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Foreign-related activities of the Chinese local governments and agents of globalization: a case study of 31 provinces in mainland China

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Content FOREIGN-RELATED ACTIVITIES OF THE CHINESE LOCAL GOVERNMENTS AND AGENTS OF GLOBALIZATION A CASE STUDY OF 31 PROVINCES IN MAINLAND CHINA by Yanli Chu A Dissertation Presented to the FACULTY OF THE SCHOOL OF POLICY , PLANNING AND DEVELOPMENT UNIVERSITY OF SOUTHERN CALIFORNIA In Partial Fulfillment of the Requirements for the Degree DOCTOR OF PLANNING AND DEVELOPMENT STUDIES August 2008 Copyright 2008 Yanli Chu ii TABLE OF CONTENTS List of Tables v List of Figures vii Abbreviations ix Abstract xi Chapter One: Introduction 1 Practical Background of the Research 1 Theoretical Background of the Research 9 Significance and Purpose of the Research 11 Research Questions 13 Research Framework and Organization 19 Endnotes 23 Chapter Two: Literature Review on Subnational Governments’ 25 International Activities Initial Studies on Subnational Governments’ International 25 Activities Research on the Local Governments’ Foreign-related Activities 27 in Mainland China Competing Viewpoints 29 Endnotes 47 Chapter Three: A Review on the Chinese Provincial Governments’ 48 Foreign-related Activities before 1978 The Period from the Han Dynasty to the Opium War 49 (140BC-1839AD) The Period from the Opium War to the Founding of People’s 59 Republic of China (1840-1949) iii The Period from the Founding of People’s Republic of China to 66 China’s Opening-up (1949-1978) Endnotes 72 Chapter Four: Theoretical Framework and Assumptions 74 Why the Chinese Central Government Encourages its Provinces 74 to Interact with the Agents of globalization How the Chinese Central Government Encourages its 80 Provinces to Interact with the Agents of globalization Why the Chinese Provinces Actively Interact with the Agents of 88 Globalization How the Chinese Provinces Interact with the Agents of 94 Globalization Research Framework and Assumptions 99 Endnotes 105 Chapter Five: Index of Foreign-related Achievements of China’s 105 Provincial Governments Existing Indices for Reference 107 The Basic Principles for Establishing the Index of FACPG 110 Establishment of the Index 116 Endnotes 116 Chapter Six: Evaluation of FACPG during 2004-2006 118 Interpretation of the Evaluation of FACPG in 2006 118 Dynamic Analysis of FACPG during 2004~2006 137 Cluster Analysis of FACPG in 2006 143 The Regional and Geopolitical Features of FACPG 146 Chapter Seven: Factors Affecting FACPG 149 Assumed Factors and Steps of Analyses 150 Correlation between the Factors and FACPG 158 Endnotes 183 Chapter Eight: Conclusion 185 iv Bibliography 192 Appendix A: Statistical Method for the Index of FACPG 199 Appendix B: Scores and Ranks of FACPG during 2004-06 203 Appendix C: Original Data of Assumed Factors during 2004-06 207 v LIST OF TABLES Table 5.1: The Composition of the Index of FACPG 112 Table 6.1: The Raw Data of Transnational Flow of Goods 119 Table 6.2: Standardized Data of Transnational Flow of Goods 120 Table 6.3: Correlation Matrix of Transnational Flow of Goods 122 Table 6.4: Total Variance Explained of Transnational Flow of Goods 122 Table 6.5: Initial Loading Matrix of Transnational Flow of Goods 123 Table 6.6: Principal Component Matrix of Flow of Goods 123 Table 6.7: Scores and Ranks of Transnational Flow of Goods 126 Table 6.8: Initial Loading Matrix of Transnational Flow of Capital 127 Table 6.9: Scores and Ranks of Transnational Flow of Capital 128 Table 6.10: Initial Loading Matrix of Transnational Flow of People 130 Table 6.11: Scores and Ranks of Transnational Flow of People 130 Table 6.12: Initial Loading Matrix of Flow of Information 132 Table 6.13: Scores and Ranks of Transnational Flow of Information 133 Table 6.14: Initial Loading Matrix of FACPG in 2006 134 Table 6.15: Ranks of Overall FACPG in 2006 135 Table 6.16: Rank Change of Transnational Flow of Goods (2004-2006) 137 vi Table 6.17: Rank Change of Transnational Flow of Capital (2004-2006) 139 Table 6.18: Rank Change of Transnational Flow of People (2004-2006) 140 Table 6.19: Rank Change of Transnational Flow of Information 141 (2004-2006) Table 6.20: Rank Change of Overall FACPG （2004-2006） 142 Table 6.21: Four Groups based on FACPG in 2006 144 Table 6.22: Regional Features from Perspective of FACPG (2004-2006) 147 Table 6.23: Geographic Features from Perspective of FACPG (2004-2006) 148 Table 7.1: Assumed Factors related to FACPG 157 Table 7.2: Correlation Coefficient between Assumed Factors and 159 FACPG Table 7.3: Top Ten Provinces in Employment of Overseas Experts 178 vii LIST OF FIGURES Figure 4.1: Analytic Framework 100 Figure 5.1: The Index of FACPG 110 Figure 6.1: Ranks of Transnational Flow of Goods in the Provinces 125 Figure 6.2: Ranks of FACPG in 2006 136 Figure 6.3: FACPG of the Top Ten Provinces in 2006 136 Figure 6.4: Cluster Analysis Based on Overall FACPG in 2006 145 Figure 7.1: Ranks of Land Area and FACPG 160 Figure 7.2: Ranks of Population and FACPG 161 Figure 7.3: Ranks of Developed Area and FACPG 163 Figure 7.4: Ranks of GDP and FACPG 164 Figure 7.5: Ranks of Local Government Revenue and FACPG 165 Figure 7.6: Ranks of Local Government Expenditure and FACPG 166 Figure 7.7: Comparison of the Central and Local Government Revenue 167 Figure 7.8: Comparison of the Central and Local Government Expenditure 168 Figure 7.9: Ranks of Average Urban Consumption Expenditure and FACPG 168 Figure 7.10: Ranks of Average Rural Income and FACPG 169 viii Figure 7.11: Average Urban and Rural Income from 1995 to 2006 170 Figure 7.12: Ranks of R&D Expenditure and FACPG 171 Figure 7.13: Ranks of Local Government S&T Fundings and FACPG 172 Figure 7.14: S&T Funds of the Central and Provincial Governments 173 Figure 7.15: Ratio of S&T Funds in Total Expenditure of Top Ten 174 Figure 7.16: Growth of the Central and Provincial Government 175 S&T Funds Figure 7.17: Ranks of Government Appropriation for Education 175 and FACPG Figure 7.18: Education Funds during 1995-2006 176 Figure 7.19: Population with College or above Education and FACPG 177 Figure 7.20: Scattergram for 16 Factors and FACPG in 2004 181 Figure 7.21: Scattergram for 16 Factors and FACPG in 2005 181 Figure 7.22: Scattergram for 16 Factors and FACPG in 2006 182 ix ABBREVIATIONS CCP the Chinese Communist Party CNNIC the China Internet Network Information Center COC coastal open cities CPGFA the Chinese provincial governments’ foreign-related activities FACPG foreign-related achievements of China’s provincial governments FAO foreign affairs office FDI foreign direct investment FPGI Foreign Policy Globalization Index GDP gross domestic product/ gross regional product NCGs non-central governments NGO non-governmental organizations R&D research and development S&E science and education S&T science and technology SEZ Special Economic Zone UCLG United Cities and Local Governments x Abbreviations of Provinces, Municipalities and Autonomous Regions in the Chinese Mainland AH Anhui JX Jiangxi BJ Beijing JL Jilin CQ Chongqing LN Liaoning FJ Fujian NX Ningxia GS Gansu QH Qinghai GD Guangdong SA Shaanxi GX Guangxi SD Shandong GZ Guizhou SH Shanghai HA Hainan SX Shanxi HE Hebei SC Sichuan HJ Heilongjiang TJ Tianjin HN Henan TB Tibet HB Hubei XJ Xinjiang HU Hunan YN Yunnan IM Inner Mongolia ZJ Zhejiang JS Jiangsu xi ABSTRACT China’s local foreign-related activities have rapidly developed with the brisk pace of globalization and localization since China opened to the outside world in the late 1970s, bringing about a great impact on its national diplomacy and local economy. Few studies, however, concern why and how the Chinese local governments voluntarily conduct foreign activities, nor how to evaluate or what factors help shape the foreign-related achievements. Based on literature review and empirical evidence, this study examines the foreign activities of China’s 31 provincial-level governments in a globalization perspective. It first explores why and how the provincial governments interact with the transnational flow of capital, goods, people and information, which are most important agents of globalization. Second, an index is created to evaluate and rank the foreign-related achievements of China’s 31 provincial governments (FACPG) during 2004-2006 by processing the official data collected. Third, 18 factors are tested to make sure whether and to what extent they push up or pull down FACPG. The study finds that: 1) the Chinese local government international involvement did not appear until China opened its door to the outside world in the late 1970s as commonly conceived. The local international involvement can be traced back to the Han Dynasty xii and continued to flourish in the Tang Dynasty in ancient China. 2) The provincial governments in the Chinese Mainland are active in promoting foreign activities closely related to the transnational flow of globalization agents in order to benefit their local economy. 3) FACPG shows remarkable disparity during 2004 to 2006. Six coastal provinces and two municipalities directly under the central government ranked at the top consistently. 4) There were significant and positive correlations between factors tested and FACPC with exception of land area. During the observed period, factors associated with provincial acquired international competencies had much stronger positive correlation with FACPG than basic factors. 1 Chapter One Introduction “States are not and never have been the only international actors” 1 Kenneth Neal Waltz 1.1 Practical Background of the Research When the bloc motion called for Quebec to be recognized as a nation but did not include the word “Canada”, Stephen Harper, Prime Minister of Canada, told the House on November 21, 2006 “Our position is clear. May the Quebecois form a nation within Canada? The answer is yes. Do the Quebecois form an independent nation? The answer is no and the answer will always be no.” 2 Later, Michael Chong, the Intergovernmental Affairs and Sports Minister of Canada resigned on November 27, 2006, demonstrating his opposition to the continuing Quebec-as-nation controversy. He believed that “a Tory motion to recognize the province as a nation will provide fuel to separatists and divide the country.” 3 Sidestepping the Bush administration's refusal to sign up to binding targets in the Kyoto protocol，California's governor Schwarzenegger and Tony Blair, the British Prime Minister at the time, signed a historic agreement--United Kingdom and California Announcement on Climate Change & Clean Energy Collaboration in Long Beach, 2 California on July 31, 2006. 4 The agreement, which was called a snub to the White House by some newspapers and polls, shows that Californians regard climate change as the biggest issue facing the state because they fear that water shortages and heat wave will destroy the state's economy, including its vineyards, within 20 years. As the world's 12th largest carbon emitter, “California will not wait for our federal government to take strong action on global warming,” said Governor Schwarzenegger. “Today, we are taking an unprecedented step by signing an agreement between California and the United Kingdom. International partnerships are needed in the fight against global warming and California has a responsibility and a profound role to play to protect not only our environment, but to be a world leader on this issue as well.” To “ensure the voice of the sphere of government closest to the world’s citizens is heard loud and clear on the world stage” 5 , nearly 2000 mayors, councilors, and representatives of cities and local and regional governments of the world came together on the island of Jeju in the Republic of Korea for the 2nd UCLG 6 World Congress entitled “Changing Cities Are Driving the World”. One of its three plenary sessions was “City Diplomacy - Local governments building peace; 2015: a better world is possible!” UCLG also launched in the Congress its Global Report on Decentralization and Local Democracy. When French government tried to repair China-France relationship, which was hurt 3 by disruptions to Beijing Olympic torch relay by Tibetan separatists in Paris on April 7, 2008, Paris Mayor Bertrand Delanoë proposed to bestow “honorary citizenship” to Dalai Lama, the head of Tibetan separatists. A few hours after French Senate President Christian Poncelet arrived at Shanghai as the first of three emissaries sent by French President Nicolas Sarkozy to soothe Chinese anti-France sentiment, the Paris city council passed the resolution to make Dalai Lama an honorary citizen. Paris councilors also bestowed honorary citizenship on the dissident Chinese political activist Hu Jia, who was sentenced by the Chinese authorities to three years imprisonment for inciting subversion of the state. Paris move was of course considered as a “severe provocation” by the Chinese government and public. Those are examples concerning subnational international activities. Globalization and localization have developed hand in hand since the 1970s (Dirlik，1994) and the two kinds of broad and seemingly paradoxical trends empowered local officials to “think globally and act locally” with strong aspiration and capability (Hobbs, 1994:1). The involvement of subnational governments in foreign affairs does not only weaken the traditional monopoly of the national/central governments on foreign affairs but also defends their local interests directly affected by the global political economy. A nation-state no longer speaks with only one central-government legitimate voice; the voices of subnational governments can be heard on the international scene. As domestic 4 policy is gaining an increasing international dimension, subnational governments are playing a significant, though secondary, role on international affairs (Duchacek, 1986b: 13). “The age of local diplomacy is closer,” predicted Young Ho Cho, the fourth President of Korean Local Authorities Foundation for International Relations (KLAFIR) 7 , in 2004. In the era of globalization of local authorities, he adds, the national competitiveness is closely related to the competitiveness of subnational authorities. Compared to other non-state international actors that are of a non-territorial nature, for instance non-governmental organizations (NGO) or multinational corporations, subnational governments have unique advantages in their administrative “jurisdiction over geographically delineated portions of the territorial whole” (Duchacek, 1990): population, resources, enormous economic power (e.g. local-owned enterprises, revenue, investments and expenditures), and also armed forces for homeland security and emergency preparedness. 8 More importantly, they enjoy more or less constitutionally protected power in legislation such as fiscal, tax, and monetary policies, natural resources and public-goods allocation, etc. Further, they are usually taken more seriously than most individual citizens or NGOs. Feinstein and seven other mayors, for example, successfully persuaded the Soviet Union to allow thirty-six people to emigrate in late 1985 (Shuman, 1987:157). State insurance commissioners in California, New York, and Washington pushed European insurance companies and Swiss banks to respond to claims made by 5 Holocaust victims and their heirs. (John Kincaid, 125) Sometimes, the trade/tourist missions abroad of regional/provincial authority are viewed and treated as proto-embassies or proto-consulates of a potentially sovereign state (Duchacek, 1986a: 248). These characteristics empower subnational governments with some capabilities similar to those of nation states; hence, some of them are able to disobey or conflict with their national foreign policies and challenge the conventional concept of “state-centric” and a national monopoly in foreign policy. Although subnational international agendas regarding high politics are still controversial, both proponents and opponents agree that the subnational governments’ role on the international arena has become indispensable to today’s interdependent world. A nation that had only one voice in the international community before has turned into a multi-voice actor. The economic area witnesses most local foreign initiatives. On the one hand, constitutions in almost all countries keep their subnational governments away from high politics and foreign policy in particular. On the other hand, subnational governments are less interested in high political issues due to their vested responsibility. They always put local interest, especially economic growth as top priority (Duchacek, 1988, 1990). That is why they make much effort to boost export, recruit inward investment, attract foreign tourists, and seek technology for local economic development and create more job opportunities. The non-economic but low political areas also see frequent transnational 6 exchange of culture, sports, and expertise via partnerships, intergovernmental organizations or other channels. High political arena has seen increased subnational international actions since the 1970s. Regions like Quebec in Canada, Catalonia in Spain, Scotland in UK, Basque in Brazil, and Kosova in Serbia, for example, are pursuing distinct national identity and have undertaken nation-building projects to prepare the ground for eventual independence through various international activities. Some subnational activities have been closely related to military security and human rights during the past decades. For instance the comprehensive test ban movement, nuclear-free zone declarations, anti-Apartheid and divestment of local funds from South Africa, and provisions of sanctuary for refugees from Central America became international agendas in American localities during the 1980s (Hobbs, 1994; Shuman, 1987). These actions in high political arenas were not many but highly controversial; their deviation from the long existing fixed rules is more likely to attract considerable political and scholarly attention. Aldecoa and Keating (1999) claimed that subnational international initiatives have perhaps been most notable in Europe. Soldatos (1990) finds that subnational paradiplomacy appear most often in the advanced industrial federations. Actually, they emerge whenever globalization arrives. China is no exception. Marked by the reform and opening up of its economy in the late 1970s, China has gradually integrated into 7 globalization and “switched on” with the global “networking society”. (Castells, 2000) Since then, foreigners and agents of globalization 9 thronged into this most populous country that had been blocked from the outside world for dozens of years. Their arrival as well as the strong encouragement from the central government has pushed the local governments 10 at various levels to directly deal with foreign affairs. Being aware that positive foreign-related activities could help attract more foreign capital and tourists, export more local products, increase more jobs, and boost economic growth, local officials have gradually become active promoters of local foreign relations in “China’s internationalization” (Zweig, 2003). Chinese diplomacy is “localizing” (Hocking, 1993). The Chinese central government, however, has never let go of its control over local foreign affairs. The traditional relevant principles are still in effect. They are usually briefed as “Only the central government has the exclusive power for diplomacy” (waijiao daquan zai zhongyang) and “local government’s authority in foreign affairs is limited” (defang waishi shouquan youxian). In addition to the Constitution and fixed laws, non-legal soft laws like in-house regulations have been effective to regulate diversified local foreign activities. For example, those promoting local economic growth are strongly encouraged; those promoting cultural exchange are permitted; those promoting the political exchange such as officials’ visits or bilateral foreign agreements such as sister relationships with foreign counterparts are supervised; those related to high politics 8 are limited or forbidden. There is no tolerance for local foreign initiatives going beyond the central control. As soon as any local action is found to infringe upon the national interest or conflict with the national policy, Beijing administration will stop it uncompromisingly and reprimand the policy-breakers. Generally, aware of their power limitation, the local officials usually follow the higher level orders and seldom trespass the forbidden zones defined by Beijing. With the above-mentioned political surrounding and unique economic, ideological, and cultural background, the Chinese local governments prefer foreign activities closely related to economic growth. Their efforts are mostly on promoting agents of globalization. To attract more foreign capital, they improve infrastructure and service for potential foreign investors. To increase outflow of local products, in addition to preferential tax policies offered by the central government, they make various local policies like subsidy or rewards for big export companies, and establish local-based financial institutions and export processing zones where foreign enterprises are offered favorable policies. To enhance cross-border flow of people, they simplify procedures for issuing passports or visa application; assist local accredited private enterprises to apply for APEC business travel cards (ABTC) 11 and so on. To hasten flow of information, the governments increase their budget on telecommunication facilities. Dozens of years of local foreign-related practice have induced local awareness of 9 global interdependence and have shaped China’s diplomacy into a multi-layer pattern, in which national diplomacy is dominant and local ones complementary. More local officials have realized the fact that in the age of globalization, to be a gateway to agents of globalization means more channels to obtain scarce resources from abroad, and their active involvement in foreign affairs have greatly benefited local interests. Disparity among different Chinese localities, however, has appeared and the gap is increasing. 1.2 Theoretical Background of the Research Nowadays, few argue that foreign affairs is an exclusive area for the central government and more admit that the subnational government is a newly developed force in international affairs. The international academia, yet, knows less than enough about the interaction between subnational foreign activities and globalization. Further, many areas need scrutiny. First, most of the Western literature fixes their attention to subnational governments’ foreign involvement in federal states while underestimating and ignoring the rapidly developing subnational foreign relations in unitary states or developing countries in particular. 12 That is why Kincaid (1999:132) asserts, “The emergence of subnational governments as actors on the world scene can be characterized as co-operative dual federalism”. Further, little research is found on the factors that influence local foreign-related achievements. 10 Second, the local foreign-related activities in China are much different from those in the developed, federal, or highly democratic countries. The progress of the Western studies in this field could hardly give convictive and systematic explanations for China’s local practice in foreign affairs. For example, the Western subnational actors are rather interested in high political agenda while their Chinese counterparts more prefer activities directly promoting local economic growth. Few local foreign actions or legislations in China violate the national diplomatic policy. Another fine example is concerning “public opinion,” one of the major factors affecting local policy-making in the Western world. Public opinion is less important for the Chinese local officials as most of them are appointed rather than elected. Third, due to certain historical and political reasons 13 , foreign affairs is still a sensitive area in China. It seems too political to attract interests from scholars or professionals in the Chinese Mainland. They would rather stay far from it. Studies in the field did not appear until recent years when the academic atmosphere became more relaxed and free. Zhimin Chen’s Subnational Governments and Foreign Affair published in 2001 is the first monograph. Later, he examined thirteen Chinese coastal provinces in his Coastal provinces and China’s foreign policy making. Recent years saw several papers or articles about local external relations of China in journals; however, few books or comprehensive research is found. 11 Fourth, present theoretical or empirical analysis primarily is concerned with the nature, causes, and consequences of the subnational international activities. There is not any established index to evaluate the foreign-related achievements of subnational government and few empirical studies using statistical methods. 1.3 Significance and Purpose of the Research By creating an index of foreign-related achievements and analyzing the relevant official data collected, this study looks into the interaction between the provincial governments in the Chinese Mainland and four kinds of agents of globalization. Further, the study examines the 18 presumed factors that might foster or impede foreign-related achievement of 31 Chinese Provincial Governments (FACPG) by statistical methods. From a theoretical perspective, practice calls for new theories and existing theories need to be updated with time. Local international practice in China at present has outpaced the existing academic explanation. This case study may enrich the current understanding by findings from China, a unitary state and the biggest developing country. It is expected to offer an insight into the interaction between agents of globalization and subnational governments. From a practical perspective, encouraged by the central government, all the local 12 governments in Mainland China have been gradually involved in economy-related foreign affairs in varying degrees. With a vast territory and a large population, some provinces and municipalities will certainly become powerful international actors due to their strong intention and competitiveness. Besides, the Chinese central government is inclined to boost local international participation to a higher level. For example, Beijing asked all provincial party secretaries and governors to attend an unprecedented conference on foreign affairs (zhongyang waishi gongzuo huiyi) held in Beijing in August 2006. Top leaders including China’s President Hu Jingtao and Premier Wen Jiabao attended the conference. Hu proposed ways of strengthening and improving work related to foreign affairs. Wen spelled out priorities for foreign affairs now and in the years to come. They required the local governments to “participate in international economic and technological cooperation and competition in a wider area and at a higher level, making full use of both international and domestic markets and resources, making full use of every favorable condition provided by economic globalization and regional cooperation.” After the Beijing conference, almost all the local governments above county level have adopted measures to improve their competence on foreign affairs. For instance, most provincial governments have upgraded their foreign affairs office from a subordinate department into a duly constituted department of the provincial government and increased budgets and employee quota for direct foreign affairs. Findings from this study 13 will certainly benefit the momentum and practitioners in China. From a research method perspective, this study takes 31 provincial-level governments on the Chinese Mainland as units of analysis. They cover early-opened developed coastal provinces frequently involved with foreign affairs and relatively backward inland provinces rarely involved to prevent lopsidedness and to increase comparability. The index created in this study for evaluating FACPG and its statistical applied approach will pave an alternative way for future researchers. 1.4 Research Questions 1. Why and how do China’s provincial governments conduct voluntary foreign activities? 2. What are the characteristics of the Chinese provincial governments’ foreign-related activities from a globalization perspective? 3. How do China’s provincial governments interact with agents of globalization? 4. How to evaluate the foreign-related achievements of China’s provincial governments? 5. What are the factors that may affect the foreign-related achievements of China’s provincial governments? Moreover, to what extent? The research cases are four municipalities directly under the central government, 22 14 provinces and 5 autonomous regions, all of which are located on the Chinese Mainland. 14 The reasons for taking 31 provincial-level governments as the research cases are as follows: First, among all the local governments in China, the provincial-level ones are on the top tier and enjoy most authority in conducting foreign activities. Second, they all intend to be international actors and some of them are becoming powerful international actors. Taking Guangdong Province as an example, the year of 2006 witnessed its gross regional product accounting for 1/8 of China’s GDP, its provincial government revenue accounting for 1/7 of the country’s, its amount of imports and exports accounting for 1/3 of the country’s, its actually used foreign direct investment (FDI) accounting for 1/4 of the country’s. Some of the provinces have managed to sponsor international events or played a leading role in international organizations. For example, Beijing and Shanghai successfully bid to hold the 2008 Olympic Games and the 2010 World Expo. Chongqing has successfully held the fifth Asia-Pacific City Summit in 2005. Nine provinces and magecities in Mainland China have joined in the United Cities and Local Governments (UCLG), the biggest global organization of local governments. Shanghai and Tianjin were elected members of the Executive Bureau of UCLG in 2004. Third, the diversification of those provincial-level governments can increase their comparability. Owing to the dramatic differences in their geopolitical features, resource heritage, 15 historical and cultural background, the research will be complex but more meaningful. Definitions of key concepts Subnational governments are all the governments under the central government. Aldecoa and Keating (1999) employ the term to represent public authorities at the regional level when editing the papers for the seminar in Bilbao in 1999. The term of noncentral governments (NCGs) is also often used to refer to governments below the central government. For instance, Brian Hocking used NCGs when delving into multilayered diplomacy in 1993. I ňaki Aguirre alleged that he preferred the term of NCGs to subnational units because the latter does not emphasize the governmental nature of those new actors on the international scene (Aldecoa & Keating, 1999:206). In federal states like America, local governments or city halls refer to the governments under the state or provincial governments. In unitary states like China, however, the term of local governments covers all the governments under the central government. The connotations of both terms (i.e. subnational governments and noncentral government), therefore, are the same. Provincial-level governments here refers to the first-level administrative governments, such as states in U.S. and Australia, provinces in Canada and China, länder in Germany and Austria, cantons in Switzerland, regions in Spain, prefectures in Japan, and the Walloon and Flemish segments of Belgium. To simplify the expression, this 16 paper uses provincial governments or provinces to represent provinces, municipalities directly under the central government, and autonomous regions in the Chinese Mainland. Several neologies have been coined to elucidate this new political phenomenon since the 1980s (Hocking, 1999). Panayotis Soldatos created Paradiplomacy in the early 1980s when he interpreted NCG international involvement. Ivo Duchacek proposed protodiplomacy and microdiplomacy. Aguirre (1999) prefer the term of postdiplomatic or beyond diplomacy to paradiplomacy. Brian Hocking (1993) introduces a new term “multi-layered diplomacy” to contend with “paradiplomacy”. As “diplomacy” has been widely accepted as a general term for the international activity by nation-states and, particular, for negotiation skills, it seems not appropriate to cover the international activities of subnational governments since they still mainly concentrate on economic and the low-level political issues, at most. They seldom touch territorial or sovereignty agendas. That is probably one of the reasons why the literature often prefers to use the term ‘external relations’ rather than ‘foreign policy’. Even in federal states, “paradiplomacy has always been a sensitive issue” (Aldecoa and Keating, 1999: iii). This author employs “foreign-related activities of subnational governments” and “foreign-related activities of Chinese local governments” rather than “paradiplomacy”, “multi-layered diplomacy” or “postdiplomacy”. Subnational government’s international activities refer to the foreign-related 17 activities conducted by subnational governments to influence various foreign actors including individuals, organizations, governments, and companies in or out of the provinces. Generally, the activities conducted by China’s provinces may be divided into two categories. One is activities directly with foreign actors; the other is local-based but with international influences. Foreign-related achievements of China’s 31 provincial governments (FACPG) refers to local economic and social output within the provincial jurisdiction and directly influenced and brought about by the responding provincial foreign-related activities. This study focuses on the transnational movements of agents of economic globalization, which is influenced by China’s provincial government’s international activities. Internationalization and globalization reflect the cross-border flows of production factors. Many define globalization as internationalization but they are different. “Economic internationalization” expresses the process of a relatively independent national economy integrated into the international economy, and this term displays how a relatively closed or partially open economy goes to high-level openness. “Economic globalization” refers to the increasingly free flow and rational allocation of various economic resources around the world. During that process, economies all over the world are interdependent and mixed with each other. Economic internationalization is the prelude for economic globalization. Economic globalization is the development and extension of economic 18 internationalization. It is the advanced stage and a worldwide internationalization. Economic integration is the highest stage of economic globalization. Zweig (2002) defines internationalization as the expanded flows of goods, services, and people across state boundaries, along with a decline in the level of regulation affecting those flows. Literature often uses terms like “flows, networks, capacities, distributions, diffusions, and movement” to describe the process of globalization. When Pizarro, Wei, and Benerjee (2004) comment on the impacts of agencies of globalization on developing countries, they replaced the term “flows” with “agency”. They believed that “agency” is more accurate than “flows”, because the stream of globalization among countries is not smooth, coherent and uninterrupted (Pizarro et al, 113). Globalization is accomplished, conveyed, or transferred by agencies. “Agencies” is a metaphor equivalent to “vectors, conveyors, agencies or conduits” (Pizarro et al, 113). This paper uses “agents” rather than “agencies” because the former is more human and mobile. Agents of globalization are the carriers or mediums by which globalization spreads. It is an apparent characteristic or token for globalization. Capital, people, information, and culture are major agents of globalization, which are shaping the “space of flows” (Castells, 2000). In the matrix of strength, each single agent is playing its unique role in the social networking. Zweig (2002:3) defines internationalization as the expanded flows of goods, services, and people across state boundaries, along with a 19 decline in the level of regulation affecting those flows. The related legislation of World Trade Organization and European Union considers commodities/goods, services, capital, and people as objects of globalization. Neither the agent of globalization nor globalization itself has commonly accepted definitions, but none of those definitions could avoid mentioning the agents of globalization. Among the various definitions, the most frequently occurring agents are as follows: capital, people, goods, culture, knowledge, technology, services, information, ideas, and so on. Given accessible, quantifiable and controllable data, this research concentrates on the transnational flows of four major agents of globalization, i.e. capital, goods, people/labor, and information. Based on their transnational flows, foreign-related achievement of China’s provincial governments (FACPG) is evaluated. 1.5 Research Framework and Organization This research is based on the following two presumptions: 1. Assuming that the foreign-related activities of China’s 31 provincial governments aim to promoting transnational flow of the agents of globalization for the benefit of themselves. Therefore, the quality and quantity of the transnational flow of the agents of globalization related to each province may be used as the index to assess the foreign-related performance or achievements of the provincial government. Then: 20 FACPG= capital flows + goods flows + people flows + information flows An index is created to evaluate and rank PACPG by analyzing relevant official data. Corresponding to the above listed four agents of globalization, the index constitutes four sub-indices made of thirty indicators. The period from 2004 to 2006 is observed. 2. Basic condition as well as acquired international competencies has positive relations with FACPG. Then: FACPG = F (basic condition, acquired international competencies) = F (Basic factors, Economic factors, Social factors, Science and educational factors) This study tests eighteen presumed variables of four categories. The basic factors include three variables: land area, population at year-end and developed area. The economic factors include six variables: regional gross output (namely, GDP), average regional gross output (GDP per capita), revenue and expenditure of local finance, investment for fixed assets, and provincial government expenditure for foreign affairs. The social factors include five variables: the average income and expenditure of the urban residents, the average income and expenditure of the farmers, and the level of urbanization. The S&T and educational factors include four variables: R&D expenditure, provincial government funds for S&T, government funds for education, and population with college or above 21 education. It is supposed that the basic condition is a bow, the other three groups of variables a spring, FACPG an arrow, and local economic globalization a target. 15 If quality of the bow is difficult to improve, then to make the spring more elastic or shoot more vigorously and skillfully are the better ways to send the arrow farther. In other words, FACPG will primarily depend on the acquired advantages. Behind the local archers, however, stands a powerful supervisor. The central government stands there controlling the arrow’s direction and archers’ behavior. Organization of the Paper This study includes eight chapters. Chapter Two briefly outlines the main viewpoints and debates about rising subnational governments’ foreign-related activities so as to lay a theoretical foundation for exploring the rapidly increased China’s local governments’ foreign behaviors. Chapter Three examines the evolution of the Chinese subnational governments’ foreign-related activities from its preliminary stage i.e. the reign of Han Wudi Emperor (140-87 BC) to the eve of China’s opening up to the outside world in 1978. Chapter Four puts forward the theoretical framework and assumptions of the research. It delves into how the twin forces of decentralization and internationalization transformed the Chinese subnational governments into new active actors in international 22 science. It pays more effort to explore why and how the Chinese local governments conduct voluntary foreign activities and interact with agents of globalization since China opened up to the rest of the world in 1978. Chapter Five creates an index to evaluate foreign-related achievements of China’s 31 provincial governments. The index is composed of 30 indicators focusing on the transnational flows of capital, goods, people, and information. Chapter Six evaluates and ranks FACPG during 2004-2006 by analyzing official data collected. Chapter Seven looks into how the assumed eighteen variables regarding either local basic condition or acquired international competencies correlated with FACPG respectively. Finally, Chapter Eight summarizes the research findings and put forward some policy applications. 23 Chapter One Endnotes 1 Waltz, Kenneth Neal. Theory of international politics. Mass.: Addison-Wesley Pub. Co., c1979:125. 2 Quebecers form a nation within Canada: PM. http://www.cbc.ca/canada/story/2006/11/22/harper-quebec.html 3 Quebec's nation status costs Harper his first cabinet minister. <http://www.canada.com/topics/news/story.html?id=692b134e-c712-44c5-83ae-bff78fc1 a071&k=49129>. 4 <http://gov.ca.gov/index.php/press-release/2770/> 5 UCLG Jeju Declaration http://www.cities-localgovernments.org/uclg/upload/news/newsdocs/UCLG_Jeju_Declar ation_ENG.doc 6 UCLG was found in Paris in May 2004. Its members are either individual subnational governments or subnational- government organizations. Over 1000 subnational governments across 95 countries are its direct members of UCLG and 112 Local Government Associations (LGAs) are its party members. 7 KLAFIR was established in a collaborative effort of the Korean central government and the provinces and municipalities throughout Korea to help promote international cooperation and exchanges between Korea's local governments and their foreign counterparts. Since its establishment in 1994, KLAFIR has introduced various programs to support globalization of rural regions in tandem with the trend of globalization and localization. 