‘Socialism with Chinese characteristics’

1 Neoliberalization as neo-developmentalism?

The global system of capitalism is constituted by a cyclical process of boom (resulting in overaccumulation) and bust (resulting in massive devaluation). This tendency is intensified following the dollar’s de-link with gold in 1971, which precipitated a rapid and colossal increase in short-term global financial flows, mostly for speculative purposes rather than to fund trade and foreign direct investments (FDIs). The quest for a reduction of geographical barriers to financial flows and trade, in conjunction with what is now known as the new international division of labour (Fröbel et al., 1980), contributed to the contemporary hegemony of ‘neoliberalism’, a political-economic governance ideology that (1) entails individual states to effect market-like rule to protect private property and ownership rights regardless of citizenship, and (2) minimizes, if not eradicates, ‘price-distortions’ through the abolishment of regulations that impede market access for private individuals.

The principal and most influential proponent of neoliberal reason is arguably the late University of Chicago economist Milton Friedman (see Crouch, 2011; Klein, 2007; Peck, 2010). Once concretized as a developmental ideology, neoliberalism became an engine set off to shape economic policies. While the ideology was put into practice – with the participation of Friedman and his allied economists known as the ‘Chicago Boys’ – with mixed success in South America in the 1970s, it came to historical prominence worldwide through the policies of Margaret Thatcher (Prime Minister of the UK, 1979–1990) and those of Ronald Reagan (President of the USA, 1981–1989). Friedman advised both leaders. Interestingly, Deng Xiaoping, another of Thatcher’s contemporaries and then newly appointed leader of China, also received a crash course from Friedman in 1980, but the Deng administration opted not to go down the path of Latin American economies by selling off state-owned assets and opening up the entire national territory to the transnational flows of capital. For this reason, China’s national-scale developmental trajectory is an apposite arena from which to theorize how neoliberalism works as a flexible developmental ideology that generates geographically variegated impacts.

As is now clear, a national state apparatus, in its integrated position as the absolute sovereign power over social formations within state territory and as the driver of transnational financial flows through its independent ability to implement monetary policy, remains a central generator and mediator of neoliberalizing strategies. This point was obscured by the post-1989 euphoria in advanced capitalist economies, notably by neoliberal proponents in the Anglophone world. Writing just after the collapse of the Soviet Union and the publication of Francis Fukuyama’s (1992) highly influential ‘end of history’ thesis, Johnson (1993: 63) laments that ‘[t]he seeming victory of the state-as-referee conception has given American social science in particular an ethnocentrism and an ideological quality that seem to have erased all Western memory of the state from Plato’s Republic to Hobbes’s Leviathan’. A keen believer in how economic activities are inextricably entwined with the ‘guiding hand’ of the ‘plan rational’ state, Johnson (1982) is unconvinced that the putative ‘free market’ could self-regulate for the common good. Japan’s post-war economic development, to Johnson, was propelled by the industrial policies of what is now widely known as the ‘capitalist developmental state’.

While China’s developmental approach – particularly the enlargement of domestic spaces for market exchange after 1978 – appears similar to Johnson’s (1982) conceptual prototype, key differences are observed through two critical geographical perspectives (pace Beeson, 2009; Xia, 2000). First, at the national level, the presupposition of the ‘developmental state’ as ‘capitalist’ overlooks a crucial function of the state apparatus – its capacity to rescale capital allocation and the accumulation process to ameliorate uneven economic-geographical development. The state apparatus and its socioeconomic policies are assessed by developmental state theorists at the national level without ascertaining the redistributive intents and effects of spatial strategies implemented at the subnational scales (cf. Brenner, 2004; section III.2). National-level capital redistribution takes two forms in China: direct form, through the reallocation of fiscal revenue by the central government, and indirect form, through state spatial strategies that designate where SOEs’ capital investments and FDIs are (al)located. The second redistributive form occurs because the predetermined socialist goal of ‘Common Affluence’ impels the Chinese state to ensure capital flows and fixity are as balanced as possible across state space (more in section III).

Second, the conceptualization of developmental statism is not extended dialectically to the global scale to show how they exist in tension with other states that advocate the construction of a self-regulatory global ‘free’ market. It is not inadvertent that Japan’s economic development stagnated after a currency appreciation agreement (the Plaza Accord) was signed in September 1985. Similarly, the economy of South Korea – another state commonly held to be an exemplary developmental state – spun into crisis in 1997–1998 after its government believed transnational financial market liberalization would enhance the performance of domestic Korean firms. Over the last decade, the relevance of the developmental state concept vis-a-vis intensifying neoliberalizing processes is increasingly called into question (see, inter alia, Beeson and Islam, 2005; Glassman, 1999; Low, 2004). The rationale of this critical evaluation is clear: the ability of these economies’ ‘national champions’ (e.g. Toyota, Samsung) to shift and/or stretch production networks overseas – and hence the need for ‘free’ market access to foreign product and labour markets – has intensified global-scale neoliberalization. While this phenomenon appears at first glance to be analogous to China’s recent ‘Go Abroad’ (zouchuqu) developmental approach (to be elaborated in section III), the ideological basis is distinct in the Chinese context: China’s developmentalist orientation, bound a priori within Marxian temporal parameters and a single-party political system (see section II.2), necessitates the proactive differentiation of state involvement in economic activities at different scales (now including the global scale) to accommodate the demands of the neoliberally oriented ‘Washington Consensus’. ⁵ A focus on China’s state spatial strategies over the past decade, specifically how these strategies accommodate and/or reignite neoliberalizing impulses in relation to the global economy, would thereby offer a more incisive platform from which to theorize the developmentalist orientation of the CPC.

