China’s competitive cities and state China’s competitive cities and state entrepreneurialism: land development,

city branding and high-tech parks

Fulong Wu

Bartlett School of Planning, University College London

fulong.wu@ucl.ac.uk

Keynote presented in the 15th TCI Annual Global Conference, 16th -19th Oct.

2012, Bilbao.

capital labour

land city

Social exclusion and invisible consumers

Entrepreneurial local

governance

Scattered and over-consumption

The ‘world factory’ model of development

Emerging cities in the Yangtze River Delta

The growth of the city of Kunshan

600

700

800

900

1000

亿元 改革开放 昆山开办工业区

开发浦东 长江三角洲快速发展

中国入世 世界工厂

Opening of Shanghai’s Pudong new area

World factory regime

100 m

illion

Self-funded

industrial zone

0

100

200

300

400

500

1978

1980

1985

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

亿元100 million

The ‘business model’ of China’s state

entrepreneurialism: land development dynamics

• Attract investment in industrial development

• Property development and place branding

• Land sales to generate the revenue

• Recycle the profit to fund mega-urban projects to • Recycle the profit to fund mega-urban projects to

generate more development opportunities

Rapid urban expansion

Fierce inter-city competition Fierce inter-city competition

Modern logistics center

延伸保税叠加

功能吸引展览

展示、国际采建滔集团总部

中城集团总部

“place-based competitiveness”: zones, clusters and new towns

展示、国际采

购等高端部分

业务

建滔集团总部

苏豪国际广场 Kunshan: Shanghai’s Edge City

Chinese suburban new towns as the

outcome of state entrepreneurialism

Beijing Economic and Technological

Development Zone

Creating ‘urban clusters’ in the city-region through strategic spatial

planning

But, the problem of the ‘world factory’ model is

the lack of competitiveness or local innovation

capacities

40

50

60

70

80

90

100

Perc

en

tag

e (

%)

Others

Foreign wholly owned

Sino-foreign joint venture

Sino-foreign cooperatives

State-owned

Chinese high-tech exports by firm ownership

0

10

20

30

40

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

Year

Perc

en

tag

e (

%)

State-owned

Source: MOST

China’s changing national innovation system (NIS)

�Mission oriented stage (1949-1978)�Mission oriented stage (1949-1978)

�Economy transition stage (1978-2001): reform,

devolution and marketization

�Globalisation stage (2001-2006): the world factory model and land-driven industrial development

�“Indigenous innovation capacities’ stage (2006-):

fostering place-based competitiveness

Innovation and high-tech parks

Two explanations:

-Agglomeration (firms

and market) -Diversity (regional innovation system)

State entrepreneurialism-the role of municipal

government)government)-hybrid approach to “fostering indigenous

innovation”

Shanghai’s Zhangjiang High-tech Park

Growth of the bio-tech sector in ZJHP

Market Social

The policy of “Focusing on Zhangjiang” in Shanghai

FinancialCapital

Strong state support, revenue from land development

Under developed financial system, lack exit opportunities

High-tech park as an innovation

system

Market

Capital

Social

Capital

Capital

Breaking out fragments

Strong ‘guanxi’Large potential market

Inactive networksSocial exclusion

Intellectual

Capital

Physical

CapitalHumanCapital

New facilities,

infrastructure development Low cost skilled labours

Overseas returnees

Strong science base

Still in an initial stageLack managerial talent

Weak technology transfer

IPR issues

Branding and the development of “one zone -- six parks” (a group of high-tech parks based on Zhangjiang brand)

‘Shanghai Zhangjiang High- and New-Technology DevelopmentZone’ (SZHNTDZ) in 2006

Conclusion

• Creating place-based competitiveness: the ‘neoliberal’ entrepreneurial model, public private partnership model, entrepreneurial model, public private partnership model, and the development state model.

• Chinese hybrid model of using the market (investment) and the strong role of local state (municipality) - “state entrepreneurialism”

Conclusion (continue)

• We need an institutional perspective to understand the

development of place-based competitiveness: all

explanations based on agglomeration and differentiation

might be plausible – but for these effects to work, there is

an institutional dynamics that is specific to the local context.

• In China, this context is the development of world-factory,

its underlying business model of state entrepreneurialism

and the policies of the state such as ‘Fostering Indigenous

Innovation Capacities’