China Adjusts to the World Economy: The Political Economy of China's Coastal Development Strategy

Abstract

E XPORT-ORIENTED DEVELOPMENT has become, in words of Jagdish Bhagwati, the new economic orthodoxy in development studies.' Major international organizations, led by World Bank, now prescribe export orientation as leading cure for poor economic performance in developing economies, wherejanus-faced elites cry for more development aid to alleviate dire poverty and in same breath tout their country's wondrous foreign investment environment. Starting from a few tentative steps toward opening to outside world in 1970s, China has become one more in expanding group of countries to embrace doctrine of export orientation. Since late 1970s, China's foreign trade volume has grown by leaps and bounds, rising from slightly over U.S. $20 billion in 1978 to over U.S. $111 billion in 1989. Capping trend toward outward orientation, Chinese leadership formally launched its own version of export-oriented development strategy in early 1988, which was officially christened outward-oriented development strategy in coastal areas [yanzai diqu waixiangxingfazhan zhanlue], or ''coastal development strategy. China's coastal region includes twelve provinces: Liaoning, Beijing, Tianjin, Hebei, Shandong, Jiangsu, Shanghai, Zhejiang, Fujian, Guangdong, Guangxi, and, since 1988, Hainan. In 1986, coastal region accounted for less than 14 percent of China's land area and 41.3 percent of China's population, but over 60 percent of gross national industrial output and 79 percent of China's foreign trade.2 Briefly put, coastal development strategy was intended to allow more prosperous coastal provinces to fully participate in international