Local Political Regimes & State Entrepreneurs in China

Reading reponse to David L. Wank, Commodifying Communism: Business, Trust, and Politics in a Chinese City. Cambridge: Cambridge University Press, 1999.

Through the case studies on China’s southern city Xiamen, David Wank investigates how market economy emerges from a communist order. The central thesis of his book Commodifying Communism: Business, Trust, and Politics in a Chinese City is that the revival of private business in China does not lead to the decline of patron-client ties but rather to the emergence of new commercialized forms of clientelism. I found this book helpful in understanding the practice of private business in China in terms of three major issues: access to resources, commodification and clientelist ties.

Building upon David Stark and Victor Nee’s words, Wank highlight the fact that economic reform entails the redrawing of the boundaries between the state and society and shaping new patterns of transactions, mediation, and bargaining across them. (7) The subject concerned in the new state-society relationship is the various resources that are originally monopolized by the state. Economic reform, hence, involves the demonopolization of state resources and making them accessible to the private sectors. Wank termed this transformation process “commodification”, as it signifies the process by which previously unpriced resources owned by the state to be the objects of priced calculation and being transacted in the market. Commodification is therefore the transformation of institutionalized social relations of control over these resources. (29) I found Wank’s analysis fascinating as it explains many issues that we have discussed regarding China’s transitional economy, such as the emerge of private businesses, as well as how land - a state-monopolized resource - is commodified to generate revenue according to the market price calculation.

Wank continues to unfold the different dimensions of commodifying process in China’s market reform. There are three aspects of commodification: economy, network and polity. By economy, he means the commodification of state monopoly; by network, he means the commodification of patron-client network that is the legacies of the planned economy; and by means of polity, he means the commodification of the social network into an institutional element in China’s emerging market economy.

Wank makes particular emphasis on the clientelist ties (commonly know as guanxi) to the commodifying process in China. He raises high the importance of clientelist ties as a way to provide weaker parties with steadier access to resources. The clientelist ties between the exchange parties (the state and the private entrepreneurs) enhance expectations on the likely behavior of others by embedding interactions in social norms and practices. The significances of Wank’s research on clientelist ties lays in two folds: firstly, it provides a good account on how the pre-reform legacies on social network maintains, reinterprets, and commodified in the reform era, allowing the emergence of new patterns of bargaining and alliance across the boundaries of state and society; secondly, it provides an throughout analysis on the natures of clientelist ties, in which they are (i) market transactions; (ii) embodied social trust, and (iii) embodied political contestation.

Although Wank remarks that the clientelist ties have many positive effects to China’s emerging market economic, such as allowing greater clarity (as compared to the ambitrary statist mechanism), predictability (as compare to China’s ever-changing policies) and institutional flexibility (as compare to huge variations in policy implementation), I would worry that the emphasis on the clientelist ties over the development of legal and institutional structures will lead to both corruption and the failure of China to achieve a unified standard in policy implementation in the local level. Especially when there are more and more foreign investors coming to China, they may not be able to participate in the localized clientist social network. Clear legal and institutional structures will be needed for the long term development of the market economy.

Hyper-Traditions

Abstract(s) submitted to 2006 IASTE Conference

Learning from Las Vegas! The Recent Development of Macao’s Mega- Casino/resorts

In his influential book on Las Vegas, Robert Venturi points out that visiting Las Vegas in the mid 1960s was like visiting Rome in the late 1940s. To Venturi, there are many parallels between Las Vegas and Rome; the only difference is that Las Vegas was built in one day - the small desert city’s short history cannot be comparable to the long history of the ancient Rome.

Ever since the publishing of Venturi’s book in 1972, Las Vegas has changed dramatically over the past decades. If Venturi considers the city as the paradigm of North American urbanism in the 1960s, then today’s Las Vegas can be considered as the paradigm of Neo-liberal urbanism. The thematic mega- casino/resorts in Las Vegas are all using mimics of historic icons to attract visitors, such as the pyramid, the Statue of Liberty, the Eiffel Tower, the Venetian grand canal, and etc. Many scholars hence highlight the fact that traditions and heritages from other parts of the world are being decontextualized, mimicked and transplanted to Las Vegas. They argue that traditions and heritages are no longer place-specific. Nevertheless, few aware that the borrowed traditions and heritages have been localized in Las Vegas; it is such concentration of mimicked heritages and the commodified experiences embodied in the space of spectacle that create the unique sense of place in Las Vegas. The meaning of “place” has been problematized in this special case.

