the county-level cities ofHaicheng, Wafangdian, Dashiqiao, Gaizhou, and Pulandian, and the rapidly urbanizing rural areas between city of Shenyang and Dalian (see Figure 6.7). In the past 15 years, this region has experienced rapid socioeconomic change. In particular, those areas within the transport corridor between the large metropolitan centres which were defined traditionally as rural areas up to the -  1970s are now increasingly characterized by urban features, such as diverse consumption patterns, -  a predominantly non-rural employment structure, and non-agricultural sources of income, and generally higher income levels. However, for the purposes of official government policy, these areas are still considered as rural by the Chinese government. As covered in Chapter 3, they are not truly 122  The Emergence of the Shenyang-Dalian EMR  urban according to any official government definitions. For instance, neither the number of the officially-defined non-agricultural population nor the size of settlement in the rural areas of the Shenyang-Dalian corridor fit into any of the standards set up by the Chinese government. Yet as will be shown later in this thesis they are not purely rural areas. The socioeconomic features of these areas lying between Shenyang and Dalian have long departed from their traditional rural characteristics. 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 interface along 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 social change and cannot be simply characterized as the urban expansion of existing cities into the intervening rural districts. Rather, this region represents a new type of settlement pattern in China’s space economy.  6.3. The Concentration of Population and Wealth  The economic role of the Shenyang-Dalian EIvIR is that of a ‘main Street’ of China in terms of organizing socioeconomic activity. As outlined in Figure 6.4 and the following sub-sections, it is an area with an enormous and powerful concentration of people, wealth, and economic activities.  6.3.1. Concentration of Population  One ofthe major features ofthe Shenyang-Dalian mega-urban region is the high concentration ofpopulation. The very highest population density, outside the cities, is found in areas surrounding the major urban centres, such as the outer-urban-districts of Shenyang, Anshan, Benxi, Yingkou and Dalian cities (see Figure 6.4). The adjoining counties of Liaozhong, Denta, Haicheng, and Dashiqiao (the location and counties’ names of the EMR and non-EMR are shown in Appendix 3) are also among those with the highest population density. The counties of Wafangdian, Pulandian, Gaithou, and Liaoyang generally have higher population density than other counties outside the corridor. Such 123  The Emergence of the Shenyang-Dalian EMR  spatial juxtaposition has created much higher population densities which are frequently much higher than the suburban areas oflarge Western cities. For instance, compared with the population density of 580 persons per square kilometre in Great Vancouver Regional District (GVRD, Strategic Planning Department, 1994), the population density in Ganjinzi a suburb of Dalian city, was 976 -  persons per square kilometre in 1992 (LSB, 1993). In other suburbs (Sujiantun and Dongling of Shenyang’s suburbs, Lushunkou, Jinzhou of Dalian’s suburbs), the density was above 400 persons per square kilometre. The county of Yingkou had population density as high as 433 persons per square kilometre and most counties in the corridor had population densities over 250 persons per square kilometre (ibid) (Figure 6.4). In fact, with 34,987 square kilometres of land area, which accounts for 24 percent ofthe provincial land, the Shenyang-Dalian corridor contained about half of the provinc&s population, and about 66 per cent of the province’s non-agricultural population (Table 6.1).  6.3.2. Concentration Of Wealth The corridor is not only a centre of population concentration but also a centre of dense economic activities. Data in Table 6.1 show that in 1991 the mega-urban region covered only 24 per cent of the provincial area, but produced two thirds of the provincial GDP and agricultural and industrial output; contained 66.5 per cent of the non-agricultural population; and generated more than 70 percent of rural industrial output value (village-run enterprises), foreign investment and commodity flows. Compared with China’s total, this region, which covers only 0.4 percent of the land area, contained 1.8 per cent of China’s population and 3.8 per cent of the non-agricultural population. The share of GDP, industrial output as well as foreign investment ranged from 3.6 to 6.6 per cent of China’s total. The degree of concentration for various economic indices 23 of the Shenyang-Dalian corridor in both Liaoning province and China was very high, based on a comparison  Here, the degree of concentration is measured by the Shenyang-Dalian EMR’ share of a certain index in Liaoning province/China divided by the Shenyang-Dalian EMR’s land share in Liaoning province/China. 124  The Emergence of the Shenyang-Dalian FJv1R  Table 6.1 Selected socioeconomic indices in the Shenyang-Dalian EIVIR’, 1991 S-D EMR’ Land area (thousand square  %of Liaoning  DCin 2 Liaoning  %of China  DCin 2 China  350.0  24.0  1.0  0.4  1.0  Population (million persons)  19.6  49.8  2.1  1.8  5.0  Non-agricultural population (million)  11.1  66.5  2.8  3.8  10.6  GDP (billionyuan)  71.6  66.7  2.8  3.6  10.0  )  Agricultural and industrial output (billionyuan)  148.4  68.6  2.9  4.7  13.1  Industrial output value (billionyuan)  135.3  72.7  3.0  5.9  16.4  Village industrial output (billion yuan)  11.8  73.8  3.1  4.5  12.5  Utilized foreign investment (million US$)  763.3  78.6  3.3  6.6  18.3  Long-distance passengers (million)  300.0  64.3  2.7  n.a.  n.a.  Commodities transported (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 in Liaoning 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.  125  The Emergence of the Shenyang-Dalian EMR with the share of the corridor’s land area in both the province and China. Table 6.1 also indicates a relatively high degree of concentration of both economic activities and flow of commodities and population. For example, the concentration index of agricultural and industrial output, industrial output value, village industrial output, and utilized foreign investment in this corridor was over 3 and 10, compared with Liaoning province and China as a whole, respectively (Table 6.1).  6.4. Spatial Patterns Within The Corridor  It may be argued that the significant concentration of economic activities in the Shenyang Dalian 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 concentrated important economic activities. In Liaoning province, the spatial patterns of the rural economic transition in the EMR differed from those in the non-EIVIR regions. In other words, the EMR rural areas and the surrounding suburban regions of the large city centres are sharply distinguished from the non-EMR rural areas. For example, Table 6.2 compares the economic growth levels between EMR and non-EMR counties. It shows higher average levels of socioeconomic indices in ElVIR  location than in the non-EMR regions of Liaoning province. The population density in the EMR averaged 355 persons per square kilometre, compared with only 151 persons per square kilometre in non-EMR parts ofLiaoning province (see Table 6.2).  Many of the indices of labour productivity  and 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 of both the non-agriculture industry per county in the EMR comprised more than three times of that in the non EMR areas (Table 6.2).  This higher degree of population and wealth concentration can be further portrayed by the spatial 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 by  126  The Emergence of the Shenyang-Dalian EMR  Table 6.2 Rural county’s economic growth levels between EMR and Non-EMR in Liaoning*, 1992 II’DEX  S.D EMR (1)  Non-EMR (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%  355  151  235%  2,336  1,704  137%  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%  Population density (jersonIper square km) Per capita rural GDP (yuan/person) GDP per land area (yuan/sq. km)  Notes: *Rur counties refer to counties, county-level cities, and suburbs of the large cities (including villages, market towns, and designated towns). * *Data in 1991. #Non-agricultural labour force excluded those peasants engaged in both farming and non-farming activities. Non-EMR refers to all rural counties and suburbs outside the Shenyang-Dalian EMR. Sources: LSB, 1992a, 1992b and 1993a. 127  The Emergence of the Shenyang-Dalian EMR  higher values along the Shenyang-Dalian corridor compared with other parts of the province. Thus those areas with higher rural industrial productivity were those which lay within the corridor. The output 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, and Shenyang, Anshan in the north and adjoining regions.  Exports and Foreign Investment:  As a centre of economic activities, the corridor has very strong external linkages with the rest ofthe world. As indicators of this process it was found that foreign investment and exported goods were extremely concentrated in the corridor areas. As noted earlier in Chapter 5, in terms of foreign investment, Liaoning emerged as the second largest centre of foreign investment in China. Japan is the largest foreign investor in Liaoning (followed by Taiwan, US, South Korea, and Hong Kong). In 1991, Japanese direct investment reached US$246 million, accounting for 45.6 per cent oftotal foreign direct investment (LSB, 1992: 204). The major sectors of foreign investment in 1992 were manufacturing (82.9 per cent), real estate (8.2 per cent), and construction (5.9 per cent), while the remaining sectors accounted for only 3 per cent (LSB, 1992: 582).  Within the province, cities and their suburban districts of the Shenyang-Dalian corridor received the largest share offoreign investment. As Figure 6.9 shows, the two largest host locations to foreign investment in 1992 were the city cores and the suburban areas of Shenyang and Dalian. Fushun, Anshan and Yingkou also accounted for quite a significant share of the total.  The commodities exported overseas from this province ranked second in China (behind Guangdong), reaching US$ 5,770 million in 1991 (LSB, 1992: 638). Considering either exported goods by original places or imported goods by receiving places, the corridor was the major trading region of Liaoning province. Figure 6.10 shows the exported and imported goods by metropolitan regions of Liaoning province. It indicates that the metropolitan regions of Shenyang, Anshan, 128  The Emergence of the Shenyang-Dalian E44R  Figure 6.8 Industrial Output Value of Village-Run and Private Rural Industries Per Land Area (by County), Liaoning Province, 1992  Note: in 100,000 yuan/square kilometre (in current price) Source: Liaoning Statistical Year Book, 1993  129  The Emergence of the Shenyang-Dalian EMR  Figure 6.9 Foreign Investment (by County), Liaoning, 1992  Source: Liaoning Statistical Year Book, 1992 and 1993.  130  The Emergence of the Shenyang-Dalian EMR  Figure 6.10 Exported and Imported Goods (by Metropolitan Region), Liaoning, 1991  Source: Liaoning Statistical Year Book, 1992  131  The 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 of intense socioeconomic activities in northern China. Of importance to this thesis, the analysis also indicates that since 1978 not only the urban centres but also the rural areas along the corridor have acted as core economic regions.  6.5. Characteristics Of The Shenyang-Dalian Corridor -The Coexistence of Agricultural And Non-Agricultural Activities, 1978-1992 The discussion now turns to the analysis of other features of the spatial and socioeconomic changes, that have characterized the Shenyang-Dalian corridor during the post-1978 period, in particular an intensive mixture of agricultural and non-agricultural activities. The coexistence and intermix of agricultural and rural non-agricultural activities within the same economic region comprise one of more important spatial and economic factors that separates the pattern of rural and urban settlement transition in the Shenyang-Dalian region from that found in urban areas of most Western industrialized nations. The rich mix of both agricultural and non-agricultural activities, which has evolved 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 intensiveness of both agricultural and non-agricultural activities in the corridor.  6.5.1. Non-Agricultural Activities  The transition of the rural labour force from farming to non-farming activities, and the transition of the workforce from full-time farming to engagement in both agricultural and non agricultural 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 has taken place in the Shenyang-Dalian mega-urban region at a tremendous pace following the rural 132  The Emergence of the Shenyang-Dalian EMR reforms of 1978. As Figure 6.1 indicates, the Shenyang-Dalian corridor was characterized by a high  proportion of the labour force engaged in non-agricultural activities. By 1991, for the Shenyang Dalian region as a whole, about 71 percent of rural GDP came from non-agricultural activities, and 33 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 actual number of the rural non-agricultural labour force in the Shenyang-Dalian EMR is likely to be much more than the number recorded by the official city Statistics Bureau (City Statistical Bureau collects rural migrants mainly from city Public Security Bureau). This is because some of them engaged in non-agricultural activities can not be recorded by the public security bureau. 24 In addition, some peasants engaged in both farming and non-farming were still recorded in the census as belonging to the 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 to operate throughout China, the highly supportive local conditions in this corridor, especially in the areas oftypes I and II, have contributed to more a rapid proliferation of non-agricultural enterprises  than the rest of the province. The initial development of rural-based industries in the Shenyang Dalian corridor can be traced to the early 1 970s. At that time, most rural industry was agriculturally  oriented, together with the small-scale rural industries discussed in Chapter 5. After 1978, rural industries which provided services to the large cities were promoted by the central government, such as free markets, repair industries, construction, transportation, restaurants, retailing and other services.  