This approach begins with the presupposition that state intervention drives and cushions the global-scale neoliberalization process. If the market is self-regulatory anywhere, there should not be macroeconomic intervention at the intra- and interstate levels. As the aforementioned ‘Geithner Proposal’ indicates, neoliberalization is an impossibility without proactive state intervention. It is even plausible that states are inherently anti-market because they do not believe in self-regulating markets in the first place; what counts as ‘markets’ – and, indeed, as ‘free’ markets – to individual states is thus open to interpretation. Peck (2010) sums up this dialectic incisively:

Neoliberalism … has only ever existed in ‘impure’ form, indeed can only exist in messy hybrids. Its utopian vision of a free society and free economy is ultimately unattainable. Yet the pristine clarity of its ideological apparition, the free market, coupled with the endless frustrations borne of the inevitable failure to arrive at this elusive destination, nevertheless confer a significant degree of forward momentum on the neoliberal project. Ironically, neoliberalism possesses a progressive, forward-leaning dynamic by virtue of the very unattainability of its idealized destination. (Peck, 2010: 7, emphases in original)

The more successful the primitive accumulation process, the broader the pool of ‘industrial reserve army’. This outcome, which suppresses wages and deepens uneven development, leads Harvey (2005a: 19) to interpret neoliberalization ‘as a utopian project to realize a theoretical design for the reorganization of international capitalism or as a political project to re-establish the conditions for capital accumulation and to restore the power of economic elites’. The notion of utopianism, Harvey adds, ‘primarily worked as a system of justification and legitimation for whatever needed to be done to achieve this goal. The evidence suggests, moreover, that when neoliberal principles clash with the need to restore or sustain elite power, then the principles are either abandoned or become so twisted as to be unrecognizable’ (p. 19). Wade (2003) succinctly describes this ‘twisting’ in his critical discursive analysis of the ‘Washington Consensus’:

What [it] does not include are proactive industrial policies to nurture new industries and new technologies and to diffuse innovations to established industries – that might have the unwanted consequence of raising the competitive pressure on industries in the industrialized countries. This is definitely not on today’s development agenda. Indeed, words like ‘technology’, ‘national innovation system’, ‘entrepreneurship’, ‘competitiveness’, and ‘universities’ are conspicuously missing from the thinking of development organizations like the World Bank and the bilateral donors. So too are words like ‘distribution of power’, ‘elite capture’, ‘trade unions’, and even ‘freedom of association’. The poor are to be lifted up by supplying them with missing assets and by gaining the knowledge with which to manage them better, not through their own engagement in collective action. Thus lifted up, they will be as good-natured as the sheep they tend. (Wade, 2003: xliv)

Indeed, there seems to be an implicit concession in Wade’s comment that these developmental discourses have come to represent the eternal-cum-ecumenical new normal; that ‘utopianism’ is now strictly defined by neoliberal parameters. Perhaps, in the heady days of the early 1990s, neoliberal policy-makers in Washington forgot about their Beijing counterparts’ resolute resolve to contextualize the ‘universal truth of Marxism’ across (and possibly beyond) Chinese state space.

2 China after 1949: (already) living in different times

The CPC’s attempt to resolve developmental contradictions in the contemporary conjuncture foregrounds – and is arguably undergirded by – a unique interpretation of a major tenet of Marxian historical materialism, namely, how ‘modes of production’ succeed one another chronologically through social revolution. The ultimate socioeconomic end-state of Marxian historical evolution is an upper-stage ‘socialist mode of production’ – communism – ruled directly by the proletariat, with the state functioning in a faded capacity. Much has been written on this classic prediction over the last century, and the aim of this paper is not to review this extensive literature. Rather, this paper explores a dialectical phenomenon not fully addressed by received historical-materialist conceptualizations of China: it is Chinese policy-makers’ simultaneous affirmation and negation of Marxian historical materialism that drives the reinstitutionalization of state space in China.

This spatial dialectic evolved in three ways. First, former CPC Chairman Mao Zedong’s attempt to introduce ‘socialism’ to a newly unified China (which essentially was a territorial patchwork of diverse economies) in itself contradicted Marx’s formulation: it was the weak (rather than strong, as Marx determined) and geographically uneven existence of the capitalist mode of production that provided both the conditions for the successful CPC-led revolution prior to 1949 and the obstacles to fully realize, in Marxian determination, a proletarian-led socialist mode of production across the country thereafter. This led to a second contradiction: a socialist epoch first emerged before it had the opportunity to develop its existential preconditions (through the capitalist mode of production). Following an extensive review of historical resources, Li (2006: 64–65) explains how Joseph Stalin, the former leader of the Soviet Union and a fervent advocate of policy radicalism in the 1920s and 1930s, advised Chinese policy-makers in 1948 to keep the economic status quo of China unchanged should they emerge victorious in the civil war with the Nationalists. Gradualism, rather than radicalism, was the recommended developmental approach to socialist transformation. It was arguably because of Stalin’s advice – which took into account the economic-geographical foundations that the CPC inherited – that Mao (1949) initially decided to engage capitalists in his quest to build a socialist mode of production:

China’s private capitalist industry, which occupies second place in her modern industry, is a force which must not be ignored. Because they have been oppressed or hemmed in by imperialism, feudalism and bureaucrat-capitalism, the national bourgeoisie of China and its representatives have often taken part in the people’s democratic revolutionary struggles or maintained a neutral stand. For this reason and because China’s economy is still backward, there will be need, for a fairly long period after the victory of the revolution, to make use of the positive qualities of urban and rural private capitalism as far as possible, in the interest of developing the national economy. (Mao, 1949: n.p.)

For this reason, the declaration of a socialist epoch in China became at once a social totality and a spatial process. The political act of Marxian temporal framing produced its own socioeconomic necessity and geographical contingency: to be in and of a socialist epoch, it would be necessary to launch socioeconomic policies that were aligned to Marxist-Leninist principles, but this alignment was (and still is) a contingent process – its success depended on whether socialist ideals and policies can be smoothly implemented across a highly disparate and geographically uneven national social formation. It was this eagerness to accelerate the transposition of ‘social fantasy’ into reality (i.e. universalize the Marxist-Leninist model of socialism across Chinese state space) that led Mao Zedong to turn to Stalin’s Short Course ⁷ for guidance (Li, 2006). The outcome – which unfortunately generated catastrophic consequences – was radical economic Stalinization in the immediate years following the establishment of ‘new China’:

Between 1950 and 1953, Mao consciously and deliberately sought to repeat Stalin’s actions between 1921 and 1925 as described in the Short Course. Mao almost literally relied upon this work as a do-it-yourself handbook for building socialism. Mao’s general line, which summarized Stalin’s basic ideas on how to build socialism, became a mini handbook for building socialism in China in the 1950s. He was more radical than most other Chinese leaders in pursuing a Stalinist vision of China, and more so than conventional wisdom would have us believe. There was no place in Mao’s vision of a socialist economy for market forces or a private economy (Li, 2006: 186–187).

The rolling series of contradictions generated by the socialistic historicization of China from 1949 thus exemplifies the paradoxical interpretation of Marxian historical materialism by Chinese policy-makers. On one hand, the temporal logic of historical evolution is indeed what Deng made it to be – a ‘universal truth’. It was, as aforementioned, through a decisive round of revolution in 1949 that Mao launched a socialist epoch in/for China, following which he fortified the ‘superstructure’ ⁸ (i.e. new social institutions and ideas) to cement state-society relations. Addressing the geographical contingency associated with socialistic historicization, on the other hand, would prove to be a greater challenge. Under the Mao administration, the necessary push for sociospatial egalitarianism was paradoxically built upon the contingency it sought to extinguish – uneven development. As such, Whyte (2005: 6) correctly problematizes the conventional account that portrays Deng Xiaoping as trading off social equality for economic efficiency: this account ‘diverts attention from other features of the stratification system of Mao-era China, many of which were decidedly not egalitarian either in intent or consequences’. Rather, Whyte adds:

in China the combination of virtually total suppression of markets in favor of bureaucratic allocation as well as of voluntary changes in residence and employment makes the dominance of one’s bureaucratic location rather than one’s individual human capital or other social background traits (and one’s resulting ‘market position’) much greater as a general rule. (Whyte, 2005: 6)

Recent social-scientific research shows how ‘Mao’s invisible hand’ – e.g. socioeconomic foundations laid during the Mao era, the hukou (household registration) institution that undergirds rural-urban differentiation, geographically sensitive ‘adaptive governance’ – continues to extend deep into the Chinese political economy (e.g. Chan and Buckingham, 2008; Heilmann and Perry, 2011; Kueh, 2008; Lin, 2006). As outgoing Chinese President Hu Jintao emphasizes in his valedictory speech at the 18th Party Congress, Mao’s Marxian historicization of China as a priori socialist has not effaced the contingent determinants of an advanced socialist stage:

We must be soberly aware that China is still in the primary stage of socialism and will long remain so. This basic condition of China has not changed; nor has the principal problem in our society, that is, how we can meet the ever-growing material and cultural needs of the people with backward social production; nor has China’s international position as the largest developing country in the world. ( Global Times, 2012)

Hu and Wen’s comments, this paper argues, are historic; they effectively marked the CPC’s conclusive interpretation of Marxian historical materialism. The future of ‘socialism with Chinese characteristics’ is now; socialism in China is the evolving present, driven in motion by seemingly contradictory neoliberalizing impulses and the CPC’s ‘eternal’ reforms (which, because of neoliberalization, now has a growing global reach). The discursive substitution of ‘revolution’ with ‘reform’ strongly suggests that the Chinese state apparatus’s primary political goal is existential timelessness. To achieve this, it must do everything it can to pre-empt the emergence of revolutionary ruptures across state space. Yet, precisely because Deng’s government decided against Mao-styled geo-economic insulation, it became increasingly difficult for the Chinese state to draw a coherent sociospatial reform blueprint for the entire country. The pre-emptory process is thus predicated on relational geo-institutional differentiation: tailored to actually existing economic-geographical contexts across and beyond Chinese state space, the CPC’s economic reforms – beginning first with four Special Economic Zones in southeastern China (Shantou, Shenzhen, Xiamen and Zhuhai) in 1980, and, over the past decade, through an expanding series of ‘nationally strategic new areas’ across the country – are evidently intended to produce locomotives of contemporary and future flows, fixity and redistribution of capital.

