Spatializing the project of state rescaling in post-reform China: Emerging geography of National New Areas

Habitat International xxx (xxxx) xxx

Contents lists available at ScienceDirect

Habitat International journal homepage: http://www.elsevier.com/locate/habitatint

Spatializing the project of state rescaling in post-reform China: Emerging geography of National New Areas Heng Chao a, c, George C.S. Lin b, * a

Laboratory for Urban Future, Peking University Shenzhen Graduate School, Shenzhen, 518055, China Department of Geography, The University of Hong Kong, Pokfulam Road, Hong Kong, China c School of Urban Planning and Design, Peking University Shenzhen Graduate School, Shenzhen, 518055, China b

A R T I C L E I N F O

A B S T R A C T

Keywords: State rescaling Urban and regional development China National new area Political economy Effects

Existing theory of state rescaling makes inadequate clarification of the nature of the state in the context of Western liberal democracy vis-� a-vis an authoritarian Leninist political economy such as China. Emphasis is placed upon rescaling per se and its social construction with its spatial manifestations being treated simply as a by-product or taken for granted. This paper engages with current theoretical advancements through a research that focuses on the spatiality of state rescaling in a socialist planned economy, identifies the emerging geography of the Chinese National New Areas (NNAs), and critically assesses the uneven impacts of the NNAs upon local economic growth. The establishment of the NNAs is found to be a spatial manifestation of the rescaling of power relations within an authoritarian Leninist Party-state both vertically (hierarchically) and horizontally (crossjurisdictional administrative changes). Establishing an NNA is found to have increased the spatial inequality of the municipality where it is located. A multi-variate statistical analysis has identified an inverse relationship between the economic effects of the NNAs and the level of the regional economy, degree of openness, and complexity of administration of the NNAs. Findings of this research call for better theoretical attention toward the variegated nature and internal dynamics of the state engaged in rescaling, the diverse spatial outcomes of state rescaling, and its uneven socio-economic effects contingent upon regional conditions.

1. Introduction In the studies of urban and regional development, one of the estab­ lished lines of scholarly enquiry has been centered around the refor­ mation and transformation of state power in response to the changing conditions of the local and global economies. After a short episode of the globalization fever proclaiming “the end of the nation-state” (Ohmae, 1995), it has been generally recognized that the nation-state may actively and effectively rearticulate its power relations in a variety of sophisticated manners including internationalization of the policy regime, denationalization of the economy, and destatization of the po­ litical system (Brenner, 2004, 2009; Jessop, 2002). Far from being a passive victim of the seemingly powerful, irresistible and irreversible operation of globalization, the state is increasingly considered to be a sophisticated ensemble of power relations capable of rescaling itself upward, downward and sideward in accordance with the changing cir­ cumstances of the global, national, and local economies, and this has in turn profoundly reshaped the trajectories of urban and regional

developments. The theory of state rescaling had been influential and inspirational in the studies of urban and regional developments not only in the advanced economies of the Western world but also in the devel­ oping countries of the Global South and emerging economies of the Far East. However, critical evaluation of the popular theory of state rescal­ ing would still identify a number of conceptual and methodological is­ sues that require clarification. First, the theory of state rescaling that was originated from the Western countries under a political system of liberal democracy has been readily and at times uncritically applied to cases in a non-democratic environment as if the concept of “state power” in the West and else­ where were identical. This is conceptually confusing and problematic because the nature of the state in a Western liberal democratic envi­ ronment differs significantly if not fundamentally from the state in a country such as China where an authoritarian Party-state remains in firmed controls. Second, attention has been focused on the extent (e.g. “hollowing-out”), manner (e.g. “jumping scale”), and direction (e.g. upward, downward, sideward) of state rescaling without a necessary

* Corresponding author. Department of Geography, The University of Hong Kong, Pokfulam Road, Hong Kong, China. E-mail addresses: [email protected] (H. Chao), [email protected] (G.C.S. Lin). https://doi.org/10.1016/j.habitatint.2020.102121 Received 17 August 2019; Received in revised form 8 January 2020; Accepted 18 January 2020 0197-3975/© 2020 Elsevier Ltd. All rights reserved.

Please cite this article as: Heng Chao, George C.S. Lin, Habitat International, https://doi.org/10.1016/j.habitatint.2020.102121

H. Chao and G.C.S. Lin

Habitat International xxx (xxxx) xxx

2014; Li & Wu, 2013). It has been observed that state spatial selectivity, as an important practice both grown out and materializing the rescaling of state power, operated in different forms, ranging from regional management agency to soft regional planning and policy space �, 2013; Heley, 2013). The spatiality of state rescaling has (Bayirbag recently attracted the attention of the researchers concerned with the changing dynamics of China’s urban and regional developments both at the regional and local levels (Cartier, 2005; Li, 2015; Li & Wu, 2013; Li, Xu, & Yeh, 2014; Shen, 2005; Xu & Yeh, 2012). Meanwhile, urban and regional scholars and public management researchers have evaluated the effects of state rescaling from the perspective of place-based policy _ �lu, & (Ambroziak & Hartwell, 2018; Ham, Swenson, Ays¸e Imrohoro g Song, 2010; Jensen, 2018; Man, 1999; Neumark & Kolko, 2010; Zhu, 1994, 1996). Although the influential theory of state rescaling has shed much light over the sophisticated nature and dynamics of state-capital interplay and its spatiality, several important issues remain controversial and vague. The concept of state rescaling was introduced from North America and Western Europe under a political system and institutional environment significantly different from their counterparts in China and East Asia. It is unclear whether or not and to what extent the notion of state rescaling in the Western context can be readily applied to cases elsewhere including socialist China undergoing political, economic and social transformation. Brenner, Jessop, Jones, and MacLeod (2003) devoted much time to the study of geographical scales as socially con­ structed, structured, and reproduced phenomena in the neo-liberal era. Yet there existed a tendency to over rely upon the regulatory approach associated with state intervention in response to the crisis tendencies of capitalism (Jessop, 2016) resulting in an over-structural generalization (Klink, 2013). This is problematic because it obscures the internal state dynamics and ignores the local background and social actors that are �, 2010; Vlad & Manuel, 2019). When place sensitive (Jessop, 2016; Varro applied to a political economy where the state should not be regarded as a monolithic whole with consistent interests and concerns, state orga­ nizations are fragmented into various actors with conflicting interests (Pratchett, 2004; Wilson, 2003). The variegated nature of state rescaling in different political contexts has yet to be conceptually clarified and empirically studied. Although there is no shortage of research concerning the spatiality of state rescaling, the existing literature is plagued with inconsistency and gaps. Studies of place-based policy are found to have focused on the utilitarian economic dimension (Hartwell, 2018), and criticized for their neglect of the causality behind the construction of economic space as well as their contradictory empirical findings (Eeckhout, Pinheiro, & Schmidheiny, 2014; Greenstone, Hornbeck, & Moretti, 2010; Liu, Lu, & Xiang, 2018). Most of the research has been carried out to examine the spatial outcome of state rescaling at the regional and local levels (Li & Wu, 2013; Wu, 2016; Xu & Yeh, 2011, 2012). The emerging geography of state rescaling at the national level remains an important topic to be investigated seriously and systematically. Finally, the extant literature on state rescaling has been preoccupied by theoretical articulation and categorization of the processes of state power reshuffling (i.e. scaling up, down, jumping scale, hollowing out, rolling out, etc.). Attention has been overwhelmingly directed toward the social construction of scale while relatively less has been done to critically assess the effects of the state rescaling project. It remains un­ clear how the specific process of state rescaling combines with the broader political, economic, cultural, and institutional background (Jonas & Moisio, 2018), how this interaction brings about socio-economic and geographical outcomes, and how the diverse tra­ jectories of state rescaling are shaped by and contingent upon various regional social-political conditions (Jonas, Goetz, & Bhattacharjee, 2014). The development of China’s National New Areas (NNAs) has pro­ vided a rare and valuable “laboratory” to clarify some of the contro­ versial issues and narrow the gaps existing in the literature concerning