Some of the migrants stay in their relative houses or shared accommodation with their 24 friends. Some of them were provided food and housing by the employees (such as construction team heads, restaurant owners) and the public security bureau might record only these employees or restaurant owners. 133  The Emergence of the Shenyang-Dalian EM)?  Table 6.3 Rural labour force and gross domestic product structure by major industries in the Shenyang-Dalian Region, 1991 (%)  SECTOR  LABOUR  GDP  Agriculture  66.7  28.9  Rural Industry  20  59.9  4.0  Construction  Transportation  10.1  Catering Trade  3.3  3.9  Working in Other Places  3.2  0  TOTAL  100  100  Note: Data in this table only includes labour force and GDP in rural areas. Source: LSB and Liaoning Rural Investigation Team, 1992.  134  The Emergence of the Shenyang-Dalian EMR Rural enterprises in the Shenyang-Dalian corridor has particular characteristics due to the fundamental resource endowments ofthe region, as dealt with in Chapter 5. First, the mining industry is developed in the areas along the Shenyang-Dalian corridor based on its rich natural resource endowment as discussed in Chapter 5. Large scale mineral reserves are operated by the government sector, while small scale mineral production is sometimes operated by local townships or village administrations. The author visited several rural mining sites in 1992 and 1993 and found that while some ofthem were operated with legal permission from the government, others were even operated illegally by village enterprises or individuals, without permission. In order to understand why this occurred, the author interviewed one of the officials in the Rural Township and Village Enterprise Office ofLiaoning provincial government in Shenyang. His explanation was that mineral resources are 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 opportunities 25 (interview with Demian the official felt that the local government turned a blind eye to this issue Wang, 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 assistance ofurban-based factories located in large cities such as Shenyang, Dalian, and Anshan. Thus, many rural enterprises were established in the 15 years or so to engage in subcontracting relationships with urban-based industries (Gu and Ren, 1985: 35).  Rural subcontracting flourished in the Shenyang  Dalian corridor because of the large number of nearby industrial cities. The motivations of urbanbased industries in initiating or strengthening their ties with rural enterprises is fundamental to understanding the continued growth of the rural industrial enterprises along the corridor (This issue will be discussed in next part of the thesis).  These two types of rural non-agricultural activities have together brought about large  His viewpoint was expressed in private and was not an official comment. 25 135  The Emergence of the Shenyang-Dalian EMR  increases in rural personal incomes and significant shifts in the structure of the rural labour force.  6.5.2. A Well-Developed Agricultural Economy  Traditional urban transition theory assumes that rapid industrial development in urban areas is accompanied by the eventual decline of surrounding rural populations. Yet this has not happened in the Shenyang-Dalian corridor. As a matter as fact, a major feature of the Shenyang-Dalian region is that rapid development of non-agricultural economies in the rural areas has been accompanied by the continuing increase of the productivity of the agricultural economy and population. On the one hand, the corridor’s rural counties had higher per capita agricultural output value (over 1,500 yuan per capita, compared with less than 1,000 yuan per capita in rural counties located in the western and eastern parts of the province) (see Figure 6.3). On the other hand, the rapid development of non agricultural economies in rural areas neither is at the cost of the agricultural economy nor is paralleled with a decline of the rural population. Although the share of the purely agricultural economy 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 surrounding suburban districts of the major metropolitan regions of the Shenyang-Dalian corridor. From 1978 to 1992, the industrial annual growth rate in the Shenyang-Dalian corridor as a whole was 22.7 per cent, while agricultural registered a 5.5 annual growth rate. At a micro-level, all counties and suburbs in the corridor had much higher industrial growth rates than agricultural growth, ranging from 11.2 per cent to 33.5 per cent, while agricultural growth rate ranged from 2 per cent to 7.3 per cent. The first half of this 14 year period (1978-1984) witnessed exceptionally rapid growth of both agriculture and industry, and the annual growth rate was 7.2 per cent and 11.3 per cent respectively. From 1984  Since 1984, the output value from processing of agricultural products was included in 26 rural industry. 136  The Emergence of the Shenyang-Dalian EMR Table 6.4 Agricultural and industrial output value by suburbs and counties in the Shenyang-Dalian region (million yuan in 1980 fixed price) Growth rate* Shenyang Suburbs Shenyang Counties Dalian Suburbs Dalian Counties Anshan Suburbs Anshan Counties# Yingkou Suburbs Yingkou Counties Liaoyang Suburbs  1978  1980  1984  1986  1990  agr  333  382  572  509  712  md  201  251  504  --  --  agr  280  326  544  381  md  134  147  219  339  agr  413  381  513  613  md  288  374  536  agr  449  498  588  631  md  348  411  557  1,219  agr  56  52  63  64  75  md  50  65  108  --  --  agr  204  235  386  414  md  207  224  506  agr  41  39  49  md  175  184  265  agr  414  423  md  389  agr  1992  (%)  78-84  84-92  78-92  890  9.4  5.7  7.3  7,187  16.6  39.4  29.1  602  721  11.7  3.6  7.0  1,521  2,010  8.5  31.9  21.3  1,018  3.7  8.9  6.7  7,078  10.9  38.1  25.7  862  4.6  4.9  4.8  5,040  8.1  31.7  21.0  86  1.8  4.1  3.1  783  13.8  28.1  21.7  545  488  11.2  3.0  6.4  800  3,149  4,544  16.1  31.6  24.7  47  67  86  3.0  7.3  5.4  --  --  777  7.2  14.4  11.2  555  476  506  562  5.0  0.2  2.2  399  551  848  2,201  2,685  6.0  21.9  14.8  39  37  47  47  60  52  3.4  1.2  2.1  md  6  12  31  --  --  319  33.3  33.6  33.5  --  --  --  --  --  Liaoyang Counties  agr  235  287  429  362  454  438  10.6  0.3  4.6  md  48  116  186  266  1,234  1,905  25.5  33.7  30.2  TOTAL  agr  2,465  2,660  3,747  3,544  5,203  7.2  4.2  5.5  --  md 1,845 2,184 3,515 32,327 11.3 32.0 22.7 Notes: 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. 137  The Emergence of the Shenyang-Dalian EIv1R  to 1992, however, industrial growth rate reached 32 per cent while agricultural growth remained a mere 4.2 per cent (Table 6.4). Still, it is important to note that the rapid growth of industry in the corridor during this period was not maintained at the cost of the agricultural economy, which also continued to grow. In fact, the agricultural economy increased its productivity (LSB, 1992). This was all the more remarkable in the light of more and more peasants changing their occupation from  agricultural to non-agricultural activities over this period. Such a situation, where both agriculture and industry increased output in the same period, is a significant departure from Western experience  where industrialization has often been accompanied by a decline in the agricultural economy (Schran, 1993).  6.6. Summary  This chapter has defined the spatial features of the Shenyang-Dalian EMR and revealed that it includes the city cores and their surrounding suburbs, as well as the rapidly urbanizing rural area along the Shenyang-Dalian transportation corridor. The Shenyang-Dalian EMR was characterized by a high concentration ofpeople, wealth and activities. Within the corridor, the analysis pointed to the high mix of agricultural and non-agricultural activities indicating a blurring of rural and urban activities and suggesting increased interaction between rural and urban areas. This discussion reveals that the Shenyang-Dalian corridor comprises an EMR as described by McGee and others, but one with particular Chinese characteristics. In particular, in contrast with the market-based economies of ElviRs in Thailand, Taiwan, and Indonesia, the Shenyang-Dalian EIvIR was taken place in a mixed farming system (plantation ofboth rice and other crops) and, more specifically, its evolution was due to a strong role of governments (both central and local governments).  In summary, this part of the thesis discussed natural resource endowments and development processes of the Shenyang-Dalian corridor, as well as major features of industry and urban systems in the region. These features assist in the understanding of the emergence of a new space economy inthe Shenyang-Dalian corridor following 1978. It is argued that this evolution has been the result 138  Administrative Systems and Peasant Workers of the interaction between national socioeconomic transformation in China and local conditions. The specific driving forces for the spatial integration between the rural and urban areas in the Shenyang Dalian corridor form the major topic for the next part of the thesis.  139  Administrative Systems and Peasant Workers  PART THREE TOWARDS GREATER SPATIAL INTERACTION 1978-1992  As noted earlier in this thesis, particular characteristics of the EMR style of settlement change involves the notion of ‘time-space collapse’ (Harvey, 1989) and increasing interaction between rural and urban areas (McGee, 1991) (see Figure 2.2). This issue of spatial integration in the Shenyang Dalian conidor comprises the third theme addressed in this thesis and is vital to understanding how  the corridor has evolved since 1978. This issue is covered in this part of the thesis, which focuses on 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 dynamic economic interaction between rural and urban areas, together with higher levels of population mobility and flows of capital and commodities.  This part ofthesis extends the analysis of Shenyang-Dalian thus far by focussing on important causal processes leading towards greater spatial interaction as well as the macro-level spatial patterns identified. As shown in Table 7.1, Chapter 7 of this thesis will discuss changes in the role of the government, particularly how the rural reforms of 1978, and changes in administrative systems have led to the emergence of ‘peasant workers’ in the rural areas. Chapter 8 will look at industrial decentralization from the cities and rural industrialization as well as spatial changes in economic growth patterns along the corridor. Finally, Chapter 9 will address the role of improvements in transportation and the impacts upon increased levels of population and commodities flows within the corridor.  140  Administrative Systems and Peasant Workers  Table 7.1 Critical processes and spatial outcomes in the Shenyang-Dalian corridor, 1978-92  IMPORTANT CAUSAL PROCESSES  Chp. 7  Chp. 8  Chp. 9  Administrative and political reforms  Industrial decentralization and rural industnalization  Transportation infrastructure  SPATIAL PATTERNS AND OUTCOMES  Shenyang and Dalian designated as cities ‘listed separately in the plan’; all central cities commence administration of surrounding counties  greater integration of rural-urban activities  changes in peasants’ occupations and rise of peasant workers  coexistence of agricultural and non-agricultural activities  urban industries decentralized to rural parts of the corridor; growth poles established within the corridor  the overall growth rate of industrial output value was much higher in the surrounding suburban, rural areas of the large cities; and higher in the rural counties along the comdor than those in non-corridor region  increasing rural industrialization  improvement of transportation infrastructure  more frequent mobility of the population and commodity flows within the corridor  emergence of an “informal” transportation sector  more flexibility in the flows of people and commodities within the corridor  141  Administrative Systems and Peasant Workers  CHAPTER 7 CHANGES IN ADMINISTRATWE SYSTE MS AND THE EMERGENCE OF PEASANT WORKERS  7.1. Introduction There has been much discussion about China’s and its impact on rural-urban relations (Blecher,  rapid socioeconomic transformation since 1978 1985: 2 19-245; Leeming, 1993; Leeming and Pow ell,  1990: 133-159; Saith, 1987; Zweig, 1987: 43-5 8). However, changes in the formal administ rative system have not drawn much research interest. This is perhaps surprising, particularly consideri ng how administrative reforms have impacted on the integration of rural and urban economies. This chapter will show that changes in the adm inistrative system of Liaoning province, in particular changes in administrative boundaries, have inde ed had a direct impact on rural-urban relations in the Shenyang-Dalian corridor. This chapter will also discuss the emergence of ‘peasant workers,’ a new occupation enabled by the post-1978 rural refor ms.  7.2. Changes In Administrative Systems And Their Implications The administrative geography of Liaoning province, as in other provinces of China, is organized along hierarchical lines (Figure 7.1). Three major levels of administrative organizat ion account 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) fourteen central cities (including urban areas and their adjacent counties); (3) 100 county-level governme nts (26 counties, 10 autonomous counties of mino rity nationalities, 8 county-level cities, and 56 urba n districts). All cities and counties report to the prov incial government (Figure 7.1). As discussed by many scholars, such an administrative system is essentially hierarchical in the sense that the centr al 142  _____ecflire Administrative Systems and Peasant Workers  Figure 7.1 Comparison of Traditional and Comtemporary Administrative Structures in Liaoning Central Goverment  Central Goverment  Provincial Government  Suburbs  Provincia1’ Shenyang ‘‘> and Dalian Government  County  Towns  ;\  Rural  Areas  County  Suburbs  I  Rural Areas  Towns  Current Administrative System in Liaoning (Post-1984)  Traditional Administrative Structure (Pre-1984)  Shenyang City Boundary .  