Interestingly, the borrowed heritages in Las Vegas can be further transplanted to place such as Macao, a small city in southern China. Commonly known as “Las Vegas of the Orient”, Macao is a former Portuguese colony that was handover back to China in 1999, and becomes one of the two Special Administrative Regions (SAR) in the country. Because of its colonial legacies, Macao is the only place in China where gambling is legalized. The gambling industry is the major revenue generator in the city’s economy. When Macao relaxed the restrictions on casino licensing in early 2000s, the city is following the footsteps of Las Vegas. TNCs poured into Macao and built mega- casino/resorts with themes same as those in Las Vegas. Within few year’s time, the “Las Vegas traditions and heritages” have been transplanted to Macao. Visiting today’s Macao is the same as visiting today’s Las Vegas. If Las Vegas was built in one day, then Macao was built in, perhaps, one minute.

Nevertheless, same as the case in Las Vegas, the transplanted heritages intertwined with the local heritages in Macao and localized to form a unique hyper-tradition. This paper, therefore, aims to discuss the contesting forces of globalization and localizations. Through the case studies on Las Vegas and Macao, this paper argues that:

1. Traditions can be decontextualized and transplants for multiple times;
2. In each time, the transplanted traditions are localized to form new hyper-traditions;
3. Along with the wide spread of globalization, it will take shorter and shorter time for traditions to be transplanted and localized.

Shenzhen: A City of Outsiders

What would a city look like if half of its population are immigrants, and its economic activities depends heavily on its neighboring city? Shenzhen, China’s first special economic zone, has grown from a fishing village of thirty thousands people into a city with a population of eight millions in the past two decades. Half of the total population is a floating population, meaning people who reside in the city for less than a year. Taking the advantage of abutting Hong Kong, Shenzhen has not only attracted huge investments but also visitors and tourists from its neighbour. How does the influx of outsiders, namely the Chinese immigrants and the Hong Kong visitors, affected Shenzhen’s local identities and shaped the city’s urban development?

Being an experimental city under China’s economic reform and open door policy initiated in early 1980s, Shenzhen has successfully transit into a city of commerce, consumption and spectacle. The high-dense city centre is packed with commercial high-rises, shopping malls, restaurants and entertaining amenities target to serve foreign investors, tourists and visitors; many of them mimic the developments in Hong Kong to give a sense of “Hong Kongness”, which is considered as a sign of modernity. Many foreign or local investors also fond of commissioning Hong Kong architects to design their commercial or retail projects, resulting in the importation of Hong Kong architecture and urban landscape. To develop its cultural tourism, the municipal government has opened eight theme parks in Shenzhen; ironically, these theme parks, notably the “Window to the World” and “Splendid China”, are not there to advocate local culture but to compress the foreign heritages and traditions into a confined exhibitionary space for not the locals but for the visitors.

Yet, the rapid development of Shenzhen’s economy is in fact backed up by the continuous supply of low-paid immigrant workers from all over China. In the outskirt of Shenzhen, rows of workers’ dormitories dominated the city’s sub-urban landscape. If not working in the sub-urban factories, these immigrants work in the service sectors whose consumers are mainly the visiting Hong Kongers. Seemingly, Shenzhen has been dominated by the outsiders and has lost its local identities.

Through studying the history of urbanization of Shenzhen since early 1980s, this paper aims to discuss how the influx of outsiders has affected the city’s local identities and urban development. It argues that the dynamic interactions between the locals and the outsiders, between the domestic and foreign culture, have created a hyper-tradition and culture in the city of Shenzhen, which is speculative, hybrid and rapid-changing in nature.

