The Chinese Case, Guangdong and the Pearl River Delta

The rural sector has been a key element in China's development strategy. The record up to 1979, however, was an uneven one.^[15] In the thirty years after 1949 a collective approach to rural production was created in which the traditional link between peasant households and the cultivation of privately owned land was compromised, and a large state-organized planning apparatus intervened in the Chinese peasant economy.

In 1979 major changes in China's policies began in the countryside. Theories and practices of a thirty-year period were significantly modified. There was significant decentralization of responsibility for agricultural pro-

[12] Peter Worsley has described this as "the undoing of the peasantry." See his The Three Worlds: Culture and World Development (London: Weidenfeld and Nicholson, 1984), 61-167; see also William E. James, Seiji Naya, and Gerald M. Meier, Asian Development: Economic Success and Policy Lessons (San Francisco: International Center for Economic Growth, 1987), 157-90.

[13] See the arguments, for example, in Neil J. Smelser, "Mechanisms of Change and Adjustments to Change," in Industrialization and Society , ed. Bert F. Hoselitz and Wilbert E. Moore, 32-54 (Paris: UNESCO and Mouton, 1963).

[14] G. William Skinner, "Rural Marketing in China: Repression and Revival," China Quarterly , no. 103 (September 1985): 393-413.

[15] Nicholas Lardy, Agriculture in China's Modern Economic Development (London: Cambridge University Press, 1983).

duction, and peasant households once again became the focal point of the agricultural sector of the rural economy. After 1979 Chinese peasant households assumed major management responsibility over agricultural production, including both subsistence grain production and economic crops, which became increasingly subject to market forces. At the same time, rural development policy encouraged diversification of the rural economy and promoted a shift away from a central reliance on agricultural production.^[16]

While Chinese peasant households could contemplate new forms of (private sector) economic participation, the major transformation of local economies in some of China's regions was led by a dramatic growth in collectively managed enterprises, the lineal descendants of the commune and brigade industries, whose growth had been severely limited in the period before 1979. The formal demise of the system of the People's Communes is linked to "decollectivization" and the increased ability of peasant households to determine the allocation of household labor.^[17] It is nonetheless paralleled by an intense reorganization of local administration in which the entrepreneurial and business skills of local cadres have become more critical in their judgment of performance than political and ideological accomplishments, which had prevailed for much of the previous thirty years.

Community control of nonagricultural (and especially industrial) activities was vigorously pursued, which augmented household control over strictly agricultural production. Economic opportunity in nonagricultural production expanded throughout rural China and had major consequences for peasant households, which could deploy their members into an array of decidedly new economic activities. Major changes in China's rural development policies and their impact in a variety of regional contexts since 1979 have been extensively documented.^[18] The Pearl River delta in Guangdong has been favorably located to take advantage of new directions in policy.

Guangdong, located strategically along China's south coast, is a large province of substantial geographic, economic, and cultural diversity. Its economic core is the Pearl River delta, with Guangzhou as its regional center. The delta also contains Hong Kong and Macao and two of the three

[16] Jeffrey R. Taylor, "Rural Employment Trends and the Legacy of Surplus Labour, 1978-1986," China Quarterly , no. 116 (December 1988): 736-66.

[17] A point made by Vivienne Shue, "The Fate of the Commune," Modern China 10, no. 3 (July 1984): 259-83.

[18] See the essays in W. L. Parish, Chinese Rural Development: The Great Transformation (Armonk, N.Y.: Sharpe, 1985); K. Griffin (ed.), Institutional Reform and Economic Development in the Chinese Countryside (London: Macmillan, 1984); E. Perry and C. Wong, The Political Economy of Reform in Post-Mao China (Cambridge: Harvard University Press, 1985), 1-194; Robert F. Ash, "The Evolution of Agricultural Policy," China Quarterly , no. 116 (December 1988): 529-55; Jorgen Delman, Clemens S. Ostergaard, and Flemming Christiansen (eds.), Remaking Peasant China: Problems of Rural Development and Institutions at the Start of the 1990s (Aarhus: Aarhus University Press, 1990).

Special Economic Zones (SEZ) that were located in Guangdong after the promulgation of the new "open door" policies in 1979. Outside the delta, the province is mountainous and therefore relatively poor, with inadequate communications and a pronounced ethnic diversity. Guangdong is one of China's great rural regions, ranking third in terms of the total value of rural production in 1988. Although deficient in grain production, it produces over 40 percent of China's sugarcane and is the largest producer of fruit, fish, and forest products. The province's heavy industrial base is relatively small, although it is an important center of light industry. Only Shanghai produces more sewing machines, and the province leads the nation in the production of electric fans. It is a major producer of bicycles, refined aluminum products, hand tractors, and certain food products, of which refined sugar is most significant. Since 1979 there have been sharp increases in the production of domestic appliances, electronic goods, and cameras. Overall economic growth rates have been especially marked since the middle of the 1980s. Guangdong has consistently attracted the bulk of China's foreign investment,^[19] which has had consequences for the province as a whole but which has been especially marked in the Pearl River delta.