clarification of its spatiality. Much scholarly effort has been devoted to imagine, characterize and conceptualize state rescaling primarily as a structural and political phenomenon leaving its spatial manifestations as a by-product, residual, or something to be taken for granted. Finally, the effects of state rescaling economically or otherwise and their contin­ gency upon various social and geographical conditions remain contro­ versial and vague. The competing notions of convergence and divergence have continued to divide and separate the researchers holding different views and presenting inconsistent findings from various individual case studies. Against this backdrop, the emerging geography of state rescaling as manifested in the nation-wide estab­ lishments and proliferation of the so-called National New Areas (Guojia Xinqu) in China stands out as an interesting and valuable opportunity to overcome the conceptual and methodological difficulties identified above for theoretical advancements. The purpose of this research is to identify the location and spatial distribution of China’s newly established National New Areas (hereafter NNAs), critically evaluate their social and economic effects contingent upon different regional conditions, and obtain significant theoretical insights into the spatiality of the project of state rescaling in the context of an authoritarian political system undergoing market reforms, opening up, and decentralized decision-making. The paper is organized in four parts. It starts with a critical engagement with the extant literature concerning state rescaling and its spatiality. This is then followed by a clarification of the definitional and methodological issues of our research. Our empirical study includes an identification of the pattern and process of the establishment of China’s NNAs at the national level, a statistical analysis of the impact of the NNAs upon changes in urban inequality, and a quantitative assessment of the economic effects of NNAs contingent upon different regional conditions. The paper closes with a summary of the findings of our empirical study and discussion of their implications for theoretical advancement and policy formation. 2. State rescaling and its spatiality: new bottle, old wine? In the recent three decades, theoretical attempts to understand the nature and dynamics of urban and regional development have been made focusing on the interplay among major actors and agents in the world undergoing profound changes characterized as globalization, neoliberalization and lately financialization (Lin, Li, Yang, & Hu, 2015). The functioning of the nation-state, as one of the most important actors and agents responsible for the setting and enforcement of the rules of the game, has never ceased to intrigue and inspire researchers. This has long been an issue of concerns to the scholars interested in the pattern and process of urban and regional development (old wine), but it has been brought up repeatedly for re-interpretation and re-conceptualization against new and rapidly changing contextual conditions (new bottle). In the 1990s, great enthusiasm about globalization has given rise to a popular notion of a “borderless” and “flat world” in which the roles played by the state are believed to be undermined and geographical factors such as distance and location are considered increasingly irrel­ evant (Ohmae, 1995). Subsequent critique of the over-simplistic “end of the nation-state” notion has brought the state back in the theorization of the sophisticated interplay among state, capital and space. The state is seen as a dynamic and complex system or ensemble of power relations capable of rescaling both vertically (upward/downward) and horizon­ tally (outward/inward/sideward or shrink/expand) (Brenner, 2004; Jessop, 2002). The rescaling of state power has been observed not only in Western advanced economies across the Atlantic but also in countries of the Far East across the Pacific inclusive of China undergoing profound social and economic transformation (Cartier, 2005; Li, 2015; Shen, 2005; Smart & Lin, 2007; Su, 2012; Xu & Yeh, 2012). Research in this vein has uncovered an interesting scenario in which the rescaling of state power extended from the political and institutional orbits to spatial arena. The spatiality of state rescaling has been addressed conceptually in the notion of “state spatial selectivity” (Chen, Zhang, Li, & Zhang, 2

H. Chao and G.C.S. Lin

Habitat International xxx (xxxx) xxx

developmental resources (i.e. capital, land, labor and technology) and hence increase the spatial inequality within the municipality where the NNA is located. Finally, there exists an inverse relationship between the economic effects of the NNAs and the level of the regional economy, degree of openness, and complexity of administration. The questions and hypotheses listed above have brought up several research parameters that require clarification. In this study, we see scale as a structural organization of power relations and we are mindful of the distinction between political and geographical scales. In the case of China, it is important to differentiate the structuring of power relations hierarchically and administratively (Cartier, 2005; Chien, 2013; Shen, 2005; Xu & Yeh, 2013; Yang & Li, 2013; Zhu, 2004). We follow the Chinese official definition and spatial demarcation of the NNAs. The basic geographical political economy conceptualization of uneven development is that of an observed phenomenon as a powerful process that acts on and between different spatial scales (Vlad & Manuel, 2019). Thereby, the development of a basic unit (say, municipality) shapes the evolution at the next spatial scale (regional), which, in turn, feeds back on the development at the basic unit (top down) as well as nationally (bottom up) (Pumain, 2006; Resende, 2013). In this research, the un­ even impacts of the NNAs upon local economic growth are meant to be not simply an economic phenomenon but rather a broad social, political, and spatial process of changes among different spatial scales. In our empirical study, three dimensions are selected to represent the uneven socio-economic effects of the NNAs. First, the layout and administrative structure of the NNAs established later are considered to be the result of the uneven socio-economic effects of the NNAs in the previous stage. Second, within the municipality, there exists inequality between the NNA and the non NNA and such inequality changes in response to the establishment and further development of the NNA. Third, there exists disequilibrium of the economic effects of the NNAs, that is, the contin­ gency of the economic effects of the NNAs upon different regional conditions and administrative structures. The economic effect of the NNA refers to the net impact of its establishment on the growth of the economy of its region. At present, China has set up 19 NNAs in 23 municipalities. Our analysis of the establishment and development, location and distribu­ tion, and power relationship adjustment of China’s NNAs takes into consideration of all of the 19 NNAs as empirical cases. For consistency and comparability, our evaluation of the socio-economic effects of the NNAs is based on the 16 NNAs found in 20 municipalities and estab­ lished from 2010 to 2016. We did not include the early establishment of the Shanghai Pudong New Area and Tianjin Binhai New Area or the late establishment of the Xiong’an New Area because of the technical diffi­ culties to extrapolate information for evaluation. Our research is based on analyses of the socio-economic data gathered from the 215 districts (counties) in the 20 municipalties where the NNAs are located, covering the period from 2009 to 2017 (the year when the latest data were available). These data are gathered from three main sources: (1) China’s Urban Statistics Yearbook; (2) the annual urban statistics yearbooks published by the statistical bureaus of these 20 cities; and (3) the Sta­ tistical Bulletin on National Economic and Social Development issued annually by these 215 districts (counties). In addition, official docu­ ments issued by the State Council of China and interviews with local planners and officials from 2015 to 2017 by the authors are also important materials analyzed in this study. The statistical techniques used in the data analysis include regional comparisons and panel data regression modeling that will be further clarified in the next section.

the diverse trajectories of state rescaling. Initially a special arrangement for the Shanghai Pudong New Area in 1992, the establishment of the NNAs has become a nation-wide phenomenon since 2010. By the end of 2017, the number of NNAs had reached 19, covering more than 24,000 square kilometers and widely scattering over 23 cities across the country (NDRCPRC, 2018). The NNA is functionally and territorially a physical manifestation of the rescaling of the power relationships within the Chinese Party-state both vertically (hierarchically) and horizontally (cross-jurisdictional administrative changes). In response to both intensified global competition externally and growing domestic de­ mands for sharing the benefits of reforms and development internally, the central authorities of the Party-state have identified and established the NNAs in different locales and at different points in time deemed necessary and appropriate to spatialize special vision and mission of China’s national developmental agenda. The policy making bodies at the central level may include the National Development and Reform Com­ mission, the Ministry of Land and Resources (now called the Ministry of Natural Resources), the Ministry of Environmental Protection, and the Ministry of Housing and Urban Development. These central organiza­ tions have delegated preferential policies, special permissions, and guidance over institutional innovation to the NNAs. Horizontally and locally, the NNAs often involve cross-boundary and cross-jurisdictional administrative changes in order to coordinate and facilitate the accomplishment of the special developmental missions. The significance of China’s NNAs as an important case of state rescaling has already attracted scholarly attention (Barry, 2011; Li, 2015; Lim, 2017; Ngo, Yin, & Tang, 2017; Qi, Liu, & Jiao, 2017; Xu, Chen, & Lu, 2010; Yang, Li, Hay, & Huang, 2019; Zhu & Sun, 2009; Zou & Zhao, 2018). Although much has been written to document and explain the establishment of China’s NNAs from different perspectives, the general pattern of the NNAs emerging at the national level and the uneven socio-economic effects of the NNAs contingent upon different regional conditions have remained poorly understood. 3. Definitional and methodological issues This study examines the emerging geography of China’s NNAs as a case to engage with current studies concerning the nature and dynamics of state rescaling under different political and geographic contexts. Our objectives are to investigate the establishment and development of NNAs since the 1990s, especially the adjustment of the power relations between central, provincial, municipal, and district (county) authorities regarding motivation and actual development; identify the location and distribution of China’s NNAs across the country as an illustration of the spatiality of the rescaling of power relations within an authoritarian Leninist Party-state; and critically assess the impacts of NNAs on local economic growth and urban inequality contingent upon different regional conditions. Our empirical study is organized and carried out to answer several specific questions. How has China’s NNAs as a state project of political as well as territorial reorganization come into being? What is the current status of China’s NNAs both economically and geographically? What is the spatial pattern emerging across the country and how do we make sense of this new pattern? To what extent and in what manner has the establishment of an NNA affected the spatial inequality within the municipality where the NNA is located? What is the economic effect of the NNAs, that is, to what extent has the estab­ lishment of the NNAs improved or deterred the economic growth of the region in which they are located? How do the economic effects of the NNAs vary among the different regions characterized by different level of development, degree of openness, and structure of administration? To answer these questions, three hypotheses are made for testing. First, the establishment of China’s NNAs is closely related to the dynamics of the state’s national developmental strategy and is a spatial manifestation of the rescaling of power relations within the Party-state both vertically and horizontally. Second, establishing a new NNA would lead to a concentration of

4. Emerging geography of China’s National New Areas: contextual analysis and quantitative assessment 4.1. Contextual analysis Although the theory of state rescaling has been focused on the 3