A more incisive theorization of the Chinese state’s ‘authoritarian resilience’ thus needs to incorporate the selective and seemingly contradictory spatialization of neoliberal logics for socialism (cf. Nathan, 2003). So long as China remains an integral component of the (neoliberalizing) global system of capitalism, it is clear that a Marxian-styled socialist mode of production can never be a spatiotemporal straightjacket. Stressing ‘the impossibility of fully formed totalities’ within states, Jones and Jessop (2010: 1122–1123, emphases in original) argue that analyses of contemporary states should instead theorize ‘coherence and incoherence, zones of stability and instability, deferrals and displacements’. As Figure 1 illustrates, the inherent geographical incoherence of capital fixity and flows in and through China makes it imperative to theorize ‘socialism with Chinese characteristics’ as processes that simultaneously involve neoliberal initiatives to create bigger, self-regulatory and borderless ‘free markets’ and redistributive mechanisms that ensure capital investments flow to less developed regions. These processes resulted in the (re)production of uneven economic geographies, a development arguably turned on its head by the CPC through a rolling series of strategic territorial (re)institutionalizations over the past decade.

OPEN IN VIEWER

Figure 1.

‘Socialism with Chinese characteristics’ as a cross-scalar sociospatial dialectic.

1 Neoliberalization in and through Chinese state space

Post-Mao reforms in China have been associated simultaneously with fast-paced economic growth – China’s GDP growth rate averaged ∼10% annually between 1979 and 2011 – and uneven economic-geographical development. This phenomenon has its roots in Deng Xiaoping’s willingness to accept uneven economic-geographical development as a trade-off for opening Chinese borders to transnational capital flows. The spatial expression of Deng’s economic policies was guided by a distinct geographical theory – the ‘ladder step’ approach (tidu lilun). This approach delineated Chinese state spatiality into three economic belts: the eastern (coastal), central, and western. Deng gave one belt (the eastern seaboard) the priority in ascending the development ‘ladder’. He assumed that the fruits of development in the ‘first mover’ belt would diffuse downwards to other rungs of the ladder (see Fan, 1995; Wang and Hu, 1999). In a 1988 speech entitled ‘Two Big Pictures’ (liangge dajü), Deng summed up his time-oriented theoretical approach to economic-geographical development:

the coastal area must accelerate its opening up to enable this broad region of 200 million people to first develop, from which it will stimulate even better development in the interior. This is a matter that involves a big picture. The interior must understand this big picture. (Deng, 1993: 277–278; author’s translation from Mandarin)

An expanding literature reveals how primitive accumulation – a distinct precondition and expression of neoliberalization (see section II.1) – has become a prevalent driver of economic development in China. Looking at transformations in the Shanghai rural landscape, Buck (2007) shows how primitive accumulation is related to the subsumption of labour to capital. Lin (2009b: 441) highlights how major city governments in Guangdong province ‘scaled up’ their development policies through the ‘forceful annexation of suburban cities and counties’. While Webber (2008a, 2008b) believes there are economic and non-economic logics that underpin the primitive accumulation process, Walker (2006: 1) views the violent captures of rural space and resources, which have triggered ‘a tidal wave of peasant protest’ over the past two decades, as a clear reflection of ‘gangster capitalism’ at work. Against these varied interpretations of the causes and implications of primitive accumulation across China, one pattern is clear: Deng’s (1993: 64) fear that post-1978 Chinese social formations would split into distinct ‘haves’ and ‘have-nots’ (liangji fenhua) was certainly not unfounded.

Indeed, as neoliberalization across China intensifies, the concomitant exacerbation of uneven development has meant that, if Deng’s (1993: 277–278) injunction to balance out socioeconomic disparities is to remain valid, the deferment of socialistic development in time is insufficient per se; something must be done to change space. One key challenge must be taken into consideration, however: China’s public and private economic sectors intermesh in place-specific ways that are probably not found elsewhere. To be sure, private capital investments have become more important in China’s domestic economy and, over the past three years, rules have been relaxed to permit foreign venture capitalists to operate within China. But one characteristic stays unchanged: the major economic actors within the Chinese economy remain the SOEs. ⁹ Interrelated to the SOEs’ economic practices is a sprawling state-controlled financial system. As Walter and Howie (2011) explain, complex off-budget arrangements, SOE borrowings and a non-convertible exchange rate sustain a financial system that looks increasingly internationalized but remains undergirded by older arrangements that directly affect the allocation of domestic capital. Also, to take the CPC’s recent indication as a guide, the intertwined activities of Chinese state-linked economic actors will remain integral to the ‘socialist market economy’:

We should unwaveringly consolidate and develop the public sector of the economy; allow public ownership to take diverse forms; deepen reform of state-owned enterprises; improve the mechanisms for managing all types of state assets; and invest more of state capital in major industries and key fields that comprise the lifeline of the economy and are vital to national security. We should thus steadily enhance the vitality of the state-owned sector of the economy and its capacity to leverage and influence the economy. (President Hu Jintao; Global Times, 2012)

As Figure 1 shows, these ‘contradictory and complex patterns of state behaviour’ can be seen through the Chinese government’s selective endorsement of neoliberalization at the global and subnational scales. At the global level, the central government’s push for global free trade and investments is accompanied by its staunch refusal to succumb to US-led pressures to alter its fixed exchange rate regime, an arrangement which ensures China-based producers enjoy propitious terms of trade and economic stability (cf. Broz, 2002; Lim, 2010). Indeed, well-capitalized China-based firms, particularly the national sovereign wealth fund (China Investment Corporation) and large SOEs (e.g. CNOOC and SINOPEC), need the ‘freedom’ at the global scale if they are to expand into new markets and successfully fulfil the state’s ‘Go Abroad’ market expansion programme. The launch of this programme – which Gonzalez-Vicente (2011) identifies as an extra-territorial expression of ‘state entrepreneurialism’ – was primarily due to the large overaccumulation ¹⁰ of US dollars under China’s fixed exchange rate system (Lim, 2010; Nolan, 2012). Given the US government’s preferred post-subprime crisis strategy of printing and injecting dollars into money markets (known as ‘quantitative easing’), China’s surplus capital stock needs to be quickly and regularly reinvested to preclude future devaluation. Chinese firms launching outward FDI – which surged from US$2.7 billion in 2002 to US$60.07 billion in 2011 ( China Daily, 2012a) – would thus benefit directly from less regulatory barriers imposed by foreign states and/or supranational institutions. This quest for unfettered market access overseas is arguably the main reason why China joined the WTO in 2001 and, more importantly, willingly became bound to the WTO’s goal of reducing barriers to market access at the global scale. ¹¹ Contrary to popular zero-sum conceptions of Sino-US relations, then, US (neoliberal) hegemony is in fact not unwelcomed by the Chinese state. If anything, US hegemony – expressed and effected through the ‘Washington Consensus’ – has, in a most intriguing twist, become the sine qua non of China’s socialistic development (cf. Figure 1).

The Chinese state’s global-scale endorsement of neoliberal logics generated new vulnerabilities, however. After the US government announced its plan to launch a second round of ‘quantitative easing’ in November 2010, the Chinese Vice Finance Minister Zhu Guangyao expressed immediate concerns about this intervention by the US government in global money markets:

As a major reserve currency issuer, for the United States to launch a second round of quantitative easing at this time, we feel that it did not recognize its responsibility to stabilize global markets and did not think about the impact of excessive liquidity on emerging markets. ( Reuters, 2010)

Vis-a-vis this global-scale vulnerability, the importance and urgency of crafting capital accumulation opportunities from within Chinese state space became more pronounced. While the Chinese state has been cautious in its ‘down-scaling’ of neoliberal logics in order to preclude further sociospatial inequality, it appears increasingly keen to overcome the limitations of this ‘down-scaling’ process. Indeed, it now appears to be in the interests of the Chinese state to differentiate the institutionalization of neoliberal governance logics at the subnational scale in order to produce new (re)investment opportunities for global circulatory capital (of which it is now an integral part; cf. Figure 1). The emergence of Chinese state space as a relational and reflexive entity (in relation to neoliberal ideology) in turn reinforces Peck’s (2010: 10, emphasis in original) observation that neoliberalization is a process that ‘denotes the form of state/economy relations, not a linear path towards a purely free-market state’. As Wang Hui (2009) puts it, state-capital co-evolution is fundamental to the post-1978 neoliberalization in/of China:

Chinese neoliberalism has at times expressed its contradictions with the state in an anti-political (or anti-historical, or even anti-socialist – in its traditional sense) way. But these oppositions seem incapable of really concealing neoliberalism’s intimate connections with state-directed economic policy. For neoliberalism, in truth, relies … upon its inherent links to the state. (Wang, 2009: 19)

Through reinforcing the ability to shield Chinese sociospatial formations from the very process – neoliberalization – it allows and (selectively) endorses, the CPC has begun channelling new capital investments to less developed areas, particularly the western interior. This process is inherently dialectical: on one hand, the Chinese state apparatus – directly through its macroeconomic and spatial strategies and indirectly through its aforementioned arsenal of SOEs – appears to be producing a differentiated pattern of reinstitutionalization to embed ‘free market’ logics and produce spatiotemporal fixes for targeted investments, while, on the other hand, it simultaneously negates some of these logics (in the name of ‘rebalancing’ economic-geographical development) through broadening and deepening state involvement in economic practices within the targeted spatiotemporal fixes (cf. Deng, 1993: 277–278). An analysis of variegated neoliberalization in and through China could thus begin from the place-specific intersections of politico-economic processes that originate from and flow across different scales, namely (a) the global economy, (b) the nation state, (c) individual provinces and (d) prefectures and counties. Space, as section III.2 shows, is not an epiphenomenon when it comes to the interplay between neoliberalizing dynamics and the developmental parameters of ‘socialism with Chinese characteristics’ – its role is central.

