Shanghai Minghang, Nanjing, Hangzhou, Ningbo, Suzhou

Export Processing Zone 3 Shanghai Jinqiao, Songjiang, Kunshan

Free Trade Zone 3 Shanghai Waigaoqiao, Ningbo, Zhangjiagang

Chemical Industry Park 2 Shanghai, Nanjing

High-tech Park 5 Shanghai, Suzhou, Nanjing, Wuxi, Hangzhou

Resources: collected by author

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In foreseeable future this region’s hard infrastructure will be lifted up to a standard which may match the standard of the developed Asia. Guiding by the 11

Five Year Plan the state of art transportation system, including high-speed train and magnetic-lifted train will be built up across the region which can create the distance/space shrinking effect among the 16 major cities in YRD.

Regarding the soft infrastructure, the area takes the marketization, internationalization, informatization, and rule by law as the major content of reform and opening-up. Backed-up by the most educated labor force and strong R&D resources, YRD has been keeping as the major destination of foreign investment. Right now, YRD’s soft infrastructure improvement is focusing on the deepening and speeding-up of regional integration. (See Appendix 2 )

The Development Prospects of YRD

Blueprinted by the 11

Five Year Plan, YRD will continually experience the

high rate of growth at around 9%. The Regional Gross Output will stand at

RMB 6300 bil (USD 850 bil) by 2010. This prediction is based on the

further urbanization and industrialization. By 2010, the regional urbanization

rate will be over 60% and the challenge will move from how to be urbanized

into how to maintain the environmental and ecological sustainability. For

industrialization, to upgrade the structure from labor intensive and low value

added economy into the technology/knowledge intensive and high value

added one is the main task. Also proposed by the YRD 11

Five Year Plan,

petrol-chemical industry, auto industry, high-tech industry, logistic industry,

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and financial sector are the key industrial clusters in this region and will be under careful coordinating. The major cities in YRD are to experience service oriented economic restructuring while the whole area keeps up-grading its manufacturing structure.

Beggar-thy-neighbors has been the persistent handicap for the intra-region relation. That leads to unnecessary costs. With the national strategic will of taking the whole YRD as the powerhouse of China’s peaceful rising, the localities are now fully aware of the value of cooperation. The regional integration is sure to be the key word of YRD. As the most market oriented region in China all the localities believe that it should be mainly the market to play the role as allocating force of resources, capital, labor, industrial capacities as well as other economic functions. Simple-minded balanced development is not the choice. Competition through cooperation will be the major tone of this region. Through this way the YRD will build its economy based on better division of labor, which is sure to lift YRD into the row of most influential economic region in the would with a shorter time span.

The Cross-region Interaction with YRD

The current economic relation between major Core Economic Regions (CERs) in Northeast Asia are still the vivid example of flying geese despite the ambitions, that every CERs hold, to fly higher and fly beyond.

The interdependent relation between Northeast Asia CERs also has its

uniqueness. To take European FURs as the comparing model. The relations

between the FURs are mainly horizontal interdependence based

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intra-industrial division of labor. However the relations between CERs in Northeast Asia are by far vertical interdependence based inter-industrial division of labor. This leads to the uneven share of added value. This also leads to the ambitions of majority CERs to outperform the others. Therefore much more economic, political and cultural wisdoms are in need to set up an area-wide vision for the CERs to reposition themselves in a coordinative win-win way.

Re-positioning the YRD within the Northeast Asia

To reposition each CER in Northeast Asia’s geo-economic map we need to catch the major character of this area at first hand. That is outward-orientation. The northeast Asian economies have not always taken the neighbor as top business partner especially regarding the final-products trade and financial investment.

Take YRD as example. Within the top 4 export destinations targeted by YRD, USA holds the No. 1 as USD22.6 bil, Japan as the second biggest destination absorbs commodities worth USD15.1 bil, Hong Kong mainly depended on its transit function hold the 3

position as USD8.9 bil, Germany hold the 4

as USD5.2 bil.

Breaking down to the regional level, outward-orientation is also the image

and personality every regions and cities want to built up. Tokyo has been

imaged as Japan’s World City, Seoul wants to built herself as World’s First

Rate City, Hong Kong identifies herself as Asian World City. Therefore, to

position the Northeast Asia CERs directly into the global geo-economic map

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might be more suitable and meaningful than into the area level one. This is

the major difference comparing with those mainly inward orientated

Functional Urban Regions (FURs) in Europe and the Metropolitan Regions

in the States. In this sense, the Open Regionalism, the basic spirit of APEC,

can also be the guiding principles for interacting between Core Economic

Regions in Northeast Asia. Those are Non-discrimination, Free Trade,

Transparency, Consultation and Consensus.

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