Shenyang City And Its Current Administrative Boundary (Jncludmg The City Core; Two Counties; And Four Suburban Districts)  • Xinmin County  ...........Xinchengzi  Shenyang City Core  (  .  ..  Liaozhong C 0 un’’  •....  .7  Donglmg Sujiatiu  •  25  50km  Source: Liaoning Year Book, 1993 143  Administrative Systems and Peasant Wo  rkers  planned economy required local administrativ  e units to follow orders from upper level administrative units. The state set targets for the local uni ts, distributed their products, assigned thei r personnel, allocated their equipment, took over their profit, and covered all their deficits (Ogden , 1992: 77-79; and 102-103). However, recent change s in the affiliation of administrative units have had very important impacts on rural-urban relations. In particular, since the mid 1980s, there hav e been some changes in administrative systems which aim at encouraging more horizontal linkages betw een rural and urban areas, rather than the traditional vertically-based hierarchical links.  7.2.1. Establishment Of A City ‘Lis ted Separately In The Plan’ The hierarchical administrative system in Liaoning has developed in a somewh at different manner from that of China’s other pro vinces and this has had a distinct outcom e for the Shenyang Dalian corridor. First, Liaoning’s two central cities, Shenyang and Dalian, incl uding the counties under 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 free the cities from the restrictions ofthe pro vince and allow them to escape from the province’s patronage and power. Thus, these city governmen ts were granted economic powers equ al to those of a province, and so are listed separately wit hin the state plan, rather than, as it had been the case for decades, treated as a component in a hier archical system under the province’s juri sdiction. In other words, the city government authorit ies of Shenyang and Dalian since 1984 have had a similar economic decision-making power to that of Liaoning province. Significantly, the city authorities of Shenyang and Dalian can now directly cooperate and trade with the rest of the province and the outside world. For example, starting from 1985, the central government has given Dal ian city an annual foreign exchange allocation of about US $100 million as well as provincial status for fore ign trade enterprises (Lai and others, 1992: 25-85) . That is to say, Dalian can directly export its own products to foreign market without permission from the Liaoigng province. Originally, the province’s patronage and pow er control over the cities extended as far as 144  Administrative Systems and Peasant Worke  rs supplying funds and electricity to the city, managing its financial income, and allocati ng industrial production and the distribution of major raw materials. Along with these activities, the pro vince also had the privilege of collecting the major portion ofthe wealth accumulated from the city’s pro duction and redistributing it to other cities through out the province. The large cities were ther efore, often in practice, neglected in terms of new urb an infrastructure, and forced to maintain dila pidated urban utilities for whose upkeep they had quite mini mal or even no funds of their own. Neither could the cities work out any comprehensive urban plan , since their management powers were far too restricted by the myriad of vertical bureaucracies amo ng which the arrangement of its activities was divided (Solinger, 1993: 211). The special designation of Shenyang and Dal ian in 1984 overturned these old arrange ments and allowed these cities to set up their own development plans and organize their produc tion by themselves. The central government bec ame the only level the government to who m they were responsible for following orders. The pro vincial government’s power was limited to controlling economic development, in these two citi es as well as their administrative areas (ibi d.).  7.2.2. The Central City Administering Surrounding Counties A second set of reforms established in the early 1 980s was the shi dai xian system (cen tral city administering counties or city leading coun ties), which erased the jurisdictional lines that had kept central cities isolated from their rural hinterland s. Within the previous administration sys tem, counties (xian) were subdivided into townships and /or towns, while city districts were subdiv ided into residents’ committees or townships and/or tow ns. The province was divided in cities and pre fectures (diqu), with the prefectures being further sub divided into counties. The administration of citi es and their surrounding counties, accordingly, conver ged at the provincial level without many horizontal linkages between major cities and their surroun ding rural areas. The reform of the administrative system was aimed at placing both rural (county) and urban (city) planning and administration under a unified jurisdiction in the so called ‘central cities’ (zh ongxin chengshi) (Figure 7.1). For example,  145  Administrative Systems and Peasant Workers all the central cities ofthe Shenyang-Dalian cor ridor, e.g. Shenyang, Dalian, Anshan, Fushun , Benxi, Liaoyang, and Yingkou, became empowe red after 1984 to incorporate about a half doz en counties and suburban districts in their environs. So, within the new borders these cities can now deploy the resources ofthe entire area under their juri sdiction, and thereby create new economic linka ges. For instance, as Figure 7.1 shows, the Shenyang metropolitan region stretches across a 100 km radius and today includes the Shenyang city core (i.e. the built-up area), four suburban districts (which are rural in nature), and two rural counties. The initial objective of such new urban-rural ties has been to “promote an overall urban network [while) urba nizing the village” (Solinger, 1993: 211). This would overcome the flaws ofthe original administrativ e system which, as already noted, caused a split after 1949, so that cities only managed industrial development, and rural areas alone were resp onsible for agricultural development. This separation had negative impacts for the development of an integrated rural-urban economy. Rural areas could not receive technological and financial assistan ce from urban areas and neither could urban enterprises estab lish subcontracting connections with rural areas where cheap labour and natural resources were available. By contrast, the new system has facilitated the combination of urban and rural planning, the rational deployment of resources, and a generalized readjustment of regional-based industrial structures. It should be noticed that Liaoni ng is one of China’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 Problem s, 1992: 135; Ma and Cui, 1987: 380-38 1). The concept of rural counties fulling under city jurisdiction requires further comment. The basics of such administrative reform are that certain counties should be tied economical ly to particular cities, as these cities were suitable to pro vide much of the motive force for develop ment in the counties, particularly development outside the agricultural sector (see Kojima, 1987). Each rura l county 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 typically  146  Administrative Systems and Peasant Workers  27 A large portion of the population in these counties under urban be more than 56 kilometres. jurisdiction probably lives within 20 to 30 kilometres of their major urban centre. This is close enough to have regular contact with the urban area by bus or motorized vehicle along the Shenyang Dalian corridor.  7.2.3. Implications There are many implications of these administrative reforms for rural-urban interactions. First, in practical terms, the erasure of administrative boundaries has encouraged subcontracting from urban factories to rural locations, product and technology diffusion, as well as joint urban-rural investment schemes, all of which have helped induce rural development while enabling urban firms to use cheaper and less sophisticated factories in the countryside to turn out less sophisticated parts and components. This reform also offered cramped or capital- and material-short city plants a chance to expand their operations into rural areas. Moreover, it has enabled the hiring of cheaper, lessskilled labour from the countryside, thus giving jobs to surplus workers from the fields, and sending important equipment and technical personnel into the rural areas. The reform therefore generates new rural-based jobs because ofthe rise ofindigenous rural industries creating employment opportunities but also due to the decentralization of urban factories searching for cheaper cost of living and less strict population registration regulations in rural areas. The case study villages in Part Four of this thesis demonstrate this emerging relationship between rural villages and their central cities with detailed examples.  Second, the administrative integration in Liaoning province has undoubtedly assisted further comprehensive planning and a convergence of the rural and urban economy. To begin with, it makes  27 area of Liaoning province is 145,900 square kilometre. Each of 44 counties and The county-level cities has average land area of 3,315 square kilometres. Each of 14 central cities administers 3 counties, which means that the farthest distance between villages or towns to their central city is less than 56 kilometres. 147  Administrative Systems and Peasant Workers  it possible for central city governments to incorporate rural and urban developments and relax the rigid regulations designed to prevent peasants’ mobility (Department of Personnel, 1991) and so facilitate economic links between rural and urban areas. The negative side of this new system for China’s rural areas is that some central city governments overemphasize development priority in the central cities and use their authority to force the rural-based county governments to financially support construction in the central city. The county governments complain of such central citybiased attitude. They ridicule the system as not “city leading counties” (shi dcii xian) but “city eating counties” (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 the Shenyang-Dalian region.  As shown later in Chapter 8, in the Shenyang-Dalian corridor the core cities have also been able to organize and relocate economic activities, such as the decentralization of urban industry, to surrounding rural areas, i.e. from the central urban places to all surrounding counties. This has led to a greater integration between the urban core and its administered rural areas. Finally, many rural products, such as cash crops, vegetables, fresh meat and fish, are more easily sold in city markets than before the administrative reforms. These changes have, in turn, resulted in the emergence of more prosperous rural areas, strong rural-urban linkages and an integrated rural-urban economy.  7.3. The Rise Of Peasant Workers  The term ‘peasant worker’ (nongmin gong) refers to those peasants who are currently engaged in non-agricultural activities either in urban, town or local villages, but whose registration status is still agricultural. Even though they reside in officially designed urban areas for an extended period oftime they are still classified as agricultural persons for official purposes. As discussed more thuly in Chapter 4, this is because peasant workers are still administratively tied to a rural district and not entitled to receive commodity grains and other subsidized urban rations from the state (Blecher, 1985: 109-123). 148  Administrative Systems andPeasant Workers  The rise of peasant 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 nonfarming and the development of small towns. They contribute significantly to the growth of the rural non-farming sector, which is a major source of economic viability for small towns and rural areas in general. Moreover, precisely because they are ‘both farmers and workers,’ their choice and level of activities simultaneously affect both the farm and the non-farming sectors. They hold the key to understanding the dynamics that link the growth processes of agricultural and non-agricultural activities as well as understanding the mix of agricultural and non-agricultural activities that coexist side 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 first has been the subsidization of agriculture by industry’ (yigongbunong). In other words, village and township industries are expected to help modernize the agricultural sectors through the modernization of village and small township infrastructure, the provision of agricultural machinery, and the provision of services related to agricultural production. The second objective has been to help prevent excessive rural-to-urban migration guided by the principle of ‘leave the land but not the rural area’ (ii tu bull xiang) (Liu et. al., 1990: 23-25). In this way, policy makers have expected rural enterprises to help retain the surplus and displaced rural labour force, and so limit urban congestion through the provision of non-agricultural jobs in rural market towns and villages.  Under such circumstances, the peasant workers have emerged as a special occupational group in rural China. According to their place of residence, peasant workers can be classified in three major sub-groups. The first (group (1) in Figure 7.2) includes those peasants who reside in their villages but who have found work (often part-time or seasonal) in non-agricultural activities. The second sub group ofpeasant workers are those who have found jobs in non-agricultural activities in nearby small  28 industry here includes township enterprises and village enterprises as well as Rural individually-owned (or private) enterprises. 