2 China’s new ‘national strategy’ of/for socialism: decentralization-as-centralization?

In the build-up to the 12th Five-Year Plan (2011–2015), China’s central government candidly acknowledged the gamut of current challenges engendered by the market-oriented reforms and development of the past three decades, one of which is uneven development (see Table 1). The analysis of ‘state spatial strategies’, which Brenner (2004: 94) defines as the use of ‘political strategies oriented towards the reproduction, modification, or transformation of inherited frameworks of state spatial intervention at various scales’, offers a fertile launchpad from which to understand how Chinese policy-makers turn the challenges of uneven economic-geographical development into strategic advantage. As Brenner (2004) observes, insofar as a national political economy is positioned vis-a-vis the global system of capitalism, modification to/in state space is at once contingent and necessary:

The restructuring of state spatiality rarely entails the complete dissolution of entrenched political geographies … [it] is uneven, discontinuous, and unpredictable: it is best conceived as a layering process in which newly emergent state spatial projects and state spatial strategies are superimposed upon entrenched morphologies of state spatial organization. Thus conceived, the spatiality of state power is at once a presupposition, a medium, and a product of the conflictual interplay between inherited geographical parcelizations of state space and emergent political strategies intended to instrumentalize, restructure, or transform the latter towards particular sociopolitical ends. (Brenner, 2004: 107, emphases in original)

OPEN IN VIEWER

Table 1.

China’s 10 economic challenges, identified in the proposal of the 12th Five-Year Plan

Number	Economic challenge
1	Increasing constraints of resource environments
2	Relationship between investment and consumption is unbalanced
3	Income distribution gap widened
4	Scientific and technical innovation capacity remains weak
5	Asset structure is unsatisfactory
6	Thin and weak agricultural foundation
7	Lack of coordination in urban-rural development
8	Co-existence of contradictory economic structure and employment pressures
9	Apparent increase in social contradictions
10	Persistent structural and systemic obstacles to scientific development

Source: Suggestions on the 12th Five-Year Plan by the Communist Party of China (p. 3, Mandarin document; NDRC, 2011). Author’s compilation and translation.

The domestically variegated regulatory experiments – which remain undertheorized in the social-scientific literature – are currently evident at two scales: cross-provincial regions and intra-urban economic zones. Proactive cross-provincial spatial planning only became more prominent in the decade following 1999, during which the Chinese state launched three broad regional development programmes, namely the Great Western Opening Up (xibu dakaifa), the Northeast Revitalization (dongbei zhenxing) and the Rise of the Central (zhongbu jueqi). While fiscal monies have been redistributed to the provinces involved to launch concrete developmental projects, these programmes entailed no specific institutional (re)formulations at the provincial level (for a detailed overview, see Li and Wu, 2012; Liu et al., 2012). The more crucial goal of these programmes appears to be the production of cross-provincial geographical imaginations. This goal is to materialize through a discursive-ideological strategy: the name of each programme began to be included in individual provinces’ policy documents, while the mass media began to discuss province-specific economic development policies in relation to the broader regional strategy (e.g. how the urbanization of capital and labour power in Chongqing is connected to and helps drive the Great Western Development programme). Developing regional consciousness is important as individual provincial governments have been working disparately, particularly since the early 1990s, and interprovincial (and, by extension, interurban) collaboration has proved very difficult (author’s personal communications with Chinese urban planners, 2012). Intriguingly, the delineation of three major regions of development bears striking similarity to Mao’s ‘Three Front’ ¹² spatial developmental approach in the mid-1960s (cf. Li and Wu, 2012); the key difference is that these regions’ developmental programmes are to be crafted with their respective positions in the global capitalist – rather than geopolitical – system in mind.

Geographically targeted (re)institutionalizations were and are expected to be implemented at the intra-urban level, with six ‘nationally strategic new areas’ (guojia zhanlüe xinqu) identified as bordered zones within selected cities to ‘move first, experiment first’ (xianxing xianshi). The ‘new area’ concept is actually not novel, although its scale of implementation has widened considerably since 2006 (see Table 2). Following the success of the first four Special Economic Zones in the provinces of Guangdong and Fujian, the world-renowned Pudong New Area in Shanghai was approved for development in 1990, and has since been transformed into a city-regional ‘motor’ of China’s economic growth. This intra-urban (re)institutionalization was not extended elsewhere in China for 14 years until the Binhai industrial region adjacent to the northeastern city of Tianjin was designated China’s second ‘nationally strategic new area’ in 2006. From 2009 to 2012, four more ‘new areas’ were demarcated. Two ‘new areas’ are in the western interior, namely Liangjiang New Area in the city of Chongqing and Lanzhou New Area, which overlaps the city of the same name in Gansu province. The other two are located along the coast, namely Zhoushan Archipelago New Area, based offshore in Zhejiang province, and Nansha New Area, strategically positioned between two specialized new zones (Hengqin, in Zhuhai, and Qianhai, in Shenzhen) in the Pearl River Delta. It appears that several more of these ‘nationally strategic new areas’ will be identified across the country in the coming years ( Xinhua, 2012). The unfolding of this seemingly patterned development raises two major research questions. (1) What does it mean, in both ideological and practical terms, to speak of a place as ‘nationally strategic’? (2) If a place is ‘strategic’ in the ‘national’ sense, what is the ‘national strategy’?