Aggregate statistics for Guangdong province, although impressive, tend to mask the performance of the delta region which, since early 1985, has been designated an "open economic region" (jingji kaifang qu ).^[20] The delta region occupies a commanding position in the Guangdong provincial economy. With less than a fifth of the provincial population, it has built on its advantageous location, closely proximate to Hong Kong and, through it, to the world economy. Guangdong was unable to take full advantage of its long tradition of commercialized production before 1978 but, nonetheless, was the major provincial producer of cash crops such as fish, silk cocoons,

[19] Yang Dali, "Patterns of China's Regional Development Strategy," China Quarterly , no. 122 (June 1990): 248.

[20] The core of the delta is composed of the two "municipalities" (shi ) of Foshan and Jiangmen, which were created out of the former Foshan prefecture, in the early period of reform. The western part of the delta is composed of the four xian (Enping, Taishan, Kaiping, Xinhui), from which the bulk of the North American Chinese population traces its ancestry, Doumen and Heshan; the central delta extends from Guangzhou south and includes Nanhai, Punyu, Shunde, and Zhongshan and also mountainous Gaoming and Sanshui. The eastern delta consists of Dongguan and Bao'an, adjacent to the Shenzhen Special Economic Zone and Hong Kong. In 1987 the administrative definition of the "Open Economic Area" was expanded up the West River to include Zhaoqing shi , north of Guangzhou to include Huaxian and Conghua xian , and eastward to include much of what had formerly been Huiyang prefecture. Most of these new additions are not strictly delta, are mountainous and Hakka-speaking. They had begun to share in the prosperity of what is known as "the small delta," the original, essentially Cantonese-speaking, core. For a discussion of the "small" and "large" delta, see Guangdongsheng Nianjian 1989 (1989 Guangdong Yearbook), 252-53; 492; 496.

fruit, and vegetables. In the wake of rural reform its agricultural sector flourished under the newly liberalized policies. While sericulture in the central delta declined, the production of fish, fruit, and vegetables expanded dramatically, destined for the domestic market as well as Hong Kong and Macao. The major transformation in the rural sector, however, was not in agriculture. Rapid economic growth occurred as the rural sector shifted to nonagricultural production. Entrepreneurial energies were released in a flurry of industrial growth, concentrated, initially, in certain regions of the delta. The central delta from Guangzhou south to Macao and the Zhuhai Special Economic Zone and the eastern corridor to Hong Kong and the rapidly expanding Shenzhen area comprised the major areas of new economic activity. These developments were possible partly because national policy allowed the province considerable autonomy to pursue innovative measures to seek capital and to retain foreign exchange earnings. The delta was able to mobilize the extensive links it possessed with its expatriate kinsmen who live in Hong Kong, Macao, and overseas.

The entire delta has long been an area of out-migration. From the mid-nineteenth century large numbers of émigrés from south and southeast China met some of the developmental needs of the burgeoning global economy and worked as unskilled laborers in the Americas and in Southeast Asia. The western reaches of the delta have provided the great majority of Americans and Canadians of Chinese origin. Under different circumstances, a large number of delta residents left for Hong Kong in the late 1940s and 1950s, and many contributed to Hong Kong's economic transformation after 1950.

In the 1980s the entreprencurial skills and capital of these émigrés were actively sought. Kinship connections and local loyalties have become a central part of local development initiatives. In the process the delta has become firmly linked to the global economy through its Hong Kong connections. It has thus begun to share with other parts of East and Southeast Asia some of the developmental characteristics that McGee has described as the "desakota process," in which an intense mixture of agricultural and nonagricultural activities stretch along linear corridors between large city cores. The process typically occurs in regions characterized by high population densities and which were formerly dominated by wet rice agriculture.^[21] The Pearl River delta constitutes one of those regions.

[21] T. G. McGee, "Urbanasasi or Kotadesasi? Evolving Patterns of Urbanization in Asia," in Urbanization in Asia , ed. L. Ma, A. Noble, and A. Dutt, 93-108 (Honolulu: University of Hawaii Press, 1989); G. E. Johnson, "The Political Economy of Chinese Urbanization: Guangdong and the Pearl River Delta," in Urbanizing China , ed. Gregory Guldin, 185-220 (Westport, Conn.: Greenwood Press, 1992).

Map 5.1.
The Pearl River Delta