H. Chao and G.C.S. Lin

Habitat International xxx (xxxx) xxx

restructuring of power relations and its social construction, there is no shortage of documentation on the spatiality of state rescaling and the diverse geography emerging across different world regions. For example, much research has been done in Europe and North America to identify the process of state rescaling, but different causal relationships contingent upon different regional conditions were documented _ �lu, & Song, (Cochrane, 2012; Cox, 2010; Ham, Swenson, Imrohoro g 2010; Pike & Tomaney, 2009). In a similar manner but showing a different trajectory, China’s NNAs have been the spatial manifestations of the rescaling project designated by the authoritarian Party-state for the purpose of national strategic development and reform endeavors. In terms of size, function, motivation, and formulation process, an NNA is significantly different from other types of development zones (i.e. export process zones, economic and technological development zones, etc.) indicating its importance as the territorial establishments of the state’s national developmental strategy (see Table 1). Chinese official documents indicate that the establishment of NNAs is periodic and essentially an ad hoc state intervention coming out of different state aspiration, motivations, and strategic considerations (see Table 2). In 1992, Shanghai Pudong New Area was established and rapidly developed by central government to better introduce global capital, speed up integration into globalization, and promote the full opening of the Yangtze River Delta region (the State Council, 1992). The Tianjin Binhai New Area was established in 2006 in order to cope with the new opportunities of globalization, especially the new global layout of modern manufacturing industry. The central government hopes that the rapid development of the Binhai New Area will promote the inde­ pendent innovation of Chinese manufacturing industry, enhance inter­ national competitiveness, and promote the Beijing–Tianjin–Hebei region (the State Council, 2006). From 2010 to 2012, the central gov­ ernment set up Chongqing Liangjiang New Area, Zhejiang Zhoushan Archipelago New Area, Gansu Lanzhou New Area, and Guangzhou Nansha New Area in response to the international financial crisis and to cultivate new regional growth poles as well as to promote relatively balanced development between eastern, central, and western regions.1 In 2014, the number of NNAs increased dramatically, and by 2017, 13 NNAs were added, nine of which were established in Western and Central China. On the one hand, the central government still strengthen the role of NNAs as regional growth poles to stabilize economic growth and promote regional coordinated development. On the other hand, the

Party-state requires that all NNAs carry out innovative developmental experiments to effectively meet new challenges.2 Comparing the time of the establishment of the NNAs with the growth rate of China’s GDP (see Fig. 1), it can be seen that the establishment of the NNAs happened to be at the turning point of national macro-economic growth. The difference is that the Pudong New Area and Binhai New Area were set up in the period of increasing macro-economic growth whereas other NNAs established after 2010 were in the period of declining macro-economic growth. The state designation of NNA represents a profound regional devel­ opmental strategy which is closely related to the advantages of “growth poles” and geographic reallocation of resources at national scale and can be seen as a state rescaling project to spatialize the new vision and mission that characterized China’s national developmental agenda. The earliest two NNAs are in the Yangtze River Delta Area (YRDA) and the Beijing-Tianjin-Hebei Area (BTHA) of the eastern region. They have been established as the “growth poles” of regional development and the spatial representation of an unbalanced regional development strategy. Because of the gradient strategy among regions and the widening regional disparity, continuing an unbalanced developmental strategy would intensify existing inequality and social contradictions. The cen­ tral government needs to create more NNAs to solve this contradiction. In 2010, the Chongqing Liangjiang New Area was established, which was the first NNA established in the western region. Since 2014, the establishment of the Jinpu New Area has formally filled the gap in northeast China. In 2015, the Xiangjiang New Area was part of the “one belt and one road initiative” which has become a national strategy. As such, the sequence and distribution of the NNAs have followed the spatial sequence of “east-west-central”. At present, the distribution of NNAs in the three macro-regions remains relatively unbalanced (see Fig. 2): nine in the eastern region, six in the western region and four in the central region. The number of NNAs in the central region is not only the least, but also the land area of NNAs is relatively small. Although the spatial distribution of NNAs is supposed to follow the rule that “one NNA for one province or municipality”, there are noticeable exceptions with more than one NNA established in one province such as the YRDA and BTHA. In the BTHA, the Xiong’an New Area approved in 2017 was for the purpose of alleviating the pressures felt by Beijing and promoting the integration of the BTHA (Zou & Zhao, 2018). After the Pudong New Area, Zhoushan Archipelago New Area established in 2011 and Jiangbei New Area established in 2015 were also for the internal integration of the YRDA (Yang et al., 2019). Although there is only Nansha New Area in the Pearl River Delta Area, its political ambition is far more significant than its geographic coverage as it has been entrusted with a special mission to integrate and facilitate the development of the newly estab­ lished Guangdong-Hong Kong-Macao Greater Bay Area (the State Council, 2012). It has been documented that the practices of state rescaling in the context of Western liberal democracy have relied upon the release of incentive for corporate and public initiatives (Harrison, 2014). By contrast, the establishment of China’s NNAs has involved primarily the delegation and decentralization of state power downward to local gov­ ernments (Ngo et al., 2017). Therefore, the development and imple­ mentation of NNAs require profound adjustment of governance scale to local jurisdiction and territorial boundaries. This adjustment means that administrative bodies at all levels will have to change the NNA’s spatial division and power allocation by all means flexibly or otherwise. As a

Table 1 Typology of China’s national developmental zones. Type

Launch year

Amount

Function

Policy characteristics and Statedirected visions

ESZ

1980

7

Complex

NETDZ

1984

219

Single

NHIDZ

1988

168

Single

NNA

1992

19

Complex

NFTZ

2013

12

Single

Special economic policies and systems Preferential policy, attract foreign investment, industrial development Preferential policy, hi-tech industrial cluster Preferential policy, experiment and demonstration, special permissions and management, national strategy Preferential tariff, special permissions and management

Note: ESZ: Economic Special Zone, NETDZ: National Economic and Techno­ logical Development Zone, NHIDZ: National High-Tech Industrial Development Zone, NNA: National New Area, and NFTZ: National Free Trade Zone. Source: Retrieved and compiled July 25, 2019, from www.cadz.org.cn/.

2 Source: author compiled the documents of State Letter (2014–2017) con­ cerning the approval of the State Council for the establishment of National NewArea, including State Letter [2014] No.2, State Letter [2014] No.3, State Letter [2014] No.71, State Letter [2014] No.76, State Letter [2014] No.133, State Letter [2015] No.66, State Letter [2015] No.103, State Letter [2015] No.137, State Letter [2015] No.141, State Letter [2015] No.217, State Letter [2016] No.96 and State Letter [2017] No.41.

1 Source: author compiled the documents of State Letter (2010–2012) con­ cerning the approval of the State Council for the establishment of National New Area, including State Letter [2010] No.36, State Letter [2011] No.77, State Letter [2012] No.104 and State Letter [2012] No.128.

4

H. Chao and G.C.S. Lin

Habitat International xxx (xxxx) xxx

Table 2 Periodicity of establishment of China’s National New Areas (NNAs). Period

International background

Domestic background

National New Area (Establishment time)

State-directed visions

Period I: 1980s to early 1990s Period II: 1990s to early 2000s Period Ш: 2000s to 2012

Capital globalization and global trade system

Coastal opening-up

Pudong (10.1992)

The frontier of integrating into globalization; regional growth pole; promoting the coastal opening-up

New Opportunities of globalization

Entry into the WTO; eastern-led development strategy

Binhaia (05.2006)

Independent innovation; international competitiveness; regional growth pole

Global financial crisis

Expanding domestic demand; balanced development of the eastern, central and western regions of China

Liangjiang (05.2010); Archipelago (06.2011); Lanzhou (08.2012); Nansha (09.2012)

Post-Financial Crisis; economic globalization adjustment

New normal; economic transition; “one belt and one road”; comprehensive Opening-up and regional harmonious development.

Xi’xian (01.2014); Gui’an (01.2014); West Coast (06.2014); Jinpu (06.2014); Tianfu (10.2014); Xiangjiang (04.2015); Jiangbei (06.2015); Fuzhou (08.2015); Dianzhong (09.2015); Haerbin (12.2015); Changchun (02.2016); Ganjiang (06.2016); Xiongan (04.2017)

Regional growth pole; promoting the development of central cities and urban agglomerations; optimize the regional development pattern Regional growth pole; opening-up window; exploring innovative development and green development

Period Ⅳ: 2012 to present

Source: author compiled the documents of State Letter (1992–2017) concerning the approval of the State Council for the establishment of National New Area.

Fig. 1. The process of the establishment of the NNAs and the growth rate of China’s GDP.

Fig. 2. The spatial distribution and land area of China’s NNAs.

“prefecture-district” (see Fig. 3).3 The “prefecture-prefecture” NNA ex­ ceeds the administrative boundary of a single prefecture-level city, spanning at least two prefecture-level cities. The “prefecture-county” NNAs are located in one prefecture-level city, but their spatial scope covers at least one county or county-level city. The “prefecture-district”

result, a new cross-border joint territorial organization has often been formed in the NNA, and several existing territorial organizations with different scales and cross-administrative boundaries have been super­ imposed. This adjustment is tailored to local conditions and is based on location and the concerns of municipal or provincial governments. The spatial division of the NNA breaks through existing administrative di­ visions and consists of several complete districts/counties, which can be divided into “prefecture-prefecture”, “prefecture-county” and

3

5

Source: author compiled from master plan of each National New Area.