OPEN IN VIEWER

Table 2.

China’s ‘nationally strategic new areas’, 1990–2012.

Area	Concise overview
Shanghai Pudong	The oldest of the new areas, initiated for development in 1990; probably the most widely known worldwide. Now the national base of many TNCs and big domestic firms; a major financial centre; as well as a major global seaport. Plans underway to launch China's first free trade zone (a ‘mini Hong Kong’) in 2013. It is arguably the success of this new area that led China’s central government to formulate similar spatial strategies in other cities.
Tianjin Binhai	Relatively established; was already a designated industrial development zone for several years when it was ‘upgraded’ to zone of ‘national strategic significance’ in 2006. Since the institutional redesignation, perhaps the most high-profile development has been the establishment of Airbus’s first non-EU assembly facility. Tianjin has also become a zone of financial innovations. GDP growth per annum has regularly hit or exceeded 20% since 2007. The development of this area is, surprisingly, not covered in much of the social science literature to date.
Chongqing Liangjiang	Officially unveiled as ‘new area’ in June 2010. Planning commenced several years before, during the 2006–2010 developmental phase. Like Binhai, the area around Chongqing has experienced industrialization in the past decade. It is the first inland nationally strategic new area. The primary developmental aim is to redirect more capital flows to the western region, as part of China’s ‘Great Western Opening Up’ strategy. Current plans are to develop high value-added manufacturing capacities and deepening firms’ production chains in the region, as well as to experiment with ambitious reforms to enhance social welfare. The inclusion of social reforms alongside industrialization strategies has highlighted the tensions associated with socialistic development in contemporary China.
Zhejiang Zhoushan Archipelago	Approved for development in July 2011; located off the coast of Ningbo, in Zhejiang province. Designated to boost the development of China’s ‘oceanic economy’ and ‘land-ocean integration’ (luhai tongchou), it is an intriguing site from which to examine the commodification of aquatic nature.
Gansu Lanzhou	Approved for development in August 2012; located in the arid and mountainous northwestern interior. Integral to the ‘Great Western Opening Up’ strategy: designated to absorb manufacturing industries relocating from coastal provinces.
Guangzhou Nansha	Approved for development in September 2012; located at the centre of the Pearl River Delta, just south of Guangzhou, in between two other specially designated zones, Hengqin (in Zhuhai) and Qianhai (in Shenzhen). An integral part of the Guangdong-Hong Kong-Macau economic development agreement to enhance the regional integration of the Pearl River Delta (PRD) metropolitan region (yuegangao yitihua). Aids in the industrial restructuring and upgrading of the PRD as lower-end manufacturing activities relocate due to cost pressures. Expected to experiment in policies regarding China’s financial reforms (jingai) and integration of labour markets between Guangdong province and the Hong Kong and Macau SARs.

Source: Author’s compilation.

To arrive at an understanding of what a ‘national strategy’ of economic development might look like, it would be helpful to begin with the pre-existing state spatial form of the contemporary conjuncture. This brings to question the causal effect of economic-geographical unevenness. The last decade of high economic growth has been based on what Chinese president Hu Jintao terms ‘unbalanced, uncoordinated and unsustainable development’ ( Global Times, 2012). A national strategy thus inevitably builds on – and attempts to change – this uneven spatiality. A critical examination of how actually existing uneven geographies complement one another offers useful insights on how the CPC addresses and absorbs the contradictory pressures associated with global economic integration. So long as the targeted zones of reinstitutionalization are ascertained to be ‘nationally strategic’, the spatial logic goes beyond that of interurban competitiveness. These ‘new areas’ are possibly designated to circumvent – if not overturn – the oft-debilitating, race-to-the-bottom competition by local governments (see section III.1; cf. Howell, 2006). Thus fortified with new (centrally approved) institutions tailored to their pre-existing economic-geographical positioning within national state space, China’s ‘nationally strategic new areas’ are intended to be more competitive at the global scale. In other words, unevenness is harnessed by the central government, with the place-specific competitive impulses directed outwards to the global economy. Each designated ‘nationally strategic new area’ could thus become a central competitive node for the country because its positional importance has been ‘scaled up’ to the global level. Decentralization, in this regard, transposes into a new form of centralization that propels and reproduces China’s ‘socialist market economy’.

At the national level, the Chinese central government’s emergent decentralization-as-centralization strategy transcends dichotomous conceptualizations of politico-economic centralization and decentralization. Putting into practice the power to reconfigure national state space, the central government appears to be effecting a more balanced domestic allocation of capital (and, by extension, labour power). This in turn reinforces its control over local practices that may deviate from national goals. Furthermore, as one planner in China remarked, ‘whenever the central government launches a project, many people at the local level automatically respond with much fervour. There is no problem getting people [at the local scale] to do things’ (personal communication, Beijing, 2012; author’s translation). This insight strongly suggests how interprovincial and intercity competition have not devalued perceptions of the central government’s importance; rather, relations with the central government are highly valued because it is through the central government that a locality ‘jumps scale’ and, almost instantly, assumes a propitious economic-geographical position globally. The formation and evolution of the ‘nationally strategic new areas’ thus brings into focus a new central-local dynamic that shows, on closer reading, how ‘developmentalism’ is constituted in and through Chinese state space (cf. Beeson, 2009; Howell, 2006).