8 For instance, each state in U.S. has a Guard composed of part-time soldiers who otherwise live as civilians. Most often, a governor activates the Guard during state and local emergencies such as floods, riots and power outages. Nevertheless, the president also can activate state Guard troops to serve alongside the active U.S. military and its reserves. The National Guard employs 444,000 part-time soldiers between its two branches: the Army and Air National Guards. Seven governors refused to allow or attached condition to their National Guard units’ participation in military exercises in Honduras. 24 9 Agents of globalization are mediums /materials by which globalization spreads. This study focuses on the interaction between China’s local governments and four kinds of carries of globalization, i.e. capital, goods, people/labor, and information. 10 As China is a unitary state, governments at all level under the central government are local governments. 11 ABTC cardholders enjoy fast-track entry and exit through special APEC lanes at major airports and multiple short-term entries to these economies for a minimum of 59 days stay each visit. They need not to individually apply for visas or entry permits each time for traveling to any of the participating APEC economies, as the card is a visa. Cards are valid for three years from first issue. 12 Most literature are on international involvement of American states and local governments, for instance Bilder (1989), Brown & Fry (1993), Chernotsky (2002), Fry (1998), Goldsborough (1993), Hobbs (1988, 1994) and so on. Most papers in the two most popular collections of monographs in this field, i.e. Paradiplomacy in Action and Localizing Foreign Policy, focus on subnational foreign initiatives in federal states. 13 Duchacek (1986a) divided the political system into four types: non centralizing federal, centralizing federal, decentralized unitary, or centralized. 14 China has 4 municipalities directly under the central government, 23 provinces, 5 autonomous regions and 2 special administrative regions. Due to the differences in political system and economic statistics, this study excludes Taiwan Province, Hong Kong and Macao. 15 Pengfei Ni employs the metaphor of bow and string in his study to interpret the Chinese cities’ competitiveness. 25 Chapter Two Literature Review on Subnational Governments’ International Activities This chapter briefly outlines the main viewpoints and debates about the rising subnational governments’ international activities. It helps better understand in what global context has taken place China’s local governments’ international involvement. It also lays a theoretical background for this empirical study. 2.1 Initial Studies on Subnational Governments’ International Activities According to Peace of Westphalia, sovereign states are the exclusive legitimate international actors and subnational governments are confined within their administrative purview as well as low politics. Since the 1970s, however, together with “non-state actors”, 16 more and more subnational governments have become newcomers in the international arena and actively performed. Practice needs and leads to theory. Early research on subnational governments’ foreign related activities might date back to the 1970s. James Caporaso (1972) studied subnational governments’ role in US-Canada relationship. Focusing on economic concerns and skipped political dimension, his study was from five theoretical perspectives such as interdependence, international division of labor, network, etc. Pratt 26 (1976), Alger (1977), Alger & David (1978) noticed and touched some aspects of the phenomena. Publius issued the first collection of monographs on the subnational foreign activities in 1984. Among the monographs, Ivo Duchacek’s The International Dimensions of Self-government is most influential. He divides subnational foreign-related activities into four basic types: “transborder regional microdiplomacy, transregional microdiplomacy, global paradiplomacy, and protodiplomacy, global paradiplomacy and global proto diplomacy” (Duchacek, 1986a: 240). He believes that physical proximity leads to transborder regionalism. Transborder regionalism refers to various formal institutions or informal networks, which turn subnational governments into bi-national or tri-national cooperative associations along and across national boundaries (Duchacek, 1986). The concept “paradiplomacy” he coined in his monograph, along with “multi-level diplomacy”, have become two dominant theories in this field up to the present. Due to deepening of globalization and interdependence, more subnational governments get involved in foreign issues and some of them exert remarkable influence on their national foreign policy as well as international communities with their population, advantaged natural resources or strong economy. That is why they take controversial foreign-related actions, sometimes alone or united, against their central governments. Those actions are not many but draw much public and academic attention 27 due to their features of high politics or anti-tradition. More monographs appeared during the 1980s. Gordon (1985), Duchacek (1986, 1987, 1988), Shuman (1987, 1988), Weigel (1987), Hobbs (1988), Bilder (1989) and Torres (1989) are some of them. Among them, Duchacek’s The Territorial Dimension of Politics: Within, Among, and Across Nations published in 1986 is regarded a milestone a new stage of the theory. 2.2 Research on the Local Governments’ Foreign-related Activities in China Duchacek mentioned the paradiplomacy in China’s provinces as early as in 1988. Zweig (2002) looked into China’s internationalization. His well-known book Internationalizing China explains the role played by state leaders, global forces, and domestic actors in China’s integration with world economy. He depicts how the central government relaxes its restriction on local foreign exchange and how the local governments boost internationalization. The transnational flow of capital, goods, people, and knowledge were highlighted. Noé Cornago (1999) points out, that Beijing administration is promoting paradiplomacy in some areas. In addition to informal foreign relationship, some provincial governments are authorized to sign agreements with their foreign counterparts in economic, technological, and cultural arena. For instance, there have been some agreements between in Yunnan and northern Burma, Guangxi and Vietnam, Muslim community in Xinjiang and bordering areas between China and Russia. Cheung 28 and Tang (2001) have not only presented a historical review on provinces’ function in Chinese foreign relations but also analyzed regional external relations in an era of reform: including their nature, organization, pattern and various relevant elements. Studies on local governments’ foreign activities appeared rather late in the Chinese Mainland probably due to their highly political sensitiveness. Huang Jinqi (1998) is the first person brought forward the concept “local diplomacy” in his series of monographs on diplomacy. Li Hu worked hard for more than ten years on his masterpiece--History of Diplomatic Institution: Han & Tang. He employs many evidences and examples from considerable historical files and illustrates the significant role played by the local governments in complementing the national diplomacy during the Han and Tang Dynasties. Chen Zhimin is the first person to introduce systematically the academic progress on subnational governments’ international initials. Taking the United States, Canada, European Union, and Japan as targets, he (2001) looks into their motive mechanism, international agenda, and impact on national diplomacy. He (2005) examines the Chinese 13 coastal provincial governments’ efforts on expanding foreign exchange and affecting on China’s foreign policymakers. He claims, “The coastal provinces most commonly act as agents and partners of the central government. Occasionally, they produce unwanted consequences.” (2005:178) In Global Politics and China’s Foreign Policy, Wang Yizhou (2003:175) expresses his welcome and expectation for 29 “paradiplomacy”, calling it “a newly arisen pressure group”. He believes that it will help shape China’s foreign relations into a multileveled pattern. Being a veteran municipal official responsible for foreign affairs, Gong Tieying (2004) highly praises the role of city diplomacy in his Cities in a Perspective of International Relations: Status, Function and Political Orientation. Chen Haosu, President of the Chinese People’s Association for Friendship with Foreign Countries, also stresses the significance of city diplomacy in his On People-to-people Diplomacy. Mao Weizhun (2007) argues that paradiplomacy is a subnational passive response to internationalization and localization. He attempts to build up a conceptual framework for subnational international behavior. More Chinese scholars and practitioners have currently concerned the local-based foreign-related activities at home and abroad. For example, Liu Jialei (2003), Chen Fushou (2003), Qi Jianhua (2005), Yin Wenqiang (2006), Li Zhengang (2006), and Yang Yong (2007) studied the phenomenon from different perspectives. 2.3 Competing Viewpoints Subnational governments’ unsolicited involvement in diplomatic fields, which have long been reserved exclusively to the central government and professional diplomats, has led to an ongoing debate that started in the 1980s and generated a substantial literature. The controversies are as follows. What drives the rise or resurgence of subnational 30 governments’ international participation in the late twentieth century? Is it necessary for subnational governments to get involved in international affairs? Does the subnational governments’ involvement, especially those agendas in high political fields, harm the foreign relations of sovereign countries? What factors might affect their activities? International academic circle, especially scholars in federal counties proposed various interpretations and policy suggestions for these concerns. Driving Force from Outside or Inside？ At international level, deepening globalization, growing interdependence, extensive global networking based on advanced information technology, etc have pushed forward the momentum. All studies in this field regard globalization and interdependence as the chief driving forces. It has been a common accepted notion that globalization has blurred the traditional distinction between international and domestic affairs and transformed the division of responsibilities between national and subnational governments (Hocking, 1996). It has also weakened territory country’s control over transnational flow of capital, personnel, information and culture (Pizarro, 2003). Subnational governments thus have expanded their global linkages to survive in global competition for several decades (Conlan and Sager, 2001). Aldecoa and Keating (1999) indicate that the phenomenon of paradiplomacy is not new but resurged in the late twentieth century because of 31 globalization. Kincaid (1999) discovers that American subnational international action is rooted in early constitutional practice and revived during the late 1980s and early 1990s. Clark and Montjoy (2001) agree that American subnational international initiatives dramatically developed when the U.S. economy increasingly exposed to globalization during the past two decades. They simply consider international competition as globalization. Subnational governments have to shift their strategy from “smoke-stack chasing” to “promoting entrepreneurship” because of such international competition. Many analysts attribute subnational international initiatives to global revolutions in information, communication and transportation. They argue that it is information revolution that eliminates the cost of long distance communication so that “full-scale globalization” can be unfolded (Scholte, 2000:74). In Friedman’s “flatting world”, advanced information communication and transportation technologies offset the disadvantages of subnational governments in conducting international activities (Bilder, 1989), their weakness in getting information abroad for example. Well-equipped by Internet and advanced telecommunication, subnational governments become the nodes of international network society (Castells, 1996). Castells believes that “space of flows” has displaced “place of flows”. The “space of flows” refers to the network society with translocal and transnatinal technological flows (Graham, 2000). It is a new spatial logic. Capital, people, information, and culture can flow throughout the place, linking 32 subnetworks to each other and finally leading to a globing network society. With the assistance of Internet and satellite television, local officials can easily get information to make their own foreign policies and copy their foreign counterparts’ political participation mode. Several scholars highly value the special functions of international institutions in promoting international projection of regional governments. European integration and transnational regimes are often considered as an institutional foundation for regional international participation. Luis de Castro (1999) looks into how the Council of Europe and its Congress of Local and Regional Powers of Europe facilitated regional representation. European integration and transnational regimes have eroded the distinction between internal and external policy, hence offering more opportunities for subnational participation. Keating (1999) also attributes the resurgence of the international activities of regions in the late twentieth century to the rise of transnational regimes. He highly appraised the roles played by European Union, Maastricht Treaty, and the Committee of the Regions in boosting the subnational international activities. Recognition is a prerequisite for reciprocal exchanges in international relations. Jonsson (2006) admits that the international community had not yet even started to address the criteria to include or exclude new actors in terms of recognition. However, under in exceptional circumstances they may be recognized as national liberation 33 movements and take part in diplomacy. While non-state actors are more and more frequently participating in international affairs, traditional diplomatically accepted standards and their actual deeds have been more inclusive. For example, although Palestinian Liberation Organization did not control territory, it was conferred the membership of observer to the United Nations in 1974, and promoted to delegation in 1988. Some state governors are invited to be present in United Nations Conference on Environment and Development or International Conference on Population and Development. In global convention and multi-lateral forums, non-government organizations and subnational actors have gained more and more participation rights. However, recognition remains the only ticket to enter international arena goes to sovereignty countries, and it only goes to sovereignty countries or a few quasi-nation units. Congress and the president in U.S. have not yet stopped this subnational foreign activism through legislation or with an executive order. At national level, decentralization has removed some obstacles for subnational governments to go global. Pierre and Peters (2000) described several situations of the movement of state power: 1. Moving up, the nation-state sovereignty is shared by international or regional organizations, such as World Trade Organization. 2. Moving down, states delegate more autonomy to their subnational governments, etc. 3. Moving out, governments outsource or authorize non-government organizations or companies to 34 undertake some less significant responsibilities that previously conducted by governments. Decentralization especially in traditionally highly centralized countries mostly encouraged the local international activities. The widespread perception of federal inefficacy in trade and investment promotion is also a vital reason for local actions (Brown and Fry, 1993). The American Congress did not pass the resolution for freezing nuclear weapons but it got supports from more than 900 subnational governments (Shuman, 1986). Since “central governments federal discretionary spending falls, civilian employment declines” (Conlan and Sager, 2001:14), voters and local interest group ask local governments within their reach to play an expanding role in coping with global competitors. Most subnational international activities in high politics originated from their dissatisfaction upon the national diplomatic policies. When Reagan administration actively supported antigovernment forces in Nicaragua in the 1980s, 86 American cities became sister cities with their Nicaragua counterparts (Shuman, 1992:173). When the White House adopted a policy of “constructive engagement” toward government of South Africa where apartheid policies are carried out in 1982, 158 states and counties passed resolutions to withdraw over $19.6 billion public fund from local companies that have business with South African partners. Capitol’s final approval of imposing sanctions upon South Africa revealed that local voice have been heard and elicited a response from the federal arena. 35 At subnational level, the tremendous effect of external connections on local economy, public requirements, and local officials’ updated concept and skills enhanced their international activities. As Aldecoa and Keating (1999) indicate, global involvement is most likely associated with economic needs, to the spillover of their domestic competences into the international arena and in some cases to the need to manage ethnic or nationalist conflicts at their borders. Globalization’s Impact on State-Local Economic Development Policy by Clark and Montjoy (2001) provides a variety of data and cases to demonstrate how American subnational governments conducted international economic activities during the past decades. They find that they subnational international activism did not deteriorate their relationship with the federal government. Chernotsky (2001) concludes that rapidly developed local international activities result from interplaying triple factors, i.e. the growing significance of international economic linkage, the federal withdrawal from urban policy during the Reagan era, and the growing professionalization and entrepreneurship of city hall. States and Provinces in the International Economy edited by Brown and Fry (1993), a package of a collaborative research, focuses on why and how the states and provinces of North America respond to global economic challenges. They conclude that constituent governments’ international involvement aim at surviving international pressures. Fry (1998) further explores the forces behind the rise of American states and local influence in foreign affairs. In his the Expanding Role of 36 State and Local Governments in U.S. Foreign Affairs, he highlights the interdependence between American localities and outside world by displaying a large body of data linked to foreign trade, investment, tourism flows. Goldsborough (1993) wrote: California is adopting foreign policies, for the sake of self-assistance and survival. In order to protect local benefits, several U.S. states ignored the White House’s opposition and levied single tax from local-based multinational corporations. Not few scholars contend that public demands are playing unique role in pushing forward subnational government international activities. Hobbs (1994) regards public dissatisfaction as one of the major reasons for subnational government’s involvement in international politics. “Public officials may be forced to act on issues of public interest to grasp their support” (Hobbs, 1988). As ordinary people’ daily lives have greatly influenced by influx of foreign products, immigrants, pollution, and terrorists, citizens have to demand City Hall to be more responsive and do something. For example, former-mayor of Los Angeles complained that 9.11 terrorists were meeting at San Diego Park, trained in Florida Aviation School, starting at American domestic airports, but the police departments of those metropolises have no power to supervise domestic airports and ports. He called for subnational governments’ participation in anti-terrorist campaign. 17 Michael Shuman (1987) believed that the trend of “thinking globally and acting locally” provided a new channel by which ordinary people can directly influence 37 global policies with local governments. The neo-Marxists and structuralists often complain that public remains disenfranchised from the governing process. The drive of local interests, promotion of local governments’ capabilities, pressure from civil society, regional activism and nationalism activists have collectively raised subnational local foreign activities. Necessary or Unnecessary？ Many sovereign states still consider subnational governments’ international activities as intrusion into their exclusive domain (Aldecoa & Keating, 1999). Not surprisingly, there has been an intense political and academic debate over whether subnational governments may have a louder voice in foreign relations. Some scholars and politicians claim that state and local governments should stay completely out of matters relating to foreign affairs. Some local officials regarded foreign activities as “unnecessary meddling” (Shuman 1987:157). They maintain, “foreign policy must be made in Washington and not in the citizens’ backyards” (Spiro, 1988:202). Their key arguments are as follows. (1) A nation should speak with one voice. Subnational governments’ involvement in international issues may undermine the consequence of a nation’s foreign policy and relations, particularly if local actions contradict national policy. They worried that multi-level diplomacy might lead to Balkanization for a nation’s diplomacy so that 38 external force could destroy a country from various localities and hurt national interests (Weigel, 1987). Fry (1998) listed some such episodes that have obviously embarrassed the federal diplomats. The World Trade Organization (WTO), the European Union, and various nation-states are now insisting that many of their current problems with the U. S. were in state capitols and city halls. (2) Usually, states or localities act on their own interests and that may result in adverse consequences for the nation as a whole. (3) State and local officials are not elected to conduct foreign policy or based on their foreign policy views. State and local governments lack the expertise, information and resources to make sensible public judgments about complex international issues. (4) The proliferation of state and local governments’ involvement overseas would negatively influence the efficiency of federal foreign policy. Other scholars and practitioners believe that the state and local involvement is needed. They argue that the involvement is a necessary adaptation of American politics and federalism to a changing world. The foreign-affair issues such as trade and jobs, environment, human rights, cultural and educational exchange have increasingly affected the lives of the individual Americans. Facing the omnipresent foreign permeation and competition, the misperception that foreign policy should be formulated based on a bipartisan consensus reached by a small group of experts is outdated. In addition, state and local governments have been aware of, and sensitive to, the important constitutional 39 issues and foreign relations concerns involved, and acted responsibly. Thus, very few of local involvement have caused or to be likely to cause serious foreign relations problems. In many respects, these trends are positive, helping to democratize the foreign policy process and bringing the international arena closer to Main Street USA. Therefore, they wish there is room for a more tolerant, flexible and cooperative attitude toward "grassroots’ or constituent diplomacy" (Bilder, 1989; Hobbs, 1987, 1994; Alger, 1992; Fry, 1998, 1993; and Evans, 1998). Scholte (2003:362, 371) urged local governments be granted permission to partly get involved in the formulation and implementation of supraterritorial policies. Local institutions should be more involved in the governance of global relationship than what they are. Not surprisingly, the concepts like Track Two Diplomacy coined by Joseph V. Montville and Multi-track Diplomacy developed in 1989 by Louise Diamond and John McDonald occurred one after the other. Joseph Nye (2001) focused on territory, emphasizing that territorial actors, who had dominated world politics for over four centuries since the end of feudalist era, are playing less role due to the occurrence of non-territorial actors such as multinational corporations, transnational social movements, and international organizations. Since the 1990s, there is a trend to debase state’s function and boast the role of “new actors”. Pluralism and its branch trans-nationalism claimed that a country is not a unitary actor in international politics, and non-state actors are important actors. Joseph Nye’s metaphor of “third chess game” 40 applauded non-state actors’ role in international relations, thus welcomed by subnational “diplomats”. Actually, most scholars admit that there exist conflicts between subnational government’s foreign actions and the national diplomacy. As Kincaid (1999) indicates, complained occurred about sanctions imposed on Cuba, Indonesia, Myanmar, Northern Ireland, Nigeria and Tibet by US states and cities. Without coordinating them, fragmentation might be strengthened, and thus threatening the state’s general diplomacy and security. However, their international involvement “can no longer be dismissed as simple aberrant, trivial, or unconstitutional”, “Unless America becomes a police state” (Shuman, 1987:155, 171). Legal or Illegal? “The US Constitution does not deprive the states or local governments of all international competence or deny them access to foreign policy making” (Kincaid, 1999:115). Bilder (1989), Fry (1998) and Kline (1999) believe that American constitution and relevant laws have left enough room for local activism. For example, how to judge which local foreign activities are harmless or the “additional, indirect” influence? Which kind of actions is “infringing” or “disturbing” the federal government’s foreign policies? Subnational international actions are governed more by custom, political practice, and 41 intergovernmental comity than by constitutional and statutory rules. (Kincaid, 1999:118) American Supreme Court’s verdict on California’s Clark v. Allen in 1947 and Oregan’s Zscherning v. Miller in 1968 revealed the absence of a legal basis. Just as a congressional representative said, the reason for Maryland to punish the companies that had business with Nigerian partners is that federal government did not make any policy on it. Shuman (1987) lists a dozen of local-based foreign policies and controversial actions, but he claims that only few of them fell into the forbidden categories designated by the Constitution. Moreover, central governments have become tolerant toward subnational international participation. For example, when some U.S. states and city hall made controversial foreign policies related to Burma, Switzerland, and Nigeria, the White House mildly criticized those actions instead of stopping. American presidents have often encouraged state international activity, especially in international economic affairs, since the administration of Dwight D. Eisenhower. It was President Dwight D. Eisenhower who proposed in 1956 the People-to-People program, since then over 1,056 U.S. communities have Sister City relationships with 1,688 foreign cities in 117 nations. President Jimmy Carter encouraged the National Governors’ Association to form a standing committee in 1978 on International Trade and Foreign Relations (Kincaid, 1999:122). Meanwhile, more and more countries encourage the subnational 42 governments’ international participation by legislation. For example, Law of dispatching emergency Task Force (1987), and Basic Law of Environment (1993) in Japan granted more autonomy to the Japanese local governments. Law of Signing Treaties (1991) of Mexico, Amendment to the Constitution (1988) of Austria, and Constitution (1999) of Switzerland has granted contracting rights to their members. Parallel or Complementary? The debating focus is whether subnational governments can act as independent actors in international arena. In other words, the role played by subnational actors is parallel or complementary to their national diplomacy. Paradiplomacy represented by Soldatos and Duchacek asserts that NCG international involvement can and do exist as independent international actors. They claim that international activities by subnational governments have targets, strategies, tactics, mechanism, policymaking and output of diplomatic policies, which is similar to a country’s diplomacy. As a result, subnational governments are independent in conducting international activities, which is parallel to central diplomacy. It is the first systematic theory in international activities by subnational government foreign activities and regarded as a new paradigm in international relations. Francisco Aldecoa and Michael Keating (1999) collected and compiled research papers from several countries into a book: Paradiplomacy in action: the foreign relations of 43 subnational governments. When comparing “paradiplomacy” with “microdiplomacy”, Duchacek believed the prefix “para-” is more precise than “micro” because such diplomatic form is “parallel to, coordinated with, and complementary to” the center-to-center macrodiplomacy although the two poles, central and non-central, sometimes conflict with each other. Paradiplomacy is regarded as a label or “an abbreviation of parallel diplomacy” (Criekemans, 2006). In A Dictionary of Diplomacy, Berridge and James define “paradiplomacy” as “international activity (typically through lobbying) of regional governments such as Quebec and stateless nations such as the Kurds.” Aldecoa & Keating (1999) define paradiplomacy as “the foreign policy of non-central governments”. Dedushaj (2006) defines it a concept often used to describe international action of regions or entities of federal systems. Aguirre (1999) questions the rationality of “paradiplomacy” and suggested to replace it by “postdiplomatic” or “beyond diplomacy” (1999:205). Brian Hocking published in 1993 a monograph entitled Localizing Foreign Policy, in which he criticized the concept of paradiplomacy, replaced paradiplomacy with his multilayered diplomacy. Concentrating more on the impacts of globalization and localization, Hocking and his followers regard subnational governments’ role as a supplement to national diplomacy. Hocking (1999) uses NCG internationalization to indicate the growing extranational involvement of regional and local governments. 44 Combination of domestic and international politics has given birth to a multi-layered diplomacy, which consists of international diplomacy and local diplomacy. Subnational government cannot become a completely independent foreign actor. It is not difficult to discern the difference between the two major theoretical schools on the rising subnational government international involvement. The former emphasizes “parallel”, the emergence of a new kind of international actors, and its unique way of participating in international affairs. It also accentuates the competitions and conflicts between this new actor and the traditional actors (i.e. nation-sates in foreign affairs). The latter underlines “multilayered” and considers the NCG’s initiatives as an evolution of the process of national foreign policies. Therefore, multilayored subnational diplomacy could unnecessarily conflict with national diplomacy. Summary Subnational international initiative is not a new phenomenon but it resurged as a response, whether passive or active, to interconnected forces from international, national and subnational directions. Nowadays, few argue that international affairs are exclusive to the central government. Few ignore the fact that subnational governments have become increasingly significant new actors on the stage of international affairs. Although most relevant literature concern the phenomenon in the Western federal countries, 45 especially those in North America and Europe, there have been growing interests and actions in the developing nations under the context of globalization and interdependence. To survive in fierce international economic competition is the key driving forces behind the momentum. For example, as Kincaid indicated in 1984, American states slowed down their international involvement when the US economy provided sufficient capital, consumption, and exports during the late 1990s and much of the 2000s. Subnational international initiatives became prosperous when the US economy entered a decade-long period of stagflation in 1973. Subnational governments lay particular emphasis upon their international economic competence and promoting trade, tourism and investment through their powers of taxation, regulation, service provision and law enforcement. Although, they occasionally upgrade local internationalization beyond their jurisdiction, making louder voice in high political issues, they do not intend to violate the central diplomacy. Instead, they aim at protecting specific interests or offsetting the deficiency of the national government when required by the public or interest groups. Except for a few substate elites building or in some cases, preparing for national independence, most substate officials do not seek for distinctive international personalities or to claim diplomatic right. These conflicts, therefore, are not necessarily intractable or incompatible. 46 The central government’s attitudes towards subnational international activities varied from tolerate to supportive. Some, especially those in highly centralized countries, do not happy to see intrusion of substate actors into their traditionally reserved domain. Others, especially in the federal countries, facilitate subnational participation in foreign policymaking. Kincaid (1999) offers several examples to demonstrate how US Department of State, the Office of the US Trade Representative, and US Department of Commerce help subnational governments by providing information, advice and technical support. 47 Chapter Two Endnotes 16 Generally, the term of non-state actors excludes subnational actors. It includes non-governmental organizations, multinational/transnational companies, multilateral /intergovernmental organizations, terrorist organizations, etc 17 Riordan, Richard and Amy Zegart. “City Hall Goes to War.” The New York Times. 5 July 2002, Late ed., sec. A: 19. 48 Chapter Three A Review on the Chinese Provincial Governments’ Foreign-related Activities before 1978 This chapter examines the Chinese provincial governments’ foreign-related activities (CPGFA) from a historical perspective. It attempts to answer the following questions: (1) was any the provincial government involved in foreign affairs before China adopted the open-door policy in 1978? (2) If yes, how were they involved, and (3) what were the characteristics at different historical stages? It was not until the Han Dynasty that China made the unprecedented opening of its door and established diplomatic relations with the rest of the world. There were frequent diplomatic activities and warfare during the early Qin Dynasty, however, they were actually among substates and within China’s own territory. The evolution of CPGFA can be divided into four primary stages. The first stage is from Han Dynasty to the eve of the Opium War (140BC-1839AD). The second is from the Opium War to the eve of the founding of the People’s Republic of China (1840-1949). The third is from the founding of the People’s Republic of China to the eve of China’s reform and opening up to the outside world (1949-1978); and the fourth is from China’s opening-up to present. This chapter discusses the first three stages and the next chapter focuses on the last one. 49 3.1 The Period from the Han Dynasty to the Opium War (140BC-1839 AD) CPGFA in ancient China emerged after the two “Silk Roads” were pioneered in the reign of Han Emperor Wudi (140-87 BC). Zhang Qian, an envoy of the Han Emperor to the Western Region, pioneered an overland transportation route from Chang’an (now known as Xi’an), passing through Gansu, Xijiang, central Asia, and west Asia and connecting all countries in the Mediterranean Sea. The route is well known as “The Silk Road” because, among all the goods traded to the West along the Road, silk products were most influential. During the same dynasty, the “Maritime Silk Road” was also pioneered and was extended due to advances in shipbuilding and navigational technologies. It started from Zayton Port of Fujian Province or Xuwen and Hepu in Guangdong Province to the Korean peninsula in the north, to the seaports along the coast of east Africa, from the western fringe of the Pacific Basin to the Indian Ocean. It provided access to the Roman Empire via India. Both silk roads helped ancient China open to the rest of the world and provided opportunities for the local officials, especially those working in the frontier areas, to deal directly with foreign affairs. Through the two silk roads, foreign trade and foreigners like envoys and missionaries entered China and increased foreign affairs. An earliest system of diplomatic decision-making and administration was consequently created in the Han Dynasty. From the perspective of diplomatic decision-making, the hierarchal system was 50 highly centralized with the Emperor authority as its core. According to the significance or emergency of a diplomatic issue, the emperor usually personally consulted with his think tank or held meetings before making final decisions (Li Hu, 1998). From the perspective of diplomatic administration 18 , the system empowered the local governments in frontier areas to deal directly with foreigners and affairs within their jurisdiction. They acted as agencies of the court; instead of, the local officials were only allowed to carry out the foreign decisions made by their emperor. If any tough or vital foreign issues occurred in their jurisdiction, they had to report and ask for the emperor’s instructions before taking actions. Actions before reporting or without approval were strictly prohibited. Chen Tang’s case is a typical example. Chen Tang was a Han General appointed to defend the western boundary. He led his army to attack the Hun tribes in 36 BC without reporting and getting approval from the Han Emperor, as he believed that the court knew little about the specific situation of the regions and could hardly approved his military attack. Although his troops conquered the Hun tribes and killed Chanyu Zhizhi, the king of Hun Confederation, he was severely punished by the Han Court for a crime of violating the Emperor and diplomatic rules (Li Hu, 1998:47). Due to China’s vast territory and long boundary, the emperors of the Han Dynasty (140BC-220AD), the Three Kingdoms Period (220-265AD), the Jin Dynasty (265-420), the Southern and Northern Dynasties (420-589) and the Sui Dynasty (581-618) all 51 required the frontier prefectures to perform some diplomatic functions. They were receiving and dispatching diplomatic envoys, bestowing gifts and receiving tribute, managing border trade, and diplomatic representations. In the frontier areas, local governments, military force, and frontier-defense troops jointly administrated local foreign affairs. Besides, a few senior officials were specially appointed by the court to the frontier to supervise the local foreign actions. Dunhuang Prefecture of Gansu Province, for example, acted as a military, political center as well as a port for overland foreign trade in the East Han, Wei and Jin Dynasties particularly. The local officials thus took care of various foreign affairs. Foreign envoys, monks and merchants there had their passports checked or applied for a pass. Some of them stayed there to get familiar with local customs or learn the Chinese language; some ran their shops for trade. The Chinese envoys, officials and soldiers also stayed there for forage and learning foreign languages before setting out for foreign countries. In the Han Dynasty, informal customhouses under the local supervision were set up to check import and export commodities, protect foreign envoys, prohibit contraband. Yunmen Guan and Yang Guan along the overland Silk Road were two well-known gates. To attract and courteously treat foreign traders, most import goods were free duty or with very low taxation (Cai, 1991: 486). Departments especially responsible for foreign trade and affairs (Yuangbian Jiaoshi Zhi) were established in the frontier prefectures and under the leadership of local governments 52 in the Sui Dynasty. During the several-hundred-year period from the Han Dynasty to early Tang Dynasty, the local officials entitled Jun-tai-shou or Zhou-ci-shi were empowered to add maritime foreign trade into their responsibilities (Cai, 1991:486) For example, according to Guangdong Chronicle of Foreign Affairs, maritime foreign trade in Guangzhou was supervised by Linnan local government before the Sui Dynasty (581-618). During the Tang Dynasty (618-907), feudal China stepped into its most prosperous period. The Tang Court enacted an energetic policy in opening up to the outside world and encouraged localities to interact with foreigners. In 730, the Tang Court designated 59 provinces (Zhou) that geographically connected foreign countries by land as “frontier provinces”. The local governments in those areas were authorized to handle foreign affairs directly. The loss of Tang’s troops in Western Regions of China and the rapid growth of maritime foreign trade enabled coastal provinces like Guangdong, Fujian in the Southeast and Shandong in the North to take up more important diplomatic functions than ever before. In 714, the Tang Court appointed the first official position Shiboshi 19 in Guangzhou. The position was responsible for maritime foreign trade and affairs. Specifically, their duties were to check foreign ships, levy taxes, purchase precious and rare goods for the Tang emperor, etc (Fu Jie, 2002). The Song, Yuan and Ming Dynasties adopted the system of Shiboshi. The system continued for nearly one thousand years (Cai, 53 1991). A royal order promulgated by the Tang Court in 834 read, “Jiedushi 20 (A chief executive officer of local military and political affairs) should take care of foreign merchants in Lingnan, Fujian, and Yangzhou. Except Bojiao (customs duties), Shoushi (governmental priority and monopoly of trade in valuable goods), and Jinfeng (pay tribute of valuable goods to the Court) 21 , the arriving foreign merchants should be given freedom to do their own business and the local governments should not impose other duty on them” 22 . Jiedushi had the power to raise or lower customs duty rates and work out specific policies regarding local-based foreign trade. Further, Shiboshi and local governments were required by the court to arrange and entertain foreign envoys and merchants when foreign ships arrived at or departed the ports. To treat foreign quests courteously, specially designed guesthouses 23 were built and managed by governments in frontier or port cities. Ningbo of Zhejiang Province, for example, built up the Persia Guesthouse for arriving Persian and Arabian merchants in the Tang Dynasty. The local governments along the Southeastern coast of China were allowed not only to supervise foreign trade but also own the revenue (Zheng Youguo, 2006), hence greatly activating the local foreign initiative. Foreign trade by sea, consequently, exceeded that by land after the mid-Tang Dynasty. The five dynasties (907-960) 24 after the Tang Dynasty witnessed many favorable policies for foreign trade and cultural exchange. The local officials were active in 54 promoting foreign trade. Mayor Wang Yanbin of Quanzhou, for example, was awarded and promoted for his remarkable achievement in attracting foreign merchants and ships. He was honorably called “an excellent official in attracting foreign money for locality” (Zhaobao Shilang). The Song Dynasty (960-1127) and Yuan Dynasty (1279-1368) were outstanding in maritime foreign trade. It was primarily because of advanced technology of shipbuilding and navigation, especially the use of the compass. Moreover, as warlords in the central plain and northern China frequently obstructed the land transportation along the overland Silk Road, foreign merchants had to take the “Sea Silk Road”. To foster local foreign trade, the Court set up five customhouses (Shibosi) in Guangzhou of Guangdong Province, Hangzhou and Ningbo of Zhejiang Province, Quanzhou of Fujian Province, and Jiaozhou of Shandong Province successively in 971. As import and export tax (Shiboke) became a main source for the national fiscal revenue, the Song Dynasty attached importance to foreign trade and took away all taxes. During 1076-1085, the Song Court promulgated the world’s first specific law on foreign trade (Shibofa), which stipulated that the department named Queyiyuan 25 and local customshouses should be responsible for attracting foreign merchants and promoting foreign trade. All their activities, however, should be in accordance with Law of Queyi. The Yuan Dynasty relaxed restrictions on foreign trade and governmental monopoly 55 after unifying China. Local foreign trade reached the height of its history. During the period, Quanzhou Port of Fujian Province became one of the biggest in the world. Its trade outnumbered that of Alexandrian Port in Egypt (Polo: 192). Guangzhou of Guangdong Province traded with 141 foreign countries and regions during 1297-1307. The Ming Dynasty (1368-1911) adopted the traditional policy of “cherishing guests from afar”, allowed localities to trade with certain countries or tribes in the name of “paying tribute”, but strictly prohibited trade between local and foreign merchants. To prevent disturbance from pirates or inside conspiracy, the Ming Court prohibited sea trade many times. In 1374, the Qing Court closed customhouses in Fujian, Zhejiang, and Guangdong, which had been operated since the Tang Dynasty; only Guangzhou Customhouse was open to foreign trade. In pursuit of interests, however, the local officials in southeastern coastal provinces often had others to smuggle goods by sea. The Qing Dynasty (1616-1911) mostly advocated the “closed-door” or “half-closed-door” policy for foreign trade, opening its door to foreign trade only 30 years during the reign of Kangxi Emperor. From 1684 to 1685, the Qing Court reopened customhouses in Fujian 26 , Guangdong, Jiangsu and Zhejiang to administrate foreign merchant-ships and collect tariff. Due largely to the growing violation cases of trade rules by the Western colonists, however, the Court closed all the ports and customs in 1757 except Guangdong Customs, which acted as the only customs in China in the 56 following 100 odd years. The Qing Court promulgated Five Provisions on Foreigners in 1759, Rules on Trade with Foreigners in 1809 and Eight Provisions on Foreigners in 1835. Those regulations and rules aimed to put the activities of foreign merchants under the control of local governments, which reflected the doubt and precaution of the Qing ruler towards the outside world (Zhihong Shi, 2004). Some provinces also followed suit. The Guangdong administration, for example, promulgated regulations to limit foreign merchants’ activities in Guangzhou. 