149  Administrative Systems and Peasant Workers  Figure 7.2 Three Categories of Peasant Workers in the Shenyang-Dalian Region  (2) Rural Area I Daily Commuting to Towns -  Second Occupation  Place of Main Residence  First Occupation  150  Administrative Systems and Peasant Workers  towns 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 their official residential place to any substantial urban area. They are called ii tu bu ii xicrng (leave the land but not the rural areas). The ii tu bu ii xiang peasant workers have a very special identity because they retain a dual status in terms of occupation. In other words, while most of their time is occupied by non-agricultural activities, such as working at state enterprises or self-employed in urban service sectors, 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 rural areas), and thus refers to peasant workers who both work and reside in urban centres (group (3) in Figure 7.2). Their occupational transformation is completed and has occurred along with change of their residential places (Blecher, 1988: 109-123). Their links to their previous rural work is weak. Yet, this does not means, however, that this group of peasant workers are totally separated from their previous rural work.  Interestingly, peasant workers have not just been employed by urban employers; some have started their own businesses in urban areas (mainly in service sector). The output value of peasantrun urban businesses was about 1,169.7 million yuan in the Shenyang-Dalian mega-urban region during 1991. About 56 per cent of this output was from construction and 32 per cent from other industries. The significance of this output value was that while peasant workers in urban areas accounted for 3.2 percent ofthe total rural labour, their business output value amounted to 17.4 per cent of total rural farming output (Liaoning Rural Economic Statistics, 1992). Much of this income would 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 work as part-time farmers. It is important to realize that few rural households leave their villages entirely to work full time in urban-based industrial and service occupations. Even in these cases, peasant 151  Administrative Systems and Peasant Workers  workers often retain title to part or all of their contracted farmland and usually ask their non-li tu (not leave the land and the rural areas) family members and relatives to help cultivate their land in their absence. During the busy harvesting and planting seasons, e.g. summer sowing and autumn harvesting, they may temporarily leave their non-farming positions to return to work alongside their families in the fields (Liu and others, 1990).  According to the survey conducted by the provincial government’s Project Team of Research on Floating Population Management in 1990, about 60 per cent of migrants in Liaoning made at least one trip to their home villages per year. Among these, about 18 per cent were to help farming in the village during the busy season (54 per cent went back home to celebrate Chinese New Year; 10 per  cent to visit home regularly; 8 per cent went back home due to no job in Shenyang; and 10 per cent for other reasons) (Project Team of Research on Floating Population Management 1992: 25).  It may be asked why would a peasant worker who has a non-farming occupation still wish to maintain 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 influence a 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 non  agricultural sector is required by law, in almost all cases, to maintain his/her agricultural household status. As noted earlier, such a worker is not entitled to receive subsidized commodity grain and other food supplies from urban areas and townships, so any peasant worker naturally wishes to keep a share ofthe land for subsistence farming. In other words, she/he prefers usually to grow grain for home consumption rather than to buy food on the open market. Second, keeping part or all of the contracted farmland allows Chinese peasants some security against unexpected economic down turns in non-farming activities. Peasant workers are hilly aware that the rural non-farming sector in urban 152  Administrative Systems and Peasant Workers  or 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, the family members of a peasant may stay on the farm, while the household head moves to town for work, 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. This is because tax revenues derived from the profits of rural industries are diverted by local government back to the agricultural sector to help in its future development. Since the establishment of the household responsibility system, these subsidies are distributed to the peasants according to the size oftheir contracted responsibility land. Yet another factor is the seasonal nature of farm work (busy in summer sowing and autumn harvesting, as opposed to the rest of year) which allows some peasant workers in the Shengyang-Dalian region to conduct non-agricultural activities during the non-busy farming seasons and then help their family during the busy farming seasons. All these factors have effectively 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 everywhere in China.  The rise of peasant workers in the Shenyang-Dalian corridor resulted from both  administrative changes, as discussed above, and more general rural reforms instituted in 1978 and thereafter. It is important to note that the rural reforms facilitate a new role for peasant workers in the corridor, and so allow them to engage in new forms of economic activities, as well as allowing a limited amount of mobility to the cities (Mallee, 1988: 12-22; Department of Personnel, 1991), both ofwhich were denied to rural areas prior to 1978. Therefore, the government policy has had a strong impact on the rapid rural occupation transition in the Shenyang-Dalian corridor through increases in agriculture and the emergence of a rural surplus labour outside the major city cores. The government has promoted rural industrial development in order to provide jobs for the large rural surplus labour force released from traditional agricultural production.  In the rural areas of the Shenyang-Dalian corridor there are many households concurrently involved in both agriculture and industry or other trades. Although there is no data at the county 153  Administrative Systems and Peasant Workers  level to show how many peasant workers belong to this group, the case studies presented in Part 5 ofthis thesis will give detailed categories for peasant workers at the village level. It seems reasonable to argue that the ‘to leave the land but not the rural areas’ policy is an important force behind the emergence of spatial and economic change along the Shenyang-Dalian corridor. Many of the farmers living in this region are rural folks but since the early 1980s they have had dual occupations. Their working schedule is flexible, and whenever the peasants have spare hours they can work on their small non-agricultural enterprises. The vitality of such dual occupations lies in the seasonality of farming activities and the ability of peasants to combine both agricultural and non-agricultural activities in the same region. Specific case studies from three villages will be given in Part Four of this thesis to show how non-agricultural activities complement traditional farming and so offer better opportunities to earn higher incomes.  7.4. Summary Post-1978 changes in administrative boundaries of the Shenyang-Dalian region have included the establishment of cities of Shenyang and Dalian ‘listed separately in the plan,’ and all central cities in the Shenyang-Dalian corridor administering surrounding counties. These changes have created powerful mechanisms for rural-urban integration. Moreover, one of the important elements behind rural-urban integration in the region has been the emergence of ‘peasant workers’ who are both farmers and workers. This group have contributed significantly to the growth of the rural non farming sector in the Shenyang-Dalian region, which is a major source of economic vitality for small towns and rural areas along the corridor. These important political and administrative changes and the rise of peasant workers, have combined with industrial growth and transport changes which, as will be shown in the next two chapters, have also contributed to the emergence of the Shenyang Dalian EMR.  154  Industrial Decentralization and Rural Industrialization  CHAPTER 8 INDUSTRIAL DECENTRALIZATION AND RURAL INDUSTRIALIZATION  8.1. Introduction  Apart from administrative changes, the growth of industry outside the major urban areas has contributed to the ‘blending’ of urban and rural activities along the Shengyang-Dalian corridor. This development has been motivated by two factors. One is the decentralization of urban-based industry, and another is the rise of a distinct type of rural industrialization. Decentralization has been one of the immediate outcomes of administrative reforms and cities, such as Shenyang and Dalian, are able to shift part of their urban industrial production to surrounding rural areas. A consequence has been that rural development has benefitted through the transfer of urban capital and technology to these rural areas as well as providing employment opportunities. However, the development of rural industry in the Shenyang-Dalian corridor has not only been dependent on urban difihision and the decentralization of urban industry. Local resource-based and indigenous technology-oriented rural industrialization has also played a significant role. In order to help understand the economic transformation process and rural-urban transition in this corridor, this chapter will first discuss urban decentralization policy and government initiatives to set up three new development poles along the corridor. This will be followed by an examination of the role of rural industrialization.  8.2. Establishment Of Growth Poles Along The Corridor In addition to the establishment of the coastal open city of Dalian and Liaodong Peninsula Economic Development Zone in 1984 (see Chapter 5), another three development poles were subsequently established along the corridor in order to promote development of an export-oriented economy (Figure 8.1). These three new ‘open zones’ were expected to act as the windows for the 155  Industrial Decentralization and Rural Industrialization  Figure 8.1 Direction of Industrial Development and Special Open Zones in Liaoning Province  Tiefa Fuxin  Shenyang  Beipiao 3 Chao  OTieling  :::::::  ..  0 g  1’IO3  ...J:.  (Th LI  ,‘Q::::::::.: :  Lingyua.n  ,/  UAnshan.  Panjm  Jinzhou  .  Haichengj  .  / JinXI  Liaodong  •  .:  —  0  Fushun  .  .  .  Xingche’g  ..  H Shtnyarig-”.  .  YitlgkOu  flXI  ..  Pemnsu1 &onuc Development Zone  Daiian  .  ‘  qiao  Corridor  ©.Oou Dandong Wgcthm Zhuangh Direction of Industrial Decentrialization 50  1 00km  9’ VJ  Pul . -  -  ::  ::  1  -  -  Dalian  j  1: Dalian Special Economic Zone 2: Bayuquan Special Economic Zone 3: Tiexi Special Economic Zone  Source: Adapted from Lu, 1990: 14.  156  Industrial Decentralization and Rural Industrialization hinterland 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 attracting foreign capital and investment. In 1992, it occupied about 11 square kilometres and included a 1.6 square kilometre tax-free zone, a 2.17 square kilometre Japanese-enterprise zone, and a 8.14 square kilometre high-technology enterprise zone (see Figure 8.1) (LSB, 1992: 58).  Foreign investors establishing solely foreign-owned enterprises, joint ventures, or other forms of cooperative projects in the DETDZ are eligible to enjoy preferential treatment, such as the reduction of income tax. Profits, after income tax reductive, are exempted from tax when being  remitted out of China and products manufactured in the zone are exempted from export tax, as well as offering industrial and commercial taxes (Lai and others, 1992: 38). In 1991, total joint ventures with foreign investors reached 272 and total investment in these three zones amounted to US$1.24  billion, with US$850 million comprising foreign investment (LSB, 1992: 57). The major sources of overseas investment were from Japan, followed by South Korea, Taiwan, and Hong Kong. Other Chinese 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). The population 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 from Jinzhou, a 100,000 population urban centre. It borders on the multi-purpose deep-water modern Dayaowan Bay port, whose annual handling capacity reaches 60  -  80 million tons and lies only about  2 kilometres from a 800,000 kw Thermal Power Plant, 12 kilometres from Dalian Seaport, 30 kilometres 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 of New 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). 157  Industrial Decentralization and Rural Industrialization  At the northern part of the corridor, the provincial government set up the Tiexi Economic and Technological Development Zone (TETDZ) in 1988 and this is located within one of Shenyang’s urban districts. The TETDZ occupies a land area of 65.9 square kilometres. The machine-building industry 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 the textile and food industry (Liaoning Foreign Affairs Office, 1992: 40-4 1). The major purpose for establishing the TETDZ was to relocate state-owned large heavy industrial enterprises from the central of Shenyang and then to improve performance with foreign capital, technology, and management. This area now comprises Chin&s largest industrial cluster and in 1992 contained 855 enterprises, 112 of which were large-scale factories (ibid).  In the middle part of the corridor, yet another important development pole the Yingkou -  Exporting 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 kilometres and lies about 45 kilometres from Yingkou city. The YEPZ was designed to promote export-oriented industry. Here, industrial enterprises are mainly engaged in knowledge-intensive production through import-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 or channels for the corridor as well as other parts of the province. These open zones are expected to facilitate both urban export-oriented production and rural industrial production in the middle parts ofthe corridor between Shenyang and Dalian which are, as discussed in following section, the major destination of decentralized urban industries.  