There are three interrelated dimensions to the emergent decentralization-as-centralization dynamic, namely politics, policy and practicality. First, the act of redrawing administrative boundaries involves cross-scalar spatial politics. The identification and designation of ‘new areas’ takes place in what Peck and Theodore (2010: 169) refer to as ‘fields of power’. These ‘fields’ are intersections of ‘adaptive connections, deeply structured by enduring power relations and shifting ideological alignments’; they foreground the ‘intrinsic politics to the policy transfer process’ (p. 169). Given that the Chinese state apparatus is a heterogeneous entity within which exist different perspectives on development (see, for example, Kuhn, 2010; McGregor, 2010), it is expected that the spatial politics will play out before and after the ‘new areas’ are designated ‘nationally strategic’. It is currently unclear what kind of central-local relations lead to the choice of a location as ‘nationally strategic’ while others are passed over. The decision-making process could be totally top-down, with provincial policy-makers having little influence, or it could be an outcome of aggressive lobbying of the central government by provincial and metropolitan policy-makers. Ascertaining the nature of this process is methodologically challenging, to be sure, as it is hard to penetrate policy-making circles (especially at the central level) to obtain first-hand data, but there might be alternative sources of information (e.g. interviews with senior members of enterprises, local urban planners, reporters) from which solid inferences could be made. Given that the potential outcome of this research approach is a clearer understanding of the macro spatial logic underpinning the CPC’s strategies to actualize ‘socialism with Chinese characteristics’, it is certainly worth trying.

The next research focal point is a critical assessment of the policies introduced in each ‘new area’ and how these policies are discursively (re)presented. It is certain that the designation of an intra-urban area as ‘nationally strategic’ would be accompanied by a fresh set of policies. The primary aim of policy analysis is to ascertain how new regulatory processes and parameters – particularly how they facilitate market exchange and/or more extensively involve private producers in the organization of everyday social life – differ from the pre-existing ones. If the new policies are designated to ‘move first, experiment first’, how long these experiments last and whether they are retained or discontinued become further points of inquiry. Apart from policy content, a correlated research focal area is the discursive justification of the new policies and the statistics that are made public. To follow newly appointed Chinese President Xi Jinping’s ( Nanfang Ribao, 2012) philosophy that ‘empty talk harms the nation, practical work leads to national flourish’ (kongtanwuguo, shiganxingbang), public discourses and statistics are critical materials against which evaluations of policy rationale and effectiveness in the new areas can be made. Specifically, discourses by policy-makers offer another avenue to explore how market-oriented reforms (e.g. the ‘financial reforms’, or jingai, to be launched in Nansha New Area and two other zones in the Pearl River Delta; see Table 2) are to nurture a socialist mode of production. At the theoretical level, the integrated focus on new policy contents and their accompanying political discourses facilitates an investigation of how ‘deepening neoliberalization’ – which Brenner et al. (2010: 209) define as the ‘the growing interdependence, inter-referentiality and co-evolution of market-oriented reform efforts among territorial jurisdictions, spatial scales and policy fields’ – plays out in and through the ‘nationally strategic new areas’ vis-a-vis enduring socialist principles.

This leads to the third interrelated dimension – practicality. The objective of combining market-deepening reforms with socialist ideals within the ‘new areas’ is not to produce nationwide institutional homogeneity; the aim is to engender patterned variants of developmental permutations that, working in tandem, help to propel the entire political economy. Indeed, the concentration of processes in the ‘new areas’ are not random; the act of ‘bordering’ – and the new policies implemented within the bordered zones – are deliberately crafted to create a driving effect towards a macro potentiality (in China’s context, a ‘Harmonious Society’ constituted by balanced, coordinated and sustainable development). This said, there is every possibility that the desired actuality will not materialize; that these spaces will constantly remain spaces of socialist potential, in need of reintervention. Put another way, the processes emerging in and through the ‘new areas’ are purposive and propulsive, but not definitely transformative.

In summary, the geo-institutional differentiation of ‘nationally strategic new areas’ in China is the latest round of spatial reconfiguration aimed at resolving tensions arising from neoliberal and socialist practices. Yet it must be emphasized that these strategies are deontological; they provide a preview of emergent sites and, by extension, the macro spatial logic of development. Corresponding to what Lefebvre (1991: 33) terms ‘spaces of representation’, they are notional determinations that designate what spaces should become in order to be fully ‘real’. The primary underlying link between these strategies is the role of the state as a producer and mediator of neoliberal logics; through formulating geographically differentiated regulations of/for capital accumulation and then directly participating in the actualization of these differentiated spaces through SOE investments, Chinese policy-makers essentially aim to create different ‘spatial fixes’ for transnational capital flows, driven by both private firms and SOEs. This is proactively leavened by the twofold redistribution of state finance and the power to make mistakes (shicuoquan). These new state spaces in China are hence tentative amalgams of (market-oriented) productive forces and place-based social relations.