Can the Chinese Economy Be Spatially Optimized?

Abstract

There have been two potentially contradictory metaphors pervading contemporary commentary on the nature and trajectory of the Chinese political economy. First of all, there is the more benign metaphor of the ‘nationalization’ of economic activities, which presents a picture of an environment in which economic agents, especially multiregional firms, are increasingly indifferent to political boundaries, competing in the ‘national market’ and satisfying the demands of consumers whose tastes are increasingly homogeneous across borders. Second, there is the view of the national economy as increasingly defined by different ‘regional blocs’ which are marked by high levels of intra-regional interdependence but which compete nationally. In principle, spatial economic separation may effectively be reduced to a minimum level within a sovereign country by the central government. Due to the diversified natural, geographical environments and the heterogeneous social and cultural conditions in China, however, the Chinese economy has been spatially separated by a series of natural and artificial barriers. This kind of spatial separation became particularly serious during the period when the centrally planned system was transformed into a decentralized administrative system. Let us look briefly at this spatial separation and its negative effects on the Chinese economy through three aspects — geography, institution and culture.KeywordsPolitical AuthorityChinese EconomyTechnical ConstraintRegional Economic DevelopmentGoal Programming ModelThese keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.