8.3. Urban Industrial Decentralization and Rural Industrialization  The decentralization of urban industry from the major cities has also been a major factor promoting urban-rural interaction in this region. Starting from the early part of 1980s, the provincial 158  Industrial Decentralization and Rural Industrialization  government decided on two important steps to develop rural industry. The first was to relocate whole or parts of urban-based heavy industrial enterprises to the corridor between Shenyang and Dalian, and the second to encourage urban enterprises to subcontract to rural enterprises within the corridor (Figure 8.1). Along with the development of the three special growth centres described above, the middle part ofthe corridor has been targeted since the early 1980s to receive decentralized urban industry from Shenyang, Anshan and Dalian. The rationale behind this policy is partly to limit congestion in the traditional urban-based industrial areas. The heavy industrial-oriented urban clusters lying in the central part of the province (including the cities of Shenyang, Fushun, Anshan, Benxi, and Liaoyang) and the large port city of Dalian in the southern part of the province have had government limitations (placed in the early 1980s) on the further development of heavy industry, such as manufacturing and machine tool making. Consequently, new sites have been chosen for the expansion 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 and Zhuanghe, 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 enterprises to operate which had been limited prior to 1978. This has contributed to the rapid proliferation of  rural growth, as many town- and village-enterprises, established with the direct assistance of urbanbased state factories. Rural-urban links have been sustained by subcontracting relationships with urban industries in the Shenyang-Dalian region (Shenyang Economic Technological Cooperation Office, 1991: 227-234). For example, in 1990 Shenyang city had 484 urban enterprises which had subcontracting relationships with rural enterprises in its surrounding areas. The output of these subcontracted rural industries constituted 630 million yuan and about 10 percent of total rural industrial output (Yue, 1992: 35).  The general motivation of urban industries in initiating or strengthening their ties with township 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. The 159  Industrial Decentralization and Rural Industrialization  first, which is part of the ‘push’ factors forcing urban industries to subcontract, concerns the overall shortage of labour and the limited number of full-time workers that can be hired in urban-based enterprises. The government has imposed stringent hiring rules on urban industries to control the size ofthe urban population and to ease the financial burden of its urban subsidies for housing, food, and transportation expenses. By setting up economic linkages with township and village industrial enterprises, many urban factories can circumvent the state’s limit on the size of their work force and yet fulfil their production quotas (Lee, 1991). The second reason for cooperating with rural enterprises is that some urban industries are short of the necessary financial capital to expand production. In such cases, urban industries may agree to locate some of their manufacturing activities in rural communities if the latter can provide free land and can promise to share the burden of investment costs (Li and Li, 1985: 35). A third, but less discussed, consideration covers urban industries which have moved all or parts of their operation to rural areas because they wished to evade pollution-control expenses (Lee, 1991: 137-156). It is true that in these circumstances urban pollution 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 their industry (e.g. metal foundry shops). Rural locations, by comparison, are much less restrictive with respect to pollution controls, as well as having the advantages of much lower land rents and labour costs (interview with Mr. Demin Wang, Officer of Rural Township and Village Enterprise Section of Liaoning province, Shenyang, December 1992).  In addition, industrial work continues to enjoy more prestige in rural areas than farming, partly because it is thought to be cleaner; and factory work often requires a shorter working day than farming. Shortages of land, labour, and capital are, therefore, the most obvious and commonly mentioned reasons for many urban industries to establish subcontracting and other cooperative arrangements with the township and village industrial enterprises (interview with Mr. Born Qian, Chief Editor of China-Liaoning Peninsula International Exchange, Shenyang, February 1993).  160  Industrial Decentralization and Rural Industrialization  Rural Industrialization:  Besides policies favouring the decentralization of industry away from large cities, indigenous rural industrialization has also been encouraged by the provincial government. In particular, since 1978, a series of strategic measures have been implemented in the countryside involving the encouragement of a more diversified rural economy through the establishment of assistance to township and village enterprises, the opening of rural trade fairs, and agricultural-industrialcommercial combinations (Leeming, 1993). These measures have generally been welcomed by the peasantry and have contributed to the economic growth of both small towns and the village. The success of these measures has relied on the considerable number of rural peasants who continue to be tied to the land. As noted in the previous chapter, in the last 15 years or so they have substantially altered their mode of labour and gradually changed their life style away from merely farming. New small-scale industries in towns and villages have transformed the structure of the rural economy and accelerated the process of urbanization in the countryside.  In the Shenyang-Dalian corridor, compared with the large-scale plants decentralized from the large cities, local resource-based and agro-processing-oriented rural industries have developed based mainly on indigenous technology and resources. By way of illustration, in the southern part of the corridor around Dalian, such industries often involve the processing of fish products and fruit. In the northern part of the corridor around Shenyang and Anshan, rural industries are oriented towards labour-intensive processing of clothing and other daily articles (Yue, 1992).  In summary, the industrial development in the Shenyang-Dalian corridor in the post-1978 period has experienced two major processes. On the one hand, industrial decentralization has motivated industrial development in the middle part of the corridor. On the other hand, not in opposition but in parallel, indigenous rural industrialization has also significantly contributed to rural development. These two parallel processes have led to the emergence of new spatial patterns in the local economy in the corridor. 161  Industrial Decentralization and Rural Industrialization  8.4. Changing Patterns in the Local Space Economy  These new developments in the industrial sector have reordered the space economy of the Shenyang-Dalian mega-urban region since 1978. The major beneficiaries have been the villages and townships 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 other region of the province since 1978. This section examines patterns of industrial development in the Shenyang-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 growth rates in non-urban areas than major urban centres. Table 8.1 shows that during the period of 1978 to 1992, overall the growth rate of industrial output value was much higher in the suburban and rural areas ofthe corridor (33.5 per cent and 26.1 per cent respectively) than in the city core areas (9.8 per  cent). The second half of this period (1984-1992) saw more urban industry move to suburbs and rural areas than the first half(1978-1984). This is reflected in the 10 per cent gain of industrial output share in rural and suburbs between 1984-1992, compared with a gain ofjust 2 per cent during the period of 1978-1984. One of the reasons for this was due to the implementation of decentralization policies by the Liaoning province government which commenced in the early 1980s. Since then, rural areas in the middle part ofthe corridor (i.e. around Liaoyang, Anshan, and Yingkou) and the northern  part ofthe Dalian metropolitan region (the rural areas and suburbs ofDalian) became the major host localities for relocating urban industry (see Figure 8.1). As Table 8.1 shows, these rural areas gained a larger share of industrial output from 1978 to 1992. For example, the percentage growth over this time period in industrial output value in the rural areas of Liaoyang and Anshan (34 per cent and 28 per cent respectively), as well as rural areas and the suburban region of Dalian (28 per cent and 33 per cent, respectively) was much higher than that recorded for city core areas, and other rural areas.  162  Industrial Decentralization and Rural Industrialization  Region  Table 8.1 Industrial output by city core/suburb/rural area in the Shenyang-Dalian regions, 1978-92 (billion yuan 1978## 1984 1992 Change output  % (i)  output % (ii)  output  ui-u  % (iii)  ui-i  Grth (°‘)!  Shenyang  111.0  100.0  133.7  100.0  403.1  100.0  -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  26.9  Dalian  67.2  100.0  91.8  100.1  341.1  100.0  --  --  -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  28.7  Anshan  55.1  100  68.6  100.0  220.6  100.0  -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  28.4  Yingkou  16.4  100.0  25.0  100.0  77.4  100.0  -city core  12.1  73.7  18.5  74.0  44.3  57.2  +0.3  -16.8  -suburbs  0.3  2.0  1.0  4.0  5.4  7.0  +2.0  +3.0  -rural  4.0  24.3  5.5  22.0  27.7  35.8  -2.3  +13.8  Liaoyang  16.8  100.0  25.9  100.0  71.7  100.0  -city core  16.2  96.3  24.7  95.3  76.5  -1.0  -18.8  -19.8  10.7  -suburbs  0.1 0.5*  0.3  0.3  1.2  54.9 0.1t  0.2  +0.9  -1.0  -0.1  4.9  3.4  0.9#  3.5  16.7  23.3  +0.1  +19.8  +19.9  34.0  TOTAL  266.5  100.0  345.1  100  1113.9  100.0  -city core  249.6  93.7  309.9  89.8  762.4  68.4  -3.9  -21.4  -25.3  9.8  5.0  1.9  12.8  3.7  161.3  14.5  +1.8  +10.8  +12.6  33.5  -rural  -suburbs  --  --  --  --  --  --  --  --  --  --  --  --  --  --  11.3  14.5  12.3  13.8  -16.5  11.4  5.0  26.6  +11.5  17.5  +  --  --  12.9  12.7  -rural 11.8 4.4 22.4 6.5 190.2 26.1 17.1 +2.1 +10.6 +12.7 Notes: *: Dengta county only, Liaoyang data not available. !: 1978-92 annual growth rate. #: Only Liaoyang county. A: Only Gongchangling district. @: Data in 1979 (excluding village industry). Definitions of city core, suburbs and rural areas are based on existing administrative boundaries. All data in 1980 fixed prices. Sources: LSB, 1985: 542-573; 1993: 470-471. 163  Industrial Decentralization and Rural Industrialization  City cores in the corridor’s 4 major urban areas dominated over 90 per cent of the total metropolitan industrial output in 1978 (Yingkou over 73 per cent) (Table 8.1). Yet by 1992, rapid rural industrialization and decentralization policies caused this level of domination to decline to less than 60 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 of about 25 per cent during 1978-1992 (Table 8.1). The only exception was the suburban region of Liaoyang city where the industrial growth rate was just 6.7 per cent, causing its share of industrial output value in the metropolitan total to remain constant. This low figure may be explained by the fact 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 the surrounding suburban and rural areas of the city cores has not necessarily resulted in any industrial decline or stagnation in the city cores. Rather, the city cores still registered an annual growth rate of about 10 per cent from 1978-1992 (Table 8.1). This indicates that the policies of decentralization and rural development have been successfully implemented without affecting the economic vitality of the major urban areas.  Population Growth Patterns:  It might be thought that these new industrial growth patterns have led to substantial population 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, and indicates whether the new industrial growth patterns led to a spatial redistribution of the corridor’s population. Surprisingly, the results show that general pattern of the population distribution in the Shenyang-Dalian corridor had changed very little between 1984-9 1. Thus, all city cores, as shown  164  Industrial Decentralization and Rural Industrialization  Table 8.2 Population by city cores/suburban districts/rural areas in the Shenyang-Dalian corridor, 1984 and 1992 (million) Region  1984 total  Subtotal  1991  % (i)  16.0 100.0  total  (ii)-  % (ii)  17.5 100.0  --  1984  Region  (j)  Arishan  1991  total  % (i)  2.6  100  total  (ii)  % (ii)  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  1.3  50.8  1.4  50.0  -0.8  Shenyang  5.3 100.0  5.7 100.0  -citycore  2.8  52.8  3.0  52.6  -suburbs  1.4  26.4  1.5  26.3  -rural  1.1  20.8  1.2  21.1  Dalian  4.8 100.0  5.2 100.0  -city core  1.0  20.8  1.2  23.1  -suburbs  1.1  22.9  1.2  23.1  -rural  2.7  56.3  2.8  53.8  -0.5 -rural --  Yingkou  1.9 100.0  2.1 100.0  -0.2 -citycore  0.4  19.2  0.3  14.3  -4.9  -0.1 suburbs*  0.1  5.5  0.2  9.5  4.0  1.4  75.3  1.6  76.2  0.9  0.3 -rural --  Liaoyang  --  1.6 100.0  1.7 100.0  2.3 -city core  0.4  27.0  0.4  23.5  -3.5  0.2 suburbs*  0.1  8.9  0.2  11.8  2.9  1.0  64.1  1.1  64.7  0.6  -2.5 -rural  --  Notes: Population data of city core are based on officially registered population including permanent urban residents and long-term migrants in the city core. City core, suburbs and rural areas are based on 1992 administrative division. Suburban districts’ population in 1984 were calculated from Liaoning Rural Economic Sketch, 1985: 251-258, 719-724, and 847-854. Suburban district’ population = total population of shUiao (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.  