27 “1. Foreign warships are prohibited into the provincial rivers. 2. Foreign merchants in Guangzhou are prohibited to carry any gun or cannon. 3. Foreigners are prohibited to bring women into Guangzhou without official permission. If violation was found, the merchant would be prohibited to trade and the women would be sent to Macao. 4. Foreigners are not allowed to stay in Guangzhou for a whole year. Especially, they are required to leave during winter season. 5. Foreign companies are restricted in hiring local laborers. 6. If foreigners have something to report or appeal to the government, they should report to the business institutions designated to handle foreign trade. If they accuse the business institutions, they may deliver directly to the local governments. 7. Without formal licenses of Yinshui or comprador, foreigners are not allowed to hire labors. 8. Foreigners are prohibited to trade in any places beyond Guangzhou.” During the 2000-year-long period from the Han Dynasty to the Opium War, most of the feudal dynasties advocated the philosophy of “look up to friendship while look down upon material profits” (zhongli qingli) proposed by Confucians. The principles such as “giving more while getting less” (houwang bolai), “never to vie profits with foreign 57 barbarians” (buyu mangyi zhengli) prevailed for centuries. When foreign affairs were taken into account, political interests outweighed economic interests for imperial rulers. Under such historical background, the characteristics of the Chinese Provincial Government Foreign-related Activities (CPGFA) may be briefly concluded as follows: (1) CPGFA was originated from the openness to the outside world. Without the two Silk Road connected with the rest of the world, there would have neither foreign exchanges nor necessity for local involvements. The ancient local foreign involvement was indirectly facilitated by advanced technology of navigation and shipbuilding industries. (2) Due to China’s vast territory and long boundary, most imperial courts authorized their frontier local governments to deal directly with foreign affairs. Although the local governments were allowed only to carry out the court’s decision and required to report or get approval before taking actions to significant foreign issues, actually, because of poor facilities of communication and transportation, local officials had much room to handle foreign issues to seek either local or their own interests. (3) The local government played diversified roles ranging from political to services. According to the 10-year research, Hu Li (1998) states that frontier governments in the Han, Wei, Jin, South and North Dynasties carried out nine aspects of foreign-related duties. Their duties in the Tang Dynasty were more than twenty-two. Local 58 administrations then “enjoyed great and broad authority to foreign interactions”; they were the general representatives of the central government for the local foreign linkage and negotiation (P468-469). They not only provided board, lodge, and interpreters for foreign envoys and merchants, but also negotiated with foreign envoys and dispatched envoys to neighboring foreign countries, and even dealt with issues related to territory cession, etc. They also played a crucial role in territory defense. Guangdong Province, for example, fought to reoccupy Tunmen Island and drive out the Portuguese colonialists in 1521. Led by Zhu Wan, Fujian DuYuShi, the army and people in Fujian Province drove out the Portuguese invader in Zhangzhou Prefecture in 1549. With ten thousand soldiers and two hundred military ships, Governor Nan Juyi of Fujian, defeated the Dutch troops who occupied Penghu Islands (then under jurisdiction of Fujian government) in 1624. (4) Besides their duties assigned by the imperial courts, sometimes, the local governments conducted foreign initiatives. For example, officials of Quanzhou prefecture applied to the Song Court for preferential policy on shipping tax for several times during 1132 and 1136. Eventually, the Court agreed to reduce the tax rate from 2/10 to 1/30. Quanzhou thus became a port with the lowest shipping tax in China and attracted more foreign ships afterwards. Quanzhou government also improved harbor facilities, built lighthouses for navigation, and created a deep-sea-ship registration system 59 to encourage foreign trade. When ships went abroad or came back from abroad in batches, Quanzhou officials held ceremonies to pray for safe sailing. Those activities demonstrated dependence of local economy on foreign trade. 3.2 The Period from the Opium War to the Founding of the People’s Republic of China (1840-1949) Losing the Opium Wars forced the Qing Court to sign a series of unequal treaties and give up the closed-door policy. From then on, China became a semicolonial state and opened to the western colonists. According to the Treaty of Nanking signed in 1842, five ports-- Guangzhou, Xiamen, Fuzhou, Ninbo and Shanghai-- were open for foreign trade and culture. The one-port-for-foreign-trade situation was replaced. Some countries such as U.S. and U.K. were among the first to establish consulates in port cities. During 1843-1903, Fuzhou and Xiamen in Fujian Province accommodated 25 consulates. Gulang Islet of Xiamen gradually became an “international settlement”. The governments, especial those of the trade ports became involved with more foreign affairs. According to Sino-French Treaty of Whampoa and Sino-American Treaty of Wanghia, the heads of governments of Guangdong, Fujian, Zhejiang, and Jiangsu where the five treaty ports were located had responsibilities for foreign affairs. More importantly, in the eyes of the Qing rulers, the status of the kings of foreign countries was 60 equivalent to the Chinese governors or ministers. It was unnecessary for the Court to handle foreign trade or affairs. After the Second Opium War, foreign diplomats began to reside in Beijing. The Qing court believed that foreign consuls in China were the representatives of their merchants and missionaries. The Court still had the governors-general and provincial governors to deal with the foreign diplomats and tried to create a situation that “the barbarian residing in the capital will be disappointed and will go back to their home because they have nothing to do here” 28 . Therefore, one of significant features of diplomatic regime in the late Qing Dynasty is that Governors-general (zongdu) 29 and Governors (xunfu) took primary responsibilities to handle foreign affairs. Take Guangdong for an example. Governor-general of Liangguang was responsible for the provinces of Guangdong and Guangxi, exerting the following foreign-related responsibilities. Usually he needed to personally handle important foreign affairs, or sometimes with assistance of the Governor. Consulates located in Guangzhou often negotiated directly with the Governor-general or Governor at least. The Japanese Consul in Guangzhou negotiated with Governor-general Zhang Renjun in 1908 for the case of a Japanese ship named No 2 Chengwan 30 . “Submit timely report to the court about diplomatic, political or military activities of foreign institutions or individuals such as missionaries in his jurisdiction; report the foreign-related incidents of official or non-governmental conflicts; report the enforcement and consequences of imperial decrees; request instructions for the local development; propose suggestions regarding handling foreign-related issues 61 in his jurisdiction; transfer documents from a foreign institution to the imperial government, deliver imperial order or decree to relevant foreign institutions or individuals; contact or negotiate with foreigners if required by the imperial government; deal with any specific issues including businesses with foreign nationals, and disputes between the Chinese locals and foreign missionaries; conduct commercial and trade business and maintain administrative relationship with Guangzhou Customs; and investigate and deter smuggling activities. In short, the governor has the authority and responsibility to look into any foreign-related matters within his jurisdiction.” After the signing of Sino-British Convention of Peking, the number of open-up ports increased to 16. Local foreign affairs became more difficult to be dealt with, especially being subject to some colonial provisions such as concession, consular jurisdiction, unilateral most-favored treatment, and preaching in inland China, etc. In 1861, the Qing Court established Ministry of Foreign Affairs and set up two positions, Nanyang Minister for Foreign Trade and Beiyang Minister for Foreign Trade to perform the duty of diplomatic representatives when foreign related event happened in ports. Afterward, Governor-general of Liangjiang 31 and Governor-general of Zhili occupied these two positions, respectively. The situation of Governors-general and governors were responsible for foreign affairs had been maintained. Due to the geographical distance, the Governors-general and Governors in the southeastern coastal provinces sometimes could hardly get imperial instruction in time for emergent foreign affairs. In fact, they enjoyed rather high authority in foreign affairs, as the imperial government often had to permit 62 them to “act up to the situation” (xiangji banli). It happens at times, however, if the governor’s disposal did not satisfy the emperor, he would be reprimanded or demoted in a name of “improper proposal.” 32 Specialized official institutions were set up in provinces to cope with increasing foreign issues. Foreign affairs Bureaus (Yangwu Ju) came into being in many provinces during the late 1890s. Sichuan Provincial Foreign Affairs Bureau set up in 1895 might be the first one. Its duties were to intermediate dissension between local people and missionaries, arrange coming foreign guests’ stay and inform relevant provinces about the guest scheduling, etc. After the trade ministers were appointed for the five treaty ports after the Opium War, a mechanism of local officials responsible also for local foreign affairs gradually shaped. The extensive local involvement became a noticeable characteristic of the late Qing diplomacy. Led by Fengtian and Jilin, who initiated to set up Department of Foreign Affairs (Jiaoshe Shisi) in 1908, the rest provinces followed suit one after another. When the Beiyang government of the Republic of China came into power in 1912, they inherited the Late Qin Court’s diplomatic concepts such as “compromise leads to peace” (weiqu qiuquan), and “concession avoids troubles” (xishi ningren). They also adopted the diplomatic strategy of “controlling the foreign invaders by using their own military power” (yiyi zhiyi) and performed “maintained diplomacy” (weichi waijiao). The 63 Beiyang Government promulgated Regulations on Diplomatic Representatives in 1913, stipulating that province should dismiss its Department of Foreign Affairs (FAB) and set up “a representative office” for foreign affairs. Every treaty port sub-office should be set up to perform diplomatic representations in all treaty ports. Under the dual leadership of the Ministry of Foreign Affairs and provincial government, commissioners appointed by the Beiyang government acted as heads of the offices. During the period, the Cabinet changed frequently and the national financial budget had difficulties. To ensure the offices’ expenditure, the central government permitted customs supervisors or senior officials in treaty ports to be part-time heads of the offices. When foreign-related conflict emerged between the central and local governments, the representative office always took a side with localities. The Representative Office of Sichuan Province was renamed as Foreign Affairs Department in 1912. Its political-affairs section was responsible for affairs related to commerce such as tariff, bargaining, land lease and purchase, employment of foreigners, etc. The educational-affairs section was responsible for affairs related to foreign missionaries, foreign-fund churches and schools, lawsuits etc. The Nanjing Nationalist Government of the Republic of China was founded in 1927. To take back the diplomatic right, the Executive Yuan (xingzhengyuan) ordered the Ministry of Foreign Affairs in 1929 to withdraw representative offices and sub-offices in each province by stages. The central government handled foreign affairs exclusively; and 64 local government should not establish organization of diplomatic representations. All the foreign related events should be handled according to China’s laws, subject to the restriction by decrees. Actually, local governments received the foreign related cases concerning trade, land lease and transaction, passport issuing, citizenship and consular protection. Afterward, they submitted the cases to the Ministry of Foreign Affairs for final review, particularly the important events or issues. Provinces made much effort to settle disputes between local residents and foreign missionaries. After the Second Opium War, Western colonists including U.S., U.K. and France forced the Qing Court to sign Treaty of Tianjing in 1858, the Convention of Peking in 1860, in which stipulated that religious preachers and disciples should be protected by local governments from being disturbed by local people. Since then, large quantities of foreign preachers arrived. Sichuan for example, there were 114 foreign Catholic clergy in 1895 and the number of Christian clergy reached 191 in 1901. Conflicts between them and local residents happened frequently and thus became important issues in the local governments’ agenda. The incomplete statistics showed that from 1859 to 1934, 154 foreign related religious cases happened in Sichuan province. To handle such cases, Sichuan set up special official institutions in 1869, Shanxi in 1882 and Jiangxi in 1900. From 1870, whether being familiar with foreign affairs became a key criterion in promoting and nominating local officials. Forced by foreign diplomats, 65 especially those had extraterritoriality, the weak Qing Court tended to order the local government to punish the Chinese side. As for the local officials who did not live up to the expectation of the Court, they would be warned, dismissed or exiled, sometimes even lost their lives. Local foreign trade flourished significantly although bearing a strong semi-colony feature during this period. The accumulated export and import in Shanghai during 1884-1893 reached 1.01 billion customs tael, 33 24% up over the total volume in the last 10 years and accounting for 49.4% of the whole country. After the Sino-Japanese War of 1894-1895, several countries got franchises to set up factories in China and foreign investment soared. By 1911, there were 643 foreign-funded enterprises in Shanghai; most of the investment was from U.S., U.K. and Japan. By 1931, foreign investment in Shanghai reached $1.112 billion, taking up 34% of the national total. Besides inbound foreign goods, culture, and traders, local people began to migrate abroad since early eighteenth century. Immigrants from Guangdong were the most and earliest in China. There were over 300 million Chinese immigrants by contracts during 1801-1925, among them 70% were from Guangdong. It was tough for the provinces to handle foreign affairs when the central government was weak and forced by unequal treaties during the century from the Opium War to the founding of the People’s Republic of China. On the one hand, provinces had to carry out 66 the diplomatic policy of compromise and concession. For example, in 1845, Shanghai Land Regulations were promulgated. It was the first time that the consular jurisdiction was embodied in local regulations. In addition, most of the foreign related religious conflicts happened in China were ended in favor of the foreign side no matter whether their complaints were reasonable or not. On the other hand, the provincial governments tried to safeguard the state sovereignty and local interests with the support of local people. A victory in a religious case in Muyang village of Fu’an County Fujian Province (1862-1893) is an example. Shanghai successfully defeated the attempt of foreign consuls to expand their jurisdiction in 1905. Fujian helped the central government negotiate with the Japanese government regarding the case of “Taijian incident” in Fuzhou. The Japanese side finally apologized to the Chinese Minister of Foreign Affairs by mail and compensated injured citizens in 1919. 3.3 The Period from the Founding of the People’s Republic of China to China’s Opening-up (1949-1978) Suffering from economic containment and isolation policy by the Western powers, the new China founded in 1949 decided to be economically self-reliant and adopted a close-door foreign policy so as “to build a stable, unitary state free of foreign privileges” (Cheung, 92). The local-based international exchanges consequently were limited to the 67 former Soviet Union and a few socialist countries in East Europe. The culture Revolution (1966-1977) made situation even worse. It “sealed China from the outside world, and almost all transnational exchanges ground to a halt. Only revolutionary movements persisted” (Zweig: 1) In a word, the first three decades of the PRC saw a tight control over foreign affairs at all levels. Only border provinces and metropolises like Beijing and Shanghai had more opportunities to establish and expand their external relations. Take Shanghai, a long-standing international metropolis, as an example. According to Shanghai Municipal Chronicles of Foreign Economy and Trade 34 , during the period from 1949 to 1978, the accumulated import and export volume was $27.865 billion, among which the import volume was only $1.775 billion, accounting for 6.37% of the national total. In 1953, the export volume of Shanghai was $0.183 billion, accounting 17.9% of the national total. The export to the former Soviet Union and socialist countries in East Europe accounted for 48.07% and 12.97%, respectively. In 1959, the export volume of Shanghai increased to $0.742 billion, accounting for 32.81% of the national total, among while export to the former Soviet Union and other socialist countries in East Europe accounted for 47.22% and 16.43%, respectively. Located opposite to Taiwan cross the Taiwan Straits, Fujian province received only 79 foreign guests from Vietnam, Albania, DPRK, Cuba, and Malaysia from 1961 to 1965. The period from 1972 to 1978 saw only 336 foreign visitors in Fujian. 35 During this period, provinces were required by 68 the central government to provide economic aid to foreign countries. Between 1955 and 1978, Shanghai participated in 220 programs of economic aid covering 25 countries of Asia, Africa and East Europe, among which there were 109 programs in Vietnam. In addition to financial aid, 5480 experts were dispatched abroad. From 1953 to 1978, China trained 10957 people from aid-receiving countries. CPGFA during this period had the following features. (1) Regional external relations were restricted to socialist countries. Some provinces undertook foreign-related tasks assigned by the central government “but they did not have their own foreign affairs agendas” (Cheung, 93). (2) Provinces had little autonomy in international contacts. Local officials were at a respective distance from foreign affairs. On one hand, the central government prohibited its local officials to touch foreign affairs without permission. On the other hand, local officials could hardly forget the past events that happened during the “Cultural Revolution”. People who had relatives in foreign countries or close relations with foreigners were often treated and politically discriminated against as foreign-dispatched spies. The past lessons made the local officials fear and shy away from foreign-related affairs as a political minefield. Besides, the area seemed rather abstruse for local officials. Few officials were willing to handle foreign affairs unless instructed by the central government. (3) During the period, political interests always prevailed over economic consideration, which was due primary to the political 69 background, planned economy system and ideology at that time. For instance, around 1950, all provinces established foreign-related organizations such as Branch of Sino-Soviet Union Friendship Association, Branch of World Peace Movement of Chinese People, local sub-council under the Chinese Council of Anti-American Aggression, and provincial People’s Association of Anti-American and Aiding Korean. Summary The Chinese provincial governments’ foreign-related activities (CPGFA) can be traced back to the Han Dynasty. During the past two centuries, China remained a unitary 36 and highly centralized nation. Generally, imperial courts (140BC-1911AD), the national government of the Republic of China (1912-1949) and the central government of PRC (1949-1978) dictated diplomacy. Occasionally, they brought into play the functions of its local governments when dealing with foreign affairs. During some historical periods, the Court relied heavily on CPGFA. For example, the Tang and Yuan Dynasties saw flourishing local foreign trade. The late Qin Dynasty witnessed how Governors-general and governors actively interacted with foreign diplomats and traders in treaty ports. Aware of the significance of local foreign affairs, elites and veterans were selected and appointed to well-designed official positions such as trade superintendence and foreign-affairs commissioners in the Qing Dynasty. The local official institutions such as 70 customhouses, foreign affairs departments, and foreign guesthouses were set up with the central requirements and financial aid. Generally, local officials were reluctant to be involved in foreign affairs, especially, when their central government was weak. Considering themselves as “parents” of the local residents in their jurisdiction, local officials had to protect their “children people” when foreign-related conflict appeared. CPGFA before 1978 were more political than economic. Provinces were mostly required to manage customhouses, defend boundaries, receive and arrange foreign merchants and envoys, etc. They had few initiatives for foreign affairs because foreign trade was not that significant to the provincial economy. For most of the provinces, foreign trade was regarded as attachment to political consideration. It was common that most local officials were unwilling to be involved in foreign affairs and they lacked relevant skills. Local officials were aware of the positive influence of foreign trade on local finance and economic prosperity over time. The coastal provinces were among the first active group in foreign trade. Local officials of Quanzhou in Fujian and Guangzhou in Guangdong, for example, applied respectively to the Qing Court for setting up local-based customhouses and foreign guesthouses. Some local governments successfully persuaded the Qing Court to give them preferential policies such as low taxation, funding for port infrastructure, establishment of frontier markets, etc. 71 The ups and downs of CPGFA depended greatly on China’s economic strength and international status. When China’s economy was prosperous, it opened the door wider to the outside world and permitted more local authorities in foreign affairs. The powerful Tang Dynasty, for instance, experienced active transnational interaction at local level. The weak Qin Dynasty before the Opium War had to prohibit maritime foreign trade along Southeast provinces and close several customhouses for fear of pirates and foreign attacks. 72 Chapter Three Endnotes 18 It was constituted of three levels of administrative institutions. On the top were specially established departments responsible for diplomatic affairs in the court. On the middle were departments of the court related or partly responsible for diplomatic affairs. On the base were local governments related or partly responsible for diplomatic affairs. 19 Shiboshi is a title of the ancient official responsible for foreign trade. It was created in the Tang Dynasty and they are the earliest official positions for dealing with foreign trade. Shibosi is a name of the official department responsible for foreign trade. It was first set up in the Song Dynasty and they are the earliest official institutions for dealing with foreign trade. 20 The position was set up in Tang Dynasty and named as a set of ritual things including Jie, which was conferred when someone was appointed. 21 Bojiao, Shoushi and Jinfeng are the main tasks of a Jiedushi in administrating foreign ships. Bojiao means collecting duties from foreign ships, incarnating a country’s sovereignty; Shoushi means government’s monopoly and priority over trade of presious goods, which is hold by Chief Executive in ten days upon the earrival of ships; Jinfeng means paying tribute of valuable goods to the Court after Shoushi. 22 Seventy-fifth volume of Quan Tang Wen 23 Foreigners’ guesthouses were built in capital and ports to offer free rooms, board, and transportation for foreign envoys, merchants, and outbound imperial envoys. Normally, the local governments not only administrated the guesthouses but also provided free special-household-based servants and daily necessaries. Emerged from foreign exchange of the ancient China, they were different from the foreigners entertaining hotels in current China. 24 After Zhu Quanzhong usurped the Tang Dynasty and founded the Latter Liang Dynasty (907-923), there were sequentially four dynasties after that, namely Latter Tang (923-936), Latter Jin (936 - 946), Latter Han (947-950) and Latter Zhou (951-960). All these five dynasties were called Five Dynasties in Chinese history. 25 Queyi yuan is a department of the central government set up in the Song Dynasty. It and its branches named Quechang set up in the boundary connected with Liao, Jin and Xia were responsible for tariff and boundary trade. 73 26 All the customs in Fujian are generally called as Custom of Min, with two administrations in Fuzhou and Xiamen. In 1723, custom is also taken care by the Governor of Fujian. In 1746, upon the approval of the Court, Custom of Min is divided into 6 branches and 31 sub-branches. 27 Editorial Committee of Guangdong Chorography. Guangdong Chronicle of Foreign Affairs. Guangdong: Guangdong People Press, 2005: 103. 28 China History Association ed. The Second Opium War Volume 5. Shanghai People Press, 1978: 347. 29 There were eight governors-general (Viceroy) at the period. 30 Editorial Committee of Guangdong Chronicle. Guangdong Chronicle of Foreign Affairs. Guangdong: Guangdong People Press, 2005: 56. 31 Governor-general of Liangjiang was responsible for the provinces of Jiangxi, Anhui, and Jiangsu. Governor-general of Zhili was responsible for the provinces of Zhili, Henan and Shandong. 32 Editorial Committee of Guangdong Chronicle. Guangdong Chronicle of Foreign Affairs. Guangdong: Guangdong People Press, 2005: 45. 33 A monetary unit formerly used in China, equivalent in value to this weight of standard silver. 34 http://www.shtong.gov.cn/node2/node2245/node69969/node69974/node70024/ind ex.html> 35 Editorial Committee of Fujian Provincial Chronicle. Fujian Provincial Chronicle of Foreign Affairs. Beijing: Chorography Press, 2001:65. 36 Unitary system is based on centralization and would favor centralism in handling relations between central and local governments. Federal system is based on decentralization, containing a number of relatively independent member units (state, nation, and republic) and would favor decentralism in handling relations between central and local governments. 74 Chapter Four Theoretical Framework and Assumptions The Chinese provincial governments’ foreign-related activities (CPGFA) have thrived since 1978. They happened neither by chance nor by fate. To set up the theoretical framework and assumptions of the research, this chapter examines why and how China’s central government has encouraged its provinces to interact with the four agents of globalization, and why and how the provinces in the Chinese Mainland have actively interacted with the four agents of globalization. This examination is expected to lead to a conclusion that the four agents of globalization rather than others may be regarded as four major indicators of FACPG. 4.1 Why the Chinese Central Government Encourages its Provinces to Interact with the Agents of Globalization By the Constitution, there are four levels in Chinese administrative hierarchy, i.e. national, provincial, municipal, and county. The 31 provincial-level administrative units include 4 municipalities directly under the central government, 23 provinces, 5 autonomous regions and 3 special administrative regions. In a unitary country, they are no more than agents of the central government are. The provincial foreign activities are 75 characterized by non-sovereignty, subordination, and limitation. The extent to which China opens to the outside world or controls deregulation greatly affects the pattern of local internationalization and ultimately the nature and achievement of the regime (Zweig, 2003:277). Economic development has been China’s top-priority since 1978. Military security and political interests had been an overwhelming consideration of Chinese diplomacy for centuries. Having realized that “Development is the absolute principle.” (fazhan shi ying daoli) and “it is impossible to develop China rapidly without opening its door to the outside world” (Deng Xiaoping, 1993:64), Beijing Post-Mao administration adopted a flexible attitude toward capitalism. Economic growth rather than ideological struggle helps solve problems both at home and abroad 37 . It was decided at the third plenum of the 11 th CPC Congress in December 1978 that over-centralized administration in economy should be transformed and an opening-up policy be adopted. Accordingly, China shifted its diplomatic concern, though slowly but gradually, from politics-first to economy-first. To develop a foreign-oriented economy, the Chinese top leaders encouraged the coastal provinces to establish economic relations with their foreign partners, either governmental or nongovernmental. Before that, there had been a discrimination against coastal provinces and major efforts were made to establish industries in the interior. There was a need for defense consideration in 1960s because of 76 the perceived military attack on China would come from Taiwan, Korea and other place near the coast. (Wei Yehua Dennis, 2000) In July 1979, Beijing granted Guangdong and Fujian provinces a number of incentive policies for attracting FDI and foreign traders. In May 1980, it designated four special economic zones (SEZs) 38 in Guangdong and Fujian. In 1984, it granted SEZs and 14 Coastal Open Cities (COCs) with more freedom in foreign-related economic activities and preferential taxation for foreign-fund enterprises. All these set free the local officials in directly handling foreign affairs and turned on “a green light” for inflowing agents of globalization. Interaction between the province and agents of globalization initiated thereafter. The following figures demonstrate that during the past decades, such interactions were frequent and fruitful. FDI actually used in China reached $691.9 billion from 1979 to 2006, 433.2 times of that in 1978. Over 600,000 foreign-funded enterprises were set up by the end of 2006, making China the largest foreign-invested country in the world. Meanwhile, China has set up 10,673 overseas enterprises in over 160 countries and regions. Outbound direct investment (non-financial) accumulated to $16.13 billion, ranking 13 th in the world. Total value of imports and exports reached $1.7607 trillion, 85.3 times of that in 1978, with an annual increase over 16%, ranking third in the world. Foreign tourists’ arrival amounted to 124.9 million, 69 times of that in 1978. Foreign exchange earnings in tourism summed up to $33.949 billion, 129 times of that in 1978. The outbound Chinese labors numbered 675,000 and 77 the turnover from contracted projects and labor service with foreign countries was $35.7 billion in 2006. National diplomacy needs assistance from the provincial governments. From the perspective of population under the Chinese provincial administration, in 2006, three provinces (Henan, Shandong and Guangdong) had population exceeding 90 million each; nine provinces had more than 50 million population each; and nineteen provinces had over 30 million population each. Each equals a large country in the sense of population. From the perspective of the ratio of officials of the central government in the national total, it is above 30% in European countries and 16-17% in America. In China, however, there are only thirty thousand officials working for the central government, it is lower than 7%, making the Chinese central government the smallest in the world. The Chinese central government thus can hardly handle and, it is unnecessary to handle all the foreign affairs at local levels. Moreover, the central government needs its provinces to share some foreign affairs at the national level, such as receiving state guests, undertaking nationwide foreign activities, handling national boundary affairs, and providing aids according to bilateral or multilateral treaties. For example, in 2006, the Yunnan Provincial Foreign Affairs Office (FAO) welcomed and arranged 69 foreign official delegations to visit Yunnan, among which nine delegations were invited as the state guests. The FAO conducted a boundary survey between China and Vietnam (Yunnan 78 section), completing 54.56 Km and confirming 286 positions for boundary stones. The Public Security Department of Yunnan took over 609 Chinese citizens, who were arrested as illegal immigrants, from Burma 39 , successfully detected 10,729 cases of cross-border drug trafficking, arrested 12,926 suspects and confiscated 10.15 tons of drugs. Opium, heroin and “ice” confiscated took up 88.7%, 73% and 58.5% of the national total, respectively 40 . Fujian has acted as an organizer for China’s annual International Fair for Investment & Trade since 1996 and Guangdong for China’s annual International Hi-tech Research Findings Fair since 1999. Hainan has held the annual Bo’ao Forum for Asia 41 since 2001. Chongqing held the 5 th Asia-Pacific City Summit in 2005. Entrusted by the central government, Anhui undertook the construction of an office building for the Foreign Affairs & Cooperation Ministry of Mozambique and a large public transportation project in Madagascar. As the provincial governments are more flexible and less concerned with high-political issues, they may play a special role under circumstances when it is improper or difficult for the central government. For instance, when contacting with a country without official diplomatic relations, or when a predicament appears between top governments, or when it is unnecessary or unequal for the central government to have a dialog with foreign subnational units, etc. In 2003, when chemical poison gas bombs abandoned by the Japanese army in World War II was discovered in Heilongjiang 79 Province, the local government of Qiqihar was in a better position to negotiate with the Japanese side on behalf of the local victims (Chen Fushou, 2003:28). When serious contamination occurred to the Songhua River, Jilin and Heilongjiang in 2005, the provincial governments involved took emergency measures immediately and effectively alleviated the pollution for the residents in Russia and other countries along the river. Acting between the central government and grassroots units, provincial governments are able to exert the role of “mediators” (Hocking, 1993: 46) in coping with foreign activities concerns by non-governmental organizations (NGO) or ordinary individuals. For example, when local-based domestic NGOs and people misunderstand the national foreign policy or react improperly, it is the provincial governments’ duty to help mediate and mitigate such occurrences. The demonstrations against Japan happened in several provinces during March-April, 2005 are typical cases. Since provincial governments pay more attention to its economic agenda, their external relationship is unlikely to be hurt due to discord at the national level. External relations at provincial level are characterized by stable, long-term, and mutual benefits. For instance, stalemate between Chinese and Japanese summits during recent years could hardly stop interaction at local levels. Encouraged or permitted by national governments, economic collaboration and cultural exchanges among the 37 pairs of Sino-Japanese sister provinces or sister cities have remained normal. In 2007, the Nagasaki Governor and speaker, Okinawa deputy 80 governor and speaker, led, respectively, a large official delegation to Fujian, celebrating the 25 th and the 10 th anniversary of establishing sister-province relationship. 