Foreign-investment-induced Exo-urbanisation in the Pearl River Delta, China

Abstract

Urbanisation in the People's Republic of China during 1949-78 was mainly driven by internal forces under a self-reliant, centrally planned economic system. Since the Opening and Reform initiated in 1978, external forces, especially foreign investment inflow, have emerged as a new driving force of urbanisation in some parts of China, particularly in the Pearl River Delta (the Delta) of South China. This study investigates the nature and pattern of this new type of urbanisation, which we label as exo(genous)-urbanisation. Foreign direct investment (FDI) into the Delta is mainly characterised by small and medium-scale, labour-intensive, processing-types of manufacturing and trade-creative investment coming from Hong Kong and Macao. It shows a spatial tendency within the host region's urban hierarchy in favour of small cities and counties and a distinct border orientation. This contrasts with the concentration in large metropolises or economic core regions found in most less developing countries. Such FDI has interacted with internal reforms to effect significant changes in the Delta during 1978-93, such as economic restructuring, rural industrialisation, the emergence of an export-oriented economy and its rapid integration with the world economy. It has also generated massive population in-migration and dramatic landscape transformation there. Put simply, exo-urbanisation in the Delta shows a predominant growth of small urban centres particularly those along the border with Hong Kong and Macao and hence a more equal level of urbanisation in the Delta and a declining primacy of Guangzhou, the regional primate city. However, exo-urbanisation in the Delta also raises doubts on social and environmental fronts as well as on its durability. The FDI inflow and the newly created export-oriented industrialisation and urban growth in the Delta are obviously subject to vicissitudes of the world market. In spite of this, contemporary urbanisation theories should give attention to the role of external forces. Further studies on exo-urbanisation are not only practical for development and planning in areas under intensive inflow of foreign investment, but could also enrich the literature on the globalisation process and its impacts on the developing countries.