H. Chao and G.C.S. Lin

Habitat International xxx (xxxx) xxx

NNAs are located in one prefecture-level city, and their spatial scope encompasses all of the municipal districts. Based on spatial division, the administrative subjects and power allocation of the NNA have formed diversified modes, namely “new district government” (xin qu zheng fu), “co-operative work” (zheng qu he yi), and “management committee” (guan wei hui). A new district gov­ ernment is a new government approved by the State Council with the absolute power of administrative management in the NNA, including economic development, social management, and public services. The cooperative work model promotes a co-working space for management (i. e., one staff member has two functions) when the NNA and adminis­ trative division have the same overlapping area, and the names of the former administrative division and NNA are retained. The management committee is an agency set up by municipal government to exercise the powers of development and construction, social affairs being vested in local government. In different stages, an NNA often modifies the spatial division and management mode corresponding with their conditions. The Chinese experiences of the NNAs as a salient and distinctive spatial manifestation of state rescaling have been extensively docu­ mented (Li, 2015; Long, Liu, Hou, Li, & Li, 2014; Ngo et al., 2017; Yang et al., 2019). Much has been written on the processes of establishing the NNAs on the bases of micro-level case studies. Little is understood about the effects of the NNAs, their variation across the country, and their contingency upon regional conditions. As a policy space, the NNA can achieve economic effects through three mechanisms, namely special preference policies,4 infrastructure supply, and agglomeration economic effects. However, external marketization factors and internal adminis­ trative factors will interfere with the economic effects of NNAs (see Fig. 4). When enterprises relocate, NNA conditions are not the only influencing factors; marketization factors such as economic level, in­ dustrial base, traffic conditions, and the general business environment are also important (Mayer, Mayneris, & Loriane, 2017; Morisson & Doussineau, 2019). However, currently in China, each administrative unit has a territorial imperative to safeguard its development interests, especially land-centered development (Cartier, 2013; Hui & Boa, 2013; Li et al., 2014; Wang & Shen, 2017; Xu & Yeh, 2013; Zhang, Lin, Wu, & Skitmore, 2017; Zhao, 2011). Whether the NNA management mode can unify territorial development logic, that is, reduce conflicts and con­ tradictions between the new management subject and the existing management subject, also affects the NNA’s economic effect. Currently, NNAs are a controversial issue. NNAs have a positive impact on urban economic growth and regional economic patterns (Barry, 2011; Xu et al., 2010). However, NNA developmental results have not met policy ex­ pectations (Liang & Chao, 2018; Long et al., 2014; NDRCPRC, 2015; Yang et al., 2019). The impact of NNAs on local economic growth is uncertain, and there may be heterogeneity requiring more accurate evaluation and wider comparison. Linking the theoretical concept of state rescaling with the specific process, diversification mode, and practical NNA results will contribute to an understanding of the nature and dynamics of China’s state rescaling.

Krugman, & Venables, 1999) and relevant empirical studies (Qi et al., 2017), the full realization of the socio-economic effect of the NNA can be divided into two stages. First, fostering the core, i.e., the NNA takes the lead in forming an enterprise gathering space and promotes its rapid economic growth. Second, developing the periphery, i.e., through the spillover and diffusion of the population and enterprises in the NNA to the low-cost outer space, economic growth will be promoted in the pe­ ripheral areas. It takes a long time to realize the economic effects of an NNA, and most NNAs have only been established recently. Therefore, this study only considers the socio-economic effect of an NNA fostering the core. First, what are the socio-economic results of the establishment and development of NNAs within the municipality? Considering the sensi­ tivity of resident population and per capita GDP in measuring the regional inequality, this section analyzes the socio-economic results brought by the establishment of an NNA to the municipality in terms of the growth rate of resident population and per capita GDP. Due to the short development time and data availability of the newly established NNAs, the results shown in the two years after the establishment of the NNAs are selected for investigation. Within the same municipality, the growth rate of resident population in the NNA is higher than that in the non NNA (see Fig. 5). In Nanjing, Qingdao, Xi’an, Xianyang and Guangzhou, the difference between the NNA and non NNA is particu­ larly significant in terms of the growth rate of the resident population. Even in China’s Northeast Region with a shrinking population, such as Dalian, Harbin and Changchun, the growth rate of the resident popu­ lation in the NNA still shows a strong contrast. Interestingly enough, the growth of per capita GDP shows an opposite trend (see Fig. 6). In a short time, the per capita GDP increment of the NNA within the same mu­ nicipality is lower than that of the non NNA. In some municipalities such as Guangzhou, Xi’an, Dalian, Chengdu and Meishan, per capita GDP of the NNA shows a negative growth. Obviously, the establishment and development of an NNA in a short time has increased the inequality within the municipality involved, which reflects the inequity in the allocation of development resources (i.e. land, labor and capital) be­ tween the state-level new areas and non-state-level new areas. Although the statistical analysis shows the uneven development of �-vis the non-NNA within the same municipality, it is still the NNA vis-a uncertain what exactly the net impact of the establishment of the NNA is on growth of the regional economy of its jurisdiction. In order to test the economic effects of a NNA, we need to compare the differences of eco­ nomic growth before and after the establishment of NNA. However, a simple direct comparison would not provide an accurate conclusion, because many factors affect local economic growth. A regression model was established (Equation (1)) to accurately test the net impact of an NNA on economic growth in its jurisdiction. This empirical model of the relationship between place-based policies and local economic growth (Jensen, 2018; Man, 1999) can be written as follows: Growthit ¼ α0 þ βXit þ €aNNAit þ ~aGit þ €et þ � Ci þ eit

(1)

where Growthit is the interpreted variable representing economic growth Ci for district (county) i in year t; €et represents the time-fixed effect; � represents the individual fixed effect of each district (county); Xit is an observation vector of the exogenous factors determining local economic growth; NNAit is a dummy variable of the NNA; Git represents other ~ are vectors of unknown coefficients; control variables; β; α0 ; € a; and a and eit is a normally distributed error term. In this model, the estimated value of coefficient € a is the key parameter. It measures the net impact of an NNA on local economic growth. In the relevant literature (Ambroziak & Hartwell, 2018; Man, 1999), the GDP growth rate and GDP logarithm are often used to characterize local economic growth. One purpose of establishing an NNA is to enhance the competitiveness of local governments in attracting global capital. Therefore, foreign direct investment (FDI) can represent the economic effect of an NNA. To improve data stability and reduce

4.2. Quantitative assessment To fill the gap identified from the extant literature and to oper­ ationalize the conceptual framework introduced above, the following section quantitatively assess the effects of China’s NNAs in relation to the different socio-economic conditions of the regions concerned. According to recent theories in new economic geography (Fujita, 4 Special preferential policies include fiscal, tax, land development, permit, the power of opening-up, finance, infrastructure and customs, which come from the direct endowment of the central government and self-innovation of local government. Source: author compiled from official documents concerning the approval of the State Council for the establishment of each new national area and information derived from official website of each national new area.

6

H. Chao and G.C.S. Lin

Habitat International xxx (xxxx) xxx

Fig. 3. Spatial division of China’s National New Areas (NNAs). Source: the authors.

Fig. 4. Conceptual framework of the economic effects of National New Areas (NNAs). Source: the authors.

Fig. 5. Comparison of the growth rate of resident population between the NNA and the non NNA in 15 municipalities (T-Tþ2). Note: T represents the year of establishment of NNA. There is no non NNA in Zhoushan, which is excluded from the statistical analysis. 7

H. Chao and G.C.S. Lin

Habitat International xxx (xxxx) xxx

Fig. 6. Comparison of the growth of per capita GDP between the NNA and the non NNA in 15 municipalities (T-Tþ2). Note: T represents the year of establishment of NNA. There is no non NNA in Zhoushan, which is excluded from the statistical analysis.

heteroscedasticity, lnGDP and lnFDI were taken as dependent variables and recorded as lngdp and lnfdi. NNA was the core explanatory variable, if the district (county) i was within the spatial scope of the NNA at time t, it was assigned 1, otherwise it was assigned 0. The control variablesGit were determined by considering the relevant literature (Ambroziak & Hartwell, 2018; Ham et al., 2010; Mayer et al., 2017; Neumark & Kolko, 2010; Wu, Luo, Zhang, & Skitmore, 2016) and the development of districts (counties) considering seven indicators (see Table 4). The existing level of economic development affected local economic growth and was expressed by the logarithm of the previous year’s GDP and denoted as lngdplg. Labor force, as an essential pro­ duction factor, plays an important role in local economic growth. It was expressed by the logarithm of urban employees at the end of the year and was recorded as lnpopu. Spatial agglomeration reflects the level of rent and infrastructure, influencing the location of industrial investment

and ultimately local economic growth. Spatial agglomeration was expressed by the number of permanent residents per square kilometer in the built-up area and was denoted as density. Economic development often promotes the evolution of industrial structure and industrial development has an impact on local economic growth. They were expressed by the proportion of secondary industry added value to GDP and tertiary industry added value to GDP, which were recorded as secind and thdind. The tax rate affects the cost and benefit of enterprises, and then affects the investments made by enterprises and local economic growth. It was expressed by the proportion of general budget income to GDP and was recorded as taxrate. Local government plays an important role in China’s economic development. Government expenditure reflects local government’s public financial investment in development and af­ fects local economic growth. It was expressed by the logarithm of per capita general budget expenditure and was recorded as lnexpe.