4.2 How the Chinese Central Government Encourages its Provinces to Interact with the Agents of Globalization. China’s Opening-up Policy and decentralization have helped transform the provinces into international actors. When founding the new China as a developing socialist country 42 in 1949, the CCP followed suit of the Soviet Union and adopted the Stalinist practice of central planning for resource allocation, suppression of light industries and services in favor of heavy industries, and minimization of trade and financial linkages with the capitalist economies (Demurger, 2001). An over centralized administration was a serious problem of the Chinese economic system (Deng Xiaoping, 1978). Since the Third Plenum of the Eleventh Party Congress in 1978, China has carried out an opening-up policy and gradual decentralization. The opening-up policy aims to attract FDI and increase export in selected areas. The area targeted during early 1980s was Guangdong and Fujian; during the middle to end of the 1980s, the 14 coastal open cities were designated; Early 1990s saw further extension of opening-up to all the inland provinces. The Fiscal system is a vital benchmark for intergovernmental relations. The essence of the fiscal decentralization in China was a five-year-long tax-revenue-sharing formula 81 individually negotiated and set between the central government and the provinces. As the marginal tax rate set by the central government varied tremendously across provinces, the provinces’ incentive to generate tax revenue accordingly varied. The study (1999) of Hehui Jin at al found the average retained earning was only 0.17 yuan for every yuan the local government increased during 1970-70 whereas 0.75 yuan was retained during 1982-92. Due to the fiscal system, the national revenue declined from 35 percent of GDP in 1978 to 14 percent in 1992. To restore the national fiscal capacity to help the poorer provinces, China readjusted its fiscal system in 1994 by undertaking a tax reform, which introduced a value-added tax. The Budget Law enacted in 1995 designates the responsibility and authorities of various-level governments in budgeting, approving and actualizing budget. It grants local governments the right to make, approve and actualize their own budgets. Generally, China’s fiscal system is highly decentralized compared with foreign countries. Take the proportion of fiscal expenditure of the central government in the national total for example. In European countries, fiscal expenditure of the central government usually accounts for 50-60% of the total, 90% in England, and nearly 50% in the US. However, China’s central government took up only 24.7% in 2006. The provincial extra-budgetary expenditure accounted for 91.3% of the national total extra-budgetary expenditure in 2005. “Decentralization is the touchstone of federalism” (Edmond Orban, 2003:236). The abovementioned reforms led to “developmental 82 localism” in China (Zheng Yongnian, 1994). Orban at al points out: “China’s post Mao de facto federalism is launching provincial and sub-provincial governments on a booming economic trajectory (2003:236).” Except for tariffs and exchange rate, today’s provincial governments enjoy much more authorities in foreign decision-making, which greatly enhanced the provincial motivation in foreign-related activities. Provincial governments in China do not have “residuals” 43 or “reserved power” (Qi Jianhua, 2005:40). Powers exercised by the local governments are granted by the central government in the form of the Constitution and those not listed in the law all belong to the central government. The current Constitution issued in 1982 defined: firstly, a unitary system is the basis and supplemented are autonomous regions of minority nationalities and special administrative regions; secondly, democratic centralism refers to function division between the central and local governments, which are able to play an active role under the leadership of the central government. Local governments are subordinate to the central government and must abide by its leadership. The Constitution further defines that diplomatic affairs and national defense are exclusively under the control of the central government. The State Council conducts foreign affairs. This means that local authorities are not delegated with such power. Thereby, the Constitution prohibits local governments to touch upon international agenda concerning sovereignty over the territory and military security. Late premier Zhou Enlai stated, “Issues concerning 83 foreign policy must be reported to the central government” (Yong Gao, 1987:442). Local officials are often warned that “power over foreign affairs exclusively belong to the central government” (waijiao daquan zai zhongyang), or that “there are no trifles in diplomacy” (waijiao wu xiaoshi), or that “Diplomatic authorization is limited” 44 (waijiao shouquan youxian). For instance, the central government demands its localities to strictly fulfill promises in the Protocol on the Accession of the People’s Republic of China signed by the Chinese central government and WTO, namely, “China's local regulations，rules and other measures of local governments at the subnational level shall conform to the obligations undertaken in the WTO Agreement and this Protocol.” China has not yet empowered its provinces to conduct high-political foreign activities. Local foreign activities should be in accordance with the national foreign policy and secondly promote the local economic development. Actually, the central government has made clear what foreign agendas are encouraged and what are prohibited for localities. Foreign activities to promote economic growth are strongly encouraged, especially those attracting FDI, inviting tourists, increasing export and introducing advanced technology. Non-economic or low-political foreign activities exchange is under supervision, especially those related to inviting foreign high-ranking officials, signing agreements of sister-city relationship, joining in international organizations, etc. High-political activities are forbidden, especially those concerning territory sovereignty and military security. 84 Foreign-related laws and regulations have been made to narrow the provincial foreign activities into interaction between localities and agents of globalization. In other words, the purpose of opening-up is to speed up economic development, make full use of resources abroad, and integrate China into the international community. To encourage FDI, the most effective accelerator of economic development, Income Tax Law on Chinese-foreign Equity Joint Ventures and Income Tax Law of Foreign-funded Enterprises issued respectively in 1980 and 1981 provide favorable taxation and simplified procedures for Sino-foreign equity joint ventures and foreign-funded enterprises. Interim Provisions on Alleviation or Exemption of Income Tax and Consolidated Industrial & Commercial Tax in Special Economic Regions and the 14 Coastal Harbor Cities issued in 1984 and Provisions on Encouraging Foreign Investment issued in 1986 established the framework and pattern of foreign-funded enterprises in China. The provincial governments were empowered to approve FDI projects below $30 million and to decrease or exempt income tax and land use fees within their jurisdiction. To narrow the regional gap, the State Council empowered the inland provinces to approve FDI projects from a maximum $10 million to below $30 million in 1996. State Administration of Foreign Exchange in August 2007 gave its permission to domestic individuals to invest in overseas securities markets with proprietary or purchased foreign exchange through relevant channels in the pilot area. 85 This is a further effort to encourage capital outflow. The central government has adopted three incentive policies to encourage export since 1978. They were financial subsidies granted to export enterprises, especially before the mid 1990s; export rebates since the late 1990’s; and modulation of RMB exchange rate, depreciating RMB exchange rate before 1994. Thanks to the policies, export dependence surpassed import dependence. From 1990 to 2005, the average export dependence was above 20% and 30% at the most; that means every year 20% of GDP came from exports. Second, every 10% increase in exports has brought about 1% increase in GDP, while every 10% increase in imports has brought about a negative increase of 0.56% in GDP (Chunmei Liu, 2007:52). To get rid of the negative impact in the Asian Financial Crisis in 1998, China brought up the rate of export rebates in 1999, up from 6% to 15% on the average. The past four years saw China’s trade surplus soar. It accounted for 7 percent of the country’s GDP in 2006. To promote cross-border movement of people, China has endorsed policies to simplify entry and exit formalities. It implemented Law on Control of the Entry & Exit of Aliens and Measures for the Administration of Examination and Approval of Foreigners’ Permanent Residence in China in 1985, abolished exit visas and designated residences for inbound foreigners, etc. Before enforcement of Law on Control of the Entry and Exit of Aliens, only about 200 places were opened to foreigners. By the end of 2005, the 86 places amounted to 2800. Transnational movement of the Chinese citizens is most dramatic. During 1949-1979, only 280,000 Chinese citizens went abroad. Shortly after the opening-up, Law on Control of Exit & Entry of Chinese Citizens and Measures for the Administration of the Overseas Tours of Chinese Citizens went into effect respectively. According to the China National Tourism Administration (CNTA), 34 million Chinese traveled abroad in 2006, making China the sixth largest source of outbound tourists. The UN World Tourism Organization forecasted that China would become the fourth largest by the mid-2010s and the number will exceed 100 million by 2020. According to CNTA, 2.35 million tourists traveled between China and the US in 2006. The US contributed about 1.71 million of them, a year-on-year increase of 9.95 percent. For better mutual understanding, CNTA led 26 provincial tourism directors to meet with their US counterparts in late October 2007. China and the US were both working hard to add the US to Chinese tourists’ destination list, which already includes 132 countries and regions. Before 1999, official outbound always outnumbered those of the personal outbound. After 2000, due to the simplified procedures of applying for passports, personal outbound departures, especially for tourism increased dramatically and began to outnumber those of official ones. Passport Law of China enacted in 2007 displays the Chinese government’s determination to speed up the transnational flow of Chinese citizens. 87 Information is a vital productive factor than capital in a networking society. Cross-border flow of information is mainly through the Internet, fax, correspondence, telephones, and the press. Among them Internet is the most important as it enables “space of flows” to displace “space of places” 45 . Information via the Internet depends on the Internet coverage and the proportion of users to the total population. The Internet first appeared in China in 1986. It was an international Internet project-Chinese Academic Network (CANET) between Beijing Research Institute of Applied Computer Technology and German University of Karlsruhe. In September 1987, CANET established the first E-node in China and sent out the first E-mail of China on September 14, reading, "Across the Great Wall we can reach every corner in the world”, which initiated Chinese access to the Internet. Over the 20 years, China’s Internet has seen a rapid growth in application. According to a survey issued by the China Internet Network Information Center (CNNIC), the number of Internet users in the Chinese Mainland reached 137 million with 843,000 websites at the end of 2006, second only to the United States. Furthermore, China issued a set of regulations on December 2006 saying that when foreign journalists interview a person in the run-up to, and during the 2008 Olympic Games, they only need the consent of the interviewer. The statute removed some restrictions that had been in place since the Regulations on the Supervision of Foreign Journalists and Resident Foreign News Organs were issued in 1990. The scope of coverage may include politics, 88 the economy, society, culture and other fields. 4.3 Why the Chinese Provinces Actively Interact with the Agents of Globalization. The provinces confine their foreign activities to interaction with agents of globalization mainly because (1) agents of globalization tremendously promote local socioeconomic development; (2) the central government allows them to act only with agents of globalization. The Constitution stipulates that the primary responsibilities of the provincial government are to develop economy and maintain social stability. Local officials in China act as the equivalent of a board of directors and sometimes more directly as the chief executive officers and the CCP secretary are at the helm of this corporate-like organization (Oi, 1995). Zweig considers local communist leaders as the directors of transnational corporations (2002:1). Economic development is always the top-priority of the provincial top leaders. Bai Enpei, Secretary of Yunnan Provincial Committee, told his subordinates “to accelerate the development is the most fundamental task of Yunnan Province”. Su Rong, Party Secretary of Gansu states, told his subordinates “The most important political agenda of Gansu Province is to develop”. Xu Guangchun, Party Secretary of Henan Province, stressed, “Our top-priority is to make local people’s life better off”. As agents of globalization are obviously promoters for local economic 89 development, the local governments have to demolish obstructions on the way of flow of the agents of globalization. Local governments welcome agents of globalization because of their awareness of the remarkable positive impacts of agents of globalization on economic growth. The agents initially flooded into Guangdong, Fujian and then SEZs in more provinces, where have geopolitical advantages, better infrastructure, preferential taxation, efficient administration and service, etc. Isolated from the outside world for decades, the local officials lacked experience in handling alien merchants, travelers, exotic commodities and cultures. They were curious but worried that globalization would hurt local economy and society. However, the officials at coastal areas realized readily that the pioneer provinces became “nodes” and “floating space” connecting the domestic and international network and developed far more rapidly than other inland provinces. Globalization has transferred previously conceived disadvantages such as coastal area, overseas Chinese networks, and historical overseas linkages into advantages for economic development. Transnational flow of capital and goods are two main propellers of GDP growth. Guangdong Province, which took the lead in opening up, is an excellent example. In 2006, it attracted $14.5 billions foreign capital, accounting for over a quarter of the nation. Its foreign trade totaled $527.2 billion, about 1/3 of the nation. Its GDP surpasses 90 $325 billion, taking up 1/8 of the nation. Its GDP per capita reached $3509, twice that of the nation. Its revenue totaled $65 billion, representing 1/7 of the nation. Jiangsu Province ranked first in paid in FDI during 2002-2006 and has established the most long-term relationship provinces with foreign counterparts in China. For instance it has 175 foreign sister provinces and cities in 2006. The group composed of 14 COCs is another convincing example. Their GDP totaled $539 billion in 2006, accounting for 19.3% of China; that is, 1/13 population created 1/5 GDP of the country. Their paid in FDI totaled $30.4 billion, representing 43.7% of China; the increase rate was 20.9%, much higher than the national average level. The average urban and rural income was 127% and 178% of that of the national average level respectively. Foreign trade improves local employment, income and financial revenue. Take export processing as an example. The population engaged in export processing totaled five million in Fujian Province, representing 27% of the total employment of the province. The export of processing industry reached $16.2 billion, accounting for 46.51% of the provincial total exports; the import of processing industry was $ 8.778 billion, taking up 43.3% of the total import. As more cities were designated as SEZs or COCs and granted preferential policies, 46 the competition for international sources became more intense. The thirst for FDI and information is just like drought fields needing water. The governments, no matter in 91 coastal or bordering or inland provinces, all attempted to persuade Beijing to grant them more authority in handling foreign affairs so that they could be more competitive in the transnational flow of globalization agents. Shambaugh and Lampton (2001) highlighted the great effort made by the provincial governments in attracting FDI. Chen Zhimin (2005) and Cheung (2001) offer a vivid picture of how the provincial officials influenced the national policymakers by lobbying. Gerald Segal (1999) depicts a situation of how the Chinese local governments compete with each other by offering preferential policies to foreign investors or traders. To attract more FDI, Governors of the provinces treat visiting foreign officials and big entrepreneurs as VIPs. For example, Yunnan provincial leaders held over 200 formal meetings with foreign visitors in 2005 47 . In 2006, Yunnan Governor Xu Rongkai made a special trip to Guangxi Province for meeting the premiers of Myanmar, Singapore, Kampuchea, Malaysia, Thailand and Viet Nam, who were attending the summit conference of the 15 th anniversary of China-ASEAN Dialogue. During his visit, he exchanged views with the premiers of the six countries on the trade, investment, infrastructure like Pan-Asia Railway, drug-banning and alternative plant, travel, personnel training etc. between Yunnan and the six countries. 48 To develop long-term stable bilateral cooperation with foreign counterparts, the 31 provinces had set up 443 sister-provinces by the end of 2006. Shanghai ranks at first and Beijing second, with 51 and 39 provinces respectively. Turning away from empty talk, more provinces 92 are seeking economic benefits from foreign sister-provinces. After over 30 years of practice, local officials are more open-minded, pragmatic, skillful and experienced, acting as the propellers in the progress of China’s internationalization (Zweig, 2003). Some provincial governments annually sponsor their officials to study international politics, international relations, and public administration in the developed countries like the USA, UK, Japan, Singapore, etc. Preferential policies are also formulated for recruitment of the returnees from aboard to act as government officials (Zweig, 2004). Besides, well informed by advanced IT, the local people have been interested in international issues and their opinion has exerted larger influence on the provincial foreign policymaking. As the public opinion is no longer limited to empty talk, there has been consciousness of public participation and a distinct tendency of practice in foreign activities (Sun Hong, 2006). Decentralization in China does not set free provinces to encroach into the high political fields. Neither does it weaken the central control over the local foreign affairs. Under the current political system and diplomatic administration, the central government can absolutely avoid the zero-sum effect in foreign affairs. It gives specific guidance and strict control over local foreign affairs by not only the laws and regulations but also “soft law”. Among them, the most effective way is the personnel system of evaluation, promotion and appointment of local officials (Jae Ho Chung, 1995:503). Once the central 93 government discovers that the local foreign activities conflict with the national diplomatic policies or might damage the national interest, it will stop the activities or punish the actors (Jingqi Huang 2003). Apart from that, the lessons from history have helped the local officials better understand what is encouraged and what is prohibited. As a result, the provincial governments keep a cautious attitude toward non-economic foreign affairs. For this reason, most of them have not yet joined the United Cities and Local Governments. The local governments seldom get rid of the central control or violate the national foreign policies. The provincial governments, for example, undertake crackdowns on the illegal activities such as smuggling, illegal immigrants, infringement of intellectual property, etc. 4.4 How the Chinese Provinces Interact with the Agents of Globalization. Provincial foreign activities are either in foreign countries or local-based. The first category includes visits abroad, trade missions, promotion fairs, sister-cities, membership in international organization, etc. For instance, 2174 groups composed of 15,089 persons in Yunnan Province went abroad in 2006 for official purposes, among them, 44 groups were leaders at the provincial level. 49 In 2005, Zhejiang Governor Lv Zushan led a big delegation to Paris and hosted a France-Zhejinang Fair. Yunnan Governor Xu Rongkai led a delegation to Tokyo and hosted “Yunnan Travel Promotion and Merchant 94 Invitation”. In 2007, Heilongjiang Deputy-Governor Su Zhanshu led an economic and trade delegation to hold a Heilongjiang Promotion Fair in Los Angles and the debut of “Charm of Heilongjiang” TV program and the two years’ anniversary of Heilongjiang Satellite TV’s entering North America. Guangdong sponsored “2007 Economy and Trade Cooperation Fair between China Guangdong--Tanzania”. During the fair, the two sides signed contracts of $1.8 billion, covering trade, construction projects, investment cooperation, merchant invitation, etc. More than 20 provinces are members of international or regional government organizations, such as UCLG, World Association of Major Metropolises, and Asia-Pacific City Summit, etc. In June 2005, 13 governors and mayors of the Chinese Mainland attended the conference of UCLG Council and the Forum of World Mayors and discussed the function of the local governments in realizing the development goal of the UN in the millennium summit and the disaster management. Asia Kyushu Summit of Local Governments has been held ten times, and the leaders of Fujian Province attended the meeting twice upon invitations. Most of the foreign activities are local-based due to provincial budgets as well as strict check-approval for going abroad. Besides undertaking tasks assigned by Beijing, most foreign activities at provincial level are related to agents of globalization. Most provincial foreign activities focus on attracting more foreign capital because 19.3% is contributed by FDI among each one percentage of GDP growth in China (Jinfan 95 Jiang 2004). First, the provinces takes advantage of the various resources to persuade the central government to grant lower income tax rate, higher retained proportion of foreign exchange, freer administration for foreign trade, and more simplified procedure in foreign affairs, etc. The tax rate exerts a greater influence on the flow of FDI than the market potential and investment environment (Benassy-Quere and Fontagne 2001), on the base of preferential policies stipulated by the state. Therefore, provinces grant tax reduction or exemption for foreign investment; or extend the preferential period upon expiration of that stipulated by the laws of the state. Second, the provinces delegate the foreign-related approval power to the local governments below them and simplify procedure to raise efficiency. E.g., Fujian empowered all its county-level governments and the main development zones to approve the foreign investment projects below $30 million provided that the project is not prohibited or restricted by the state, nor does it go against the laws and regulations of the state concerning environment protection. 50 Third, provinces protect legal rights of foreign-funded enterprises and the individuals, e.g. to regulate the fees beyond the tax to mitigate their burden. Fourth, the developed coastal provinces began to support the provincial-owned enterprises to invest in foreign countries. By June 2007, the number of enterprises and institutions investing aboard from Zhejiang Province amounted to 2809, with total investment of $1.64 billion, among which the Chinese investment accounted for $1.3 billion. 96 The provinces also strive for quick transnational flow of goods, especially for export and earning foreign exchanges. Apart from the export policies of the central government, each province has full uses of their authority to make competitive simulative policies. The local-based provincial common practice are: totally or partly refund export tax, give awards to local foreign trade enterprises with remarkable achievement, promote local famous brands to international markets, provide finance guarantee for small and medium enterprises, assist the local enterprises to fight against trade barriers, etc. In terms of import, the Rules of Fujian Province on Awarding the Expansion of Import was formulated in 2007 to encourage the import of key technology and advanced equipment from aboard. From the perspective of transnational movement of people, provinces usually pay more attention to attracting foreign visitors and exporting labor force. Take Fujian for example, under the full support of the governments, Wuyi Mountain in Fujian was conferred the title of World Natural and Cultural heritage by United Nations Educational, Scientific, and Cultural Organization in 1999, the Big Golden Lake in Fujian won the title of World Geopark in 2005. Since then, they have attracted more foreign visitors and thus become new resources of local revenue. Jiangsu Province sent 112, 421 labors abroad in 2006 and the business turnover reached $4.4 billion. In terms of officials’ foreign trips, those closely related to economic and trade purposes were much easier to 97 get approval than others were. For example, 31600 officials of Mainland China went abroad on business in 2005, among them 19100 were from economic or trade departments. Flowing information is mostly invisible but it strengthens a provincial competitiveness. Capital always flows into an area with abundant information. The provinces, thus, attach much importance to speed up transnational flow of information by developing IT networks and industry. Each province had established a new department and provincial-owned company to facilitate information flow from the perspectives of governments and quasi-governmental enterprises respectively. Led by Guangdong and Fujian, more provinces have worked hard to turn themselves into “Strong Province in IT” respectively. The business turnover of telecommunication of Guangdong in 2006 amounted to $34 billion, accounting for 17.5% of the country. The number of telephone households in Guangdong exceeded 100 million in February 2006. At that time, only six countries 51 in the world had more than 100 million telephone householders. The fixed assets investment of Fujian in the communication industry amounted to $1.13 billion in 2006, increasing by 11.5% and accounting for 2.74% of the provincial total FAI. The average consumption expenditure in telecommunication accounts for 10.26% of the total. Meanwhile, provinces are making much effort to introduce more foreign people and projects with expertise. Particularly after China’s accession to the WTO, talents with the 98 skills of foreign trade, legal knowledge or those possessing an international MBA are in great demand for regional development (Zweig, 2004). For example, during recent years, Shandong Province has employed 82,000 professionals and sent more than 11,000 locals abroad for training. The province has spent $9.6 million on talent-exchange projects. With the help of foreign expertise, Dezhou-based Himin Solar Energy Group of Shandong Province is now the world’s leading manufacturer of solar water heaters. 4.5 Research Framework and Assumptions The provincial foreign initiatives are results from twin forces of pouring globalization and up-down decentralization. This research is within a multivariate framework and explores how the complex interplay of national, local and global forces shaped the activities and achievements. Figure 4.1 on the next page shows a brief picture of the analytic framework. Obviously, there are three leading actors: globalization, the Chinese central and the provincial governments (blue colored). The central government has turned on two “green lights” to let in globalization and its provincial governments’ transnational interactions. The final aim of CPGFA is neither to interact with agents of globalization nor FACPG. It is pursuing for more rapid economic development. Globalization assisted by advanced information technology has begun to knock China’s door since the late 1960s (Jane Stewart, 2003). China did not let it in until the 99 open door policy adopted in 1978. Principle of regional economic self-reliance and self-sufficiency were carried out during 1960s and 1970s. Considering the coastal provinces as less safe area, many factories were moved from Shanghai and other coastal cities to the Northwest inland provinces. The Third Five-Year Plan (1966-70) allocated 71 percent of national investment in the inland provinces (Demurger at al, 2001). In a word, it was the opening-up policy that made it possible for globalization to enter and gradually penetrate into this long-standing largest isolated market. The favorable, well-designed policies have been not only an effective promoter but also an efficient screen that let in only those are considered must or necessities for economic growth. These necessities are foreign capital, equipment, visitors, advanced technology and overseas channels for exports. 100 Figure 4.1 Analytical Framework Fiscal Decentralization Administrative Decentralization the Chinese Central Govt Provincial Govts More Initiatives More Autonomy China’s Open Door Policy Basic Factors GDP/FDI-based Evaluation & Promotion System Provincial Interaction with Agents of Globalization Globalization Foreign Achievements of Chinese Provincial S&E Factors Social Factors Economic Factors Favorable Policies Agents of Globalizatio Positive Impact on Economy Interregional Competition Strict Control and Supervision Provincial Socioeconomic Development 101 Through the screen “have passed a rapidly expanding quantity of goods, services, capital, and people” (Zweig: 3). Without opening-up to the outside world, no provinces in China could have interacted directly with agents of globalization. Decentralization is another wing for the rising CPGFA. With more autonomy in fiscal and administrative decision-making, the provinces have more initiatives to expand their international contact and activities. The decentralization has been gradual and limited. The central government has not yet devolved any power regarding high politics to its provinces. Even low political but non-economic issues like official contact or sister-city relationship with foreign counterparts are still under strict control. In addition to the favorable policies, the provincial government performance and achievement have been evaluated largely based on indicators like the growth rate of GDP, FDI, exports, etc. This further has encouraged the provinces to concentrate their efforts to interact with the agents of globalization actively. Regulated by specially designed favorable policy and economic-growth-oriented incentive personnel system, the provincial governments have been most interested in attracting foreign investment and visitors, promoting foreign trade and introducing information related to economic development. Therefore, the degree to which the four agents of globalization flow in a certain period may be indicators of foreign-related 102 achievement of China’s provincial government. Specifically, bidirectional and transnational flow are underlined. Disparities in FACPG are reasonable and causal. Scattered on a land of 9.6 million square kilometers, the provinces can hardly obtained same achievements based on greatly diversified comparative advantage such as different historical background and geographical features. To evaluate FACPG is to find causes for the disparity. Which factors might cause excellent or unsatisfactory FACPG and to what extent? Which of them positive and which negative? Which of them can be controlled or adjusted? Obviously, dozens of factors may be accounted into the list responsible for disparities in FACPG. This research targets 18 factors according to two principles. Firstly, priority and more scrutiny should be given to basic, economic, social, and science and education (S&E) factors. Second, factors tested should be (1) mostly used in socioeconomic research such as population and GDP, (2) mostly related to FACPG such as investment in fixed asset, expenditure for foreign affairs, (3) mostly controllable or adjustable by the provincial governments such as provincial expenditure for R&D and S&E, etc. Therefore, analysis of the Chinese provinces may provide useful references for other developing countries that are undergoing similar interaction between subnational governments and agents of globalization. 103 Chapter Four Endnotes 37 Excerpt from Deng Xiaoping’s Opening Speech at 12 th Party Congress 38 They are Shenzhen, Zhuhai, Shantou, and Xiamen. 39 “Provincial Chronicle of Yunnan Foreign Affairs 2006”. < http://www.yfao.gov.cn/show.aspx?id=796>. 40 Xinhua News. <http://news.xinhuanet.com/legal/2007-06/06/content_6204396.htm>. 41 Boao Forum for Asia was formally inaugurated in February 2001, initiated in 1998 by Fidel V . Ramos, former President of the Philippines, Bob Hawke, former Prime Minister of Australia, and Morihiro Hosokawa, former Prime Minister of Japan. It is a non-government, non-profit international organization. <http://www.boaoforum.org/html/adoutjs-en.asp> 42 The basis of the socialist economic system is socialist public ownership of the means of production. In the primary stage of socialism, the State owns the public means of production on behalf of the society, which requires the government, the central government representing people’s interests in particular, to be involved in social economy so as to have better control over it and grasp more social resources. The basis of the capitalist economic system is private ownership of the means of production, which puts more stress on the function of market mechanism. Therefore, in handling the relations between the central and local government, socialist countries are inclined to centralization, while capitalist countries to decentralization. 43 The term “residual” was first mentioned in the Amendment 10 of US Constitution, which says, “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.” In federal countries, residuals belong to the states. 44 Those are quotations of the late Premier Zhou Enlai. 45 In network society, space may be divided into “place of flows” and “place of places”. The "space of flows" refers to the network society with translocal and transnatinal technological flows. “Place of places” refers to “the geographic spaces and communities of everyday life in cities”. (Graham, 2000) The former is a computer-based 104 material organization of time-sharing social practice via flows. Place of flows is a hierarchy model. Electronic network acts as its basic tier. Nodes and hubs make up its middle tier. The spatial organization of the managerial elites dominates its top tier. It is rather difficult to tell which layer is most important although Castells underscores the top one. 46 For example, the foreign-funded enterprises in SEZs or COCs pay the enterprise income tax at the lowest rate; local governments in SEZs and COCs had authority to exempt the foreign-funded enterprise within their jurisdiction of local enterprise income tax. 47 “Provincial Chronicle of Yunnan Foreign Affairs 2005”. <http://www.yfao.gov.cn/show.aspx?id=852>. 48 “Provincial Chronicle of Yunnan Foreign Affairs 2005”. <http://www.yfao.gov.cn/show.aspx?id=796>. 49 “Provincial Chronicle of Yunnan Foreign Affairs 2005”. <http://www.yfao.gov.cn/show.aspx?id=796>. 50 “Decision on Delegation of Power of Examination and Approval of Foreign Investment Project and Simplification of Examination and Approval Procedures”. <http://www.fj-info.com/Html/zcfg/150431067609543071046625.html>. 51 They are China, USA, Japan, Germany, Brazil and India. 105 Chapter Five Index of Foreign-related Achievements of China’s Provincial Governments The Chinese provinces in Mainland China have obtained great achievements by conducting international activities since China was open up in late 1970s. There are， however, few competent evaluations of the effectiveness of subnational government promotional activities in international arenas (Kincaid, 1999). There is no index in literature to evaluate the achievements of subnational government international activities. This chapter creates an index to evaluate the foreign-related achievements of China’s 31 provincial governments (FACPG), hence examines the characteristics of the current interaction between China’s provinces and agents of globalization. 5.1 Existing Indices for Reference The term “diplomatic power” first appeared in Japanese Overall National Strength published by the Economic Planning Department of Japan in 1987. It is weighed 2/30 of the index and composed of four indicators, i.e. staff number of Ministry of Foreign Affairs, diplomatic budget, visits of states chief, and number of overseas broadcasting center. Huang Shuofeng (1999) adopted the term as a sub-index when he studied soft national power in 1999. Huang’s “diplomatic power” is also made of four indicators, i.e. 106 foreign policy, foreign-related activity, foreign trade and international influence. In her Comparison of the Overall National Strength of World’ s Major Powers published in 2006, Wang Ling believes that diplomatic power is the most important part of soft power. She ranked the diplomatic power of world’s ten major countries with six indicators, i.e. (1) diplomatic power of proposal, (2) any alliance with other countries, (3) status in the U.N, (4) relationship with neighboring countries, (5) economic and military assisting ability, and (6) diplomatic independence. 52 There have appeared some comprehensive indexes recently to evaluate a country’s diplomatic power, which bear certain referential values to the setting of the index for evaluating FACPG. For example, A.T. Kearney Company created Foreign Policy Globalization Index (FPGI) to evaluate a country’s level of global integration FPGI includes (1) the inward and outward flows of international trade and investment, (2) transnational flows of people, (3) international telephone traffic and number of Internet users, and (4) the memberships in international organizations. In 2006, this company evaluated and ranked 62 countries that account for 96% of world’s GDP and 85% of the global population. Swiss Institute for Business Cycle Research created KOF Index of Globalization to evaluate a country’s globalization level from the economic, social and political dimensions. By analyzing the 25 valuables, the globalization level of 122 countries during 1997-2004 was evaluated in 2007. 53 Openness Index shows the level of 107 a country’s openness towards international trade and international visitors. It is an aggregate index combining the Visa Index and Tourism Openness Index. Index of Global Economic Freedom 54 , jointly set up by the American Heritage Foundation and Wall Street Journal, has been issued for consecutive 11 years. It comprises 50 indicators that are divided into 10 categories, i.e. (1) foreign trade policy, (2) government’s fiscal burdens, (3) degree of government interference in the economy, (4) monetary policy, (5) capital flows, foreign investment, banking and financial conditions, salary and price, property rights, industry supervision as well as labor flows. Index of degree of city’s internationalization introduced by Xie Dihui in 2001 can be divided into economic internationalization, international service, and international exchanges. Recently, the American magazine Foreign Policy issued a report on the degrees of 62 countries’ internationalization. Its major indicators include free flows of capital and people, convenience of outbound tourism, popularity of internet and communication and so on. 55 5.2 The Basic Principles for Establishing the Index of FACPG The Chinese provincial governments are required and supervised by the central government to implement the national diplomatic policies and promote local economic and social development with designated foreign-related activilities. The activities are both organizational behaviors and local officials’ individual behaviors. The index is designed 108 to indicate as much of the achievements as possible by carefully selected indicators. To create a scientific index that conforms to the situation of China, the following principles are underscored. To be scientific and accurate. Based on the aforementioned understanding of the interaction between China’s provincial-government international activities and globalization agents, this index focuses on qualitative and quantitative flow of four primary agents of globalization. FACPG discussed can be divided into direct and indirect. The latter is economy-related but non-economic. As FACPC in non-economic sectors are difficult to quantify, this index gives priority to indicators closely related to the transnational inflow and outflow of capital, goods, people, and information so as to undertake a comprehensive and objective evaluation. All indicators bear clear connotations to be conducive to qualitative and quantitative analysis. To be valid and dynamic. This study covers three years from 2004 to 2006 to avoid data missing and ensure reliability. For example, authorized data about outbound investment and Internet-related facilities of 31 provinces have been unavailable until 2004. More importantly, China carried out its first national economic census in 2004. The census results in The First National Economic Census Yearbook and standardizes primary economic and social statistic criteria. Most of the data employed in this study are from the national or provincial statistical Bureaus and their publications. Specifically, the 109 data of capital and goods transnational flow come from the website of Ministry of Commerce of China and statistical yearbook of provinces. The data of transnational flow of people/labor are from The Outline of China Tourism Statistics by National Tourism Administration of China. The data of information transnational flows are from the Annual report on China Communication Statistics by Ministry of Information Industry of the PRC and The Statistical Report of Internet Development Status in China by China Internet Network Information Center. To demonstrate status quo, changes, and make comparisons, the index applies gross data, per-capita data and growth rate to reflect the total and average flow, tendency and potential respectively. To be Creditable and Feasible. Generally, an ideal index should include subjective indicators. For example, local government officials’ attitude toward international activities might directly affect their behaviors and achievements as well. The pretest of survey conducted in Fujian Province, however, showed that it is hard to get high response rate and creditable answer. Probably the topic discussed is so sensitive that some officials are reluctant to fill out the questionnaires, and some even refuse to be the participants of the survey. The pretest ended with few responses and in the return questionnaires, some questions were left blank. 