165  Industrial Decentralization and Rural Industrialization in Table 8.2, for instance, maintained a slight increase in population, but the share in the region’s total population slightly declined, while in the suburban districts as well as some rural areas increased due to the migrants from other rural areas of the non-EMR. Dalian was an exception as its city core increased its population share by 2.3 per cent of total population over the study period. One of reasons for this increase was mainly due to an establishment of new city  -  New Dalian (iiz  Vancouver Sun, November 16, 1994) in the north of Dalian city core along the coast. Yet this is -  only a mere fraction of the total population which Dalian’ suburban and rural areas possess. The slight increase in population ofthe suburban districts and rural areas in the Shenyang-Dalian corridor indicates an ability of these non-city core areas to maintain their population share, rather than an estimate of all rural inhabitants moving to city cores. This will be further confirmed by the fact that most 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. Summary  This chapter has delineated two important development processes which have helped to transform the surrounding areas of the major urban centres in the Shenyang-Dalian corridor. On the one hand, industrial decentralization policies and the establishment of three growth poles have turned traditional rural localities into minor industrial centres in the middle part of the corridor and the northern areas of the Dalian metropolitan region. In addition, rural industrialization has grown at a much faster rate than industry in the surrounding areas of large cities and the city core. This was further 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 the urban cores themselves. However, this did not lead to a parallel decline of the corridor’s metropolitan centres. 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 not much population (as Table 8.2 indicated). This indicates a slowdown in the traditional pulling force ofurban centres to new migrants. This may be explained by the fact that new industrial development 166  Industrial Decentralization and Rural Industrialization patterns have caused new jobs to occur in the suburban and rural areas along the Shenyang-Dalian corridor. This in turn has helped to keep the local population ‘down at the thnn’ rather than contribute to mass migration to the industrial cities, as predicted by the traditional urban transition model.  167  Transportation and Time-Space Convergence  CHAPTER 9 IMPROVEMENTS IN TRANSPORTATION iNFRASTRUCTURE AN]) TIME SPACE CONVERGENCE  9.1. Introduction  Yet another factor in the emergence of the Shenyang-Dalian EMR has been the laying down of advanced transport infrastructure almost continuously over the last five decades, involving both the Japanese colonial government and the PRC government. One of the direct outcomes of such transportation improvement, as well as the rapid growth of the informal transportation sector, has been 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 of EMRs, and so its growth in the Shenyang-Dalian corridor is an important component of this study. Spatial interaction 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 how improved transportation facilities have promoted ‘time-space convergence’ in the study region and how this has impacted on flows of commodities and mobility of population within the corridor.  9.2. Improvement Of Transportation Infrastructure  As mentioned in chapter 5, this region has had a well developed road and railway system as well as water transportation, compared with many other areas in China. This was due to its singular colonial experience in the 193 Os and 1 940s under Japanese occupation, as well as the priority given to Liaoning province during the communist period. The acceleration of investment in ports, railway and road construction, both in the colonial period and in the post-independence period, created the  necessary linkages to allow economic growth to flourish. 168  Transportation and Time-Space Convergence  Comprehensive data on spatial interaction at the county level in the Shenyang-Dalian corridor is lacking. For example, data on flows of commodities, population, and capital among the counties are not available. Nevertheless, Table 9.1 documents the tremendous growth of transportation facilities put in place in Liaoning province by both central and provincial governments over the last 35 years or so, as well as the substantial increase in transportation volumes. For example, the total  road 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 highway grade road reached 11,470 kilometres in 1991. The spatial configuration of the Shenyang-Dalian corridor 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 railway networks in the country, with double-trailed railways.  The newly developed transportation systems enhance relatively developed transportation networks in the Shenyang-Dalian corridor. Open to traffic of the Shenyang-Dalian expressway in 1990° (China’s longest) fhrther reduces the travel time within the corridor. With a four-lane expressway, a maximum speed of over 100 km/hr, this highway passes through five large industrial cities and eleven counties and has reduced the travel time from Shenyang to Dalian (375 1cm) from eight hours in the early 1980s to about 4 hours in 1990 (LSB, 1992). Consequently, the road transport has overtaken the railway’s top position for long-distance passengers since the middle 1980s. In 1990, passengers transported by road amounted to 2.1 times as many as those transported by railway, compared with a more or less equal share passengers transported by road and railway in China 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).  30 construction of the Shenyang-Dalian Expressway started in 1984. The official The opening to traffic was in 1990, but most parts of it had been opened to traffic since 1985. 169  Transportation and Time-Space Convergence Table 9.1 Major developments of transportation infrastructure in Liaoning province 1957 Railways(lOOkm)  1978  1985  1991  26.4  35.9  48.8  49.4  116.8  303.5  330.1  402.0  Highways(lOOkm)  0.0  46.0  65.7  114.7  Pipe line (100 km)  0.0  12.2  14.3  14.2  Airline 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  4.0  Civil car and truck (1,000)  7.9  89.6  205.4  407.6  Other vehicles (1,000)*  n.a.  n.a.  84.4  262.3  Commodities (million ton)  102.9  452.7  685.3  790.6  Total 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  3.6  RoadTotal(lOOkm)  Note:  *  Excluding scooters and other small engine motor vehicles.  Sources: LSB, 1992: 555-559; Yue, 1992: 660-661. 170  Transportation and Time-Space Convergence  Figure 9.1 Transportation Networks and Cities in the Shenyang-Dalian Region, 1992 To Moscow via Harbin —  • : ::: ::: : : : : ?  /  ToJilin Fushun  Shenyang  ..::  .:Liaoyan •  /  :Anshan’  .  • I  •  Shenyang— Dalian Corridor  ::::::::::: [Iaicheng. ‘IF Bayuquan Special Open Zone  Dashlqlao\ Gaizhou:  Double Track Railroad Single Track Railroad Highway Local Road Pipe Line Seaport 0  Airport 50km  171  Transportation and Time-Space Convergence The high utilization of automobiles and motorcycles in various metropolitan regions in Liaoning is shown in Figure 9.2. This pattern indicates that more vehicles are used within the corridor than other parts of the province. For example, the levels of automobile use and motorcycles per 10,000 population in this corridor were as much as twice or more times higher than levels in the remaining 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 and travel hardly envisioned 20 years ago. One immediate outcome of improving transportation facilities is a reduction of travel time from one place to another. For instance, the average travel time from Shenyang to Dalian has been reduced tremendously within the last 40 years (Janelle, 1969). Table 9.2 indicates that by using transport modes which are affordable to ordinary people (e.g. according  to the regular income ofworkers and farmers), travel times between Shenyang and Dalian have been reduced from about 2 weeks in the 1900s, to 1 day in the 1950s, and to just 8 hours in 1989. After 1989, the average travel time between Shenyang and Dalian has shrunk to only four hours, mainly because 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 people and 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, since 1978, commuting peasant workers have been able to work, or operate their own business, in urban areas 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 were mere daily commuters bringing agricultural products to sell at urban markets. This was possible  172  ___  __  __  Transportation and Time-Space Convergence  Figure 9.2 Automobiles and Motorcycles Per 1000 Population (by Metropolitan Regions), Liaoning, 1991  0  100km  50  N:  Tie1ing  ....  Fw ô Shenyang  Chaoyang •  ..—...:; ::.  .  .  Llaoyang Jinzhou  ..JIL-  ..  .::  .  Benxi  PaIU1fl Anshan  Shenyang Dalian : Corridor ...:  Jima YlngkQU *  Dandong  Dian  50  100  150  Automobiles and motorcycles per 1000 populaflon  Source: Liaoning Statistical Year Book, 1992  173  Transportation and Time-Space Convergence  Table 9.2 Travel time between Shenyang and Dalian, 1900-1992  1900  1930  1950  1980  1989  1992  simple road, waterway  simple road; railway  road; railway  railway; road  railway; highway; airline  highway; railway; airline  Modes  walking  water; donkey  train  train  train; bus  train; bus  Travel time  2 weeks  1 week  1 day  12 hrs  8 hrs  4 hrs  Modes  water; donkey  train  train  car  plane; car  plane  Travel time  1 week  iday  12 hrs  8 hrs  1 hr  30 mm  Major routes  Affordable for ordinary people  For elites*  Notes: * For business people and other elites. Travel times in 1900 and 1950’s are based on author’s estimation. Travel time between 1980 and 1992 were estimated based on the author’s field research.  174  Transportation and Time-Space Convergence because ofthe more convenient transportation links which were set up during the 1980s and the rise of vehicle ownership among the rural peasants.  Second, the improvement oftransportation facilities has also made it possible for some crops sold in urban markets (such as vegetables and milk dairy products, which were traditionally planted only in suburban districts) to be planted in the rural areas farther away from the city core. For example, agricultural products from distant rural areas, such as vegetables, and dairy product, can now be transported to urban markets in Shenyang, Dalian, Anshan, Benxi, and Fushun. Often this is stimulated as land in nearby suburbs becomes more and more taken over by urban activities, such as large scale construction of housing, making it difficult to sustain market gardening in the city’s immediate suburban areas. Therefore, over time, relatively remote rural areas have developed vegetable farming oriented to supply urban markets (Yue, 1992).  Third, the increased use of highways in the corridor has also facilitated subcontracting activities in rural areas, as noted in Chapter 8. This is because rural subcontractors have been able since 1 980s to deliver their products to urban ‘parent’ factories (for assembling or delivery to final markets), and have been able to receive the materials they need for production without delay (Interview with Demin Wang, Officer of Rural Township and Village Enterprise Section of Liaoning province, Shenyang, December 1992).  Finally, transportation improvements have indirectly facilitated the diffusion of technology and new 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 for special cash farming enterprises. These technicians and engineers can commute at the weekend when they 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 engaged in either consulting or teaching local employees to learn specific skills in rural areas. Although there is no official data available to show either the actual number of this group working in this way, or the 175  Transportation and Time-Space Convergence  occupation of their second job in rural areas, it is considered that numbers have been increasing because of the rise of the rural economy, both in the industrial and agricultural sectors, within the corridor. For all the above reasons, the considerable advance in transportation networks along the corridor and the further development ofthe former treaty ports ofDalian and Yingkou, have hastened the mobility and circulation of commodities, people, and capital, and facilitated the transfer ofurban technology and know-how throughout the wider region.  9.3. Informal Transportation Sectors  Besides the growth of formal transport links, developed or assisted by government, the development of regional mobility has also benefitted from the emergence of new informal transportation sectors in both rural and urban areas.  This refers to non-state and low-cost  transportation such as motor cycles, bicycles, tractors, a variety of pedal bikes, and horse or donkeydrawn carriages, as well as carts pulled by people. While traditional low-technology transportation such as carts and bicycles have always been prevalent in communities along the Shenyang-Dalian corridor, new forms ofinformal transportation have been developed since 1978 to address problems ofinadequate formal modem transport and the increasing demands for mobility. It should be noted that modem transportation, such as new highways and railways, requires massive capital investment that government authorities cannot easily make. Informal transportation modes, by comparison, require far less capital. Although the informal transportation sectors operate outside official recognition, they have served to increase the mobility of people and goods between rural and urban areas in the Shenyang-Dalian region. They normally operate over short distances, and as such are mainly used for commuting between nearby urban and rural areas.  