Table 3 Comparison of the management modes of China’s National New Areas (NNAs). Management mode

Spatial division

Complexity

Economic function and social function

Characteristic

City

National New Area

New district government

“prefecture-district”

★

Unified

Shanghai Tianjin

Pudong Binhai

Co-operative work

“prefecture-district” or “prefecturecounty”

★★

Unified

The legal subject is clear; establishment procedure is complex; the organization is sound; strong management ability; high management costs. Establishment procedure is simple; one staff member has two functions; low administration cost and weak capacity for integration and coordination

Management committee I

“prefecture-district”

★★

Disunity

Zhoushan Guangzhopu Qingdao Dalian Chongqing Nanjing Haerbin Changchun

Archipelago Nansha West Coast Jinpu Liangjiang Jiangbei Haerbin Changchun

Management committee II

“prefecture-county”

★★★

Disunity

Lanzhou Changsha Fuzhou Kunming

Lanzhou Xiangjiang Fuzhou Dianzhong

Management committee III

“prefectureprefecture”

★★★★

Disunity

Xi’an; Xianyang Guiyang; Anshun Chengdu; Meishan Nanchang; Jiujiang

Xi’xian

Establishment procedure is simple; under municipal government; flexible institutional settings; high efficiency of management development and construction; not a complete administrative body and does not have the function of social affairs management. Establishment procedure is simple; under municipal government, flexible institutional settings; not a complete administrative body and does not have the function of social affairs management; difficulties in managing county governments. Establishment procedure is simple; under provincial government; flexible institutional settings; not a complete administrative body and does not have the function of social affairs management. It’s hard to manage municipal governments, and there’s even competition.

Note: Number of five-pointed star indicates degree of complexity. The research period is from January 2010 to December 2016. Source: the authors. 8

Gui’an Tianfu Ganjiang

H. Chao and G.C.S. Lin

Habitat International xxx (xxxx) xxx

which formed the study area (see Fig. 7). The overall area of Chongqing was considered too large. Therefore, the study only included the nine central districts. The empirical analysis considered districts (counties) as units, and at least one district (county) in each city was covered by an NNA, a total of 215 districts (counties). During the research, the spatial division and management mode of the 16 NNAs remained stable.

Table 4 The definition of dependent and independent variables. Type of variable

Variable name

The meaning of the variable

Dependent variable

lngdp lnfdi NNA

Logarithm of GDP Logarithmic Value of FDI Dummy variable (0,1)

lngdplg

Economic level: Logarithmic value of GDP in the last year. Labor force: Logarithm of urban employees at the end of the year. Spatial agglomeration: Permanent resident population per km2 in built-up areas. Industrial structure: The proportion of the added value of secondary industry to GDP. Industrial structure: The proportion of the added value of tertiary industry to GDP. Tax rate level: General budget Income as a proportion of GDP. Government expenditure: Logarithmic value of per capita budgetary expenditure. Capital Input: Logarithmic value of fixed asset investment.

National New Area (NNA) variable Control variables

lnpopu density secind thdind taxrate lnexpe lninve

4.2.1. Economic effects of NNAs Our quantitative modeling involves a total of 16 NNAs that are distributed among 20 cities. The collinearity and heterogeneity tests for the independent variables showed that the variance inflation factor values of each variable were lower than 10, I2 ¼ 18%, and P > 0.1. There were no obvious collinearity and heterogeneity problems in the regression model. According to the panel data characteristics and het­ erogeneity test results, the fixed effect model was used for an empirical analysis to eliminate the non-observational regional effects. The regression results (see Table 5) showed that after controlling for the control variables affecting economic growth, i.e., lngdplg, lnpopu, den­ sity, secind, thdind, taxrate, lnexpe, and lninve, the establishment of an NNA significantly promoted GDP and FDI growth. First, the establish­ ment of an NNA played an important role in promoting GDP, with a contribution of 13.5% (t ¼ 7.20). Second, the establishment of an NNA promoted the growth of FDI, contributing 36.7% (t ¼ 3.54). This indi­ cated that the special preferential policies and infrastructure construc­ tion of NNAs based on land development could attract investment. It also showed that NNAs can contribute to stable national economic growth. The empirical results for the control variables were consistent with

Investment is the driving force of local economic growth. It was expressed by the logarithm of fixed asset investment and recorded as lninve. After removing Shanghai Pudong New Area, Tianjin Binhai New Area and Xiong’an new area, the other 16 NNAs were selected as sam­ ples for quantitative modeling. They were distributed over 20 cities,

Fig. 7. Location of China’s National New Areas and their affected municipalities. Source: the authors. 9

H. Chao and G.C.S. Lin

Habitat International xxx (xxxx) xxx

Table 5 The model results for China’s National New Areas (NNAs) and local economic growth. Variables NNA taxrate lnpopu density lngdplg lnexpe lninve secind thdind _cons R2 N

Table 6 The model results for China’s National New Areas (NNAs) and local economic growth in different regions.

lngdp

lnfdi

Coefficient

Coefficient

Variables

CWR

ER

CWR

0.135c (7.20) 0.011c ( 7.84) 0.243c (9.54) 0.130e-04b ( 3.28) 0.550c (36.13) 0.159c (11.41) 0.144c (12.94) 0.144e-02 ( 0.51) 0.895e-02a ( 1.48) 0.297b ( 2.37) 0.946 1935

0.367c (3.54) 0.022c ( 2.91) 0.481c (3.61) 0.100e-04 (0.47) 0.290b (3.44) 0.400c (6.09) 0.263c (4.63) 0.002 (1.22) 0.008a (2.39) 7.578c ( 11.43) 0.575 1935

Coefficient

Coefficient

Coefficient

NNA taxrate

c

c

ER c

Coefficient

lngdplg

0.088 (4.42) 0.018c ( 5.21) 0.333c (8.74) 8.610e-06b ( 2.17) 0.425c (15.34)

0.565 (4.71) 0.031c ( 3.78) 0.491b (2.37) 0.380e-04 (0.73) 0.324c (3.38)

lnexpe lninve secind

0.144c (9.00) 0.138c (9.23) 0.004c (3.98)

0.196b (2.61) 0.448c (6.51) 0.015a (2.58)

thdind

0.003a (2.51)

0.015a (2.37)

0.010a (2.00)

_cons

0.924c ( 4.79) 0.949 1494

0.244c (8.23) 0.133c (8.36) 0.49 e 03a ( 1.94) 0.91e-03 ( 1.14) 0.371 ( 1.60) 0.944 441

0.050 (0.24) 0.003 ( 0.12) 0.827c (4.48) 0.139e-04 ( 0.55) 0.216 ( 1.19) 0.864c (5.88) 0.156a (2.05) 0.001 (0.82)

8.22a ( 8.43) 0.641 1494

10.311c ( 7.57) 0.347 441

R2 N

the existing research conclusions. During the study period, China’s local economic growth displayed the apparent effects of economic scale, i.e., the initial economic level was significantly positively correlated with local economic growth (Qi et al., 2017). The labor force also plays a significant role in promoting local economic growth, to some extent showing that labor is still an important factor in promoting economic growth (Ham et al., 2010; Mayer et al., 2017; Neumark & Kolko, 2010). The degree of spatial agglomeration was slightly negatively correlated with economic growth, while the impact of economic structure on local economic growth was not significant. The tax rate had a significant negative impact on GDP growth; a higher tax rate reduced the attrac­ tiveness of jurisdictions to enterprises (Morisson & Doussineau, 2019). The impact of government expenditure and fixed asset investment on economic growth was also consistent with research results (Ambroziak & Hartwell, 2018; Liu, Yue, Fan, & Zhang, 2017), and had a significant promotional effect.

lnfdi

0.177 (5.56) 0.007c ( 4.46) 0.275c (6.65) 2.620e-06 ( 0.26) 0.575c (31.31)

lnpopu density

Note: t statistics in parentheses. a Indicates a significance level of 10%. b Indicates a significance level of 5%, and. c Indicates a significance level of 1%.

lngdp

Note: CWR: Central and western regions, ER: Eastern region, t statistics in parentheses. a Indicates a significance level of 10%. b Indicates a significance level of 5%, and. c Indicates a significance level of 1%.