56 To give priority to credibility, this study adopts and analyzes only objective data. Furthermore, owing to the current Chinese statistical system, some useful data are unavailable, such as outbound visitors to foreign 110 countries, international remittance, international letters, talking hours of coming-in international calls, foreign population in the provinces, budget directly for PGFA, etc. Some data are incomparable. For instance Taiwan, Hong Kong, Macao’s data are with different statistic criterion. The study, therefore, excludes them. 5.3 Establishment of the Index Index of FACPG is a comprehensive multiple index for evaluating FACPG over a certain period through the inflows and outflows of four globalization agents in the observed regions. It consists of four sub-indexes and thirty indicators. (Figure 5.1) Figure 5.1 the Index of FACPG Capital Transnational flows (B1) indicates the achievements of the provincial governments in promoting transnational flow of capital, especially in attracting inflow of foreign capital. It consists of six indicators. Transnational Inflow: FDI actually used (C11) and its growth rate (C12), and per-capita FDI actually used (C13) indicate the inflow of Index of FACPG A1 Capital Transnational flows (B1) Goods Transnational flows (B2) People Transnational flows (B3) Information Transnational flows (B4) 111 foreign capital amount, per-capita amount, and its developing tendency respectively. Transnational Outflow: Overseas Direct Investment (C14), per-capita Overseas Direct Investment (C15) and growth rate of Overseas Direct Investment (C16) indicate the outflow of local capital amount, per-capita amount and development potential respectively. Goods Transnational Flows (B2) indicates the achievements of the provincial governments in promoting foreign trade and local market openness. The export can greatly benefit local economy by foreign exchange earning, job increasing, and promoting local reputation. The governments, therefore, have attached importance to foreign trade. To promote export is one of their priority international activities. In addition, export not only shows the competitiveness of local goods in the international market but also reflects the extent to which the local economy has integrated with the world economy. It consists of five indicators: Transnational Inflow: Import value (C21) and its growth rate (C22) indicate the inflow of foreign goods and its development potential respectively. The percentage of import value in GDP (C23) reflects the dependence of local economy on import. Transnational Outflow: Export value (C24) and its growth rate (C25) indicate the outflow of local goods and its development potential respectively. The percentage of export value in GDP (C26) reflects the dependence of local economy on export. 112 Table 5.1 Composition of the Index of FACPG Sub Indexes Indicators C11 FDI actually used (Paid in FDI) C12 Growth rate of FDI actually used over previous year C13 Per-capita FDI actually used C14 Overseas direct investment by the local investors (non-financial investment) C15 Per-capita overseas direct investment by the local investors B1 Capital Transnational flows (Weight: 0.25) C16 Growth rate of overseas direct investment over previous year (%) C21 Imports C22 Growth rate of imports over previous year (%) C23 Percentage of imports in GDP C24 Exports C25 Growth rate of exports over previous year (%) B2 Goods Transnational flows (Weight: 0.25) C26 Percentage of exports in GDP C31 Number of inbound foreign visitors C32 Growth rate of inbound foreign visitors over previous year (%) C33 Foreign exchange earnings from inbound foreign tourism C34 Growth of the foreign exchange earning from inbound foreign tourism (%) C35 Foreign exchange earning from inbound foreign tourism in GDP (%) C36 Year-end number of outbound labor contracted C37 Accomplished revenue from engineering projects, labor contracts, and design consultation with foreign countries and regions C38 Growth of Accomplished business revenue through contracted overseas engineering projects and labor contracts over previous year (%) C39 Number of outbound visitors on official purposes B3 People Transnational flows (Weight: 0.25) C310 Number of sister cities with foreign counterparts 113 Table 5.1 Continued Sub Indexes Indicators C41 Number of internet users C42 Growth rate of internet users over previous year (%) C43 Coverage of Internet users of the province population C44 Talking hours of outgoing calls to foreign countries 57 C45 Growth of talking hours of international calls over previous year (%) C46 Coverage of fixed Telephone subscribed of the province population C47 Coverage of mobile phone users of the province population B4 Information Transnational flows (Weight: 0.25) C48 Number of internet websites People Transnational Flows (B3) indicates the achievements of the provincial governments in promoting the transnational flows of personnel, encouraging multilateral official visits, enhancing the economic and trade cooperation and cultural exchanges, increasing the labor export as well as improving the capability to earn foreign exchange through inbound foreign tourism, etc. It consists of ten indicators. Transnational Inflow: The number of inbound foreign visitors (C31) 58 and its growth rate (C32) indicate the inflow of foreign visitors and its development potential respectively. Foreign exchange earnings from inbound foreign tourism (C33) and its growth rate (C34) indicate the benefit from foreign tourism and its development potential respectively. Percentage of foreign exchange earning from foreign tourism (C35) in the provincial GDP reflects the contribution of inbound foreign tourism to the local 114 economy. Transnational Outflow: the number of labor working abroad as contracted workers at the year-end (C36) indicates the degree of labor export. Accomplished revenue from engineering projects, labor contracts, and design consultation with foreign countries and regions (C37) and its growth rate (C38) reflects the benefit from labor outflow and its development potential respectively. The number of outbound visitors on official duty (C39) 59 shows the frequency of overseas visits by the officials working in local governments or provincial-own enterprises. Two-way transnational flows: number of international sister cities (C40) indicates the formal and frequent exchanges between the provincial subnational governments and their counterparts. Information Transnational Flows (B4) indicates the governments’ achievements in improving telecommunication and relevant facilities. Different from capital, goods or people’s flow, information flow is rather difficult to measure as data. Eight third-grade indicators are selected to demonstrate three dimensions related to information transnational flow. They are verbal information exchange via various types of telephones, written information exchange via Internet, and local telecommunication facilities. Internet: the number of internet users at the year-end (C41), its growth rate （C42） and percentage of internet users to the population of the province (C43) indicate the scale of 115 internet use, the development potential of internet and the popularization of internet respectively. International call: Talking hours of out-going call to foreign countries (C44) reflects the amount of information transnational flow via various kinds of telephones. The growth of the talking hours (C45) reveals the development potential. Telecommunication facilities: popularization/coverage of fixed telephone (C46), popularization of mobile phones (C47) and number of internet websites (C48) indicate indirectly the financial input of the provincial governments to the facilities necessary for information transnational flows respectively. 116 Chapter Five Endnotes 52 Scores of the 10 major powers are as follows: U.S (98.64), Russia (87.46), France (82.12), U.K (78.52), China (78.52), Germany (72.25), Japan (66.57), Canada (61.14), Korea (54.35), and India (50.42). 53 <http://globalization.kof.ethz.ch/>. 54 Other famous index of economic freedom includes Report on Economic Freedom issued by The Frazer Institute of Canada and Annual Report on World Economic Freedom by The Cato Institute of U. S. However, different institutes have different methods for establishing the indices. 55 Ma, Yufeng. “Singapore with coexisting internationalization and tradition.” Forum on United Morning Newspaper <http:// www. zaobao. com/ special/china/general/ letter091203.html>. 56 Kincaid (1999:121) also complains that data on the attitudes of American state officials are not available. 57 It includes the international calls with fixed telephones, mobile phones and IP telephones. 58 According to the State Statistics Bureau, the term of foreign visitors refers to foreigners, overseas Chinese, Chinese compatriots from Hong Kong, Macao and Taiwan coming to provincial regions for sightseeing, visits, tours, family reunion, vacations, study tours, conferences and other activities of a business, scientific and technological, cultural, education and religious nature. It does not include representatives and employees of resident institutions of foreign countries such as embassies, consulates, news agencies and offices of foreign companies and organizations, nor does it includes long-term foreign experts or students residing in the provincial regions, or persons in transition without spending a night in though regions. 59 Chinese citizens going abroad can be divided into two categories. Most people are for private purpose and holding private passports. Others are on official duty and holding business passports. Most provinces have not yet released their data either for private or official duty as the data is regarded as internal-used. This study uses the data of labors working abroad from each province to reflect the situation of private visitors 117 abroad. The data of visitors on official duties with local application for visa is employed to indicate the situation of official visitors. According to the official statistics about visitors abroad in the whole country (excluding Hong Kong, Macao and Taiwan), those who are on the official duty with locally applied visa accounts around 17% of the total visitors abroad on official duty in each province. Before 1999, the number of going abroad on official duty is far much bigger than that for private purpose. Since China simplified the procedures for its citizens to apply private passports in 2000, the number of visitors for private purpose has gradually exceeded that for official duty. The data from the Statistical Report on the Socioeconomic Development of China in 2006 shows that the number of visitors for private purpose in 2006 reached 83.4％from 41％in 1992. 118 Chapter Six Evaluation of FACPG during 2004-2006 Based on the theoretical framework and Index of FACPG established in previous chapters, this chapter reports the results from Principal Component Analysis (PCA) approach to derive indicators of FACPG by analyzing the transnational flow of goods, capital, people and information in the period from 2004 to 2006. Software like SPSS 13.0 for Windows and Excel are used to process the official data collected. 6.1 Interpretation of the Evaluation of FACPG in 2006 To shorten the length of the paper, only the processing steps concerning the goods transnational flow are illustrated here. To evaluate transnational flow of goods in China’s provinces, six indicators are selected. They are import value, growth rate of import over previous year, percentage of import value in GDP, export value, growth rate of export value over previous year, and percentage of export value in GDP. The former and the latter three indicators respectively represent the transnational inflow and outflow of goods. The data process is as follows: Step 1: Standardization of the raw data, i.e. transform raw data into standard ones through the process explained in the last part of my Chapter Five. For example, the raw data in Table 6.1 are transformed into standardized data in Table 6.2 after standardization. 119 Table 6.1 The Raw Data of Transnational Flow of Goods in 2006 Provinces Import ($10000) Growth Rate of Import % of Import in GDP Export ($10000) Growth Rate of Export % of Import in GDP Anhui 542077 37.9 7.06 683833 31.8 8.91 Beijing 12019305 27.0 124.55 3797921 23.0 39.36 Chongqin 211867 19.5 4.86 335192 33.0 7.69 Fujian 2139783 9.3 22.82 4126491 18.4 44.01 Gansu 231053 50.1 8.12 150960 38.4 5.31 Guangdong22526319 18.7 69.40 30195337 26.8 93.02 Guangxi 307352 33.3 5.12 359297 24.9 5.99 Guizhou 57836 6.2 2.04 103844 20.9 3.66 Hainan 147045 -3.2 11.18 137562 34.5 10.46 Hebei 569402 10.6 3.92 1284022 17.5 8.84 Heilong jiang 442058 26.4 5.69 843598 39.0 10.86 Henan 316154 19.9 2.03 669575 31.6 4.30 Hubei 550211 18.9 5.87 626068 41.4 6.68 Hunan 225721 0.2 2.41 509182 35.9 5.44 Inner Monglia 381792 23.1 6.38 214092 20.7 3.58 Jiangsu 12357660 17.7 45.88 16041885 30.5 59.56 Jiangxi 244048 50.2 4.23 375307 53.9 6.50 Jilin 491736 21.1 9.26 299670 21.5 5.64 Liaoning 2007189 14.2 17.35 2831918 20.8 24.47 Ningxia 49450 77.1 5.60 94346 37.2 10.68 Qinghai 11752 30.4 1.47 53422 65.3 6.67 Shaanxi 173123 15.4 3.16 362976 18.0 6.62 Shandong 3661492 19.6 13.41 5859978 27.1 21.46 120 Table 6.1 Continued Provinces Import ($10000) Growth Rate of Import (%) % of Import in GDP Export ($10000) Growth Rate of Export (%) % of Import in GDP Shanghai 11393834 19.2 88.5211359127 25.2 88.25 Shanxi 248749 23.3 4.83 414030 17.3 8.04 Sichuan 439693 37.4 4.07 662406 40.9 6.13 Tianjin 3098218 19.6 57.14 3350187 22.4 61.79 Tibet 10618 164.9 2.93 22222 34.4 6.13 Xinjiang 196404 -32.3 5.20 713923 41.7 18.92 Yunnan 284035 35.1 5.68 339143 28.4 6.78 Zhejiang 3825385 25.1 19.56 10089771 31.4 51.58 Table 6.2 Standardized Data of Transnational Flow of Goods in 2006 Provinces Import Growth Rate of Export % of Import in GDP Export Growth Rate of Export % of Import in GDP Anhui -0.39427 0.346 -0.39107-0.388110.09451 -0.47643 Beijing 1.85534 0.00112 3.668320.10677-0.71119 0.73538 Chongqin -0.45899 -0.23618 -0.46708-0.443510.20438 -0.52498 Fujian -0.08111 -0.5589 0.153450.15899-1.13235 0.92044 Gansu -0.45523 0.732 -0.35445-0.472790.69878 -0.6197 Guangdong 3.91479 -0.26149 1.76284 4.30176-0.36327 2.87088 Guangxi -0.44028 0.20045 -0.4581-0.43968-0.53723 -0.59264 Guizhou -0.48919 -0.65698 -0.56452-0.48028-0.90346 -0.68537 Hainan -0.4717 -0.9544 -0.24872-0.474920.34171 -0.41475 Hebei -0.38891 -0.51777 -0.49956 -0.29273 -1.21475 -0.47922 Heilongjiang -0.41388 -0.01786 -0.43841 -0.36272 0.75372 -0.39883 Henan -0.43855 -0.22352 -0.56486-0.390370.0762 -0.6599 Hubei -0.39268 -0.25516 -0.43219-0.397290.97345 -0.56518 Hunan -0.45628 -0.84682 -0.55173-0.415860.46989 -0.61453 Inner Magn olia -0.42569 -0.12227 -0.41457 -0.46276 -0.92177 -0.68855 Jiangsu 1.92166 -0.29313 0.95022.05254-0.02451 1.53928 Jiangxi -0.45269 0.73517 -0.48885-0.437142.11791 -0.57234 121 Table 6.2 Continued Provinces Import Growth Rate of Export % of Import in GDP Export Growth Rate of Export % of Import in GDP Jilin -0.40414 -0.18555-0.31506-0.44916-0.84852 -0.60657 Liaoning -0.1071 -0.40387 -0.03554-0.04674-0.91261 0.14281 Ningxia -0.49083 1.58627 -0.44152 -0.48179 0.58892 -0.40599 Qinghai -0.49822 0.1087 -0.58421-0.488293.16166 -0.56558 Shaanxi -0.46659 -0.3659 -0.52582-0.4391-1.16897 -0.56757 Shandong 0.21716 -0.23301 -0.171670.43447-0.33581 0.02302 Shanghai 1.73275 -0.24567 2.423451.30837-0.50976 2.68105 Shanxi -0.45177 -0.11594 -0.46812-0.43098-1.23306 -0.51106 Sichuan -0.41434 0.33018 -0.49438-0.391510.92768 -0.58707 Tianjin 0.10675 -0.23301 1.339240.03562-0.76612 1.62802 Tibet -0.49844 4.36424-0.53377-0.493250.33256 -0.58707 Xichuan -0.41434 0.33018 -0.49438-0.391510.92768 -0.58707 Xinjiang -0.46203 -1.87511 -0.45534 -0.38333 1.00092 -0.07807 Yunnan -0.44485 0.2574 -0.43875-0.44288-0.21678 -0.5612 Zhejiang 0.24928 -0.05899 0.040811.106650.05789 1.2217 Step 2: Establishing the correlation matrix. (Table 6.3) Step 3: Use the correlation matrix to calculate the eigenvalues, eigenvector and the principal component’s contribution rate to decide how many principal components should be extracted. (Table 6.4) 122 Table 6.3 Correlation Matrix of Transnational Flow of Goods in 2006 Import Growth Rate of Import % of Import in GDP Export Growth Rate of Export % of Export in GDP Import 1.000 -.109 .813 .929 -.198 .861 Growth rate of import -.109 1.000 -.100-.125 .186 -.167 % of import in GDP .813 -.100 1.000.583 -.269 .785 Export .929 -.125 .5831.000 -.160 .859 Growth rate of export -.198 .186 -.269-.160 1.000 -.241 % of export in GDP .861 -.167 .785.859 -.241 1.000 Table 6.4 Total Variance Explained of Flow of Goods in 2006 Initial Eigenvalues Extraction Sums of Squared Loadings Total % of Variance Cumulative % Total 3.528 58.795 58.795 3.528 1.095 18.257 77.052 1.095 0.82 13.669 90.721 0.82 0.409 6.81 97.531 0.145 2.425 99.956 0.003 0.044 100 Extraction Method: Principal Component Analysis In Table 6.4, the principal component’s eigenvalues and contribution rates of variance are descending. Table 6.4 shows that the first three principal components can explain 90.72% 123 of the total variances. Following the instruction of Jolliffe (1986) and Rencher (1995) that the accumulative contribution rates usually should be higher than 85%, this study extracts 3 principal components. Step 4: Calculate the coefficient of principal components and fix their matrixes. After the above process, initial loading matrix (Table 6.5) and principal component matrix (Table 6.6) are figured out. Table 6.5 Initial Loading Matrix of Transnational Flow of Goods in 2006 Component 1 2 3 Import .965.151.041 Growth Rate of Import -.207 .774 -.596 % of Import in GDP .856 .043 -.113 Export .904.153.122 Growth Rate of Export -.329 .666 .659 % of Export in GDP .947 .062 .042 Table 6.6 Principal Component Matrix of Flow of Goods in 2006 Component 1 2 3 Import 0.5140.1440.045 Growth Rate of Import -0.11 0.74 -0.658 % of Import in GDP 0.456 0.041 -0.125 Export 0.4810.1460.135 Growth Rate of Export -0.175 0.636 0.728 % of Export in GDP 0.504 0.059 0.046 124 Transnational Flow of Goods in 2006. To evaluate transnational flow of goods in China’s provinces, six indicators are selected. They are: (1) FDI actually used, (2) Per-capita FDI actually used, (3) Growth rate of FDI actually used over previous year, (4) overseas direct investment by the local individuals and companies, (5) Per-capita overseas direct investment, and (6) Growth rate of overseas direct investment over previous year. The former three indicators and the latter three respectively represent the transnational inflow and outflow of capital. By PCA, the initial loading matrix and three principal components reflecting the capital transnational flow are obtained. Table 6.5 and 6.6 show that F1 primarily describes import value, export value, and their percentage in GDP; F2 and F3 describes growth rate of both import and export. In other words, the ranks of transnational flow of goods primarily depend on import value, export value, their percentage in GDP, growth rate of import and export. The principal component matrixes are as follows: F 1 ＝0.514zx 1 -0.11zx 2 +0.456zx 3 +0.481zx 4 -0.175zx 5 +0.504zx 6 F 2 ＝0.144zx 1 +0.74zx 2 +0.041zx 3 +0.146zx 4 +0.636zx 5 +0.059zx 6 F 3 ＝0.045zx 1 -0.658zx 2 -0.125zx 3 +0.135zx 4 +0.728zx 5 +0.046zx 6 Then we get a comprehensive principal component matrix by using the principal component functions：F=0.5880F 1 +0.1826F 2 +0.1367F 3. 125 Step 5: Calculate the score of each principal component and the total score, and rank the FACPG according to the score. (Table 6.7 and Figure 6.1). 0 0.2 0.4 0.6 0.8 1 Shaanxi Guizhou Shanxi Inner Hebei Jilin Guangxi Yunnan Henan Tibet Chongqing Anhui Hunan Hainan Ningxia Gansu Sichuan Liaoning Heilongjiang Hubei Xinjiang Jiangxi Fujian Shandong Qinghai Tianjin Zhejiang Beijing Jiangsu Shanghai Guangdong provinces score of transnational flow of goods Figure 6.1 Ranks of Transnational Flow of Goods in the Provinces in 2006 Table 6.7 and Figure 6.1 show there is great disparity in goods transnational flow in China’s 31 provinces. Guangdong, Shanghai and Jiangsu rank the top three. 126 Table 6.7 Scores and Ranks of Transnational Flow of Goods in 2006 Provinces F1 Ranks F2 Ranks F3 Ranks F Ranks Guangdong 3.42 1 0.97 5 0.64 7 2.28 1 Shanghai 2.18 2 0.18 12 -0.15 16 1.29 2 Jiangsu 1.71 3 0.45 8 0.54 9 1.17 3 Beijing 1.69 4 0.02 14 -0.93 29 0.87 4 Zhejiang 0.69 6 0.25 10 0.32 11 0.49 5 Tianjin 0.89 5 -0.47 20 -0.54 22 0.36 6 Qinghai -0.86 31 1.81 2 2.41 1 0.16 7 Shandong 0.18 8 -0.28 17 0.00 14 0.05 8 Fujian 0.44 7 -1.01 28 -0.46 21 0.01 9 Jiangxi -0.75 29 1.63 3 1.12 3 0.01 10 Xinjiang -0.34 11 -0.86 26 2.14 2 -0.06 11 Hubei -0.54 25 0.25 11 0.92 5 -0.15 12 Heilongjiang -0.49 21 0.30 9 0.58 8 -0.15 13 Liaoning 0.10 9 -0.86 25 -0.44 20 -0.16 14 Sichuan -0.60 26 0.63 7 0.46 10 -0.17 15 Gansu -0.61 27 0.76 6 -0.05 15 -0.22 16 Ningxia -0.62 28 1.30 4 -0.74 28 -0.23 17 Hainan -0.40 15 -0.63 22 0.89 6 -0.23 18 Hunan -0.52 23 -0.49 21 0.95 4 -0.27 19 Anhui -0.46 18 0.15 13 -0.22 17 -0.27 20 Chongqing -0.50 22 -0.22 16 0.28 12 -0.29 21 Xizang -0.84 30 3.10 1 -2.96 31 -0.33 22 Henan -0.53 24 -0.29 18 0.19 13 -0.34 23 Yunnan -0.49 20 -0.12 15 -0.42 19 -0.37 24 Guangxi -0.46 19 -0.36 19 -0.63 25 -0.43 25 Jilin -0.37 13 -0.81 23 -0.62 24 -0.45 26 Hebei -0.29 10.00 -1.25 31 -0.62 23 -0.48 27 Inner Mongolia -0.43 16.00 -0.83 24 -0.72 27 -0.50 28 Shanxi -0.36 12.00 -1.00 27 -0.95 30 -0.53 29 Guizhou -0.45 17.00 -1.21 30 -0.30 18 -0.53 30 Shaanxi -0.39 14.00 -1.15 29 -0.72 26 -0.54 31 127 Transnational Flow of Capital in 2006. To evaluate transnational flow of capital, six indicators are selected. They are (1) FDI actually used; (2) Per-capita FDI actually used; (3) Growth rate of FDI actually used; (4) Overseas direct investment; (5) Per-capita overseas direct investment; (6) Growth rate of overseas direct investment. The former three indicators represent transnational inflow of capital, while the next three represent transnational outflow of capital. Table 6.8 Initial Loading Matrix of Transnational Flow of Capital in 2006 Component 1 2 3 FDI actually used .928 .046 -.002 Per-capita FDI actually used .681 -.490 -.447 Growth rate of FDI actually used -.275 .520 -.477 Outward direct investment .832 .009 .033 Per-capita outward direct investment .482 .693 .458 Growth rate of outward direct investment -.153 -.601 .480 Table 6.8 shows that F1 primarily represents FDI actually used, Per-capita FDI, and Outward direct investment; F2 represents Growth rate of FDI and Per-capita outward direct investment; F3 represents growth rate of outward direct investment. 128 Table 6.9 Scores and Ranks of Capital Transnational Flow in 2006 Provinces F1 Rank1 F2 Rank2 F3 Rank3 F Rank Guangdong 3.0522 1 0.70683 7 1.06186 5 1.97877 1 Jiangsu 2.07784 2 0.37916 12 -0.1310116 1.15453 2 Shandong 1.21555 4 0.82732 6 1.14184 2 1.08648 3 Henan -0.0616 12 1.55767 1 0.864527 0.59434 4 Zhejiang 1.21162 5 -0.21528 22 -0.04758 15 0.54938 5 Sichuan -0.15312 14 0.97115 4 1.13267 3 0.42449 6 Hunan 0.00118 11 0.61635 8 0.81076 8 0.33739 7 Heilongjiang0.47323 8 -0.07351 21 0.44382 11 0.30561 8 Hebei -0.11549 13 0.4884310 1.080694 0.29087 9 Shanghai Fujian 1.78062 0.75199 3 6 -1.64483 -0.63335 30 24 -1.47772 -0.39941 28 22 0.14606 0.12255 10 11 Hubei -0.20716 15 0.2947714 0.7095310 0.11584 12 Liaoning 0.33081 10 0.29931 13 -0.83339 27 0.10017 13 Anhui Jiangxi -0.60299 -0.2318 21 16 1.5328 0.02316 2 19 -0.68192 0.26402 24 12 0.01499 -0.06199 14 15 Guangxi -0.50624 17 0.12629 16 0.77329 9 -0.07556 16 Guizhou -0.58027 19 -0.24339 23 1.02717 6 -0.17487 17 Yunnan -0.72584 25 0.89197 5 -0.3825221 -0.18111 18 Shaanxi -0.68354 22 0.42856 11 -0.23631 19 -0.26894 19 Shanxi -0.70537 23 0.54357 9 -0.7193226 -0.33787 20 Jilin Beijing -0.58033 0.4525 20 9 0.08467 -1.06449 17 28 -0.5486 -1.55151 23 29 -0.37721 -0.37802 21 22 Chongqing -0.71725 24 0.06467 18 -0.15492 17 -0.37863 23 Inner Mongolia -0.52861 18 -0.007 20 -0.68609 25 -0.40396 24 Gansu -0.86488 28 0.25271 15 -0.2905920 -0.4245 25 Tianjin 0.5423 7 -1.6017429 -1.9679231 -0.57029 26 Xinjiang Ningxia -1.18314 -0.81075 31 27 1.06447 -0.76896 3 25 -1.75213 0.02786 30 14 -0.62518 -0.63896 27 28 Qinghai -0.75347 26 -0.83473 27 -0.16995 18 -0.66663 29 Xizang -0.92409 29 -0.77119 26 0.08888 13 -0.68622 30 Hainan -0.95389 30 -3.29538 31 2.60397 1 -0.97153 31 129 Table 6.9 shows a remarkable imbalance of capital transnational flow. Guangdong, Jiangsu and Shandong ranked at top three. Fujian, ranked 11 th in the country, bears distinctive advantages in attracting foreign investments, but per-capita overseas direct investment by the local investors and its growth rate are rather weak. Transnational Flow of People in 2006. To evaluate transnational flow of people, ten indicators are selected. They are: (1) Number of inbound foreign visitors; (2) Growth rate of inbound foreign visitors over previous year; (3) Foreign exchange earnings from inbound foreign tourism; (4) Growth rate of the foreign exchange earning from inbound foreign tourism; (5) Foreign exchange earning from inbound foreign tourism in GDP; (6) Year-end number of outbound labor contracted; (7) Accomplished revenue from engineering projects, labor contracts, and design consultation with foreign countries and regions; (8) Growth of accomplished revenue from engineering projects, labor contracts, and design consultation with foreign countries and regions; (9) Number of outbound visitors on official purposes; and (10) Number of sister cities with foreign counterparts. The former five indicators represent the transnational inflow of people while the next four and the last one respectively represent the outflow of people and two-way flow of people. 130 Table 6.10 Initial Loading Matrix of Transnational Flow of People in 2006 Component 1 2 3 Number of inbound foreign visitors .807 -.218 .213 Growth rate of inbound foreign visitors -.371 .664 .360 Foreign exchange earnings from inbound foreign tourism .920 -.270 .174 Growth rate of the foreign exchange earning from inbound foreign tourism -.222 .383 .817 Foreign exchange earning from inbound foreign tourism in GDP .604 -.487 .372 Year-end number of outbound labor contracted .617 .657 -.255 Accomplished revenue from the economic cooperation abroad .934 .179 -.013 Number of outbound visitors on official purposes .883 .037 .050 Number of sister cities with foreign counterparts .690 .642 -.169 Table 6.10 shows that F1 primarily represents revenue from outbound economic cooperation, foreign exchange earnings from inbound foreign tourism, inflow and outflow people; F2 represents growth rate of inbound foreign visitors; F3 represents growth rate of foreign exchange earning from inbound foreign tourism. Table 6.11 Scores and Ranks of Transnational Flow of People in 2006 Provinces F1 Rank1 F2 Rank2 F3 Rank3 F Rank Jiangsu 2.264683 2.540671 -1.1138729 1.83211 1 Guangdong 3.13688 1 -1.4186230 1.27669 5 1.75325 2 Shanghai 2.3903 2 -1.2173129 -0.0975414 1.1445 3 Shandong 0.842786 2.259082 -0.5956123 0.97464 4 Zhejiang 1.03388 4 0.38388 13 0.32228 10 0.77046 5 131 Table 6.11 Continued Provinces F1 Rank1 F2 Rank2 F3 Rank3 F Rank Liaoning 0.371027 1.044063 -0.1249415 0.46143 6 Heilongjiang Beijing -0.38155 0.96455 17 5 0.84656 -2.13252 4 31 1.28903 0.56424 4 8 0.16437 0.15174 7 8 Hainan Fujian -0.58141 0.31531 24 8 -0.05316 -0.21992 15 16 3.10045 -0.61306 1 24 0.09169 0.04776 9 10 Hunan -0.46689 20 0.7585 6 0.67916 7 0.00078 11 Sichuan -0.3720616 0.675579 0.2930911 -0.01876 12 Henan -0.3862618 0.728227 -0.0764913 -0.06926 13 Anhui Shanxi Jiangxi -0.32851 -0.8314 -0.72554 14 30 28 0.59226 0.76525 0.67577 10 5 8 -0.16448 1.38113 0.82101 16 3 6 -0.0802 -0.11564 -0.15582 14 15 16 Hubei -0.38931 19 0.41191 12 -0.40141 20 -0.19614 17 Jilin -0.2762112 0.5477811 -1.1025128 -0.19792 18 Yunnan -0.2720410 -0.4138720 0.351859 -0.21427 19 Tianjin -0.2953813 -0.4038718 0.0932712 -0.26429 20 Hebei -0.27275 11 0.00432 14 -0.92394 27 -0.30164 21 Xizang -0.7612129 -0.3205417 1.44432 -0.32777 22 Shaanxi -0.24095 9 -0.53071 23 -0.66664 25 -0.37441 23 Guangxi -0.35518 15 -0.51135 22 -0.41764 21 -0.40241 24 Inner Mongolia -0.57569 23 -0.40605 19 -0.29177 18 -0.49242 25 Chongqing -0.49668 21 -0.67238 24 -0.49662 22 -0.53942 26 Xinjiang Qinghai Guizhou -0.62284 -0.84076 -0.69947 25 31 27 -0.67357 -0.41981 -0.76479 25 21 26 -0.22357 -0.31459 -0.67056 17 19 26 -0.57612 -0.6605 -0.71108 27 28 29 Gansu -0.50723 22 -0.99395 27 -1.62835 30 -0.79147 30 Ningxia -0.64008 26 -1.08141 28 -1.69289 31 -0.90317 31 Transnational Flow of Information in 2006. To evaluate transnational flow of information, eight indicators are selected. They are: (1) Number of internet users, (2) Growth rate of internet users over previous year, (3) Coverage of Internet users of the 132 province population, (4) Talking hours of out-going calls to foreign countries, (5) Growth rate of talking hours of international calls over previous year, (6) Coverage of fixed Telephone subscribed of the province population, (7) Coverage of mobile phone users of the province population, and (8) Number of Internet websites. The former three indicators represent the local level of Internet utility and coverage, the next two and the last three respectively reflect the situation of international calls and telecommunication facilities. (Table 6.12 and 6.13) Table 6.12 Initial Loading Matrix of Flow of Information in 2006 Component 1 2 3 Number of internet users .652 -.199 .673 Growth rate of internet users -.344 .681 -.017 Popularity of Internet users (percentage in population) .908 .095 -.311 Talking hours of outgoing calls to foreign countries .927 .053 .176 Growth rate of talking hours of international calls .021 .818 .296 Popularity of fixed Telephone subscribed .887 .212 -.293 Popularity of mobile phone users .942 .041 -.268 Number of internet websites .933 -.016 .193 Table 6.12 shows that F1 represents popularity of mobile phone users, Number of internet websites, Talking hours of outgoing calls to foreign countries, Popularity of Internet users; F2 presents Growth rate of talking hours of international calls and Growth rate of internet users; F3 represents Number of internet users. 133 Table 6.13 Scores and Ranks of Transnational Flow of Information in 2006 Provinces F1 Rank1 F2 Rank2 F3 Rank3 F Rank Guangdong 2.65343 1 -0.14908 21 3.07636 1 2.20385 1 Shanghai Beijing 2.46841 2.63243 3 2 0.58863 0.12278 6 16 -1.42072 -1.73305 29 30 1.64197 1.63308 2 3 Zhejiang 1.21849 4 0.41645 8 -0.0260316 0.91806 4 Jiangsu Fujian 0.78089 0.54055 5 7 0.102 -0.08481 17 20 1.01816 -0.45335 3 22 0.68894 0.30334 5 6 Shandong 0.33137 8 -0.83576 26 1.6024 2 0.28187 7 Liaoning 0.19392 9 0.1682513 -0.1905920 0.14095 8 Xinjiang Tianjin -0.28349 0.62659 13 6 1.34438 -0.76462 3 24 0.07342 -2.19065 15 31 0.05344 0.02263 9 10 Hubei -0.2539 12 0.1846611 0.898314 -0.03029 11 Hainan -0.5125 20 2.245592 -0.6615725 -0.03644 12 Hebei -0.23757 10 -0.0758319 0.673297 -0.09398 13 Shanxi -0.41834 18 0.836665 0.100414 -0.12794 14 Shaanxi -0.31981 16 0.33228 9 0.2381813 -0.13264 15 Xizang -0.991 30 2.518311 -0.1246717 -0.25245 16 Heilongjiang -0.24937 11 -0.56167 23 -0.16146 19 -0.29434 17 Anhui -0.58764 23 0.1265515 0.562128 -0.31489 18 Jiangxi -0.77517 29 0.991944 0.3515711 -0.31642 19 Yunnan -0.67825 27 0.1659514 0.829645 -0.33713 20 Gansu -0.69282 28 0.448657 0.2666212 -0.36735 21 Jilin -0.31013 14 -0.31537 22 -0.75973 26 -0.36762 22 Sichuan -0.31866 15 -1.3782528 0.70295 6 -0.38025 23 Inner Mongolia -0.6118 25 0.28099 10 -0.35277 21 -0.41905 24 Hunan -0.52984 21 -0.7711625 0.3665710 -0.46038 25 Qinghai -0.65903 26 0.18277 12 -0.49188 23 -0.48698 26 Henan -0.55438 22 -0.8686927 0.375879 -0.49375 27 Ningxia -0.59424 24 -0.05027 18 -0.78272 27 -0.52036 28 Guangxi -0.49794 19 -1.55842 29 -0.13254 18 -0.64223 29 Chongqing -0.36575 17 -1.81435 30 -1.09716 28 -0.71763 30 Guizhou -1.00444 31 -1.82854 31 -0.557 24 -1.096 31 134 Table 6.13 shows that Guangdong has a prominent edge over other provinces and with Shanghai and Beijing closely running after it. The middle and western provinces take the back seats. Fujian, ranks 6 th in the country, bears some advantages in infrastructures, but the number of internet users and talking hours of outgoing calls to foreign countries are weak. Overall Evaluation of FACPG of 2006 To get the final comprehensive scores and ranks of FACPG in 2006, the four-dimension scores calculated above are put together and processed using the method of Principal Component Analysis as well. Table 6.14 Initial Loading Matrix of FACPG in 2006 Component 1 Transnational flow of Capital .920 Transnational flow of Goods .797 Transnational flow of People .942 Transnational flow of Information .897 F in Table 6.14 represents the transnational flow of four agents of globalization. It is also the final indicator of FACPG. Table 6.15, 6.16 and Figure 6.2 demonstrate that Guangdong’s is far better than its 30 counterparts in Mainland China. Jiangsu, Shanghai, Zhejiang, Shandong and Beijing are better than others. 135 Table 6.15 Ranks of Overall FACPG in 2006 Provinces Goods Flow Capital Flow People Flow Information Flow F Comprehensive FACPG Guangdong 1 1 2 1 2.80315 1 Jiangsu 3 2 1 5 1.94827 2 Shanghai 2 10 3 2 1.45291 3 Zhejiang 5 5 5 4 0.99198 4 Shandong 8 3 4 7 0.9647 5 Beijing 4 22 8 3 0.61049 6 Liaoning 14 13 6 8 0.36005 7 Fujian 9 11 10 6 0.22165 8 Heilongjiang 13 8 7 17 0.09453 9 Sichuan 15 6 12 23 0.03555 10 Hubei 12 12 17 11 -0.02652 11 Henan 23 4 13 27 -0.05994 12 Hunan 19 7 11 25 -0.08189 13 Tianjin 6 26 20 10 -0.08784 14 Jiangxi 10 15 16 19 -0.20301 15 Hebei 27 9 21 13 -0.22931 16 Anhui 20 14 14 18 -0.23775 17 Yunnan 24 18 19 20 -0.31406 18 Hainan 18 31 9 12 -0.32402 19 Shanxi 29 20 15 14 -0.40728 20 Xinjiang 11 27 27 9 -0.4596 21 Shaanxi 31 19 23 15 -0.51581 22 Jilin 26 21 18 22 -0.5332623 Guangxi 25 16 24 29 -0.56547 24 Xizang 22 30 22 16 -0.58942 25 Qinghai 7 29 28 26 -0.64464 26 Gansu 16 25 30 21 -0.70627 27 Inner Mongolia 28 24 25 24 -0.79969 28 Chongqing 21 23 26 30 -0.85186 29 Ningxia 17 28 31 28 -0.89992 30 Guizhou 30 17 29 31 -0.94572 31 136 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1 Guizhou Ningxia Chongqing Inner Gansu Qinghai Tibet Guangxi Jilin Shaanxi Xinjiang Shanxi Hainan Yunnan Anhui Hebei Jiangxi Tianjin Hunan Henan Hubei Sichuan Heilongjiang Fujian Liaoning Beijing Shandong Zhejiang Shanghai Jiangsu Guangdong province score of FACPG Figure 6.2 Ranks of FACPG in 2006 0 10 20 30 40 50 60 70 80 90 100 Guangdong Jiangsu Shanghai Zhejiang Shandong Beijing Fujian Liaoning Heilongjiang Sichuan Goods Flow capital flows people flows information flows Figure 6.3 FACPG of the Top Ten Provinces in 2006 137 Figure 6.3 shows that among the top ten are three municipalities directly under the national government and seven coastal provinces. Bejing and Shanghai are especially strong in people flow; Guangdong, Jiangsu and Shandong are especially strong in capital flow. Among its four agencies of globalization, people flow is not remarkable in Guangdong. 6.2 Dynamic Analysis of FACPG during 2004-2006 By analyzing the data of 2004-2006, we can clearly see the change and potential of FACPG through each dimension during the three years. For the sake of space economy, here only final ranks based on their comprehensive scores in 2004 and 2005 are displayed. Their detailed scores and ranks are provided in the appendices. Table 6.16 Rank Change of Transnational Flow of Goods (2004-2006) Provinces 2004 2005 2006 Rank Change Anhui 14 13 20 －6 Beijing 22 2 4 18 Chongqing 23 17 21 2 Fujian 11 8 9 2 Gansu 25 26 16 9 Guangdong 1 1 1 0 Guangxi 16 19 25 －9 Guizhou 17 29 30 －13 Hainan 31 28 18 13 Hebei 9 23 27 －18 138 Table 6.16 Continued Provinces 2004 2005 2006 Rank Change Heilongjiang 8 9 13 —5 Henan 4 21 23 －19 Hubei 12 14 12 0 Hunan 7 24 19 －12 Inner Mongolia 24 15 28 －4 Jiangsu 2 4 3 －1 Jiangxi 15 20 10 5 Jilin 21 12 26 －5 Liaoning 13 11 14 －1 Ningxia 28 27 17 11 Qinghai 29 31 7 22 Shaanxi 19 16 31 －12 Shandong 3 10 8 －5 Shanghai 10 3 2 8 Shanxi 20 30 29 －9 Sichuan 6 25 15 －9 Tianjin 26 5 6 20 Xinjiang 27 7 11 16 Tibet 30 18 22 8 Yunnan 18 22 24 －6 Zhejiang 5 6 5 0 Table 6.16 shows that 28 provinces’ ranks of transnational flow of goods changed except Guangdong, Hubei and and Zhejiang. Qinghai and Henan experienced the biggest change. Qinghai’s ranks upped 22 places; Henan’s dropped 19 places. Table 6.17 shows that in the aspect of capital flow, Henan and Beijing experienced biggest changed in their ranks. Henan moved up 22 places and Beijing dropped down by 20 places. Ranks of Chongqing, Tibet and Yunnan remained unchanged. 139 Table 6.17 Rank Change of Transnational Flow of Capital（2004-2006） Provinces 2004 2005 2006 Rank Change Anhui 19 19 14 5 Beijing 2 3 22 －20 Chongqing 23 26 23 0 Fujian 14 13 11 －3 Gansu 16 5 25 －9 Guangdong 4 4 1 3 Guangxi 28 28 16 12 Guizhou 29 30 17 12 Hainan 21 20 31 －10 Hebei 12 11 9 3 Heilongjiang 11 8 8 3 Henan 26 2 4 22 Hubei 22 16 12 10 Hunan 25 10 7 18 Inner Mongolia 15 18 24 －9 Jiangsu 8 9 2 6 Jiangxi 24 14 15 9 Jilin 6 29 21 －15 Liaoning 5 21 13 －8 Ningxia 17 25 28 －11 Qinghai 27 22 29 －2 Shaanxi 13 24 19 －6 Shandong 10 7 3 7 Shanghai 1 1 10 －9 Shanxi 31 31 20 11 Sichuan 20 15 6 14 Tianjin 9 12 26 －19 Xinjiang 3 23 27 －24 Tibet 30 27 30 0 Yunnan 18 17 18 0 Zhejiang 7 6 5 2 140 Table 6.18 Rank Change of Transnational Flow of People（2004-2006） Provinces 2004 2005 2006 Rank Change Anhui 14 14 14 0 Beijing 9 6 8 1 Chongqing 26 23 26 0 Fujian 8 13 10 －2 Gansu 23 22 30 －7 Guangdong 2 1 2 0 Guangxi 20 16 24 －4 Guizhou 21 26 29 －8 Hainan 30 7 9 21 Hebei 11 30 21 －10 Heilongjiang 18 25 7 11 Henan 12 11 13 －1 Hubei 15 8 17 －2 Hunan 6 17 11 －5 Inner Mongolia 25 15 25 0 Jiangsu 1 2 1 0 Jiangxi 22 18 16 6 Jilin 13 20 18 －5 Liaoning 7 9 6 1 Ningxia 28 27 31 －3 Qinghai 31 29 28 3 Shaanxi 16 21 23 －7 Shandong 4 5 4 0 Shanghai 3 3 3 0 Shanxi 17 10 15 2 Sichuan 10 28 12 －2 Tianjin 19 19 20 －1 Xinjiang 27 31 27 0 Xizang 29 24 22 7 Yunnan 24 12 19 5 Zhejiang 5 4 5 0 141 Table 6.19 Rank Change of Transnational Flow of Information（2004-2006） Provinces 2004 2005 2006 Rank Change Anhui 15 24 18 －3 Beijing 2 2 3 －1 Chongqing 25 29 30 －5 Fujian 8 7 6 2 Gansu 26 21 21 5 Guangdong 1 1 1 0 Guangxi 17 25 29 －12 Guizhou 27 31 31 －4 Hainan 22 8 12 10 Hebei 11 12 13 －2 Heilongjiang 14 18 17 －3 Henan 20 15 27 －7 Hubei 18 20 11 7 Hunan 21 26 25 －4 Inner Mongolia 24 19 24 0 Jiangsu 6 5 5 1 Jiangxi 28 22 19 9 Jilin 19 17 22 －3 Liaoning 9 9 8 1 Ningxia 30 30 28 2 Qinghai 29 13 26 3 Shaanxi 13 14 15 －2 Shandong 5 10 7 －2 Shanghai 3 3 2 1 Shanxi 12 11 14 －2 Sichuan 10 16 23 －13 Tianjin 7 6 10 －3 Xinjiang 16 28 9 7 Tibet 31 23 16 15 Yunnan 23 27 20 3 Zhejiang 4 4 4 0 142 Table 6.20 Rank Change of Overall FACPG（2004-2006） Provinces 2004 2005 2006 Rank Change Anhui 17 19 17 0 Beijing 3 3 6 －3 Chongqing 25 28 29 －4 Fujian 10 9 8 2 Gansu 24 12 27 －3 Guangdong 2 2 1 1 Guangxi 22 26 24 －2 Guizhou 28 31 31 －3 Hainan 27 15 19 8 Hebei 11 13 16 －5 Heilongjiang 13 10 9 4 Henan 18 8 12 6 Hubei 19 16 11 8 Hunan 16 14 13 3 Inner Mongolia 20 18 28 －8 Jiangsu 4 4 2 2 Jiangxi 26 17 15 11 Jilin 12 22 23 －11 Liaoning 7 11 7 0 Ningxia 29 30 30 －1 Qinghai 30 29 26 4 Shaanxi 15 23 22 －7 Shandong 6 7 5 1 Shanghai 1 1 3 －2 Shanxi 23 24 20 3 Sichuan 14 20 10 4 Tianjin 8 6 14 －6 Xinjiang 9 25 21 －15 Tibet 31 27 25 6 Yunnan 21 21 18 3 Zhejiang 5 5 4 1 143 Table 6.18 shows seven provinces’ ranks maintained stable. Hainan and Hebei experienced the biggest change. Hainan moved up by 21 places and Hebei dropped down by 10 places. Table 6.19 shows that Tibet moved up by 15 places and Sichuan dropped down by 13 places. Guangdong, Inner Mongolia and Zhejiang’s ranks remained unchanged. Table 6.20 shows that 29 provinces’ overall FACPG changed during 2004-2006. Among them Jiangxi moved up by 11 places, Xinjiang and Jilin dropped down by 15 and 11 places, respectively. Ranks of Anhui and Liaoning remained the same for all three years. 6.3 Cluster Analysis of FACPG in 2006 Isometry Analysis. China’s 31 provinces can be classified into four categories according to their FACPG in 2006. d = (3.47417 + 1.05274) / 4 = 1.132. Group A: FACPG ranging from 2.342 to 3.474 Group B: FACPG ranging from 1.210 to 2.342 Group C: FACPG ranging from 0.078 to 1.210 Group D: FACPG ranging from -1.054 to 0.078 144 Table 6.21 Four Groups based on FACPG in 2006 Provinces Scores Ranks Grade Guangdong 3.47417 1 A Jiangsu 2.07926 2 B Shanghai 1.7935 3 B Zhejiang 1.14298 4 C Shandong 1.00106 5 C Beijing 0.94743 6 C Liaoning 0.22547 7 C Fujian 0.1929 8 C Heilongjiang 0.01299 9 D Sichuan -0.0624 10 D Hubei -0.12034 11 D Henan -0.13825 12 D Hunan -0.16591 13 D Tianjin -0.17253 14 D Jiangxi -0.21177 15 D Hebei -0.27254 16 D Anhui -0.27531 17 D Yunnan -0.46816 18 D Hainan -0.47108 19 D Shanxi -0.48022 20 D Xinjiang -0.51327 21 D Shanxi -0.57307 22 D Jilin -0.58862 23 D Guangxi -0.65451 24 D Xizang -0.67085 25 D Qinghai -0.67578 26 D Gansu -0.76403 27 D Inner Mongolia -0.77234 28 D Chongqing -0.80222 29 D Ningxia -0.9638 30 D Guizhou -1.05274 31 D 145 Cluster Analysis. Using Ward’s method and Squared Euclidean Distance, the provinces can be classified into six clusters by their overall FACPG in 2006. (Figure 6.4) Group One (1): Guangdong Group Two (2): Shanghai, Beijing Group Three (3): Jiangsu, Zhejiang , Shandong Group Four (10): Hebei, Liaoning, Heilongjiang, Anhui, Fujian, Jiangxi, Henan, Hubei, Hunan, and Sichuan Group Five (8): Tianjin, Shanxi, Jilin, Hainan, Y unnan, Tibet, Shaanxi, Xinjiang Group Six (7): Inner Mongolia, Guangxi, Chongqing, Guizhou, Gansu, Qinghai, Ningxia Figure 6.4 Cluster Analysis Based on Overall FACPG in 2006 146 6.4 The Regional and Geopolitical Features of FACPG The final evaluation results of FACPG in 2004-06 demonstrate strong regional and geographical features. Four groups by regions differed remarkably in FACPG. (Table 6.22) The Eastern group greatly exceeded other three groups, particularly the Western one. Eight Eastern provinces were among the top ten during the period observed. Ten among twelve Western provinces ranked among the last ten in FACPG in 2006. Table 6.23 indicates geographical advantages had notable influence on FACPG. Firstly, the outcome of the evaluation differed from the common conceive that the administrative status of municipalities directly under the central government could exert much influence. Tianjin and Chongqing ranked at 14 th and 29 th in 2006 respectively. Even Beijing, the capital megacity, legged behind five coastal provinces in 2006. Secondly, coastal provinces keep ahead in FACPG. Seven among eleven coastal provinces consistently ranked among top ten for three years. Of nine inland provinces, only Sichuan appeared among the top ten in 2006. This disparity may be attributed to geographical differences and coastal development strategy decreed in 1988. Third, contrary to the traditional belief, the border provinces, especially those along land borders did not rank better than those do not. Most of them took the back seats for the period of 2004-06. It is probably because most of the Chinese neighboring countries are relatively underdeveloped. 