The popularity of such  transportation modes is also due to their flexibility in congested roads. Although there is little reliable statistical data for such categories, partial evidence suggests that these modes now play a very important role in the corridor’s regional interaction. By way of illustration, data available from the Liaoning Yearbook indicate that in this province the number of private-owned tractors increased from just a small number in 1978 to 73,900 in 1991, and that motor cycles increased from 79,860 in 1986 176  Transportation and Time-Space Convergence to 236,000 in 1991 (LSB, 1992). Such a form of transport ‘take-off since 1978 is because of both increases in household income and changes in the central government regulation towards private ownership of various vehicles. There is also no reliable data to indicate the exact pattern of use of other informal transportation modes, such as bicycles and carts. It should be noted, however, that the rural labour force engaged in the transportation sector increased from 20,000 in 1978 to 246,000 in 1991 (i.e. an annual growth rate of 21 per cent), and the output of this sector increased from 10,000 yuan in 1981 to 283,000 yuan in 1991 (LSB, 1992). The rising significance of informal transportation is reflected by the fact that ‘private-run’ transportation services accounted for 39.5 per cent 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 in the Shenyang-Dalian corridor. Field surveys conducted by the author in 1992 and 1993 found that close to Shenyang, Dalian and many other metropolitan areas in this corridor, the major highways were utilized by a mixture ofmodern transportation vehicles (cars, buses, trucks) together with horsedrawn-carriages, carts, bicycles or tricycles often with fully loaded goods, motorcycles, and tractors fully loaded with passengers or goods.  One of the important results of recent growth of informal transportation modes is the expansion ofpeople’s activity space in the corridor. In China as a whole, Chang and Kwok’s research indicates that rural villagers regularly commute to work by bicycle an average of 10 kilometres (about a 20 minute ride) (Chang and Kwok, 1990: 140-157). Other research indicates that peasant workers  commute daily by bicycle from one to five kilometres between their jobs in towns and their homes in nearby villages (Zhang, 1986: 206). It is likely that these patterns also occur in the Shenyang Dalian corridor, and with the growth of various other kinds of informal transportation modes, people have the means to travel between rural and urban areas in the corridor more frequently. Indeed, by motor cycles and tractors, the commuting distance may reach as far as 30 kilometres (about half an hour distance). An implication of the low cost and flexible informal transportation modes is that 177  Transportation and Time-Space Convergence  peasant workers in the Shenyang-Dalian corridor can continue to maintain a dual status: i.e. working in urban areas during the day and returning home to the village at night, or during the busy harvest season as noted in Chapter 7. Also, informal transport allows shipments of rural products to urban markets to be more affordable. Moreover, ‘weekend technicians,’ as mentioned above, who reside in urban areas can now frequently conduct producer services to rural businesses utilizing motor cycles, and this, in turn, has greatly hastened technological diffusion into rural areas.  Rural-urban interaction in the Shenyang-Dalian corridor has become more and more influenced 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 ruralurban integration in the Shenyang-Dalian corridor.  9.4. Population Flows  Generally speaking, the intensity and patterns of population flows are influenced by the transportation lines, available transportation modes, and numbers of people involved. The population mobility in the Shenyang-Dalian corridor is measured by the number of passengers, travelling frequency, and the purpose of their travel.  The highly developed transportation facilities in this region, together with the high demand for frequent rural-urban and inter-city interaction, has led to higher levels of mobility in this region since 1978. Thus in 1991, the number of trips per capita per year on formal transportation modes in Liaoning 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 rate of travel frequency. Figure 9.3 shows, for example, that the region within the Shenyang-Dalian corridor, as well as the southeastern coastal region, had a larger number of trips per capita than the rest 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. 178  Transportation and Time-Space Convergence  Figure 9.3 Frequency of Travel Times Per Capita in Liaoning Province, 1990  Number of Trips/Person Per Year  ***  *  5  10  20  30  *  * * *  * *  Shenyang  *  *  * *  * * * *  *  *  *  •*  * *  * *  *  *  *  *  *  H’V...%Shenyang— Dahan Corridor  *  *  *  * o  so  *  * *  *  100km  ‘I —  Dalian  Source: Based on Liaoning Statistical Bureau and Liaoning Urban Socioeconomic Investigation Team, 1991: 52 and 108  179  Transportation and Time-Space Convergence As might be expected, the spatial pattern of migration in and out of Liaoning province revolves around the Shenyang-Dalian corridor due to the high density of economic opportunities and transportation facilities. As it is growing more strongly than other parts of the province, the Shenyang-Dalian corridor experienced a net inflow of migrants since 1978. The degree of inmigration along the corridor is estimated by examining the ratio between ‘in-migration’ and ‘out migration for each county. Figure 9.4 shows that higher levels of both in- and out-migrants occurred along the corridor than other parts ofthe province. The analysis reveals that places with higher than the provincial average in/out migration ratios were the suburban areas of the central cities (such as the city suburbs of Shenyang, Anshan, Fushun, Benxi, Yingkou, and Dalian), as well as the rural areas along the corridor. This confirms that the corridor has been the major destination for the migrants from other parts of the province.  The pattern of high population mobility in the corridor reflects strong regional economic interactions 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, or visiting 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, towns and 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 in Shenyang 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 travelling between rural and urban areas in Shenyang and Dalian accounted about 40 to 44 per cent of the total rural-to-urban travellers, compared with just 29 per cent in Chaoyang. In particular, about 14 to 25 per cent ofpassengers in the Shenyang-Dalian region travelled for ‘economic reasons’ between rural and urban areas (i.e. rural-to-urban and township-to-urban area trips) in contrast to about 6 per cent in the non-EMR region of Chaoyang region (Table 9.3). 180  Transportation and Time-Space Convergence  Figure 9.4 Inward and Outward Migration Patterns (by County), Liaoning, 1990  Source: Chinese Academy of Social Sciences, Population Research Institute, 1993: 370-3 75  181  Transportation and Time-Space Convergence Table 9.3 Bus passengers’s travel purposes, Results of survey conducted in Dalian, Shenyang, and Chaoyang, 1986 (%) Non-EMR EMR Reason for Travel Dalian Chaoyang Shenyang U-U  R-U  T-U  U-U  V-U  T-U  R-U  T-U  100.0  100.0  100.0  100.0  100.0  100.0  100.0  100.0  Economic Reasons  58.5  40.0  39.0  49.9  44.7  52.4  29.2  39.6  -on official business  34.3  10.8  10.7  32.5  21.3  22.7  14.3  19.9  -conference, training  14.7  4.3  4.3  6.9  1.8  2.3  2.0  3.9  -business  4.8  14.1  21.5  8.2  19.2  24.6  6.7  5.8  -exported labour  2.7  6.8  1.8  1.4  2.4  2.3  4.0  3.6  -commuting  2.0  4.0  0.7  0.9  0.0  0.5  2.2  6.4  Social Reasons  40.5  60.0  61.0  49.9  54.7  44.6  66.8  56.5  -tourism  17.7  9.0  13.7  26.9  16.0  10.5  2.6  2.6  -hospital treatment  2.9  6.8  4.8  3.2  6.3  3.3  6.4  5.7  -visit relatives  19.9  44.2  42.5  19.8  32.4  30.8  57.8  48.2  1.0  0.0  0.0  0.2  0.6  3.0  4.0  3.9  Total  Others  Notes: 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). 182  Transportation and Time-Space Convergence Within the category of ‘travel for social reasons’, both Shenyang and Dalian had a higher percentage ofpassengers who made trip for tourism (ranging from 9 per cent to 27 per cent), than in Chaoyang (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 the higher than family average incomes found along the corridor than in Chaoyang (see chapter 6), which  may have enabled people to have more money to spend on tourism. Travel in Chaoyang has more traditional patterns and motives, such as visiting relatives. The higher numbers of economic and tourism-oriented bus travellers in the Shenyang-Dalian corridor suggest a wider level of economic interaction in this region than adjoining counties. In fact, the extent of travel for economic reasons in the Shenyang-Dalian corridor may be much higher than recorded in Table 9.3 if we calculate passengers 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 levels of population mobility is the so called ‘floating population.’ As noted in Chapter 3, this term refers to 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. This component of rural-urban interaction is peculiar to the EMRs in China. Some commentators refer  to this phenomenon as the blind flows (mongliu), but most refer it as the ‘floating population’ (Ma and Noble, 1986: 279-290).  Table 9.4 shows a rapid increase in the proportion of population that is floating in selected cities along the Shenyang-Dalian corridor between 1981-1989. Whereas the floating population in major cities accounted for about 4 to 6 per cent of these cities’ population in 1981, by 1989 it was 14 per cent in Anshan, 22 per cent in Fushun, 16 per cent in Shenyang, and 22 per cent in Dalian.  183  Transportation and Time-Space Convergence  Table 9.4 Floating population of major cities of the Shenyang-Dalian region (‘000) Shenyang City Floating population (‘000)  Dalian City  Fushun City  Anshan City  190.0  60.0  70.0  40.0  6.5  5.0  6.9  4.0  600.0  170.0  250.0  160.0  18.0  12.0  22.1  14.3  538.0*  38.0  n.a.  n.a.  16.6  22.6  n.a.  n.a.  1981 As%ofcity population Floating population (‘000) 1986 As%ofcity population Floating population (‘000) 1989 As%ofcity population Note:  *  data in 1988.  Source: Li, 1991: 97-98.  184  Transportation and Time-Space Convergence  The impact ofthe floating population on large cities has both positive and negative attributes On the positive side, the floating population provides cheap labour, reduces urban enterprises’ welfare burdens, eases urban labour shortages, and allows urban enterprises, particularly labour intensive industry, to adopt a more flexible employment system. The floating population contributes to various kinds of urban 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 rates in urban areas (Chan, 1994). Thus, in 1988, the Shenyang floating population accounted for about 69.8 percent oftotal criminal cases (Li, 1991: 4 and 49). China’s rigorous family planning policy may be under jeopardy due to the floating population, as it is difficult for the government to monitor the second or third children per couple of the floating population. Yet another negative effect of the increase 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 during 1987 because of the increase of the floating population (ibid: 65). Moreover, the water supply situation has deteriorated in China’s urban areas due to the increase of the floating population. Table 9.5 shows that the floating population caused the cities of Shenyang, Fushun, and Anshan in 1991  to have about 12 to 18 percent less water supply per capita compared with a situation without any floating population.  The ‘floating population’ in the rural areas of the Shenyang-Dalian corridor is more difficult to monitor. It should be noted that the official population data of the rural areas excluded short-term migrants and long-term illegal migrants (i.e. those without official registration status). In fact, since the late 1980s, population migration into the corridor from remaining parts of the province has increasingly 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 of Liaoning province recorded a higher shares of in-migrants in the total population within the Shenyang-Dalian corridor than in other parts of the province. Thus, in-migrants in most of the counties and suburbs in the corridor accounted for about 3 to 11 per cent of total population, while those in the non-corridor region accounted for only 1 to  185  Transportation and Time-Space Convergence  Table 9.5 Amount of water supply per capita urban resident with and without floating population (Litre/per person per day)  Shenyang  Fushun  Anshan  WithoutFloating Population (i)  195.0  106.1  137.0  With Floating Population (ii)  165.8  86.9  120.4  14.97%  18.10%  12.12%  City  Reduced*  Note: Per capita water supply reduced due to floating population is calculated by * 100%. Source: Adapted from Li, 1991: 65.  186  Transportation and Time-Space Convergence  Table 9.6 Share of migrants in total population in selected counties and suburban districts, 1990  Within Shenyang-Dalian EMR  Region  %  Shenyang  3.65  Outside Shenyang-Dalian EMR  Notes  city core Dalian  Region  %  Notes  Shuang-  2.66  urban district of Chaoyang  tai 3.12  Gutai  city 2.79  city core Bayu-  11.63  4.61  new economic zone  Long-  near Yingkou city  chen  suburb of Anshan city  Jiping  2.63  suburb of Chaoyang city  1.04  county in western part of  county Donglin  5.97  district Jinzhou  Haicheng  Wafandian  urban district of Jinzhou city  quan Jiubu  (%)  3.23  2.68  2.80  suburb of Shenyang  Panshan  city  county  outer suburbs of  Beizhen  Dalian city  county  county-level city near  Liaoning  Anshan  Total  province 6.91  near China’s third largest oil field  1.08  in western part of province  2.78  county-level city in the north of Dalian  Source: Calculation based on Llaoning Population Census-1990: 3 70-373. 