to tax, land, and other cost factors to those sensitive to human capital, technology, and the marketization environment. The preferential pol­ icies and low-cost land provided by the NNA are no longer the most important investment considerations. Second, industrial structure adjustment is currently the main problem in the eastern region. The development of an NNA in the eastern region is no longer based on “blind investment” but occurs by attracting high-end industries. The eastern region has a relatively well-developed economy and strong in­ dustrial base, business facilities, and degree of openness. The external environment of an NNA is also attractive. Therefore, the marginal utility of the NNA is discounted. In contrast, the industrial base in the central and western regions is relatively weak, and infrastructure construction and degree of openness are poor. This external environment enables the NNA to achieve higher marginal utility through preferential policies, infrastructure supply, and low-cost land, making it easier to attract en­ terprises to invest in the NNA. Second, the conceptual framework (see Fig. 4) also points out that the administrative structure of NNAs may interfere with their economic effects. Based on the above analysis, the administrative structures of 16 NNAs were divided into four groups according to their spatial division and management mode, namely “municipal districts þ co-operative work”, “municipal districts þ management committee”, “municipal counties þ management committee”, and “cross-municipalities þ management committee” (see Table 3). The samples were classified according to the basic unit of a city, and the models were analyzed separately to test the differences of economic effects of different administrative structures of NNAs. In terms of GDP growth (see Table 7), municipal districts þ co-operative work NNAs and municipal district þ management committee NNAs made relatively high contributions of 17.5% (t ¼ 5.52) and 15.7% (t ¼ 4.16). Municipal county þ management committee NNAs and cross-municipalities þ management committee NNAs made relatively low contributions to GDP growth at 8.3% (t ¼ 2.82) and 6.7% (t ¼ 4.33) respectively. This shows that in NNAs’ spatial division and management mode, the non-uniqueness of the adminis­ tration of prefecture-level cities or the existence of county-level administration reduced the NNA’s economic effect. The test results were similar for the impact of FDI (see Table 7). The contribution of municipal districts þ co-operative work NNAs and municipal districts þ

4.2.2. The disequilibrium of the economic effects of NNAs Based on the conceptual framework (see Fig. 4) above, the level of the regional economy and degree of openness may interfere with the economic effects of the NNAs. According to China’s official division of the three regions of the eastern, the central and the western, and considering the implementation of the regional strategy of promoting the first development and opening up of the eastern region since the reform and opening up, the eastern region of China is stronger than the central and western regions in terms of the level of economy and degree of openness. In order to test the difference of the economic effects of NNA in different regional contexts, this paper makes an empirical test on the NNAs and their influenced municipalities in the eastern, central and western regions (see Table 6). In terms of local GDP growth, the contribution of NNAs located in the eastern region was 8.8% (t ¼ 4.42), while in the central and western regions it was higher at 17.7% (t ¼ 5.56). In terms of the contribution to local FDI growth, the NNAs located in the eastern region had no significant impact, while those located in the central and western regions accounted for 56.5% (t ¼ 4.71). This confirmed the conceptual framework, that is, the level of the regional economy and degree of openness will interfere with the economic effects of NNAs. There are legitimate reasons for this result. The focus on developing the eastern region of China gives the region a high level of economic development, business facilities, industrial structure, and degree of openness. Therefore, different aspects of NNA preferential policies and low-cost land will appeal to enterprises in different regions. First, with the industrial transformation acceleration and upgrading facilities, en­ terprises investing in the eastern region have shifted from those sensitive 10

H. Chao and G.C.S. Lin

Habitat International xxx (xxxx) xxx

Table 7 The model results for China’s National New Areas (NNAs) and local economic growth in different administrative structures. Variables

lngdp

lnfdi

MDCW

MDMC

MCMC

CMMC

MDCW

MDMC

MCMC

CMMC

Coefficient

Coefficient

Coefficient

Coefficient

Coefficient

Coefficient

Coefficient

Coefficient

NNA taxrate

0.175c (5.52) 0.009c ( 4.07)

0.165b (2.12) 0.105b ( 2.34)

lngdplg lnexpe lninve secind

0.340c (9.91) 0.192c (8.73) 0.176c (4.84) 7.830e-04 ( 0.30) 3.260e-04 (2.48)

0.067c (4.33) 0.016b ( 3.04) 0.191c (4.40) 0.761e-05 (1.37) 0.532c (19.82) 0.108c (7.22) 0.147c (11.12) 0.0047a (2.64) 5.253e-04 (0.27) 0.431b ( 2.97) 0.969 801

0.416b (3.17) 0.008 ( 0.81)

0.281c (6.05) 8.701e-06 (2.32)

0.083b (2.82) 0.021c ( 6.86) 0.233c (3.45) 0.112e-04 (0.46) 0.621c (20.87) 0.142c (6.28) 0.045b (3.22) 0.002 ( 2.03) 0.008c (7.38)

0.392c (3.41) 0.047 ( 1.76)

lnpopu density

0.157c (4.16) 0.012b ( 3.12) 0.312c (3.77) 4.812e-04b (3.01) 0.414c (18.16) 0.183c (7.03) 0.105c (4.12) 0.003 ( 1.07)

0.135c (3.61) 0.535e-04 ( 0.78) 0.256b (2.46) 0.152 (0.47) 0.551c (6.24) 0.822e-04 (0.03)

0.211c (3.58) 0.106e-04 ( 0.63) 0.279c (3.52) 0.059 (0.48) 0.349c (4.05) 0.001 (0.31)

0.408b (3.12) 1.102e-04 ( 0.30) 0.129b (2.95) 0.174 (0.51) 0.428c (3.56) 0.037b ( 2.37)

0.153 (1.28) 0.023 ( 1.10) 0.113a (2.79) 0.418e-05 (0.07) 0.144a (2.49) 0.505b (3.73) 0.3587c (3.58) 0.002 (0.12)

thdind _cons R2 N

0.439 ( 1.79) 0.951 279

0.002 (1.26) 0.959 ( 2.16) 0.923 432

0.071 (0.21) 0.972 423

0.003 (0.02) b

6.971 ( 2.63) 0.642 279

0.008 ( 0.74) b

4.035 ( 2.03) 0.713 432

0.023 ( 1.34) 5.372 ( 1.09) 0.652 423

0.018 ( 0.85) 1.478a ( 1.61) 0.586 801

Note: MDCW: Municipal district þ co-operative work, MDMC: Municipal district þ management committee, MCMC: Municipal county þ management committee, CMMC: Cross-municipal þ management committee, t statistics in parentheses. a Indicates a significance level of 10%. b Indicates a significance level of 5%, and. c Indicates a significance level of 1%.

Fig. 8. Administrative division of the Xi’xian New Areas. Source: the authors. 11

H. Chao and G.C.S. Lin

Habitat International xxx (xxxx) xxx

management committee NNAs to FDI growth was high at 39.2% (t ¼ 3.41) and 41.6% (t ¼ 3.17) respectively, while for municipal county þ management committee NNAs and cross-municipalities þ management committee NNAs the contribution was less at 16.5% (t ¼ 2.12) and 15.3% (t ¼ 1.28) respectively. This confirms the conceptual framework, that is, the administrative structure of the NNA interferes with its economic effect. The more complex the administrative relationship in the spatial division and management mode of an NNA, the less effective it will be in promoting economic growth in its jurisdiction. Also, the spatial division of an NNA has a key impact on its governance scale. NNAs are located in the administrative areas of one municipality or prefecture-level city, and all of them are composed of municipal districts. The construction of governance scale is often responsible for forming the municipal districts þ co-operative work and municipal districts þ administrative commit­ tee. These two types of NNA can better achieve the integration of new and old scales in the early stages of development, which show higher economic effects. For NNAs where the spatial scope is beyond the administrative boundary of a single prefecture-level city or whose in­ ternal space includes municipal counties, the governance scale is mainly of the municipal counties þ management committee and cross-munici­ palities þ management committee. These two types of NNA have the characteristics of diversification of their management subjects and an inconsistent territorial logic, show lower economic effects. These results reflect the fact that prefecture-level cities, municipal districts, and municipal counties (or county-level cities) in China, as administrative development units, differ in their willingness and ability to develop. Compared with municipal districts, prefecture-level cities and municipal counties (or county-level cities) have more independent land and monetary systems, and display a stronger willingness and ability to develop. Xi’xian New Area is an example; its spatial division is across Xi’an and Xianyang, and consists of five functional zones (see Fig. 8). The Shanxi Provincial Government established an administrative committee to coordinate and manage the development of Xi’xian New Area. This gives provincial administrative authority for economic management, planning, land, construction, and environmental protec­ tion using the vertical and horizontal movement of power (Shanxi Provincial Government, 2014). However, the administrative committee plays a coordinating role in the construction and development of Xi’xian New Area. This is a kind of incomplete reconstruction of management system. Although the management of the five functional zones has been unified, there is still inevitable competition among the administrative sectors.

