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NEW MEDITERRANEAN: Port-city network in East and South-East Asia: towards the emergence of a “Mediterranean Sea” model of interdependence

Port-city network in East and South-East Asia: towards the emergence of a “Mediterranean Sea” model of interdependence

François Gipouloux

Map 1: Maritime Asia Economic Corridor

Copyright Gipouloux 2000, China Perspectives

Nowadays, global cities illustrate the extent to which world trends deeply penetrate into the interior of national territory and devices traditionally controlled by the state. The different port-cities (Tokyo-Yokohama, Osaka-Kobe, Pusan, Kaohsiung, Singapore, Hong Kong, Macau, Shanghai, Xiamen, Tianjin, Dalian) situated on the periphery of this Mediterranean Sea forms a system characterised by the intensity of their economic linkages, a differentiated relationship with their hinterland, and a specific level integration in the world economy.
The concentration of control functions goes along with the dispersion of manufacturing capabilities (at the regional, national and global levels). Thus Hong Kong, but also Singapore, or the Tokyo-Yokohama conurbation, for instance, implements a new logic of agglomeration and takes part in a new geography of centrality and marginality. What emerges then is a transnational urban system, whose frame is found on the periphery of a maritime corridor, stretching from Vladivostok to Singapore.
The concept of a Mediterranean sea makes it possible to grasp the dynamics of economic flows, the emergence of gravity centres, the evolution of hierarchies. It indeed forms an urban system in this Asian corridor, i.e. a system of cities characterised by a functional division of the work and responsibilities within a polycentric region. The network configuration of port-cities finally leads to a questioning of the new attributes of sovereignty. The example of Hong Kong shows that sovereignty no longer rests exclusively upon the territory itself, but on the functions performed by a given area. In that sense, it also depends on the capacity to model economic spaces, to create and to impose technical, financial and legal norms.
Main hypotheses
1. Transnational entities (Sea of Japan Economic Zone, Yellow Sea Economic Zone, Sea of China Economic Zone) are the core of economic spaces in East Asia.
2. Production, trade and innovation are structured by new forms of flexible organisation such as networks, more than by the national policies only.
3. Major actors of this configuration are cities, more than governments or Nation-States. Major Asian port-cities are not only centres of exchanges. Since the mid-1980s, they have become world-wide-oriented centres for production, trade and research. Thus, they tend to return to what they were before the eighteenth century: prominent actors of international trade, elaboration centres of new forms of sociability.
While one would have thought that the dispersion of production sites, made possible by information technology, would have made urban agglomerations lose their importance, the globalisation of economic activity has transformed cities into nodes, concentrating control functions. In particular, cities have become sites for the post-manufacturing production in advanced technologies, finance and high value-added services. They have, equally, been transformed into transnational markets where firms and governments can buy financial instruments and specialised services.
4. The growing intensity of the service function in the organisation of industries ends with the formation of a new urban economy, characterised by the very strong growth of high value-added services, the dramatic progression in export-linked services and the stagnation of the services linked to the physical handling of the freight.
The category “service” is, however, too large to be relevant. It covers the wholesale and retail trade, import-export activity, hotel and restaurant businesses, transportation, warehousing and communications, finance, insurance, real estate, business services, personal and social services. In addition, the location of services is highly differentiated. While services for consumption or community services can be dispersed, and are linked to the population density, services for production (project design, advertising, auditing, accounting expertise, legal advice, etc.) are far more concentrated geographically.
Integrating AND disintegrating effects on China’s territory of an “Asian Mediterranean”
As 80% of direct investment in China originates from countries in the region, we might wonder if, in the final analysis, the appearance of this boundary within the country might not be the result of outside influences rather than the consequence of the endogenous development of Chinese capitalism. If we look at it from another angle, focusing not on China, but on the East Asian economic corridor, the picture appears in a different light.
The border referred to earlier clearly divides China in two and underlines the relatively heterogeneous nature of the two economic situations. But this border also inserts China in a different economic zone, one that is more wide reaching, where intra-Asian exchange is the driving force. In short, this border integrates as well as separates. It is perhaps necessary to look at China from an outside perspective in order to interpret the dynamics at work on the Chinese mainland. And it is on the edge of this “Asian Mediterranean”, whose forms and flows need to be identified, that we must look to find one of the sources of Chinese development.
“The Mediterranean” is not only the title of one of Fernand Braudel’s most celebrated works, but also a concept which carries wider significance, providing its author with a means of illustrating the dynamics of European capitalism in the 16th century. Applying it to a completely different context, Denys Lombard provided a brilliant illustration of this concept in his study of the South China Sea. Braudel’s attention was focused on the cities situated on the shores of the Mediterranean Sea, and we are no longer living in the sixteenth century. Nevertheless there are four aspects of the “Mediterranean” concept that deserve to be highlighted inasmuch they may help us understand what is at stake and which economic forces are at work today in the corridor running from the strait of La Perouse to the strait of Malacca.