147 Table 6.22 Regional Features from the Perspective of FACPG Regions Provinces Ranks in 2004 Ranks in 2005 Ranks in 2006 Beijing 3 3 6 Fujian 10 9 8 Guangdong 2 2 1 Hainan 27 15 19 Hebei 11 13 16 Jiangsu 4 4 2 Liaoning 7 11 7 Shandong 6 7 5 Shanghai 1 1 3 Tianjin 8 6 14 Eastern Provinces (11) Zhejiang 5 5 4 Anhui 17 19 17 Heilongjiang 13 10 9 Henan 18 8 12 Hubei 19 16 11 Hunan 16 14 13 Jiangxi 26 17 15 Jilin 12 22 23 Central Provinces (8) Shanxi 23 24 20 Chongqing 25 28 29 Gansu 24 12 27 Guangxi 22 26 24 Guizhou 28 31 31 Inner Mongolia 20 18 28 Ningxia 29 30 30 Qinghai 30 29 26 Shanxi 15 23 22 Sichuan 14 20 10 Tibet 31 27 25 Xinjiang 9 25 21 Western Provinces (12) Yunnan 21 21 18 148 Table 6.23 Geopolitical Features from the Perspective of FACPG Provinces 2006 Ranks 2005 Ranks 2004 Ranks Municipality Coast Border Inland Guangdong 1 2 2 √ Jiangsu 2 4 4 √ Shanghai 3 1 1 √ √ Zhejiang 4 5 5 √ Shandong 5 7 6 √ Beijing 6 3 3 √ Liaoning 7 11 7 √ √ Fujian 8 9 10 √ Heilongjiang 9 10 13 √ Sichuan 10 20 14 √ Hubei 11 16 19 √ Henan 12 8 18 √ Hunan 13 14 16 √ Tianjin 14 6 8 √ √ Jiangxi 15 17 26 √ Hebei 16 13 11 √ Anhui 17 19 17 √ Yunnan 18 21 21 √ Hainan 19 15 27 √ Shanxi 20 24 23 √ Xinjiang 21 25 9 √ Shaanxi 22 23 15 √ Jilin 23 22 12 √ Guangxi 24 26 22 √ √ Tibet 25 27 31 √ Qinghai 26 29 30 √ Gansu 27 12 24 √ Inner Mongolia 28 18 20 √ Chongqing 29 28 25 √ √ Ningxia 30 30 29 √ Guizhou 31 31 28 √ 149 Chapter Seven Factors Affecting FACPG Few scholars examine the variables regarding FACPG by statistical approaches. Among them, Heidi Hobbs did an excellent job when she delved into the controversial international agendas initiated in the 1980s by the American cities. Focusing on the comprehensive test ban movement, nuclear free zone declarations, divestment of local funds from South Africa, and provisions of sanctuary for Central American refugees, she tests eight variables: (1) land area, (2) population, (3) education level, (4) poverty level, (5) per capita income, (6) median household income, (7) housing, and (8) the structure of local governments. Her research reveals that the American cities particularly active in foreign issues are significantly larger in land area and population with more minorities than the non-active domestic counterparts. The active cities have a greater percentage of population below the poverty level and are economically less well off in terms of median household income. They almost double the number of renters and are facing with extremely high housing costs (1994:55). This chapter examines eighteen assumed factors that might affect FACPG from basic condition or acquired international competencies. The factors are categorized into four groups: basic, economic, social, scientific and educational. 150 7.1 Assumed Factors and Steps of Analysis Basic Condition includes land area, population, geographical location, transportation facility, natural resources, etc. Several studies have underlined the impact of geographical location on the transnational flows of globalization agents. Hobbs finds that 47% of the 353 American cities particularly active in the abovementioned high political issues are located in the Northeast. Specifically, 50 of them are in Massachusetts and 55 in New Jersey. Possibly, due to its border territory and relative larger Hispanic population, the western region is the most active on the sanctuary issue, constituting 50% of the total. The South-Sun Belt area is the least active for the most issues probably because they are too busy with their economic issues to be more attentive to the world around it (1994:45). Demurger at al (2002) finds that the effects of geography on China’s provincial growth rates in 1996-99 are remarkable. Their contributions were 2.5 percentage points for the provincial-level metropolises, 0.6 for the northeast provinces, 2.8 for the coastal provinces, 2.0 for the central provinces, 0 for the northwestern provinces, and 0.1 for the southwestern provinces. He points out that the coastal dummy variable used in many studies is a mixture of “pure geography effects” and “preferential-policy effects”. Zweig (2002), Cheung (2001), and Zhimin Chen (2003) believe that the Chinese provinces along the southeast coast far outperform the interior regions in foreign trade and FDI largely because of the advantages of their geographical location. Chapter Six of this 151 paper also discovers that FACPG during 2004-2006 spans is positively related to their geographic location. However, as geographical location is unchangeable or difficult to change, this research will not select it as a variable. Territory is a key precondition for existence and function of a subnational government. Larger land area may not only provide natural resources but also expands local tax bases. The territory-based authority enables subnational governments to be superior to NGOs and sometimes to compete with a nation-state under some situations. The Foreign Policy Globalization Index by A.T. Kearney regards size of land area as a key indicator and discovers that the size of countries plays a role in determining levels of globalization. Hobbs holds that the larger cities of land area have been more responsive to divestment (1988:54-56). In China, however, it seems that the land area under provincial jurisdiction has negative relationship with FACPG. For example, Tibet, the second largest province, and Qinghai, the third largest, both ranked after the 25 th place in terms of FACPG from 2004 to 2006, while the three smallest ones, Shanghai, Tianjin and Beijing, occupied the front seats for three straight years. Furthermore, as majority of China’s territory is countryside, the size of developed area (actually urbanized areas) is growing and expected to have something to do with flows of globalization agents. This paper thus attempts to seek a further evident with the help of statistical analysis. Population, the subject each subnational government provides public goods to, is the 152 demanders, consumers and exporters of the agents of globalization. They might have relations with FACPG or the fluidity of the globalization agents. For example, more people in a province might consume more foreign commodities or lower labor wages to attract more FDI. Conlan and Sager (2001) finds that the subnational international initiatives of the American states differ considerably from one another in term of population. The average international trade budget in the ten most populous U.S. states was $3.3 million in 1994 whereas in the ten least populous states it was $377,550, which was little more than one-tenth of the former. The ten most populous states had an average of 5.5 overseas offices in 1994 whereas the ten least populous states averaged less than one office apiece. Seven of the then smallest states had no overseas offices at all in 1994. Hobbs upholds that size, change and density of population of a region are important variables to its international involvement (1988:54-56). A larger population may result in stronger urban support for local foreign policy. Local international activism also has obvious demographic features. Hobbs discovers that American cities with a higher than average percentage of blacks were more active in addressing special foreign issues such as divestment while those with a higher than average percentage of Hispanics were more active in addressing the sanctuary issues (1994:43). This paper attempts to test whether population size positively correlate with FACPG. Acquired international competencies are based most on foreign-related political, 153 economic, social factors. Some scholars and institutes have explored how political factors affect paradiplomacy. For example, when KOF Index of Globalization selected 25 variables in 2007 from the economic, social and political perspectives to measure a country’s globalization, hidden import barriers and capital restrictions are taken as variables. Index of Economic Freedom employs ten indicators to represent foreign-related achievements in 2007, namely, trade policy, government financial burden, government intervention in economy, monetary policy, capital flow and foreign investment, banking and financial conditions, salary and price, property right, industry regulation, and labor fluidity. Most of them are associated with government policy. Duchacek argues that the diversified forms, goals, intensity, frequency and importance of subnational government’s foreign participation depend on intervening variables such as coordinating mechanisms, self-confidence of the national center, political climate, and the nature of the political system, etc (1986a: 240). Sager and Conlan (2001) conclude that American subnational internationalization depend largely on political leadership and business support. A change in governor or a lack of interest by the small business sector undercut many states’ international efforts. (Kincaid, 1999) believes that subnational international actions are influenced more by custom, political practice, and intergovernmental comity than by enforcement of constitutional and statutory rules. Hobbs (1994) questions whether mayor-councils or council-manager local governments act more readily on 154 broader policy issues such as the test ban or divestment. She also asserts that a more favorable political climate such as that of California may push forward local activism. Demurger (2001) and Zweig (2002) expatiate how the central government’s deregulation policy set free the local transnational contacts in the Chinese provinces. Undoubtedly, foreign-related preferential policy granted to the coastal provinces in China is crucial for their FACPG. As incentive policies can speed up flows of globalization agents, all the Chinese local governments are thriving after preferential policies. Cheung (2001) and Zhimin Chen (2003) believe that Guangdong and Fujian have achieved rapid economic growth partly because the top leaders of the two provinces successfully persuaded Deng Xiaoping, then the number one economic reformer of China, to grant them a deregulation policy at the very beginning of China’s internationalization. That is “special policy and flexible measures”. However, most of the research takes preferential policies as dummy variables as those policies are very complicated. Meanwhile, the negative effects of preferential policies have gradually been distinct. Policies like low-rent land, low tariff, tax-free or reduction, export subsidy and tax rebate are enforced at the cost of state or local revenue. Exemption and reduction caused the loss of state revenue of over $8.8 billion in 1995 (Huang, Guixiang, 1997). Tax rebate in Fujian Province reached US$ 3.64 billion in 2007. Wang Dan at al (2004) discovers that deduction- taxation policy does not work when an investment project has particular requirements for location or a cluster of 155 related sectors. Instead, tax increase may be a superior choice. Since China’s accession into the WTO, the central government has abolished some previously granted preferential policies to create a fair competition environment. Since July 1, 2007, the Chinese government has carried out an export stringent policy, abolished or slashed tax-rebates for 2,831 commodities, which take up 37% of the total products in the customhouse’s list. These are high energy-consumed or high resource-consumed products, etc. Most important, Law on Corporate Income Tax made by the national government began to levy a unitary tax rate (25%) on both domestic and foreign enterprises from Jan. 1, 2008. This signals that the central government is increasing adjustment and reduction of preferential policies to foreign enterprises and individuals. As the preferential policies are under frequent adjustment, this paper does not select it as a variable. Economic factors are expected to have much correlation with paradiplomatic achievement. For instance, Soldatos (1990) finds that subnational international involvement has appeared most often in advanced industrial federations as well as in those with substantial amount of own financial resource. Conlan and Sager (2001) finds that budgetary difficulties restrain U.S. states from becoming as active as they might like to be. Economic complementarity leads to more transnational interaction. Some studies (Fleisher and Chen 1997, Mody and Wang 1997, and Demurge 2001) approved that infrastructure investment has statistically significant positive impact on foreign trade. 156 Social variables are also measures of subnational initiatives. Clavel Kann and others attribute the American local foreign initiatives on foreign policy to the middle class radicalism. Hobbs examines (1994) several variables such as poverty level, per capita income, median household income, and housing. Interestingly, her observations do not support the middle-class radical profile as the results suggest that active cities have more people below the poverty level and less above the national level. House renters are more active than house owners. Scientific and educational factors are concerned. Duchacek (1986) gave a close look at the quality and skill of subnational elites to handle foreign affairs as well as ethnic/lingual heterogeneity whereas Hobbs investigated whether those American cities particularly active in the controversial international issues in both 1980 and 1990 have larger population with better education. Clark and Montjoy (2001) introduce a new incentive strategy called “promoting entrepreneurship”. It encourages business transnational expansion by exploring new markets or by providing human capital development or support for R&D, etc. This chapter tests three basic factors, six economic factors, five social factors, and four scientific and educational factors. The period from 2004 to 2006 is targeted. The ranks of FACPG are from Chapter Six of this paper. The ranks of the sixteen factors are processed from the original data given by China Statistical Yearbooks compiled annually 157 by National Bureau of Statistics of China and published by China Statistics Press. The ranks of Expenditure on R&D and Government Appropriation for science and technology are processed from the original data given by Statistical Communiqués on National Expenditures on Science and Technology released annually by National Bureau of Statistics of China, Ministry of Science and Technology and Ministry of Finance. 60 Table 7.1 Assumed Factors related to FACPG Variables Population at the Year-end Land Area Basic factors 61 (3) Developed areas GDP Per Capita GDP Local Government Revenue Local Government Expenditure Investment in Fixed Assets Economic factors (6) Expenditures for Foreign Affairs Per Capita Disposable Income of Urban Households Per Capita Consumption Expenditure of Urban Households Per Capita Net Income of Rural Households Per Capita Consumption Expenditure of Rural Households Social factors (5) Urbanization Rate (%) 62 R&D Expenditure Government Appropriation for Science and Technology Government Appropriation for Education Scientific and Educational factors (4) Population with College or Higher Education Steps of Analysis This chapter adopts Spearman’s product-moment correlation coefficient, a nonparametric 158 method based on ranks, to measure the linear relationship between the eighteen assumed factors and FACPG for three different years from 2004 to 2006. The steps are as follows: Step 1: To rank the two variables (here FACPG and 18 assumed factors) and mark them as U i and V i respectively, then come to the sum 2 i D . The equation is： 2 1 i 1 2 ) V ( ∑ ∑ = = − = n i i n i i U D Step 2: To use the following formula and get Spearman’s rho 63 . ) 1 ( 6 1 2 2 1 − − = ∑ n n D R (Where: R is the coefficient, D is the difference between the two ranks for each subject, n is the number of subjects. Both 1 and 6 are constants) Step 3: Using the R, to find and interpret whether and to what extent those assumed factors correlate with FACPG during 2004-2006. 7.2 Correlation between Factors and FACPG The R between Assumed Factors and FACPG during 2004-06 are as follows. Detailed data and ranks of the eighteen variables during the three-year period can be found in the appendixes. As shown in Table 7-2 on the next page, the eighteen assumed factors, except land area, seventeen factors have positive correlation with FACPG and they are all significant at the 0.01 level. 159 Table 7.2 Correlation between Factors and FACPG in 2006 2004 2005 2006 Assumed Factors FACPG FACPG FAPCG Correlation Coeffici -.321 -.421* -.268 1. Land Area Sig. (2-tailed) .078 .018 .145 Correlation Coefficient .389* .340 .514** 2. Population Sig. (2-tailed) .031 .061 .003 Correlation Coefficient .737** .646** .788** 3. Developed Areas Sig. (2-tailed) .000 .000 .000 Correlation Coefficient .788** .767** .856** 4. GDP Sig. (2-tailed) .000 .000 .000 Correlation Coefficient .829** .735** .683** 5. Per Capita GDP Sig. (2-tailed) .000 .000 .000 Correlation Coefficient .762** .793** .872** 6. Local Government Revenue Sig. (2-tailed) .000 .000 .000 Correlation Coefficient .797** .691** .824** 7. Local Government Expenditure Sig. (2-tailed) .000 .000 .000 Correlation Coefficient .732** .676** .750** 8. Investment in Fixed Assets Sig. (2-tailed) .000 .000 .000 Correlation Coefficient .649** .583** .536** 9. Expenditures for Foreign Affairs Sig. (2-tailed) .000 .001 .002 Correlation Coefficient .630** .617** .664** 10. Per Capita UrbanIncome Sig. (2-tailed) .000 .000 .000 Correlation Coefficient .598** 494** .824** 11. Per Capita Urban Consumption Spending Sig. (2-tailed) .000 .005 .000 Correlation Coefficient .825** .820** .812** 12. Per Capita Rural Income Sig. (2-tailed) .000 .000 .000 Correlation Coefficient .763** .748** .791** 13. Per Capita Rural Consumption Spending Sig. (2-tailed) .000 .000 .000 Correlation Coefficient .669** .615** .552** 14. Urbanization Rate Sig. (2-tailed) .000 .000 .001 Correlation Coefficient .600** .779** .831** 15. R&D Expenditure Sig. (2-tailed) .000 .000 .000 160 Table 7.2 Continued 2004 2005 2006 Assumed Factors FACPG FACPG FAPCG .866** .805** .879** 16. Government Spending for S&T Correlation Coefficient Sig. (2-tailed) 00 0 .748** .714** .814** 17.Government Spending for Education Correlation Coefficient Sig. (2-tailed) 00 0 .603** .706** .852** 18.Population with College or above Education Correlation Coefficient Sig. (2-tailed) 00 0 * Correlation is significant at the 0.05 level (2-tailed). ** Correlation is significant at the 0.01 level (2-tailed). 7.21 Correlation between the Basic Factors and FACPG in 2006 0 10 20 30 40 Land Area FACPG Land Area 14 24 31 25 18 29 20 22 6 4 13 16 9 30 17 11 21 7 28 19 1 10 12 8 2 3 5 23 26 27 15 FACPG 1 2 3 4 5 6 7 8 9 10111213141516171819202122232425262728293031 G D J S S H Z J S D B J L N F J H L S C H B H N H U T J J X H E A H Y N H A S X X J S A J L G X T B Q H G S I M C Q N X G Z Figure 7.1 Ranks of Land Area and FACPG According to the R (-.268, P is 0.145), there is no relationship between land area and FACPG. Figure 7.1 shows that land area of Shanghai, Beijing and Tianjin, the three largest megacities in China, rank at the last three while their ranks of FACPG are on the 161 top. Meanwhile, the three provinces with largest land area (Xinjiang, Tibet and Qinghai) ranked at bottom in FACPG. This implies that (1) the magnet effect of the metropolises is distinct for attracting the four agents of globalization; (2) the flow of agents of globalization showed no strong demand for land recourses or land-related natural resources during the period under study. (3) Land is a state-own natural resource. Land users including foreign individuals or enterprises have to acquire land use rights directly by leasing from the government. 64 Since the central government allowed local governments to hold their land-related income as a part of local extra-budgetary revenue in 1994, land has been a primary source of the local government’s fiscal revenue. A recent study conducted by Development Research Center of the State Council of China reveals that in most localities, land-related income accounts of 60-90% of local extra-budgetary revenues 0 10 20 30 40 Population FACPG Population 3 5 2510 2 26141815 4 9 1 7 2713 6 8 1228192417211131302223202916 FACPG 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 G D J S S H Z J S D B J L N F J H J S C H B H N H U T J J X H E A H Y N H A S X X J S A J L G X T B Q H G S I M C Q N X G Z Figure 7.2 Ranks of Population and FACPG 162 The R (0.514) indicates a weak positive correlation between population and FACPG. However, the R does not interpret the practical situation in China. (1) Why big cities like Beijing and Shanghai have small population but rank at top in FACPG? The problem is probably the demographic data of urban areas. The official data count only people with permanent urban IDs and exclude a large number of floating populations like migrant workers and foreign tourists. As Demurger at al (2002) point out, the household registration system makes the movement of the rural poor to prosperous areas illegal. Accordingly, the real number of residents of central cities is likely to be much bigger than reported whereas the real number of inland like provinces might be much smaller because millions farmers in the inland provinces have migrated to the coastal areas or big cities for better-paid jobs. Henan, Sichuan, Anhui, for example, are most populous provinces as well as biggest labor-export provinces to the coastal developed areas. It is rather difficult to estimate the influence of the floating population on the transnational flows of globalization agents. For instance, the rural-to-urban migrants working in large quantities of joint ventures, export-processing zones, information and capital brought in by foreign tourists, etc. (2) Some coastal provinces with a huge number of permanent urban residents like Guangdong, Jiangsu, Zhejiang, and Shandong rank at top in population and FACPG. They are good cases to suggest that there should be a strong positive relationship between population and FACPG. 163 0 10 20 30 40 FACPG Developed Areas FACPG 1 2 3 4 5 6 7 8 9 10111213141516171819202122232425262728293031 Developed Areas 1 3 15 5 2 11 4 17 7 10 9 6 13 25 18 8 12 24 29 23 21 20 14 19 31 30 26 16 22 28 27 G D J S S H Z J S D B J L N FJ H J S C H B H N H U T J J X H E A H Y N H A S X X J S A J L G X T B Q H G S I M C Q N X G Z Figure 7.3 Ranks of Developed Area and FACPG The R (0.788) between developed area and FACPG in 2006 outstands from the basic factors. The ranks of Guangdong, Sichuan, Hunan, Xinjiang and Shanghai are found same in both developed area and FACPG. 7.22. Correlation between the Economic, Social, S&E Factors and FACPG in 2006 Due to the space limit, this paper only give further analysis on the following nine factors whose R is above 0.8. (1) GDP/Gross Regional Product (.856) (2) Local government revenue (.872) (3) Local government expenditure (.824) (4) Per capita annual net income of rural households (.812) 164 (5) Per capita Urban Consumption Expenditure (.824) (6) R&D Expenditure (.831) (7) Government appropriation for science and technology (.879), (8) Government appropriation for education (.814) (9) Residents with college or above education (.852) 0 10 20 30 40 GDP FACPG GDP 1 2 7 4 2 10 8 11 14 9 12 5 13 21 19 6 152328182520221631302717242926 FACPG 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 G D J S S H Z J S D B J L N F J H J S C H B H N H U T J J X H E A H Y N H A S X X J S A J L G X T B Q H G S I M C Q N X G Z Figure 7.4 Ranks of GDP and FACPG GDP is a key indicator internationally used to gauge a country or a region’s economic strength. It is also a benchmark to assess FACPG. From Figure 6.3, the two zigzag lines are found a tendency to overlap. The seven provinces among the top ten of GDP are among the top eight of FACPG. The GDP ranks of five provinces (Guangdong, Jiangsu, Zhejiang, Hunan and Gansu) match well with their FACPG ranks. These results somehow differ from Hobbs’ argument that most American active cities are located in the Snow Belt or Rust Belt as Sun Belt cities are too busy with economic development to be involved in. 165 0 10 20 30 40 Revenue FACPG Revenue 1 23546 7 12171014 8 131623 9 151828112619242131302720222925 FACPG 1 23456 789 10111213141516171819202122232425262728293031 G D JS S H ZJ S D BJ L N FJ H J S C H B H N H U TJ J X H E A H Y N H A S X X J S A JL G X T B Q H G S I M C Q N X G Z Figure 7.5 Ranks of Local Government Revenue and FACPG The correlation between provincial government revenue 65 and FACPG (0.872) is very strong. Figure 7.5 shows that the top seven provinces in revenue are also the top seven in FACPG. Nine provinces rank similarly in both. Provincial revenue is the financial prerequisite for their foreign-related activities. To intensify taxation supervision and prevent tax evasion and decrease preferential policies are some alternatives to increase revenues. For example, the newly enforced Corporate Income Tax Law abolished those special taxation exclusively enjoyed by foreign-funded enterprises. According to a static analysis of Fujian Province, the province will increase over $1.47 billion revenue annually after the law put into action in 2008. 166 0 10 20 30 40 Govt Expenditure FACPG Govt Expenditure 1 2 4 5 3 9 7 20 13 8 12 6 11 26 22 10 14 16 31 15 23 17 21 19 29 28 27 18 25 30 24 FACPG 1 2 3 4 5 6 7 8 9 1011121314 15 16171819 2021 2223242526 2728293031 G D JS S H ZJ S D B J L N FJ H J S C H B H N H U TJ J X H E A H Y N H A S X X J S A JL G X T B Q H G S I M C Q N X G Z Figure 7.6 Ranks of Local Government Expenditure and FACPG The R between provincial government expenditure and FACPG (0.824) indicates a strong positive correlation. Figure 7.6 shows that the top seven provinces in expenditure are among the top nine in FACPG. Five provinces ranked similarly in expenditure and FACPG. The past decades witnessed how composition of the government revenue and expenditure changed. Figure 7.7 shows that the local governments’revenue accounted for 84.5% of total government revenue in 1978 but it dropped down to 47.2% in 2006. The figure also illustrates that the central government’s revenue gradually exceeded the local governments’ revenue from 1994. 167 0 10 20 30 40 50 60 70 80 90 100 1978 1980 1985 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Year Percentage Central Government Revenue Local Government Revenue Figure 7.7 Comparison of the Central and Local Governments’ Revenue In 1978, the local governments’ expenditure accounted for only 47.4% of total government expenditure in the Chinese Mainland but it moved up to 75.3% in 2006. Figure 7.8 illustrates that the percentage of local governments’ expenditure greatly increased during the past two decades. With decreasing share in the national revenue, local governments may make more efforts to increase local revenue by promoting foreign trade and tourists, etc. Meanwhile, they may exert more influence on FACPG by increasing budget. 168 0 10 20 30 40 50 60 70 80 90 100 1978 1980 1985 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Year Percentage Local Government Expenditure Central Government Expenditure Figure 7.8 Comparison of Expenditure of Central and Local Government 0 10 20 30 40 Urban Experditure FACPG Urban Experditure 47 23 411162814152710 5 2918191622212613172531302312 8 2024 FACPG 1 2 3 4 5 6 7 8 9 10111213141516171819202122232425262728293031 G D J S S H Z J S D B J L N F J H J S C H B H N H U T J J X H E A H Y N H A S X X J S A J L G X T B Q H G S I M C Q N X G Z Figure 7.9 Ranks of Average Urban Consumption Expenditure & FACPG The R between FACPG and average urban and rural consumption expenditure are 0.824 and 0.791 respectively. Each represents a strong positive relationship. Urban per capita 169 consumption expenditure (8697 RMB) was more than 3 times of that of farmers (2829 RMB) in 2006. Due to the income gap, ownership of PC in urban areas is 47.2 per 100 households but only 2.7 in rural areas. 0 10 20 30 40 Farmer's Income FACPG Farmer's Income 6513 82 97 12 20 141715 4 1310212918192528112326 2730 16 22 2431 FACPG 1234 56 78 9 10111213141516171819 20212223242526272829 3031 G D J S S H Z J S D B J L N F J H J S C H B H N H U T J J X H E A H Y N H A S X X J S A J L G X T B Q H G S I M C Q N X G Z Figure 7.10 Ranks of Average Rural Income and FACPG The R between average rural income and FACPG (.812) indicates a strong positive correlation. Figure 7.10 shows that most provinces rank at top in farmer’s income also rank high in FACPG. Tianjin ranked at 4th in farmer’s income but 14th in FACPG. Perhaps it is because of its small proportion of farmers in their population. 170 Unit: Y uan 4283 4839 5160 5425 5854 6280 6860 7703 8472 9422 10493 11759 1578 1926 2090 2162 2210 2253 2366 2476 2622 2936 3257 3587 0 2000 4000 6000 8000 10000 12000 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 year income Per Capita Urban Income Per Capita Rural Income Figure 7.11 Average Urban and Rural Income from 1995 to 2006 Figure 7.11 illuminates that per capita urban income increased much greater than that of farmers during the past decade. China is an agricultural country dominated by rural population. 66 In 2006 the national population was 1.3 billion, among which 737 million were farmers, accounting for 56.1%. Average rural income is a key indicator of a rural household’s income and consuming power. The urban average income was 3.28 times of that of farmers in 2006. To raise farmers’ income will boost their consumption capability, promote outbound travel, increase the use of PCs, cell phones and Internet, and subsequently speed up the flows of agents of globalization. The governments have carried out policies such as exemption of agricultural taxes, etc. More advanced planting 171 and breeding technologies have been brought in from abroad to enhance the production of grain, milk, pigs and edible oil to safeguard food supplies and curb price hikes. 0 10 20 30 40 R&D Expenditure FACPG R&D Expenditure 3 2 4 6 3 1 7 12 18 9 10 14 16 11 21 13 15 23 30 20 27 8 17 24 31 29 22 26 19 28 25 FACPG 1 2 3 4 5 6 7 8 9 1011 12 13 14 151617 18 192021 22 23 24 252627 28 2930 31 G D JS S H ZJ S D B J L N FJ H J S C H B H N H U TJ J X H E A H Y N H A S X X J S A JL G X T B Q H G S I M C Q N X G Z Figure 7.12 Ranks of R&D Expenditure and FACPG R&D expenditure includes basic research, applied research and experimental development. It represents the technical strength of a province and lures agents of globalization. The R between R&D expenditure and FACPG (.831) indicates a strong positive correlation. There are nine provinces spent more than 10 billion yuan on R&D in 2006. Their total expenditures reached at 215.4 billion yuan, accounting for 71.7 % of the national expenditures. Guangdong, Jiangsu, Shanghai, Zhejiang, Shandong, Beijing and Liaoning were the top seven in FACPG. China spent 3003.1 billion yuan on S&T in 2006, up by 22.6% compared with the previous year, ranking 6 th in the world. It made up 172 1.34% of GDP that year 67 . In Key Indicators of Science and Technology 2007/1, Organization of Economic Cooperation and Development (OECD) released the latest data of R&D spending in its 30 member countries and 8 non-OECD countries, China, Russia, Argentina, South Africa, Israel, Singapore, Romania, and Slovakia 68 . The data show that in a period of ten years, from 1996 to 2006, R&D spending in China grew at an annual rate of 19.7%, far outweighing the growth rate of main developed countries. However, there still exists a big gap compared with the developed countries. In 2006, China’s R&D spending accounted for only 4.3% of these 38 countries’ total, while USA accounted for 38.8%, Japan 17.1%, Germany 7.8%, and France 5.1%. Moreover, R&D spending in a large majority of the developed countries exceeded 2% of their GDP. It was over 4% in Israel. In the UK, Australia and Canada, the government is the major source of R&D experditure. Government funding in Australia made up 44.4% of the total R&D spending. Great efforts are devoted to R&D in these countries. 0 10 20 30 40 Appropriation FACPG Appropriation 1 5 2 3 6 4 7 11141210 9 13 8 2615191629212517201831302722242823 FACPG 1 2 3 4 5 6 7 8 9 10111213141516171819202122232425262728293031 S H G D B J J S Z J T J S D H E F J H J L N G S H B H U H A H B J X I M A H S C Y N J L S A S X X J G X T B C Q Q H N X G Z Figure 7.13 Ranks of Local Government S&T Appropriation and FACPG 173 Local Government science and technology (S&T) Appropriation refers to the money the local financial departments spent in a statistical year to S&T projects including special project funds for S&T, operating funds, capital funds and others. It not only enhances local independent innovation capability and international competitiveness, but also brings about “catchment area” effect to the agents of globalization. The R (.879) indicates the strongest positive correlation. Figure 7.13 illustrates that the first half of the two lines tend to overlap but the rear half do not. The seven provinces spent most of the funds on S&T in 2006 also ranked the top seven in FACPG. Unit: 100 million yuan 216 243 275 290 356 350 444 511 609 692 808 1010 87 106 134 149 188 226 259 305 336 403 527 679 0 200 400 600 800 1000 1200 1400 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 year income The Central Govt S&T Appropriation The Local Govt S&T Appropriation Figure 7.14 S&T Funds of the Central and Provincial Governments Source: China S&T Statistics Data Book 2006 http://www.sts.org.cn/sjkl/kjtjdt/data2006/cstsm06.htm 174 Figure 7.14 illustrates an increasing tendency of S&T appropriation by the central and provincial governments during the past decade. S&T appropriation by the provinces in 2006 is 6.4 times of that in 1996. 5.23% 4.66% 4.29% 4.08% 2.79% 2.70% 2.43% 2.24% 2.11% 1.55% 0% 1% 2% 3% 4% 5% 6% Shanghai Beijing Zhejiang Guangdong Tianjin Jiangsu Liaoning Shandong Fujian Hubei Ratio of S&T Funds in Total Expenditure Figure 7.15 Ratio of S&T Funds in Total Expenditure of Top Ten in 2006 Figure 7.15 shows that the S&T appropriations of the provinces were rather small compared with their total expenditure. Even Shanghai spent only 5.23% of its expenditure for S&T. Besides, there is an apparent disparity even among the top ten provinces in S&T appropriation. 175 25.00% 10.30% 28.80% 2.20% 0% 5% 10% 15% 20% 25% 30% 35% growth rate over last year % in total expenditure the central govt's S&T appropriation the provincial govts'S&T appropriation Figure 7.16 Growth of the Central and Provincial Government S&T Funds Figure 7.16 shows that the growth rate of the local S&T funds is higher than that of the central one, but the ratio of local S&T to their total expenditure is lower than that of the central government. 0 10 20 30 40 Education Funding FACPG Education Funding 1 2 6 4 3 9 101517 8 13 5 142621 7 111228192418231631302522272920 FACPG 1 2 3 4 5 6 7 8 9 10111213141516171819202122232425262728293031 G D J S S H Z J S D B J L N FJ H J S C H B H N H U T J J X H E A H Y N H A S X X J S A J L G X T B Q H G S I M C Q N X G Z Figure 7.17 Ranks of Government Appropriation for Education & FACPG 176 Government appropriation for education refers to State budgetary fund for education, tax and fees collected by governments at all levels that are used for education purpose, education fund for enterprise-run schools, income from school-run enterprises, work-study program and social service that are used for education purpose. The R (.814) indicates a strong positive correlation. Four provinces (Guangdong, Jiangsu, Zhejiang, and Jilin) ranked similarly. The eye-catching fact is that the educational appropriation of the capital city Beijing spent fewer funds on education than several less internationalized provinces, i.e. Hainan, Henan and Sichuan. Unit: 100 million yuan 0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 year education funds Total Education Funds Government Education Funds Budgetary Education Funds Figure 7.18 Education Funds During 1995-2006 Figure 7.18 shows that the total education funds 69 increased more rapidly than government or budgetary ones 70 . In 2006, education fund by the central government accounted for 3.01% of the GDP and below the target (4%) set by the State Council 71 . 177 Ten provinces in 2006 did not increase their education appropriation along with the growth of their financial income as required by Education Law. 0 10 20 30 40 Well－educated Popu FACPG Well－educated Popu 4 2 1612 1 15111714 7 3 5 8 22 9 6 132328182710192031302425212926 FACPG 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 G D J S S H Z J S D B J L N F J H J S C H B H N H U T J J X H E A H Y N H A S X X J S A J L G X T B Q H G S I M C Q N X G Z Figure 7.19 Population with College or above Education and FACPG A greater population with college and above education often represents a larger skilled labor force and a competitive region for agents of globalization. The R went up from 0.603 in 2004 to 0.852 in 2006. Obviously, the demand for a skilled labor force by the flows of agents of globalization in China is growing. Additionally, provincial employment of overseas experts (EOE) should not be ignored. More than 479,006 foreign experts were employed by the Chinese localities in 2005. Among them, 229,298 are long-term employees, 390,052 are in economic sectors and 97,471 in cultural and educational sectors. Table 7-3 shows the ranks of FACPG and EOE in the top ten provinces in 2004 and 2005. It is not surprising that EOE in Guangdong in 2004 and 2005 account to 35.5% and 34.3% of that of the country respectively. 178 Table 7.3 The Top Ten Provinces in Employment of Overseas Experts 2004 2005 Ranks of FACPG Ranks of EOE Number of EOE % Ranks of FACPG Ranks of EOE Number of EOE % Total - - 454649100 - - 487523 100 Guangdong 2 1 16604036.5 2 1 167218 34.3 Shanghai 1 2 6284413.8 1 2 73193 15.0 Jiangsu 4 3 434449.6 4 3 42405 8.7 Beijing 3 4 363298.0 3 4 40919 8.4 Zhejiang 5 6 273556.0 5 5 34416 7.1 Liaoning 7 5 292836.4 11 6 29605 6.1 Tianjin 8 7 140423.1 6 7 17027 3.5 Shandong 6 8 133582.9 7 8 15000 3.1 Fujian 10 9 125082.8 9 9 12574 2.6 Sichuan 14 10 104162.3 20 10 8878 1.8 Source: 2004-2005 Collection of Statistic Documents on Overseas Experts working in the Chinese Mainland compiled by National Statistic Bureau of China and State Administration of Foreign Experts Affairs Summary: “A test is said to be reliable if its results are consistent,” stated Fred Pyrczak (2002: 116). From above analysis, the following findings can be concluded. 1. The three basic factors have less correlation with FACPG than those in other three groups during the period observed. (a) Land area has neither discernible relationship with FACPG, nor statistical significance. Due to the difference between China and in USA, Hobbs’ findings cannot explain the case of FACPG. (b) Population did not show a positive relationship with FACPG until 2006. It is expected to show an increasingly 179 strong correlation in the near future as the central government began to adjust the unreasonable household registration system by employing a new demographic method. The official data of population will approach to the reality. (c) Developed area is consistently significant correlated with FACPG. Follow up and further observation on the basic factors is needed in the coming years. 2. The six economic factors all have strong relationship with FACPG. In 2006, coefficients of the three factors’ were above 0.8 and four increased compared with those in 2004 with exception of per capita GDP. Surprisingly, expenditure for foreign affairs had moderate correlated with FACPG during three years. This is probably because the data cover only the budget of the foreign affairs offices, whose duties and budgets, however, are much different in different provinces. 3. The five social factors all have positive relationship with FACPG. Among them, average urban consumption expenditure and average rural income have an outstanding and consistent correlation with FACPG in three years running. Surprisingly again, urbanization rate had moderate correlation with FACPG and came down year by year. The reason for this change is not clear. 4. Coefficients of the four scientific and educational factors’ had all gone up from 2004 to 2006. This group always showed stronger positive correlation during the period investigated. It might be the most important group of factors related to a province’s 180 potential competitiveness to the flow of globalization agents. 5. The test of the consecutive period from 2004 to 2006 finds a tendency of gradually increasing correlation between most factors and FACPG. The R of 13 factors grew bigger in 2006 than in 2004. Only four became smaller. They are GDP per capita, Expenditure for Foreign Affairs, Average Farmer’s Income, and Urbanization Rate. The R above 0.8 increased from three in 2004 to nine in 2006. Figure 7.20-22 are scattergrams 72 for the rankings of provinces for 16 factors. They show the distribution of R of 31 provinces in the three years. Provinces in the lower left-hand corner of the scattergrams ranked at top in both FACPG and 16 factors. Provinces in the upper righter-hand corner ranked at bottom in both FACPG and 16 factors. Provinces in the upper left-hand area performed good in FACPG but lagged behind in 16 factors. Provinces in the lower right-hand area were weak in FACPG but strong in 16 factors. During the period investigated, Guangdong, Jiangsu, Shanghai, Zhejiang, Shandong, Beijing and Liaoning were seven “standing committee members” staying consistently at the top ten in both FACPG and 16 Factors. Five of them are costal provinces; two of them are megacities directly under the central government. Another group of “standing committee members” includes Guizhou, Ningxia, Qinghai, Gansu, Tibet, Chongqing and Guangxi, who ranked consistently at the bottom in both FACPG and Factors. Most of them are from Northwest part of China. Only one is from coastal 181 area and a municipality directly under the central government. Figure 7.20 Scattergram for 16 Factors and FACPG in 2004 Figure 7.21 Scattergram for 16 Factors and FACPG in 2005 182 Figure 7.22 Scattergram for 16 Factors and FACPG in 2006 Importantly, the factors except for land area tested in this study can be changed by policymaking.Although the results do not necessarily infer causal relationship, it implies that FACPG can be promoted most likely from these perspectives. 