contrast, the controversial issue concerning the relevance of geography and spatiality of state rescaling has not been addressed adequately and satisfactorily possibly because spatial outcome is considered to be a by-product or simply taken for granted. Without serious investigations of the spatiality of state rescaling, any attempt to theorize the dynamics of urban and regional development must necessarily be handicapped and incomplete. As this study has demonstrated, geography matters in �-vis the differentiation of the state in Western liberal democracy vis-a authoritarian political economy, in the location and distribution of the projects of state rescaling, and in the making of uneven economic effects of the projects of state rescaling in different regional contexts. The main point to be made on the basis of our empirical study is therefore to foreground the spatiality of the observed practices of state rescaling as an important avenue to advance theoretical enquiries into the nature and dynamics of urban and regional development in different world regions. In contrast with many existing studies of individual cases of China’s NNAs at the micro-level (Li, 2015; Long et al., 2014; Ngo et al., 2017; Yang et al., 2019; Zhu & Sun, 2009; Zou et al., 2018), our research has unveiled a general pattern and process of the location and distribution of the NNAs at the national level. The findings of our research confirm the notion of state rescaling as an interesting theoretical perspective to interpret China’s NNAs as the spatial manifestations of the rescaling project. However, our research has pinpointed the salient and distinct Chinese characteristics. The periodic and ad hoc establishment of the NNAs illustrates the authoritarian although at times fragmented nature of the Chinese Party-state that is determined to spatialize its ambition and developmental agenda through rescaling both politically and geographically. To what extent has the mission of the Party-state been accomplished in the establishment and development of the NNAs? Our empirical study has revealed an interesting portfolio in which the single scheme of the NNAs introduced by the central Party-state has had diverse economic effects contingent upon various regional conditions. Establishing an NNA is found to have increased the spatial inequality in the municipality where it is located. There existed significant spatial variation across the country in terms of the contribution of the NNAs to the growth of GDP depending on the level of the regional economy, degree of openness and complexity of administration. The contribution of the NNAs to the growth of GDP and FDI is found to be significant higher in central and western China than that in eastern China. The more complex the administrative relationship in the spatial division and management mode of the NNAs is, the less they contribute to local economic growth. The strong territorial structure of prefecture-level cities and municipal counties (or county-level cities) enables them to safeguard their developmental interests (Cartier, 2013; Li et al., 2014; Wang & Shen, 2017; Xu & Yeh, 2013; Zhao, 2011). When the spatial division of the NNAs crosses the border of prefecture-level city or in­ cludes counties, the management mode of the administrative committee can be impeded by territorial development, and the new and old governance bodies may suffer from conflicts and competitions. The emerging geography of China’s NNAs and the heterogeneity of their economic effects illustrate various regional trajectories of state rescaling contingent upon local social, economic, and political condi­ tions. In the Western countries of liberal democracy, the discussion around state rescaling focuses on the relationship between state and non-state sectors at the super-local level (Harrison, 2014). For an authoritarian Party-state in China, the practice of state rescaling has involved primarily the restructuring of power relations both vertically (hierarchically) and horizontally (cross-boundary and cross-jurisdictional administrative changes) within the state apparatus. Despite these differences, state rescaling represents a response to the crisis of development and governance. The findings of our research also have significant implications for planning and policy formation. Our quantitative assessment of China’s NNAs has confirmed their positive economic effects. However, the findings of our assessment have also clearly suggested the need for a

In terms of the actual development, in administrative terms, the five functional zones of Xixian New Area are part of Xi’an City and Xia­ nyang City. The different cities govern the fiscal and taxation administration. For development, construction, and attracting in­ vestment, each functional zone operates independently and sepa­ rately affecting the overall development, construction, and factor inputs of the NNA.5 5. Conclusions and discussion For a long while, theoretical attempts to understand the nature and dynamics of urban and regional development had been (mis)led by a popular belief that, as a consequence of globalization, nation-states had lost controls over the flows of capital and labour and geography does not matter anymore. The “end of the nation-state” thesis (Ohmae, 1995) has subsequently been disputed and replaced with a more sophisticated theory of state rescaling (Brenner, 2004, 2009; Jessop, 2002). By

5 Interview with a senior official who directly involved in administrative committee of Xi’xian New Area, December 2016, Xi’an.

12

H. Chao and G.C.S. Lin

Habitat International xxx (xxxx) xxx

rational site selection of the NNAs and the streamlining of their gover­ nance structure. NNAs should be located in regions that can produce strong marginal effects, and the complexity of management structure should be simplified to facilitate territorial development. The evaluation criteria adopted in this study did not address the issue of whether the benefits of NNAs exceed their initial investment, and whether NNAs can enhance regional imbalance. Although this study defined four types of NNA, in practice NNAs may be more complex and diverse. Future research is needed to clarify the extent to which the benefits of estab­ lishing a NNA would outweigh investment and how such benefits have affected the widening or narrowing of regional disparities. There is also the need for comparative studies of different cases so as to unveil the general pattern, process, mechanism, and effects of Chinese state rescaling in the establishment and development of the NNAs.

empowerment zones and federal enterprise community. Journal of Public Economics, 95(7), 779–797. Harrison, J. (2014). Rethinking city-regionalism as the production of new non-state spatial strategies: The case of Peel Holdings Atlantic Gateway Strategy. Urban Studies, 51, 2315–2335. Hartwell, C. A. (2018). Bringing the benefits of David to Goliath: Special economic zones and institutional improvement. Regional Studies, 52(10), 1309–1321. Heley, J. (2013). Soft spaces, fuzzy boundaries and spatial governance in post-devolution wales. International Journal of Urban and Regional Research, 37, 1325–1348. Hui, E. C. M., & Boa, H. (2013). The logic behind conflicts in land acquisitions in contemporary China: A framework based upon game theory. Land Use Policy, 30(1), 373–380. Jensen, C. (2018). The employment impact of Poland’s special economic zones policy. Regional Studies, 52(7), 877–889. Jessop, B. (2002). Liberalism, neoliberalism, and urban governance: A state-theoretical perspective. Antipode, 34(3), 452–472. Jessop, B. (2016). The state - past, present, future. Cambridge, UK: Polity Press. Jonas, A. E. G., Goetz, A. R., & Bhattacharjee, S. (2014). City-regionalism as a politics of collective provision: Regional transport infrastructure in Denver, USA. Urban Studies, 51, 2444–2465. Jonas, A. E. G., & Moisio, S. (2018). City regionalism as geopolitical processes: A new framework for analysis. Progress in Human Geography, 42(3), 250–370. Klink, J. (2013). Development regimes, scales and state spatial restructuring: Change and continuity in the production of urban space in metropolitan Rio de Janeiro, Brazil. International Journal of Urban and Regional Research, 37, 1168–1187. Li, L. (2015). State rescaling and national new area development in China: The case of Chongqing Liangjiang. Habitat International, 50, 80–89. Liang, Z., & Chao, Y. (2018). Disorder or reorder? The spatial production of state-level new areas in China. Sustainability, 10, 3628. Lim, K. F. (2017). State rescaling, policy experimentation and path-dependency in postMao China: A dynamic analytical framework. Regional Studies, 51, 1580–1593. Lin, G. C. S., Li, X., Yang, F. F., & Hu, F. Z. Y. (2015). Strategizing urbanism in the era of neoliberalization: State power reshuffling, land development and municipal finance in urbanizing China. Urban Studies, 52(11), 1962–1982. Liu, Y. L., Lu, M., & Xiang, K. H. (2018). Balance through agglomeration: A race between geography and policy in China’s regional development. China and World Economy, 26(6), 72–96. Liu, Y., Yue, W., Fan, P., Peng, Y., & Zhang, Z. (2017). Financing China’s suburbanization: Capital accumulation through suburban land development in Hangzhou. International Journal of Urban and Regional Research, 40, 1112–1133. Li, Y., & Wu, F. (2013). The emergence of centrally initiated regional plan in China: A case study of Yangtze River Delta regional plan. Habitat International, 39, 137–147. Li, Z., Xu, J., & Yeh, A. G. O. (2014). State rescaling and the making of city-regions in the Pearl River Delta, China. Environment and Planning C: Government and Policy, 32(1), 129–143. Long, H. L., Liu, Y. Q., Hou, X. G., Li, T. T., & Li, Y. R. (2014). Effects of land use transitions due to rapid urbanization on ecosystem services: Implications for urban planning in the new developing area of China. Habitat International, 44, 536–544. Man, J. Y. (1999). The impact of tax increment financing programs on local economic development. Journal of Public Budgeting, 11(3), 417–430. Mayer, T., Mayneris, F., & Loriane, L. Y. (2017). The impact of urban enterprise zones on establishment location decisions and labor market outcomes: Evidence from France. Journal of Economic Geography, 17(4), 709–752. Morisson, A., & Doussineau, M. (2019). Regional innovation governance and place-based policies: Design, implementation and implications. Regional Studies, Regional Science, 6(1), 101–116. National Development and Reform Commission of People’s Republic of China (NDRCPRC). (2015). An opinion on promoting a healthy development of the National New Area. April 15, 2015. Beijing: Fagai Issue [2015] No.778 (in Chinese). National Development and Reform Commission of People’s Republic of China (NDRCPRC). (2018). China’s National New Areas development report. Beijing: China Planning Press (in Chinese). Neumark, D., & Kolko, J. (2010). Do enterprise zones create jobs? Evidence from California’s enterprise zone program. Journal of Urban Economics, 68(1), 1–19. Ngo, T. W., Yin, C., & Tang, Z. (2017). Scalar restructuring of the Chinese state: The subnational politics of development zones. Environment and Planning C: Politics and Space, 35, 57–75. Ohmae, K. (1995). The end of the nation-state: The rise of regional economies. New York: The Free Press. Pike, A., & Tomaney, J. (2009). The state and uneven development: The governance of economic development in England in the post-devolution UK. Cambridge Journal of Regions, Economy and Society, 2, 13–34. Pratchett, L. (2004). Local autonomy, local democracy and the ‘new localism’. Political Studies, 52(2), 358–375. Pumain, D. (2006). Villes et syst� emes de villes dans l’�economie. Revue d’Economie Financiere, 86, 29–46. Qi, Y. J., Liu, T., & Jiao, J. J. (2017). Implementation methods and economic impacts of national node strategies. Journal of Geographical Sciences, 348–364, 03. Resende, G. M. (2013). Spatial dimensions of economic growth in Brazil. ISRN Economics, 2013, 1–19. Shanxi Provincial Government. (2014). Some opinions on accelerating the development of Xi’xian new area. 31 october, 2014. Xi’an: Shanxi Issue [2014] No.10 (in Chinese). Shen, J. (2005). Space, scale and the state: Reorganizing urban space in China. In L. J. C. Ma, & F. L. Wu (Eds.), Restructuring the Chinese city (pp. 39–58). London: Routledge.