1. In spite of its etymology, “Mediterranean” does not define a closed space. That was not the case for the Mediterranean world in the era of Philip II, nor is it the case for the East Asian corridor today. Trade with North America, on the one hand and with Europe, on the other, are two fundamental dimensions that characterise the opening up of this zone. The massive re-locations that took place all through the 1990s, first in ASEAN countries and then in the Chinese coastal areas, resulted in a manufacturing crescent, the vocation of which was to reach out to the world and conquer distant markets.
2. A “Mediterranean” world is a melting pot for industrial undertakings, innovative activity and entrepreneurial initiatives. It is a laboratory for experimenting with new social norms and new ways.
3. As a consequence, a “Mediterranean” world is a multi-faceted space in which the flows of capital, the concentration of trade, the network of infrastructures all produce specific forces that wrench the coastal zones from their continental heartland and reorganise the space in China according to other directions of power, blurring the tight lines of control defined by bureaucratic planning.
4. A “Mediterranean” world is a link between different areas of civilisation; more precisely, through the development of trade around the Sea of Japan, the Yellow Sea and the South China Sea, the obstacles created by very diverse economic and social systems have been neatly avoided.
This view contains several implications for our perception of economy, space and territory, as well as international economic relations. However, we should avoid any form of geographic determinism. Here, the actors are more important than the structures. The entrepreneurs and their networks, and perhaps, in the final analysis, the structures providing informal dialogue for defining technical norms, such as the Pacific Basin Economic Council (PBEC), carry more weight than governments. The port cities, which could also be defined as major platforms for the flow of goods and services, as well as information, count more than the shape of the space thus defined.
1. This economic corridor in East Asia has a centrifugal effect on China. The coastal zones are “sucked up”, so to speak, by intra-Asian trade, investment flows and regional dynamics. China is violently split up by this corridor, then re-assembled by forces that partly escape the control of central government. The border between coastal China and inland China is also determined by this “Mediterranean” region, where it occupies a position at the western extremity and separates it from the Asian hinterland.
2. The corridor considerably changes the physiognomy of the coastal areas: Xiamen, in 1997, recorded a considerable inflow of investment, in particular in the area of port infrastructures (Hutchison Delta Ports) built in anticipation of establishing direct links with Taiwan. Likewise, Korean investments in Qingdao have transformed Shandong, as have Japanese investments in Dalian, by bringing these areas into the intra-Asian network. Not to mention the synergy between Hong Kong and the Pearl River Delta ports.
All in all, FDI in China has a three-fold effect on regional economic investment.
Firstly, it accelerates the differentiation of China’s economic areas. We can reasonably predict that the future implantation of FDI will not be influenced solely by matters of cost or potential for a particular market, but will also be oriented according to the two forces working on the economic geography of China, of which it is a part: the extent of the dismantling of public ownership and the diversification of the urban fabric, or more precisely the revival of the city’s role in trade.
Secondly, it underlines the invisible border that divides China into two distinct macro-regions. Both work according to their own logic: open to exchange in one case; relatively autarchic in the other, primarily on account of the particular inertia that state ownership brings about.
Thirdly, it encourages integration of the coastal zones into a network of international subcontracting led by the “Four Dragons”, Japan and, to a certain extent, American and European companies. These zones are clearly oriented towards exports: what is happening in the Pearl River Delta, the Shanghai-Nanjing-Hangzhou triangle and, to a lesser extent, the Gulf of Bohai is the constitution of a manufacturing crescent aiming to conquer distant markets in Europe or the United States. Indeed, the role played by Dalian in Japanese re-exportations is remarkable in this respect.
Seen in this light, the emergence of an “Asian Mediterranean” world confirms the reality of what many foreign companies practice today: direct investment is no longer a flow of capital enclosed in a purely bilateral dimension (for example, between Japan and China), but rather part of a multilateral movement that includes several countries or trans-national regions.
A key question remains concerning the economic partition of China. It can be divided into two parts: the question of rising provincial protectionism and the closely related issue of burgeoning new macro-regions that will become the centres of gravity for tomorrow’s China. The problem of Chi Ch’ao-ting (24)—the creation followed by the decline of key economic zones are major movements in the history of China—, as well as that of Skinner—the hierarchy of the trade centres in China determine the revival of a centre-periphery structure in each of the macro-regions in question (25)—have been turned upside down by the economic practices of the last 20 years. “Useful” China has moved to the east as a result of a transfer that undermines the Communist Party’s nationalistic determination to establish or maintain central control over economic development. Paradoxically, in an age of opening up to the world, dynamics of this sort re-establish links with the imperial model and its fluctuating sovereignty, flexible networks, fluctuating boundaries, as well as its ambition to extend real geo-political and economic power beyond the confines of China.
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Fernand Braudel, La Méditerranée et le monde méditerranéen à l’époque de Philippe II, Paris, Armand Colin, 1949. On a more recent theme, see Thomas Rohlen, “A ‘Mediterranean’ Model for Asian Regionalism: Cosmopolitan Cities and Nation States in Asia”, Working Paper, Asia Pacific Research Center, Stanford University, May 1995.

Cf. the special edition of “L’Espace Géographique” devoted to the concept of the Mediterranean model, Montpellier, 1995.

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