187  Transportation and Time-Space Convergence  2.5 per cent per cent. This is especially obvious in the newly developed economic zones such as Bayuquan District of Yingkou city (one of the corridor’s growth poles (see chapter 8)) (in-migrants accounted for 11 per cent of total population), as well as in Panshan county lying near the corridor (migrants accounted for 6.9 per cent of total population), where the oil field has expanded to the third largest in China (Table 9.6). Interestingly, counties and suburban districts within the Shenyang-Dalian EIvfR 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 along the corridor rather than in the major urban centres, as discussed in previous chapters. This is mainly due to the fact that most long-term migrants living in rural areas did not register with government agencies because controls there are generally much looser and not so strictly enforced as in the city core areas. Another obvious reason is economic, i.e. the lower living costs and increased job opportunities and general prosperity of the economy in the outlying suburban and rural areas of the corridor since 1978. Therefore, even those who work in the city core prefer to live in the out-suburbs due to the lower living expenses such as rent and food.  9.5. Patterns Of Commodity Flows  Apart from population and migration flows, another indicator of time-space convergence within the corridor concerns commodity flows. The provincial total commodity flows in Liaoning increased 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 was characterized by the majority of goods being transported along the corridor between the cities of Shenyang and Dalian. Thus, Figure 9.5a shows the intensity of flows of commodities transported from 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 the  188  00  Source: Liaoning Transportation Bureau, 1991, “Liaoning Transportation 2000”, pp. 45-48.  Figure 9.5 Commodities Transported by Train and Trunk in Liaoning, 1990  t  Transportation and Time-Space Convergence  central part ofthe province (including cities of Shenyang, Anshan, Fushun, Benxi, and Liaoyang and counties 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 region or the central part ofthe province. An analysis of commodity flows by major roads also demonstrates the same pattern (Figure 9.6), namely that the roads around Shenyang and between Shenyang and Dalian carried the largest flows of commodities.  9.6. Summary  This chapter has highlighted the important role of improved transportation systems both -  formal and informal in the Shenyang-Dalian corridor in terms of shrinking time-space dimension and -  integrating urban-rural activities. Since 1978, higher levels of flow of commodities and the increased mobility of population and migration have brought a new vitality to the Shenyang-Dallan region mega-urban region. In summary, Part Three of the thesis has delineated the macro processes of spatial integration in the Shenyang-Dalian EMR. In part these processes confirm the general model ofEMR development. However, there are particular Chinese and regional characteristics involved. These included the importance of government policy changes (e.g. changes in administrative systems and industrial development policies), and a well-developed transportation network stemming from the specific history of Japanese colonial control in the 193 Os and 1940s.  Changes in the  administrative 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 the government created a mechanism for rural-urban integration. Rural industrialization processes and industrial decentralization from urban areas formed two driving forces for the rapid development of rural-based industry. Higher flows of commodities and population within the Shenyang-Dalian EMR were the direct outcomes of frequent rural-urban interaction and major dynamic indicators of the formation of a new space economy.  However, all these discussion are based on macro-level (county) analysis. The thesis now 190  Transportation and Time-Space Convergence  Figure 9.6 Commodities transported along the major highway in Liaoning province (1990) 10 million tons 5 million tons 1 million tons • Tieling  Chaoyang Lingyuan  LIaOy  Benxi  9 JØ  N  Hcheng ‘Yingkou• •Dasluqao  SHENYANG DALIAN CORRIDOR  Dandong  Zhuangt—J’ •  afan.  • ul ndian  0  100km  Source: Liaoning Transportantion Bureau, 1991, “Liaoning Transportation 2000.”  191  Transportation and Time-Space Convergence turns to a discussion of the evolution of the Shenyang-Dalian EMR and its impact on local communities, including rapid socioeconomic transformation of the corridor villages. This will be done by investigation of a number of case studies in Part Four.  192  Hunhebu Village  PART FOUR CASE STUDY VILLAGES -  ACTIVE INCORPORATION IN THE EMERGENCE OF THE EMR  The documentation of recent changes along the Shenyang-Dalian corridor now shifts to the micro scale with an examination of socioeconomic transformation in three villages during the reform period. As noted earlier in Chapter 6, the Shenyang-Dalian corridor is in the midst of at least two major transformations. First, in the rural areas along the corridor, both the occupational and economic structures are shifting from being predominantly agricultural to a mix of agricultural and non-agricultural activities. Second, the rural towns and villages in the corridor are changing from predominantly rustic fabric to a settlement pattern containing more urban land use functions, such as manufacturing, major roads, and intensive agriculture using green-houses.  At the macro-level, the post-1978 reform programmes have attracted a large amount of research on China’s rural transformation. Leeming (1993) refers to this period of agricultural development as a ‘golden age’ characterized by an impressive increase in grain production, as well as diversification and specialization in the rural economy (i.e. a move away from traditional grain or rice production 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 the emergence ofrural-based industries, which have acted as a new engine for rural growth. During the first decade of economic reforms, it has been estimated that as many as 80 million non-agricultural jobs were created, and about half of these were in township and village enterprises (Far Eastern Economic Review, Feb. 8, 1989: 46-47). However, there has been limited research on the impact ofthese transformations on rural life and consumption patterns at the village level (Johnson, 1989). 193  Hunhebu Village This part ofthe thesis analyzes transformations in detail at the village level. For each village  the study will follow a similar format. First, the village location along the corridor will be described followed by its major natural resource endowments. Then the processes of economic and social change will be discussed. Next, the labour market changes, including demographic and occupational characteristics, will be presented, which in turn will be followed by an examination of each village’s major linkages with the urban areas.  Different geographical forces have produced different  development outcomes. The villages selected as the case studies in this section were chosen by the author to represent three types of locations along the Shenyang-Dalian corridor, and three types of active incorporation in the emergence of EMR that have occurred in the rural economy. Their localities represent three different settlement types including a ‘near suburb’ village, an ‘out-lying suburb’ 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 structures of each settlement, as well as the key economic sectors, vary widely among the three villages. Thus while the socioeconomic transformation in each village is characterized in each case by a sharp departure from the traditional rural economy, the thesis shows how the different geographical locations of these three villages within the corridor have intersected with the general transition process and resulted in quite different social and economic outcomes, as well as three distinct types of linkages with the core cities and other parts of the corridor.  194  Hunhebu Village  CHAPTER 10 RUNHEBU VILLAGE  -  A ‘NEAR SUBURB’ VILLAGE CASE STUDY  10.1. Location And Natural Resource Endowments Hunhebu village, is a suburban village lying near a large urban area in the corridor (5 kilometres away from Shenyang city). Since the administrative reforms of 1984 (see Chapter 8), it is now administrated by the Shenyang city suburban district of Dongling (Figure 10.1).  As a ‘near suburb’ village type, Hunhebu village has a relatively higher population density and lower land-person ratio than the other two cases. In 1991, Hunhebu village had a total population of 6,114 in 1,707 households (Liaoning Rural Socio-Economic Survey Team, Hunhebu (LRSEST HHB), 1992: 22). The village’s population density was 2,370 persons per square kilometre within a land area of 3,870 mu (2.58 square kilometres), which was even higher than the average population density 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 only 0.423 mu (282 square meter), which was only about 22 percent of the national average level (1,233 square meter per agricultural population). All this attests to the ‘urban’ character of this village because of its close proximity to Shenyang.  The agricultural land use pattern of Hunhebu is dominated by vegetables and rice. As Table 10.1 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 as 1.5 per cent for garden plots.  195  Hunhebu Village  Figure 10.1 Location of the Case Study Villages in the Shenyang-Dalian Region  196  Hunhebu Village  Table 10.1 Land use in Hunhebu village in 1991  LAND USE  1. Farmland  -Paddyfield  -Vegetable planting  Mulsq.km  2,586/1.72  902/0.60  1,684/1.12  %  66.82  23.31  43.51  LAND USE  2.Gardenplot  Mulsq.km  56/0.04  3. Others*  1,228/0.82  TotalLand  3,870/2.58  %  1.45  31.73  100.00  Note: *Other land uses including irrigation, roads, unusable land, and housing. Source: LRSEST-HHB, 1992: 2-3.  197  Hunhebu Village  10.2. Processes of Economic and Social Changes As with other rural areas, the national economic reforms of 1978 produced great opportunities for residents of Hunhebu village. As of 1978, agriculture was the major rural economic activity creating more than 60 per cent of village GDP (Table 10.2).  Since then, the dominant rural  agricultural economy has been replaced by new valued-added rural industries, such as the manufacture 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 64 per cent in 1991. By 1991, the rural industrial and service sectors together became the major source ofthe Hunhebu village economy (Table 10.2). However, this did not necessarily lead to a decline of the agricultural output. In fact, the absolute value of agricultural output increased from 750,000 yuan in 1978 to 4,930,000 yuan in 1991 or just 9 per cent of village output (Table 10.2).  10.2.1. Changing Ownership Structure  Another important economic characteristic of this village was that ownership of the village economy was shared by both individual households (including families and individuals, and the socalled ‘backyard economy’) and the collective (village-run economy). Table 10.2 indicates that at the  beginning of the economic reform period in 1978, the productive structure was fhlly owned by the collective (i.e. the village), yet since then, particularly after the introduction of the household responsibility system in 1982 (LRSEST, 1991: 92), the household sector and the individual economy now produce more than one third of the total output (Table 10.2). By 1991, the total output from  collective ownership declined to 63.9 per cent of total village output. Family-run and individual (private)-owned economy accounted for 36.1 per cent.  198  Hunhebu Village  Table 10.2 The output structure of Hunhebu village, 1978-199 1  Year  1978  1984  1986  1988  1990  1991  Total output (‘000 yuan)  123  771  1,519  3,133  4,497  5,482  Collective ownership (%)*  100  56  60  64  66  641  0  44  40  36  34  361  Family ownership (%)** From agriculture (‘000 yuan/%)  75/61  138/18  181/12  313/10  405/9  493/9  From industry (‘000 yuan/%)  18/15  308/45  961/63  2,005/64  2,743/61  3,509/64  From tertiary (‘000 yuan/%)  30/24  285/37  377/25  815/26  1,349/30  1,480/27  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.  199  Hunhebu Village  10.2.2. Diversification of Agricultural Products  The rapid socioeconomic transformation from farming to a more diverse array of activities in this village has greatly benefited from its favourable location viz a viz Shenyang. This location facilitates the development of agricultural production and a tertiary sector oriented to the large city’s market. In particular, the proximity of this village to Shenyang enables the rapid development of vegetable and fresh agricultural production (such as vegetable, meats, fish, and so on) and the gradual decline 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 an important feature of agricultural production in this village since 1978. Among them, vegetable production has now emerged as the key agricultural sector. Close proximity to markets and high prices obtained for vegetables throughout the 1980s has led to the conversion of about 65 per cent ofvillage farmland into vegetable plots since 1982. In 1992, vegetable production amounted to 2.77 million 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 “state monopoly 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 at fixed low prices. Due to an arbitrary price mechanism, there was little advantage for planting vegetables or other agricultural products to meet the urban demand. Consequently, rice farming was the major industry in Hunhebu. Since 1985, however, the state monopoly of vegetable marketing was abandoned (Leeming, 1993: 97) and a new system, called the ‘dual price system’ (shuangguizhi), was introduced. 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 production subsidies. For example, vegetable farmers are able to purchase grain and coal at low prices. Their risks in production and marketing are virtually nil, being assumed in effect by the official marketing  200  Hunhebu Village system. 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 mark