Funding sources This research was supported by the National Natural Science Foun­ dation of China (41801145 and 41842038), the Hong Kong Research Grants Council (CRF C7028-16G, GRF 17614218 and GRF 17662116) and the Seed Funding for Basic Research Program of the University of Hong Kong. Declaration of competing interest The authors declare that they have no competing interests. CRediT authorship contribution statement Heng Chao: Conceptualization, Methodology, Data curation, Investigation, Resources, Software, Validation, Visualization, Funding acquisition, Writing - original draft. George C.S. Lin: Supervision, Conceptualization, Funding acquisition, Methodology, Formal analysis, Writing - review & editing. References Ambroziak, A. A., & Hartwell, C. A. (2018). The impact of investments in special economic zones on regional development: The case of Poland. Regional Studies, 52 (10), 1322–1331. Barry, N. (2011). China’s economic policy today: The new state activism. Eurasian Geography and Economics, 52(3), 313–329. Bayirba� g, M. K. (2013). Continuity and change in public policy: Redistribution, exclusion and state rescaling in Turkey. International Journal of Urban and Regional Research, 37, 1123–1146. Brenner, N. (2004). New state spaces: Urban governance and the rescaling of statehood. New York: Oxford University Press. Brenner, N. (2009). Open questions on state rescaling. Cambridge Journal of Regions, Economy and Society, 2(1), 123–139. Brenner, N., Jessop, B., Jones, M., & MacLeod, G. (2003). State/space: A reader. Oxford: Blackwell. Cartier, C. (2005). City-space: Scale relations and China’s spatial administrative hierarchy. In L. J. C. Ma, & F. L. Wu (Eds.), Restructuring the Chinese city (pp. 21–38). London: Routledge. Cartier, C. (2013). What’s territorial about China? From geopolitical narratives to the administrative area economy. Eurasian Geography and Economics, 54(1), 57–77. Chen, H., Zhang, J. X., Li, X. Y., & Zhang, Z. (2014). Rescaling as a leading national transformation project: Decoding state rescaling in China’s changing central stateled regional planning. China Review, 14(1), 97–124. Chien, S. S. (2013). New local state power through administrative restructuring: A case study of post-Mao China county-level urban entrepreneurialism in Kunshan. Geoforum, 46, 103–122. Cochrane, A. (2012). Making up a region: The rise and fall of the ‘south east of England’ as a political territory. Environment and Planning C: Politics and Space, 30, 95–108. Cox, K. R. (2010). The problem of metropolitan governance and the politics of scale. Regional Studies, 44, 215–227. Eeckhout, J., Pinheiro, R., & Schmidheiny, K. (2014). Spatial sorting. Journal of Political Economy, 122(3), 554–620. Fujita, M., Krugman, P., & Venables, J. (1999). The spatial economy: Cities, regions and international trade. Cambridge, Mass: MIT Press. Greenstone, M., Hornbeck, R., & Moretti, E. (2010). Identifying agglomeration spillovers: Evidence from winners and losers of large plant openings. Journal of Political Economy, 118(3), 536–598. _ Ham, J. C., Swenson, C., Imrohoro� glu, A., & Song, H. (2010). Government programs can improve local labor markets: Evidence from state enterprise zones, federal

13

H. Chao and G.C.S. Lin

Habitat International xxx (xxxx) xxx Xu, J., & Yeh, A. G. O. (2011). Governance and planning of mega-city regions: An international comparative perspective. New York: Routledge. Xu, J., & Yeh, A. G. O. (2012). Re-building regulation and re-inventing governance in the Pearl River Delta, China. Urban Policy and Research, 30(4), 385–401. Xu, J., & Yeh, A. G. O. (2013). Interjurisdictional cooperation through bargaining: The case of the Guangzhou-Zhuhai railway in the Pearl River Delta, China. The China Quarterly, 213, 130–151. Yang, C., & Li, S. M. (2013). Transformation of cross-boundary governance in the greater Pearl River Delta, China: Contested geopolitics and emerging conflicts. Habitat International, 40, 25–34. Yang, J., Li, Y., Hay, I., & Huang, X. J. (2019). Decoding national new area development in China: Toward new land development and politics. Cities, 87, 114–120. Zhang, X. L., Lin, Y. L., Wu, Y. Z., & Skitmore, M. (2017). Industrial land price between China’s Pearl River Delta and southeast Asian regions: Competition or coopetition? Land Use Policy, 61, 575–586. Zhao, P. J. (2011). Managing urban growth in a transforming China: Evidence from Beijing. Land Use Policy, 28(1), 96–109. Zhu, J. M. (1994). Changing land policy and its impact on local growth: The experience of the Shenzhen Special Economic Zone, China, in the 1980s. Urban Studies, 31(10), 1611–1623. Zhu, J. M. (1996). Denationalization of urban physical development: The experiment in the shenzhen special economic zone, China. Cities, 13(3), 187–194. Zhu, J. M. (2004). From land use right to land development right: Institutional change in China’s urban development. Urban Studies, 41(7), 191–220. Zhu, X., & Sun, B. (2009). Tianjin Binhai new area: A case study of multi-level streams model of Chinese decision-making. Journal of Chinese Political Science, 14(2), 191–211. Zou, Y., & Zhao, W. (2018). Making a new area in Xiong’an: Incentives and challenges of China’s "Millennium plan". Geoforum, 88, 45–48.

Smart, A., & Lin, G. C. S. (2007). Local capitalisms, local citizenship and translocality: Rescaling from below in the Pearl River Delta region, China. International Journal of Urban and Regional Research, 31(2), 280–302. Su, X. (2012). Rescaling the Chinese state and regionalization in the great Mekong subregion. Review of International Political Economy, 19(3), 501–527. The State Council of People’s Republic of China. (1992). Approval of the state Council for the establishment of Pudong new area in Shanghai. 11 october, 1990. Beijing: State Letter [1992] No.145 (in Chinese). The State Council of People’s Republic of China. (2006). State council’s opinions on promoting the development and opening-up of Tianjin Binhai new area. 26 may, 2006. Beijing: State Issue [2006] No.20 (in Chinese). The State Council of People’s Republic of China. (2012). Approval of the state Council for the development plan of Guangzhou Nansha new area. 18 september, 2012. Beijing: State Issue [2012] No.128 (in Chinese). Varr� o, K. (2010). Re-politicising the analysis of "new state spaces" in Hungary and beyond: Towards an effective engagement with "actually existing neoliberalism. Antipode, 42(5), 1253–1278. Vlad, M., & Manuel, W. (2019). State rescaling and economic convergence. Regional Studies, 53(4), 462–477. Wang, L., & Shen, J. F. (2017). The challenge of spatial plan coordination in urban China: The case of Suzhou city. Urban Policy and Research, 35(2), 180–198. Wilson, D. (2003). Unravelling control freakery: Redefining central-local government relations. The British Journal of Politics & International Relations, 5(3), 317–346. Wu, F. L. (2016). China’s emergent city-region governance: A new form of state spatial selectivity through state-orchestrated rescaling. International Journal of Urban and Regional Research, 40(6), 1134–1151. Wu, Y. Z., Luo, J. J., Zhang, X. L., & Skitmore, M. (2016). Urban growth dilemmas and solutions in China: Looking forward to 2030. Habitat International, 56, 42–51. Xu, Z., Chen, Z., & Lu, M. (2010). The core-periphery model of urban system in China. The Journal of World Economy, 7, 144–160.

14