Discussions and Conclusions

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4.5 Shortage of Water Resources and Environmental Pollution

A serious challenge facing the Jing-Jin-Ji area is the shortage of water resource.

Currently, per capital water resource is roughly 300 m³ in the Jing-Jin-Ji area, significantly lower than the low limit of international standard of 1000m³. It is only 1/8 of the national average and 1/30 of the world average. Meanwhile, the Jing-Jin-Ji area has developed a water-consuming industrial structure, such as telecommunication and electronic equipment, ferrous metal smelting and pressing, chemical materials and products and beverage. The other challenge for the sustainable development in the Jing-Jin-Ji area is environmental pollution, including air pollution and water pollution.

The heavy and resource based industries are the causes of environmental pollution.

4.6 Wide Regional Economic Disparity

As analyzed, the Jing-Jin-Ji has a core-periphery spatial economic structure, suggesting the wide regional economic disparity. Beijing and Tianjin form the

economic core and Hebei is the periphery. Large gaps in economic development exist in the Jing-Jin-Ji area. In 2005, Per capita GDP in Beijing, Tianjin and Hebei was 37058 Yuan, 31550 Yuan and 13017 Yuan, respectively. Tangshan is the most developed city in Hebei and its per capita GDP was 22679 Yuan. Per capita GDP in the northern cities of Chengde and Zhangjiakou was less than 10000Yuan.

Urbanization level in cities of Hebei is also significantly lower than Beijing and Tianjin (Figure 22). As the development of large cities in the Jing-Jin-Ji area, the regional disparity will further widen. The increasing regional economic gap would make it rather difficult to coordinate regional development in the Jing-Jin-Ji area.

0 5000 10000 15000 20000 25000 30000 35000 40000 45000 50000

Beijing Tianjin

Shijiazhuang Tangshan

Baoding Langfang

Cangzhou Qinhuangdao

Zhangjiakou Chengde

Xingtai Hengshui

Handan 0 10 20 30 40 50 60 70

GDP per capita (yuan)

Urbanization level (%)

Figure 22 Per Capita GDP and urbanization level by City in the Jing-Jin-Ji area Sources: Beijing Statistical Yearbook 2006, Tianjin Statistical Yearbook 2006, and Hebei Economic Yearbook 2006.

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Economic globalization and regionalization is the inevitable trend of global economy. Since the late 1970s, China has gained its momentum in economic development due to economic reforms and open door policies, which have granted China opportunities to utilize foreign investments and foreign technology and to trade in the international markets. The rise of China has attracted a large amount of foreign investments from multinational corporations. Foreign enterprises relocate labor or resource intensive functions or industries to China and export back to the home economies or the third party economies. The massive FDI inflows have also caused rapid growth of imports of machinery and equipment and the imports of intermediate goods. Through foreign investment and intra-industry and intra-firm trade,

multinational corporations have brought China, particularly the coastal region, into the global value chain, restructuring the international division of labor. The Pearl River Delta and the Yangtze River Delta have been successfully integrated with the global economy through utilizing FDI and trading with other countries.

As one of the three core economic areas, the Jing-Jin-Ji region has achieved remarkable economic development during the last decades. Beijing and Tianjin have been the key economic centers in North China. During the period of transition, the Jing-Jin-Ji area has significantly benefited from economic globalization and gradually linked with Northeast Asian economies such as South Korea and Japan. As China moves to the new century, the Jing-Jin-Ji area is expected to play a larger role in stimulating economic development in the northern China. The establishment of Special Economic Zones in Guangdong in the 1980s initiated the fast growth of the Pearl River Delta, and the development of Pudong New Area in Shanghai launched the catch-up of the Yangtze River Delta. Recently, the Chinese government has highlighted the development of Tianjin Binhai New Area and Caofeidian in Hebei as the growth poles in the Jing-Jin-Ji area. The further development of Jing-Jin-Ji region however faces a series of challenges including lower levels of marketization,

urbanization and openness, serious shortage of water resource and widening regional disparity.

With the engagement of multinational corporations from Japan and South Korea, the Jing-Jin-Ji area has built strong economic linkages with Northeast Asia. Japan and South Korea have been the major foreign investors and the suppliers of imported goods in the Jing-Jin-Ji region. The development of Tianjin Binhai New Area and Caofeidian in Hebei would provide more opportunities for multinational corporations from Japan and South Korea. First, the Tianjin Binhai New Area will focus on

telecommunication and electronic equipment, chemical industry, high-tech industries, biological and medical products, metal smelting and pressing and transportation equipment. Relying on the good seaport, Caofeidian will be a heavy industrial production base including ferrous metal smelting and pressing, chemical materials and products. Japan and South Korea have substantial advantages in these capital and technology intensive industries. More foreign investments and imports from these two countries to the Jing-Jin-Ji area will be expected. Second, as the Jing-Jin-Ji area develops, more multinational corporations would transfer regional headquarters, R&D

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and producer services to Beijing and Tianjin, enhancing the linkages between Northeast Asian economies and the Jing-Jin-Ji area. The development of seaports in Caofeidian and Tianjin will improve the functional division among seaports in the Northeast Asian economies. However, the further integration of Northeast Asia

economies will encounter some serious difficulties. Although they share some cultural traits and are complementary in economic development and resource endowment, Northeast Asian economies have substantially different political systems and value systems, and they also lack sufficient mutual trust. To promote the economic

integration, Northeast Asian countries should work together to establish institutions and arrangements to move away the cultural and political barriers (Dobson, 2001;

Aggarwal and Koo, 2005).

References

Aggarwal, V. K. and Koo, M. G., 2005, Beyond network power? The dynamics of formal economic integration in Northeast Asia, the Pacific Rview, 18, 189-2216.

Breslin, S., 2000, Decentralization, Globalization and China’s Partial Reengagement with the Global Economy, New Political Economy, 5, 205-226.

Dobson, W., 2001, Deeper Integration in East Asia: Regional Institutions and the International Economic System, World Economy, 24, 995-1018.

Keum, H.,2000, Globalization and Intercity Cooperation in Northeast Asia, East Asia,97-114.

Peng ,D., 2003, Subregional Economic Zones and Integration in East Asia, Political Science Quarterly, 117, 613-641.

Yeung, H., Liu, W. and Dicken, P., 2006, Transnational corporations and network effects of a local manufacturing cluster in mobile telecommunications equipment in China, World Development, 34, 520-40.

Transformation of regional economic system in Japan and East Asia -- Implication for each mega city --

Masato Hisatake RIETI & METI

October 2007

1. Foreword

2. Transformation of East Asia’s regional economic system 2.1 Analysis based on macroeconomic indices

2.2 Transformation of Regional Agglomeration of the Manufacturing Sector in East Asia

3. Transformation of regional economic systems in Japan 3.1 Changes in Japan’s regional economic structure 3.2 Comparison of the three central regions of Japan

4. Dynamism of agglomeration –diversity and specialization 4.1 Diversity versus specialization –previous theoretical study 4.2 Data from White Paper on International Trade 2002

4.3 Diversity and innovation –empirical results from Hisatake and Ji (2007) 5. Concluding remarks

1