183 Chapter Seven Endnotes 60 Ministry of Science and Technology. “China S&T Statistics Data Book 2005-2007.” <http://www.sts.org.cn/sjkl/kjtjdt/data2007/cstsm07.htm>. 61 Ray S. Cline (1975, 1980) categorizes numerous factors affecting a nation’s strength into five basic, constant and long-term factors. The first one is basic strength, which is composed of land and population and makes up 100/500. 62 It is the ratio of urban population to total population. According to the State Bureau of Statistics of China, the urban population refers to the permanent residents in urban areas while the rest is regarded as rural population. A large number of farmers have migrated into and are working in urban areas, especially in big cities, but they are still calculated as rural population due to the existing dualistic household register system. Therefore, the urbanization rate based on the demographic data is much lower than the real situation. 63 R is used for ease of reading in this paper. 64 Land grant is the most commonly used means of acquiring land use rights in China. Government authorities enter into a land grant contract with land users under which the land user is required to pay land grant premiums to government in exchange for land use rights for a fixed period. 65 A provincial government’s revenue mainly comes from business tax, corporate income tax, personal income tax shared by the local coffers except interest tax, urban land use tax, fixed assets investment tax, public utilities tax, property tax, vehicle and ship transporting tax, stamp tax, animals slaughtering tax, agriculture and husbandry tax, agricultural specialty tax, arable land requisition tax, lease tax, land’s added value tax, paid use of land, 25% of the added value, 6% of the securities’ stamp tax, and tax on resources other than offshore oil. 66 Urban Population refers to total population of districts under the jurisdiction of a city with district establishment, the population of street committees under the jurisdiction of a city without district establishment, population of resident-committees of towns under the jurisdiction of a city without district establishment, and the of resident-committees of towns under the jurisdiction of a county. Rural Population refers to total population except urban population. Urban Population/ Rural Population is classified according to 184 the Regulation of Statistics Classification on Urban and Rural Population (Draft), formulated by the National Bureau of Statistics in 1999. 67 USA and Japan spent US$ 312.5 billion and US$145.9billion respectively, ranking No.1 and No.2 in the world, while Germany, France and the UK US$68.4 billion, US$ 44.3 billion and US$34 billion respectively, ranking 3 rd to 5 th , and Canada and South Korea US$19.41 billion and US$19.37 billion respectively, ranking 7 th and 8 th behind China. 68 “Comparison of China’s R&D spending with other countries.” <http://www.most.gov.cn/kjtj/tjbg/200801/t20080116_58513.htm>. 69 The total education funds include (1) government education appropriation, (2) funds from social organizations and citizens for running schools, (3) donations and fund-raising for running schools, (4) tuition and miscellaneous fees, and (5) other educational funds. 70 Government appropriation for education includes both budgetary and extra-budgetary fund for education. 71 The ratio in the developed countries was over 6% on average and 4% in India and Brazil. 72 As land area had an uncertain relationship with FACPG and population a weak or inconsistent relationship with FACPG consistent from 2004 to 2006, the following scattergrams cover only 16 factors. 185 Chapter Eight Conclusions China’s provincial foreign-related activities have rapidly developed since the late 1970s, bringing about a great positive impact on the national diplomacy and local economy. This reconfirms the popular argument that “states are not omnipotent” (Zweig, 2002:276). In Kenichi Ohmae’s “borderless world,” the Chinese regional governments can and do play a new role in world economy by active interaction with agents of globalization, among which, capital, goods, people and information are most salient. “Relationship can be measured by volume of interaction and by number of partners.” (Soldatos, 1990:35) These qualitative and quantitative analyses targeting the transnational flows of the four major agents of globalization lead to the following findings. First, the Chinese provincial governments’ foreign-related activities (CPGFA) are not a new phenomenon. It is different from the common sense that the Chinese local governments did not get involved in foreign affairs until China opened its door until the late 1970s. CPGFA appeared shortly after the two “Silk Roads” pioneered in the reign of Han Emperor Wudi (140-87BC) and occasionally flourished in some historical periods such as the Tang and Yuan Dynasties. The late Qin Dynasty, for example, relied heavily on Governors-general and governors in term of dealing with foreign diplomats and traders in treaty ports. Various local-based official institutions such as customhouses, 186 foreign affairs departments and foreign guesthouses set up in Ancient Chinese provinces were typical examples. Ancient provincial international participation boasted both similarities and differences when compared with today’s CPGFA. From the perspective of the characteristics, both are non-sovereign, non-territorial, subordinate, limited, and governmental. What is different is that the former served more to a political purpose and were less concentrated in economic interests. From the perspective of functions, both undertake responsibilities to defend territory integration and supervise foreign trade, handle local foreign affairs, etc. The former was confined within their jurisdiction and within narrow scope. The latter covers nearly all the fields except for the sovereignty-related and military areas. Besides outstanding positive impact on local economy, CPGFA is now an indispensable part rather than a supplementary one for the national diplomacy. From the perspective of transnational linkages, local officials before 1978 had neither international contacts nor chance to go abroad whereas nowadays provinces enlarge their influence internationally by frequent visits abroad, overseas offices, province-owned enterprises abroad, international sister provinces, joining international organizations, etc. From the perspective of the attitude and competence, officials before 1978 were mostly reluctant and unskillful in disposing foreign affairs whereas the current officials are active and experienced, especially in promoting agents of globalization. 187 Second, globalization should not be overvalued as the most important driving force for the rising CPGFA since 1978. As discussed earlier, globalization has flourished and knocked at China’s door since the late 1960s (Jane Stewart, 2003), China did neither let in nor let go of the absolute central control over CGGFA until 1978. It was the open door policy that ended the long-standing isolation and lowered the barriers to global linkages, hence allowing agents of globalization to flow in and out of China. In other words, without opening up to the outside world, few agents of globalization could flow in and out of China. Until recently, China has not yet opened all its regions for the outside world. For instance, if foreigners want to go to Tibet for a visit, they need to apply for a visa with the consent of the Tourism Administration of the Tibet Autonomous Region or any one of its foreign representative offices. Moreover, the well-designed preferential policies regarding FDI and trade have acted not only as effective promoters but also efficient screen machines, through which flows only those are considered must or necessities for economic growth. Third, decentralization in China did facilitate the rising CPGFA but it devolved only power regarding low politics to its provinces. Under the unitary political system, provincial governments most commonly act as agents of the central government but they have not yet been upgraded to “the partners of the central government” as Zhiming Chen 188 stressed (2005:178). The GDP and FDI based achievement evaluation system further focuses the CPGFA in economic arena. Not surprising, the provinces are most active in interacting with agents of globalization while they spend little effort and budget on non-economic agenda such as cultural exchange or building regional soft power. They keep far away from high politics. Occasionally, they do produce unwanted consequences as Zhiming Chen indicated, but those seldom related to high politics. Fourth, there is a remarkable disparity in FACPG from 2004 to 2006. Six coastal provinces (Guangdong, Jiangsu, Zhejiang, Shandong, Liaoning, and Fujian) and two municipalities (Shanghai and Beijing) rank at top consistently. Geographical advantage shows strong impact on FACPG. In term of FACPG, the eastern provinces greatly exceeded those in China’s central and western parts. Eight eastern provinces were among the top ten during the period observed, whereas most of the western provinces take a back seat. This disparity may be more attributed to geographical differences than coastal development strategy decreed in 1988. Although the western provinces were also granted preferential policies since the past decade, still, ten among twelve western provinces ranked among the last ten in 2006. Municipalities did not all rank on the top in FACPG, as assumed before study. Tianjin and Chongqing ranked at 14 th and 29 th in 2006, respectively. Even Beijing, the capital megacity, lagged behind five coastal provinces in 189 2006. Contrary to the traditional belief, the land border provinces did not rank better than those who do not. Except for Liaoning and Heilongjiang, all border provinces took the back seat from 2004 to 2006. It is probably because most of the Chinese neighboring countries are relatively underdeveloped. Fifth, the economic, social and S&E factors have much strong correlation with FACPG than basic factors. The statistical outcomes refused the previous assumption that population and land area had strong positive relationship with FACPG and confirmed 15 factors’ positive correlation with FACPG during three years. Moreover, the correlation coefficients gradually increased over time. There were only three Rs above 0.8 in 2004 but the number reached nine in 2006. Three recommendations might be particularly useful for practitioners in China or in other developing unitary states. First, thirty-year foreign-related practice and achievement have updated the Chinese officials’ attitude and trained them into international actors. Yet, as Shuman (1997) suggested that further consciousness-raising, measures are needed. Policymakers in Beijing, especially executives in various ministries, should be more open-minded and flexible to further bring down the barriers and embrace diversified agents like alien ideas, religion, information, etc. Many officials at lower levels or in inland areas are shy and 190 know little about how to deal with foreign affairs. Policymakers at higher levels should further encourage and teach them to become veterans. Meanwhile, public diplomacy and people-to-people diplomacy should be promoted to raise the public participation and a regional soft power. Second, soft law in this field thus seems more than formally promulgated law local participation in foreign issues is gradually and exploratory. Sometimes, the former is more powerful or superior to the latter. CPGFA are often instructed by in-house, unpublished documents, or in many cases according to unwritten instructions of relevant upper leaders. More specific, transparent foreign-related legislations are expected to demarcate, by law rather than by poorly defined documentation, which activities are encouraged, which are discouraged, and which are prohibited. Third, to further promoting FACPG, provincial governments may make more efforts on their GDP, average GDP, revenue and expenditure, average urban consumption expenditure, farmers’ incomes and expenditure, funding for R&D, S&T, and education. The analysis found that the resources of land area and population in the central and western provinces are not yet fully utilized, when human resources and investment environment are improved, their advantages of abundant natural resources and flexible work force will become attractive. As labor cost is rising in coastal provinces, more 191 agents of globalization will turn their eyes on provinces with large population. Currently, to develop labor-intensive industries in the more populous but inland provinces are a better way to transfer their potential advantage in labor force to practical advantage. Meanwhile, it will create the best opportunity to train workers in inland provinces. A skillful and flexible work force will in turn attract more foreign investors. To catch up their counterparts in coastal areas, inland provinces should place increasing emphasis on the “promoting entrepreneurship” suggested by Clark and Montjoy’s (2001). Since the opening up in 1978, the Chinese local governments have focused on the conventional strategies called “smoke-stack chasing”, which promote local economic development by subsidizing business inputs (e.g., capital, land and labor) or by lowering political costs (i.e., taxes and regulation). However, the new strategies are by providing advanced supports that stimulate business operation and internationalization (e.g., human capital or support for R&D). 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Ithaca: Cornell University Press, 2002. 199 Appendix A Statistical Method for Index of FACPG In order to weight the indicators of the index in an objective way, the multivariate evaluation approach based on Principal Component Analysis is employed. Principal Component Analysis (PCA) is a classical statistical method of data reduction. It reduces the dimension of the representation but preserves as much as possible of the original information content. Suppose that a dozen variables that are correlated. PCA can reduce them to a few principal components through linear combination of raw variables with little original information lost, thus enabling to give a more focused and representative description of characteristics of variables discussed. E.C. Rhodes coined a multivariate index based on the first principal component in 1937. M.G. Kendall carried out a principal component analysis on ten main crops in forty-eight British counties and ranked their productivity using the first principal component in 1939. J. R. N. Stone employed PCA to analyze seventeen American national economic statistic indicators during the period from 1922 to 1938 and discovered that all original indicators might be replaced by three principal components. With PCA, M. Scott reduced his 57 indicators to 5 principal components when he measured the development of 157 British towns in 1961. PCA has been widely applied since W. F. Massy made it better in 1965. Besides, software like SPSS 13.0 for Windows and Excel are used to process the data collected. 200 Assume p variables whose sample capacity is n, then replace the observed data of the p (k<p) original variables with the n times of observed data of those k variables, meanwhile, losing very little original information. The approach is to transform the original variable i X into principal component (expressed as F). i.e. to integrate 12 ,, , p XXX L into k （k<p） variables ( ) 1 ,, k FF L . 12 ,, , k FF F L are called 1, 2, …, m. K principal component respectively and the percentage of 12 ,, , k FF F L is descending in the total variance. The data process is as follows: Step 1: Standardization of raw data is needed if their dimensions are different due to various indicators. First, to transform the raw data into: ij ij j yx x =− (1,2, , in = L 1, 2 , , ) j p = L . Among them, 1 1 n j ij i x x n = = ∑ represents the mean of each variable. After the transformation, we get a new matrix: () np ij np Yy ×× = . Next is standardized processing of the data, i.e., to transform the data in the matrix () np ij np Yy ×× = into * / ij ij j yy s = . Among them 2 1 () 1 n ij j i j x x s n = − = − ∑ is the quadratic mean variance of each indicator. After the centralization and standardization of the data, we get the new matrix ** () np ij n p Yy ×× = . 201 Step 2: Establishing the correlation matrix R based on sample data collected. *' * 1 () R YY n = Step 3: Use the correlation matrix to calculate the eigenvalues and eigenvector. Use the above correlation matrix R to solve the eigenequation and get eigenvalue i λ （ｉ =1,2,…,k. Eigenvalue, the variance of each principal component, reflects the role that principal component plays in depicting the subjects evaluated. Step 4: Figure out the principal component’s contribution rate k F : i α ＝ 1 / k ii i λ λ = ∑ and accumulative contribution rates: 11 / p k ii ii λ λ == ∑ ∑ 。 i λ . Usually, we extract the first, the second, ….. k（k<p）principal components that corresponding 12 , k λλλ L until their accumulative contribution rates above 80% and below 90% . Step 5: calculate the score of each principal component and the total score. First, calculate the score of each principal component: 1111 212 1 2121 222 2 11 2 2 pp pp kk k pkp FaX aX aX FaX aX aX FaX aX aX =+ ++ ⎧ ⎪ =+ ++ ⎪ ⎨ ⎪ ⎪ =+ ++ ⎩ L L L L Next, calculate the total scores. Make 1 k FF L ，， to be a linear combination and take i α , the variance contribution rate of each principal component k F , as the weight to form a comprehensive evaluation function: 11 2 2 ik FF F F α αα = ++ + L . Step 6: to rank the CPGFA of each province in each observed years. 202 According to the index designed above, use the PCA to process the data collected about interaction between 4 agents of globalization and China’s 31 provincial governments. From all principal components’ scores matrixes, corresponding scores matrixes j Y with accumulation contribution rates above 85% is extracted. By using the model j ij FWY = ∑ g j, we get the two-level score k F about the four dimensions and total score F , which demonstrates the disparity and characteristics as well as the rank of the foreign-related achievements of China’s provincial governments. 203 Appendix B-1. Scores and Ranks of FACPG of 2004 Flows of Goods Flows of Capital Flows of People Flows of Information Provinces Scores Ranks Scores Ranks Scores Ranks Scores Ranks Anhui 0.015 14 -0.332 19 -0.157 14 -0.194 15 Beijing -0.378 22 1.383 2 0.1579 9 1.6182 2 Chongqing -0.379 23 -0.401 23 -0.465 26 -0.544 25 Fujian 0.1226 11 -0.124 14 0.2244 8 0.2999 8 Gansu -0.425 25 -0.309 16 -0.423 23 -0.626 26 Guangdong 1.9788 1 0.63 4 1.6957 2 2.1177 1 Guangxi -0.076 16 -0.52 28 -0.35 20 -0.231 17 Guizhou -0.175 17 -0.522 29 -0.383 21 -0.637 27 Hainan -0.972 31 -0.392 21 -0.618 30 -0.366 22 Hebei 0.2909 9 0.055 12 -0.058 11 0.0335 11 Heilongjiang 0.3056 8 0.062 11 -0.287 18 -0.1 14 Henan 0.5943 4 -0.43 26 -0.077 12 -0.275 20 Hubei 0.1158 12 -0.394 22 -0.247 15 -0.232 18 Hunan 0.3374 7 -0.413 25 0.4388 6 -0.314 21 Inner Mongolia -0.404 24 -0.214 15 -0.444 25 -0.417 24 Jiangsu 1.1545 2 0.303 8 1.9918 1 0.4945 6 Jiangxi -0.062 15 -0.405 24 -0.421 22 -0.677 28 Jilin -0.377 21 0.344 6 -0.102 13 -0.263 19 Liaoning 0.1002 13 0.364 5 0.3631 7 0.1361 9 Ningxia -0.639 28 -0.321 17 -0.521 28 -0.766 30 Qinghai -0.667 29 -0.447 27 -0.62 31 -0.689 29 Shaanxi -0.269 19 -0.104 13 -0.272 16 -0.022 13 Shandong 1.0865 3 0.239 10 0.9461 4 0.6394 5 Shanghai 0.1461 10 2.522 1 1.0267 3 1.3644 3 Shanxi -0.338 20 -0.709 31 -0.277 17 0.0285 12 Sichuan 0.4245 6 -0.391 20 -0.046 10 0.0757 10 Tianjin -0.57 26 0.302 9 -0.291 19 0.3423 7 Tibet -0.686 30 -0.56530 -0.58 29 -1.066 31 Xinjiang -0.625 27 0.808 3 -0.495 27 -0.197 16 Yunnan -0.181 18 -0.325 18 -0.429 24 -0.371 23 Zhejiang 0.5494 5 0.305 7 0.7183 5 0.8359 4 204 Appendix B-2 Scores and Ranks of FACPG of 2005 Flows of Goods Flows of Capital Flows of People Flows of Information Provinces Scores Ranks Scores Ranks Scores Ranks Scores Ranks Anhui -0.2479 13 -0.2783 19 -0.0648 14 -0.4935 24 Beijing 2.01873 2 0.36926 3 0.31078 6 1.90458 2 Chongqing -0.3784 17 -0.4374 26 -0.3652 23 -0.6387 29 Fujian 0.20483 8 0.04131 13 0.00577 13 0.41514 7 Gansu -0.5483 26 0.3243 5 -0.3607 22 -0.4221 21 Guangdong 2.34421 1 0.34565 4 2.11741 1 1.97213 1 Guangxi -0.426 19 -0.441 28 -0.2145 16 -0.508 25 Guizhou -0.7326 29 -0.4895 30 -0.5098 26 -0.8878 31 Hainan -0.6053 28 -0.3317 20 0.27759 7 0.17407 8 Hebei -0.4531 23 0.13856 11 -0.6397 30 -0.0735 12 Heilongjiang 0.14677 9 0.22662 8 -0.5089 25 -0.2541 18 Henan -0.4508 21 0.70058 2 0.04814 11 -0.2263 15 Hubei -0.2749 14 -0.222 16 0.1664 8 -0.4084 20 Hunan -0.4552 24 0.17858 10 -0.2243 17 -0.5314 26 Inner Mongolia -0.2905 15 -0.2373 18 -0.1689 15 -0.3125 19 Jiangsu 1.38368 4 0.18745 9 1.46403 2 0.5468 5 Jiangxi -0.4335 20 -0.0172 14 -0.2497 18 -0.4545 22 Jilin -0.0804 12 -0.4564 29 -0.3166 20 -0.2533 17 Liaoning 0.0194 11 -0.3716 21 0.1597 9 0.14289 9 Ningxia -0.5972 27 -0.4117 25 -0.539 27 -0.6575 30 Qinghai -1.0854 31 -0.3828 22 -0.6083 29 -0.1263 13 Shaanxi -0.3455 16 -0.4052 24 -0.3433 21 -0.2242 14 Shandong 0.09875 10 0.23955 7 0.77315 5 0.10674 10 Shanghai 1.72576 3 3.0576 1 0.98521 3 1.48897 3 Shanxi -0.8236 30 -0.5575 31 0.11835 10 -0.0068 11 Sichuan -0.4879 25 -0.1257 15 -0.5544 28 -0.2472 16 Tianjin 0.93275 5 0.09732 12 -0.2597 19 0.49858 6 Tibet -0.4119 18 -0.4407 27 -0.4192 24 -0.4552 23 Xinjiang 0.24638 7 -0.3974 23 -0.9081 31 -0.6221 28 Yunnan -0.4516 22 -0.2249 17 0.02799 12 -0.5779 27 Zhejiang 0.45853 6 0.32146 6 0.80066 4 1.13135 4 205 Appendix B-3 Scores and Ranks of FACPG of 2006 Flows of Goods Flows of Capital Flows of People Flows of Information Provinces Scores Ranks Scores Ranks Scores Ranks Scores Ranks Anhui -0.27 19 0.01499 14 -0.0802 14 -0.3149 18 Beijing 0.87 4 -0.378 22 0.15174 8 1.63308 3 Chongqing -0.29 21 -0.3786 23 -0.5394 26 -0.7176 30 Fujian 0.01 9 0.12255 11 0.04776 10 0.30334 6 Gansu -0.22 16 -0.4245 25 -0.7915 30 -0.3674 21 Guangdong 2.28 1 1.97877 1 1.75325 2 2.20385 1 Guangxi -0.43 25 -0.0756 16 -0.4024 24 -0.6422 29 Guizhou -0.53 30 -0.1749 17 -0.7111 29 -1.096 31 Hainan -0.23 17 -0.9715 31 0.09169 9 -0.0364 12 Hebei -0.48 27 0.29087 9 -0.3016 21 -0.094 13 Heilongjiang -0.15 12 0.30561 8 0.16437 7 -0.2943 17 Henan -0.34 23 0.59434 4 -0.0693 13 -0.4938 27 Hubei -0.15 13 0.11584 12 -0.1961 17 -0.0303 11 Hunan -0.27 20 0.33739 7 0.00078 11 -0.4604 25 Inner Mongolia -0.5 28 -0.404 24 -0.4924 25 -0.4191 24 Jiangsu 1.17 3 1.15453 2 1.83211 1 0.68894 5 Jiangxi 0.01 10 -0.062 15 -0.1558 16 -0.3164 19 Jilin -0.45 26 -0.3772 21 -0.1979 18 -0.3676 22 Liaoning -0.16 14 0.10017 13 0.46143 6 0.14095 8 Ningxia -0.23 18 -0.639 28 -0.9032 31 -0.5204 28 Qinghai 0.16 7 -0.6666 29 -0.6605 28 -0.487 26 Shaanxi -0.54 31 -0.2689 19 -0.3744 23 -0.1326 15 Shandong 0.05 8 1.08648 3 0.97464 4 0.28187 7 Shanghai 1.29 2 0.14606 10 1.1445 3 1.64197 2 Shanxi -0.53 29 -0.3379 20 -0.1156 15 -0.1279 14 Sichuan -0.17 15 0.42449 6 -0.0188 12 -0.3803 23 Tianjin 0.36 6 -0.5703 26 -0.2643 20 0.02263 10 Tibet -0.33 22 -0.6862 30 -0.3278 22 -0.2525 16 Xinjiang -0.06 11 -0.6252 27 -0.5761 27 0.05344 9 Yunnan -0.37 24 -0.1811 18 -0.2143 19 -0.3371 20 Zhejiang 0.49 5 0.54938 5 0.77046 5 0.91806 4 206 Appendix B-4 Final Scores and Ranks of FACPG during 2004-06 2004 2005 2006 Provinces Scores Ranks Scores Ranks Scores Ranks Anhui -0.311 17 -0.4 19 -0.275 17 Beijing 1.466 3 1.424 3 0.947 6 Chongqing -0.626 25 -0.645 28 -0.802 29 Fujian 0.134 10 0.209 9 0.193 8 Gansu -0.602 24 -0.168 12 -0.764 27 Guangdong 1.9335 2 1.94 2 3.474 1 Guangxi -0.497 22 -0.585 26 -0.655 24 Guizhou -0.689 28 -0.882 31 -1.053 31 Hainan -0.649 27 -0.242 15 -0.471 19 Hebei 0.0579 11 -0.211 13 -0.273 16 Heilongjiang -0.059 13 -0.022 10 0.013 9 Henan -0.319 18 0.238 8 -0.138 12 Hubei -0.377 19 -0.294 16 -0.12 11 Hunan -0.205 16 -0.232 14 -0.166 13 Inner Mongolia -0.464 20 -0.356 18 -0.772 28 Jiangsu 1.0658 4 0.995 4 2.079 2 Jiangxi -0.64 26 -0.325 17 -0.212 15 Jilin 0.014 12 -0.446 22 -0.589 23 Liaoning 0.3756 7 -0.135 11 0.225 7 Ningxia -0.717 29 -0.735 30 -0.964 30 Qinghai -0.786 30 -0.702 29 -0.676 26 Shaanxi -0.172 15 -0.484 23 -0.573 22 Shandong 0.7848 6 0.383 7 1.001 5 Shanghai 2.2985 1 2.979 1 1.794 3 Shanxi -0.498 23 -0.529 24 -0.48 20 Sichuan -0.157 14 -0.412 20 -0.062 10 Tianjin 0.1729 8 0.402 6 -0.173 14 Tibet -1.002 31 -0.612 27 -0.671 25 Xinjiang 0.1646 9 -0.575 25 -0.513 21 Yunnan -0.48 21 -0.428 21 -0.468 18 Zhejiang 0.7853 5 0.851 5 1.143 4 207 Appendix C-1 Original Data of Assumed Factors in 2004 Basic Factors (3) Provinces Land Areas (sq. km) Population (10 000) Developed Areas (sq. km) Anhui 139600 6461 1123.4 Beijing 16808 1493 1182.3 Chongqing 82370 3122 514.3 Fujian 121400 3511 628.3 Gansu 454300 2619 495.5 Guangdong 178500 8304 3306.1 Guangxi 236700 4889 709.7 Guizhou 176100 3904 332.3 Hainan 33900 818 164.3 Hebei 187700 6809 1248.4 Heilongjian 454000 3817 1417.6 Henan 167000 9717 1422.4 Hubei 185900 6016 1432.1 Hunan 211800 6698 1002.7 Inner Mongolia 118300 2384 699.3 Jiangsu 102600 7433 2252.9 Jiangxi 166900 4284 631.6 Jilin 187400 2709 884.7 Liaoning 145900 4217 1737.3 Ningxia 66400 588 236.4 Qinghai 720000 539 103.3 Shaanxi 205600 3705 675.0 Shandong 156700 9180 2395.6 Shanghai 6340 1742 781.0 Shanxi 156300 3335 541.3 Sichuan 487630 8725 1393.9 Tianjin 11305 1024 500.1 Tibet 1228400 274 72.4 Xinjiang 1660400 1963 585.4 Yunnan 394000 4415 428.4 Zhejiang 101800 4720 1508.5 208 Appendix C-1 1 continued Economic Factors (6) Provinces Gross Regional Product (100 million yuan) Per Capita GRP Local Govt Revenue (10 000 yuan) Anhui 4759.32 7768 4812.68 Beijing 6060.28 37058 4283.31 Chongqing 2692.81 9608 2665.39 Fujian 5763.35 17218 6053.14 Gansu 1688.49 5970 1558.93 Guangdong 18864.62 19707 16039.46 Guangxi 3433.50 7196 3320.1 Guizhou 1677.80 4215 1591.9 Hainan 798.90 9450 769.36 Hebei 8477.63 12918 8768.79 Heilongjian 5511.50 13897 5303.004 Henan 8553.79 9470 8815.09 Hubei 5633.24 10500 6309.92 Hunan 5641.94 9117 5612.26 Inner Mongolia 3041.077 11305 2712.077 Jiangsu 15003.60 20705 15403.16 Jiangxi 3456.70 8189 3495.94 Jilin 3122.01 10932 2958.21 Liaoning 6672.00 16297 6872.652 Ningxia 537.16 7880 460.35 Qinghai 466.10 8606 465.73 Shaanxi 3175.58 7757 2883.51 Shandong 15021.84 16925 15490.73 Shanghai 8072.83 55307 7450.27 Shanxi 3571.37 9150 3042.41 Sichuan 6379.633 8113 6556.013 Tianjin 3110.97 31550 2931.88 Tibet 220.34 7779 211.54 Xinjiang 2209.09 11199 2200.15 Yunnan 3081.91 6733 2959.48 Zhejiang 11648.7023942 11243 209 Appendix C-1 2 continued Economic Factors (6) Provinces Local Govt Expenditure (10 000 yuan) Investment in Fixed Assets (100 million yuan) Expenditure for Foreign Affairs (10 000 yuan) Anhui 6015280 1935.3 4024 Beijing 8982756 2528.2 1859 Chongqing 3957233 1537.1 671 Fujian 5166787 1893.9 2027 Gansu 3569366 733.9 2585 Guangdong 18529500 5870.0 5901 Guangxi 5074721 1236.5 8281 Guizhou 4184181 865.2 1851 Hainan 1272006 317.0 1558 Hebei 7855591 3218.8 8360 Heilongjian 6975516 1430.8 2822 Henan 8799580 3099.4 791 Hubei 6462888 2264.8 1001 Hunan 7195435 2072.6 2335 Inner Mongolia 5641117 1788 1345 Jiangsu 13120404 6557.1 5760 Jiangxi 4540598 1713.2 1025 Jilin 5077758 1169.1 4029 Liaoning 9313979 2979.6 17847 Ningxia 1230177 376.2 1320 Qinghai 1373363 289.2 750 Shaanxi 5163052 1508.9 2059 Shandong 11893716 6970.6 5573 Shanghai 13825254 3050.3 9289 Shanxi 5190569 1443.9 1305 Sichuan 8952534 2818.4 3689 Tianjin 3750212 1245.7 4669 Tibet 1338335 162.4 421 Xinjiang 4210446 1147.2 651 Yunnan 6636354 1291.5 4235 Zhejiang 10629355 5781.4 6781 210 Appendix C-1 3 continued Social Factors (5) Provinces Per Capital Urban Disposable Income (yuan) Per Capita Urban Consumption Expenditure (yuan) Per Capital Rural Net Income (yuan) Per Capita Rural Consumption Expenditure (yuan) Urbaniz a- tion Rate (%) Anhui 7511.43 6367.67 2499.33 2196.232 27.81 Beijing 15637.84 13244.2 6170.33 5315.709 77.54 Chongqing 9220.96 8623.29 2510.41 2142.121 33.09 Fujian 11175.37 8794.41 4089.38 3292.632 41.57 Gansu 7376.74 6529.2 1852.22 1819.579 24.01 Guangdong 13627.65 11809.87 4365.87 3707.733 55.00 Guangxi 8689.99 7032.8 2305.22 2349.601 28.15 Guizhou 7322.05 6159.29 1721.55 1552.387 23.87 Hainan 7735.78 5928.79 2817.62 1969.086 40.11 Hebei 7951.31 6699.67 3171.06 2165.722 26.08 Heilongjiang 7470.71 6178.01 3005.18 2544.649 51.54 Henan 7704.90 6038.02 2553.15 1891.571 23.20 Hubei 8022.75 6736.56 2890.01 2430.188 40.22 Hunan 8617.48 7504.99 2837.76 2756.426 29.75 Inner Mongolia 8122.99 6928.6 2606.37 2446.17 42.68 Jiangsu 10481.93 8621.82 4753.85 3567.109 41.49 Jiangxi 7559.64 6109.39 2786.78 2483.699 27.67 Jilin 7840.61 6794.71 2999.62 2305.976 49.68 Liaoning 8007.56 7369.27 3307.14 2805.94 54.24 Ningxia 7217.87 6404.31 2320.05 2094.483 32.43 Qinghai 7319.67 6245.26 1957.65 1976.025 34.76 Shaanxi 7492.47 6656.46 1866.52 1896.48 34.91 Shandong 9437.80 7457.31 3507.43 2735.772 38.00 Shanghai 16682.82 13773.41 7066.33 7277.943 88.31 Shanxi 7902.86 6342.63 2589.6 1877.696 32.26 Sichuan 7709.87 6891.27 2518.93 2274.173 26.69 Tianjin 11467.16 9653.26 5019.53 3035.961 71.99 Tibet 9106.07 8617.11 1861.31 1723.764 18.93 Xinjiang 7503.42 6207.52 2244.93 1924.412 33.82 Yunnan 8870.88 6996.9 1864.19 1788.997 23.36 Zhejiang 14546.38 12253.74 5944.06 5432.953 48.67 211 Appendix C-1 4 continued Technological and Educational Factors (4) Provinces R&D Expenditure (100 million yuan) Local Govt S&T Appropriation (100 million yuan) Government Expenditure for Education (10 000 yuan) Population with College or Higher Education Anhui 37.9 5.5 1055638 501290 Beijing 317.3 32.6 1213881 499524 Chongqing 23.7 5.0 497847 284546 Fujian 45.9 11.6 1008963 325727 Gansu 14.4 3.3 536579 200282 Guangdong 211.2 65.4 2879522 726866 Guangxi 11.9 6.8 905379 281044 Guizhou 8.7 5.1 737679 179852 Hainan 2.1 1.0 179249 57883 Hebei 43.8 9.9 1423523 697440 Heilongjiang 35.4 12.2 918029 465703 Henan 42.4 10.8 1532898 702846 Hubei 56.6 9.5 1045080 892018 Hunan 37.0 9.4 1043285 639001 Inner Mongolia 7.8 5.0 662206 198709 Jiangsu 214.0 26.8 2143705 994808 Jiangxi 21.5 4.3 737127 489854 Jilin 35.5 4.6 607409 362191 Liaoning 106.9 23.5 1210028 583465 Ningxia 3.1 1.5 161044 41448 Qinghai 3.0 1.0 152629 29483 Shaanxi 83.5 5.3 743497 583926 Shandong 142.1 22.8 2048284 946124 Shanghai 171.1 39.3 1553500 415701 Shanxi 23.4 6.3 802684 345318 Sichuan 78.0 10.8 1225217 637340 Tianjin 53.8 11.5 553991 285655 Tibet 0.4 0.7 151132 14731 Xinjiang 6.0 4.5 613943 163127 Yunnan 12.5 8.4 1118233 216308 Zhejiang 115.5 38.4 2000797 572759 212 Appendix C-2 Original Data of Assumed Factors in 2005 Basic Factors (3) Provinces Land Areas (sq. km) Provinces Land Areas (sq. km) Anhui 139600 6120 1260.4 Beijing 16808 1538 1200.0 Chongqing 82370 2798 582.5 Fujian 121400 3535 672.6 Gansu 454300 2594 507.4 Guangdong 178500 9194 3619.1 Guangxi 236700 4660 772.2 Guizhou 176100 3730 371.9 Hainan 33900 828 194.2 Hebei 187700 6851 1316.4 Heilongjian 454000 3820 1496.0 Henan 167000 9380 1572.0 Hubei 185900 5710 1417.3 Hunan 211800 6326 1032.9 Inner Mongolia 118300 2386 824.4 Jiangsu 102600 7475 2378.6 Jiangxi 166900 4311 663.6 Jilin 187400 2716 942.9 Liaoning 145900 4221 1779.9 Ningxia 66400 596 248.9 Qinghai 720000 543 105.9 Shaanxi 205600 3720 709.3 Shandong 156700 9248 2675.5 Shanghai 6340 1778 819.9 Shanxi 156300 3355 561.7 Sichuan 487630 8212 1442.9 Tianjin 11305 1043 530.0 Tibet 1228400 277 74.8 Xinjiang 1660400 2010 595.5 Yunnan 394000 4450 472.4 Zhejiang 101800 4898 1679.7 213 Appendix C-2 1 continued Economic Factors (6) Provinces Gross Regional Product (100 million yuan) Per Capita GRP Local Govt Revenue (10 000 yuan) Anhui 5375.12 8675 3340170 Beijing 6886.31 45444 9192098 Chongqing 3070.49 10982 2568072 Fujian 6568.93 18646 4326003 Gansu 1933.98 7477 1235026 Guangdong 22366.54 24435 18072044 Guangxi 4075.75 8788 2830359 Guizhou 1979.06 5052 1824963 Hainan 894.57 10871 686802 Hebei 10096.11 14782 5157017 Heilongjian 5511.50 14434 3182056 Henan 10587.42 11346 5376514 Hubei 6520.14 11431 3755217 Hunan 6511.34 10426 3952651 Inner Mongolia 3895.55 16331 2774553 Jiangsu 18305.66 24560 13226753 Jiangxi 4056.76 9440 2529236 Jilin 3620.27 13348 2071520 Liaoning 8009.01 18983 6752768 Ningxia 606.10 10239 477216 Qinghai 543.32 10045 338222 Shaanxi 3675.66 9899 2753183 Shandong 18516.87 20096 10731250 Shanghai 9154.18 51474 14173976 Shanxi 4179.52 12495 3683437 Sichuan 7385.11 9060 4796635 Tianjin 3697.62 35783 3318507 Tibet 251.21 9114 120312 Xinjiang 2604.19 13108 1803184 Yunnan 3472.89 7835 3126490 Zhejiang 13437.8527703 10665964 214 Appendix C-2 2 continued Economic Factors (6) Provinces Local Govt Expenditure (10 000 yuan) Investment in Fixed Assets (100 million yuan) Expenditure for Foreign Affairs (10 000 yuan) Anhui 7130633 2525.1 4957 Beijing 10583114 2827.2 1597 Chongqing 4873543 1933.2 616 Fujian 5930663 2316.7 1791 Gansu 4293479 870.4 2372 Guangdong 22890691 6977.9 6826 Guangxi 6114806 1661.2 8929 Guizhou 5207261 998.3 1483 Hainan 1512421 367.2 1731 Hebei 9791635 4139.7 8429 Heilongjian 7877854 1737.3 2673 Henan 11160412 4311.6 1396 Hubei 7787159 2676.6 1767 Hunan 8734181 2629.1 3070 Inner Mongolia 6818772 2643.6 2358 Jiangsu 16733965 8165.4 6762 Jiangxi 5639525 2176.6 1065 Jilin 6311212 1741.1 3241 Liaoning 12043636 4200.4 18811 Ningxia 1602509 443.3 1226 Qinghai 1697547 329.8 1025 Shaanxi 6389627 1882.2 1345 Shandong 14662271 9307.3 4639 Shanghai 16462550 3509.7 10410 Shanxi 6687508 1826.6 1456 Sichuan 10821769 3585.2 3627 Tianjin 4421207 1495.1 6260 Tibet 1854502 181.4 675 Xinjiang 5190179 1339.1 1277 Yunnan 7663115 1777.6 3680 Zhejiang 12655345 6520.1 8049 215 Appendix C-2 3 continued Social Factors (3) Provinces Per Capital Urban Disposable Income (yuan) Per Capita Urban Consumption Expenditure (yuan) Per Capital Rural Net Income (yuan) Per Capita Rural Consumption Expenditure (yuan) Urbaniz a- tion Rate (%) Anhui 8470.68 6367.67 2640.96 2196.232 35.50 Beijing 17652.95 13244.2 7346.26 5315.709 83.62 Chongqing 10243.46 8623.29 2809.32 2142.121 45.20 Fujian 12321.31 8794.41 4450.36 3292.632 47.30 Gansu 8086.82 6529.2 1979.88 1819.579 30.02 Guangdong 14769.94 11809.87 4690.49 3707.733 60.68 Guangxi 9286.70 7032.8 2494.67 2349.601 33.62 Guizhou 8151.13 6159.29 1876.96 1552.387 26.87 Hainan 8123.94 5928.79 3004.03 1969.086 45.20 Hebei 9107.09 6699.67 3481.64 2165.722 37.69 Heilongjiang 8272.51 6178.01 3221.27 2544.649 53.10 Henan 8667.97 6038.02 2870.58 1891.571 30.65 Hubei 8785.94 6736.56 3099.20 2430.188 43.20 Hunan 9523.97 7504.99 3117.74 2756.426 37.00 Inner Mongolia 9136.79 6928.6 2988.87 2446.17 47.20 Jiangsu 12318.57 8621.82 5276.29 3567.109 50.11 Jiangxi 8619.66 6109.39 3128.89 2483.699 37.00 Jilin 8690.62 6794.71 3263.99 2305.976 52.52 Liaoning 9107.55 7369.27 3690.21 2805.94 58.70 Ningxia 8093.64 6404.31 2508.89 2094.483 42.28 Qinghai 8057.85 6245.26 2151.46 1976.025 39.25 Shaanxi 8272.02 6656.46 2052.63 1896.48 37.23 Shandong 10744.79 7457.31 3930.55 2735.772 45.00 Shanghai 18645.03 13773.41 8247.77 7277.943 89.09 Shanxi 8913.91 6342.63 2890.66 1877.696 42.11 Sichuan 8385.96 6891.27 2802.78 2274.173 33.00 Tianjin 12638.55 9653.26 5579.87 3035.961 75.11 Tibet 9431.18 8617.11 2077.90 1723.764 26.65 Xinjiang 7990.15 6207.52 2482.15 1924.412 37.15 Yunnan 9265.90 6996.9 2041.79 1788.997 29.50 Zhejiang 16293.77 12253.74 6659.95 5432.953 56.02 216 Appendix C-2 4 continued Technological and Educational Factors (4) Provinces R&D Expenditure (100 million yuan) Govt S&T Appropriation (100 million yuan) Government Expenditure for Education (10 000 yuan) Population with College or Higher Education Anhui 45.9 6 1386903.9 29007 Beijing 382.1 37.6 2983476.1 48001 Chongqing 32 6 826797.5 16122 Fujian 53.6 13.6 1391027.1 21877 Gansu 19.6 3.8 727916.5 13637 Guangdong 243.8 83.8 4217378.9 66510 Guangxi 14.6 7.8 1060559.5 22556 Guizhou 11 7.8 816926.9 14897 Hainan 1.6 1.3 248164.2 5524 Hebei 58.9 11.2 1754771.2 40036 Heilongjiang 48.9 11.9 1370091.6 30888 Henan 55.6 13.8 1966366.2 48450 Hubei 75 11.4 1531661.1 36287 Hunan 44.5 12.3 1409498.3 34917 Inner Mongolia 11.7 7 855424.3 23660 Jiangsu 269.8 35.7 3099409.2 63909 Jiangxi 28.5 4.9 831076.3 19946 Jilin 39.3 6.9 985194.0 22832 Liaoning 124.7 28 1774299.7 44404 Ningxia 3.2 2 223603.9 4895 Qinghai 3 1.3 190741.6 4682 Shaanxi 92.4 6.8 1144359.2 28734 Shandong 195.1 26.5 2561587.9 50909 Shanghai 208.4 79.3 2285942.5 40549 Shanxi 26.3 6.5 1012934.1 23197 Sichuan 96.6 12.7 1828023.3 35297 Tianjin 72.6 13.7 781629.6 18601 Tibet 0.3 0.8 222773.7 293 Xinjiang 6.4 6.2 924891.6 21340 Yunnan 21.3 10.5 1391479.8 18117 Zhejiang 163.3 502853665.1 33115 217 Appendix C-3 Original Data of Assumed Factors in 2006 Basic Factors (3) Provinces Land Areas (sq. km) Population (10 000) Developed Areas (sq. km) Anhui 139600 6110 1135.9 Beijing 16808 1581 1254.2 Chongqing 82370 2808 631.4 Fujian 121400 3558 780.1 Gansu 454300 2606 523.8 Guangdong 178500 9304 3705.7 Guangxi 236700 4719 738.3 Guizhou 176100 3757 404.7 Hainan 33900 836 196.5 Hebei 187700 6898 1417.0 Heilongjian 454000 3823 1467.2 Henan 167000 9392 1678.6 Hubei 185900 5693 1298.1 Hunan 211800 6342 1037.0 Inner Mongolia 118300 2397 830.1 Jiangsu 102600 7550 2583.0 Jiangxi 166900 4339 758.0 Jilin 187400 2723 1013.2 Liaoning 145900 4271 1859.6 Ningxia 66400 604 269.4 Qinghai 720000 548 109.5 Shaanxi 205600 3735 733.9 Shandong 156700 9309 2895.1 Shanghai 6340 1815 860.2 Shanxi 156300 3375 628.6 Sichuan 487630 8169 1272.9 Tianjin 11305 1075 540.0 Tibet 1228400 281 78.0 Xinjiang 1660400 2050 673.9 Yunnan 394000 4483 542.3 Zhejiang 101800 4980 1744.2 218 Appendix C-3 1 continued Economic Factors (6) Provinces Gross Regional Product (100 million yuan) Per Capita GRP (yuan) Local Government Revenue (10 000 yuan) Anhui 6148.73 10055 4280265 Beijing 7870.28 50467 11171514 Chongqing 3491.57 12457 3177165 Fujian 7614.55 21471 5411707 Gansu 2276.7 8757 1412152 Guangdong 26204.47 28332 21794608 Guangxi 4828.51 10296 3425788 Guizhou 2282 5787 2268157 Hainan 1052.85 12654 818139 Hebei 11660.43 16962 6205340 Heilongjian 6188.9 16195 3868440 Henan 12495.97 13313 6791715 Hubei 7581.32 13296 4760823 Hunan 7568.89 11950 4779274 Inner Mongolia 4791.48 20053 3433774 Jiangsu 21645.08 28814 16566820 Jiangxi 4670.53 10798 3055214 Jilin 4275.12 15720 2452045 Liaoning 9251.15 21788 8176718 Ningxia 710.76 11847 613570 Qinghai 641.58 11762 422437 Shaanxi 4523.74 12138 3624805 Shandong 22077.36 23794 13562526 Shanghai 10366.37 57695 15760742 Shanxi 4752.54 14123 5833752 Sichuan 8637.81 10546 6075850 Tianjin 4359.15 41163 4170479 Tibet 291.01 10430 145607 Xinjiang 3045.26 15000 2194628 Yunnan 4006.72 8970 3799702 Zhejiang 15742.5131874 12982044 219 Appendix C-3 2 continued Economic Factors (6) Provinces Local Govt Expenditure (10 000 yuan) Investment in Fixed Assets (100 million yuan) Expenditure for Foreign Affairs (10 000 yuan) Anhui 9402329 3533.6 6078 Beijing 12968389 3296.4 3172 Chongqing 5942543 2407.4 661 Fujian 7286973 2981.8 2745 Gansu 5285946 1022.6 2830 Guangdong 25533399 7973.4 5835 Guangxi 7295172 2198.7 10942 Guizhou 6106411 1197.4 2087 Hainan 1745366 423.9 1645 Hebei 11803590 5470.2 9223 Heilongjian 9685255 22365 2678 Henan 14400878 5904.7 1704 Hubei 10470041 3343.5 2696 Hunan 10645177 3175.5 3393 Inner Mongolia 8121330 3363.2 3699 Jiangsu 20132502 10069.2 6778 Jiangxi 6964361 2683.6 1407 Jilin 7183588 2594.3 3555 Liaoning 14227471 5689.6 17894 Ningxia 1932089 498.7 1748 Qinghai 2146628 408.5 1262 Shaanxi 8241805 2480.7 1929 Shandong 18334400 11111.4 4905 Shanghai 17955660 3900.0 11117 Shanxi 9155698 2255.7 1827 Sichuan 13473951 4412.9 3989 Tianjin 5431219 1820.5 6263 Tibet 2001969 231.1 323 Xinjiang 6784723 1567.1 1079 Yunnan 8935821 2208.6 3754 Zhejiang 14718593 7590.2 8906 220 Appendix C-3 3 continued Social Factors (5) Provinces Per Capital Urban Disposable Income (yuan) Per Capita Urban Consumption Expenditure (yuan) Per Capital Rural Net Income (yuan) Per Capita Rural Consumption Expenditure (yuan) Urbaniza- tion Rate (%) Anhui 9771.05 7294.73 2969.08 2420.94 37.1 Beijing 19977.52 14825.41 8275.47 5724.5 84.33 Chongqing 11569.74 9398.69 2873.83 2205.21 46.7 Fujian 13753.28 9807.71 4834.75 3591.4 48 Gansu 8920.59 6974.21 2134.05 1855.49 31.09 Guangdong 16015.58 12432.22 5079.78 3885.97 63 Guangxi 9898.75 6791.95 2770.48 2413.93 34.64 Guizhou 9116.61 6848.39 1984.62 1627.07 27.46 Hainan 9395.13 7126.78 3255.53 2232.19 46.1 Hebei 10304.56 7343.49 3801.82 2495.33 38.44 Heilongjiang 9182.31 6655.43 3552.43 2618.19 53.5 Henan 9810.26 6685.18 3261.03 2229.28 32.47 Hubei 9802.65 7397.32 3419.35 2732.46 43.8 Hunan 10504.67 8169.3 3389.62 3013.32 38.71 Inner Mongolia 10357.99 7666.61 3341.88 2771.97 48.64 Jiangsu 14084.26 9628.59 5813.23 4135.21 51.9 Jiangxi 9551.12 6645.54 3459.53 2676.6 38.68 Jilin 9775.07 7352.64 3641.13 2700.66 52.97 Liaoning 10369.61 7987.49 4090.4 3066.87 58.99 Ningxia 9177.26 7205.57 2760.14 2246.97 43 Qinghai 9000.35 6530.11 2358.37 2178.95 39.26 Shaanxi 9267.7 7553.28 2260.19 2181 39.12 Shandong 12192.24 8468.4 4368.33 3143.8 46.1 Shanghai 20667.91 14761.75 9138.65 8006 88.7 Shanxi 10027.7 7170.94 3180.92 2253.25 43.01 Sichuan 9350.11 7524.81 3002.38 2395.04 34.3 Tianjin 14283.09 10548.05 6227.94 3341.06 75.73 Tibet 8941.08 6192.57 2435.02 2002.24 28.21 Xinjiang 8871.27 6730.01 2737.28 2032.36 37.94 Yunnan 10069.89 7379.81 2250.46 2195.64 30.5 Zhejiang 18265.1 13348.51 7334.81 6057.16 56.5 221 Appendix C-2 4 continued Technological and Educational Factors (4) Provinces R&D Expenditure (100 million yuan) Local Government S&T Appropriation (100 million yuan) Government Expenditure for Education (10 000 yuan) Population with College or Higher Education Anhui 59.3 8.9 1520858 663684 Beijing 433.0 60.5 1751755 565779 Chongqing 36.9 7.5 786380 376118 Fujian 67.4 15.4 1362444 461341 Gansu 24.0 4.4 874820 263691 Guangdong 313.0 104.1 3926235 1008577 Guangxi 18.2 9.3 1354638 387447 Guizhou 14.5 7.6 1119194 221546 Hainan 2.1 1.7 278479 90138 Hebei 76.7 13.5 1895526 862618 Heilongjiang 57.0 13.6 1337055 592000 Henan 79.8 17.6 2331485 974096 Hubei 94.4 16.2 1454723 1092274 Hunan 53.6 14.3 1422621 830181 Inner Mongolia 16.5 7.9 950332 252917 Jiangsu 346.1 54.4 2982252 1306181 Jiangxi 37.8 6.0 1037596 770525 Jilin 40.9 8.5 912752 435065 Liaoning 135.8 34.5 1668888 720548 Ningxia 5.0 2.0 246179 55931 Qinghai 3.3 1.5 243755 35983 Shaanxi 101.4 10.3 1280080 726219 Shandong 234.1 41.1 2922839 1338122 Shanghai 258.8 94.9 2054600 466333 Shanxi 36.3 8.1 1208708 446428 Sichuan 107.8 14.6 1818699 860640 Tianjin 95.2 18.3 815828 357382 Tibet 0.5 0.9 205964 23327 Xinjiang 8.5 7.3 892786 199251 Yunnan 20.9 11.4 1503948 284230 Zhejiang 224.0 62.9 2690418 719869

Abstract (if available)

Abstract China's local foreign-related activities have rapidly developed with the brisk pace of globalization and localization since China opened to the outside world in the late 1970s, bringing about a great impact on its national diplomacy and local economy. Few studies, however, concern why and how the Chinese local governments voluntarily conduct foreign activities, nor how to evaluate or what factors help shape the foreign-related achievements. Based on literature review and empirical evidence, this study examines the foreign activities of China's 31 provincial-level governments in a globalization perspective. It first explores why and how the provincial governments interact with the transnational flow of capital, goods, people and information, which are most important agents of globalization. Second, an index is created to evaluate and rank the foreign-related achievements of China's 31 provincial governments (FACPG) during 2004-2006 by processing the official data collected. Third, 18 factors are tested to make sure whether and to what extent they push up or pull down FACPG.

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University of Southern California Dissertations and Theses

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Asset Metadata

Creator Chu, Yanli (author)

Core Title Foreign-related activities of the Chinese local governments and agents of globalization: a case study of 31 provinces in mainland China

School School of Policy, Planning, and Development

Degree Doctor of Planning and Development Studies

Degree Program Planning

Publication Date 07/05/2008

Defense Date 12/14/2007

Publisher University of Southern California (original), University of Southern California. Libraries (digital)

Tag agents of globalization,Local government,OAI-PMH Harvest

Place Name China (countries)

Language English

Advisor Banerjee, Tridib (committee chair), Cooper, Eugene (committee member), Tang, Shui Yan (committee member), Woo, Michael (committee member)

Creator Email YANLICHU@USC.EDU

Permanent Link (DOI) https://doi.org/10.25549/usctheses-m1319

Unique identifier UC1174125

Identifier etd-Chu-20080705 (filename),usctheses-m40 (legacy collection record id),usctheses-c127-191639 (legacy record id),usctheses-m1319 (legacy record id)

Legacy Identifier etd-Chu-20080705.pdf

Dmrecord 191639

Document Type Dissertation

Rights Chu, Yanli

Type texts

Source University of Southern California (contributing entity), University of Southern California Dissertations and Theses (collection)

Repository Name Libraries, University of Southern California

Repository Location Los Angeles, California

Repository Email cisadmin@lib.usc.edu