Property & the Land Market in US and East European Transitional Cities

Last week in class we have discussed how land serves as a valuable resource to generate revenue. Yet, Walker’s article reveals that the value of land is not fixed. By using San Francisco Bay Area as an example, Walker illustrates how the land value is linked to the new economy of the region in the turn of the twenty-first century. The economic condition of the Bay Area directly affects the real estate market and hence, influences the shaping of its urban landscape. In this regards, the land value is not fixed; rather, it is flowing according to the socio-economic development.

The flowing land value is further illustrated by Verdery in her studies on the decollectivization of Transylvania. The lands in Transylvania devalued once they are privatized, i.e. to return the lands to their original owners before the collectivization. Last week when studying the decollectivtization of China, we agree that China’s booming economy is partly related to its ability to turn land as a dead asset into a lived asset, by using de Soto’s terms; and its institutional arrangement facilitates the circulation of the asset in both formal/informal and legal/illegal market. However, the case of Transylvania shows that simply granting private land titles does not immediately turns the dead asset into lived one. The peasants in Transylvania cannot afford the purchase of tools for cultivation, and their lands hence lose the use value as mean of production. The exchange value of the peasants’ lands also declined since the institutional and legal arrangements in Transylvania prohibit the circulation of the agricultural land in the market. The socio-economic condition in Transylvania does not provoke the turning of land from dead asset to lived asset.

Verdery also points out that property right is not just about right but also about accountability. Along with the granting of land titles to the peasants in Transylvania, there come the obligations, liabilities and risks. The concept of obligations and liabilities in property right can also be found in the leasing of land in China, where the leaser has to commit in certain conditions as stipulated in the land lease. But for the case in Transylvania, the declining land value greatly raises the risk that the land owner, land renters and land users have to bear. The land renter (which is usually more powerful in the case in Transylvania) develops various contractual arrangements with the land ower/user in order to share the risks, which in return further complicates the power relationship among the parties and limited the potential increase of the land value. The situation becomes more intricate when it involves overlapping ownership or collective ownership which are the products of socialist legacies.

Therefore, Verdery highlights that property is, instead of a bundle of rights, a bundle of powers - a term that we have briefly discussed last week. She stresses the fuzziness of property and concludes that “property” is in fact about social relations, relations among persons rather than between person and things. I doubts if her conclusion is only applicable to the case of Transylvania but not other capitalist societies, or even not to other postsocialist societies. I agree with her that the special ownership patterns of Transylvania has generated the kind of fuzziness because of its complexly overlapping rights, obligations, and claims that emerge from socialist property relations. Yet, I am still not sure if this fuzziness is due to the special situation of property arrangement in Transylvania, or if it is generally applicable to other transitional postsocialist states. Although in the case of China we also observe the same kind of ambiguity in property right, it different greatly from Transylvania in terms of out outcome: China enjoys great economic growth due to the changing land policy. I guess our picture would be more completed if we can include the former Soviet Union into our case study.

Exhibitionary Complex - The Space of Spectacle

The exhibitionary complex is a good example to illustrate the influence of neoliberalism, for the complex is a decontextualized architecture where the space and time are compressed in one contained environment. The “nationalism/ history/ culture” presented in the exhibitionary complex is in fact reconstructed by the state (or other powerful agencies) to help creating a consent among the people: through educating the people in the exhibitionary complex, the state is able to implant what it believe as the “real” history or culture to the people. In addition, the exhibitionary complex provides a space of spectacle where people could see and could be seen in an ordered manner. Our experiences in the exhibitionary complex are being conditioned in a way predetermined by the state, or being commodified in which we have to pay in order to have particular experiences.

Every summer in Hong Kong, there is a bookfair held in the grand Hong Kong Convention and Exhibition Center. Though the people have to buy the ticket in order to enter the exhibition center, the bookfair still attracts several hundred thousands people every year. I am always curious why these huge amounts of people not simply shop in the bookstores in the city, but go to the bookfair even though they need to pay the entry fee. Now, I aware that what these people longing for is not only the books (the commodity itself), but the entire experience of joining the bookfair (the commodified experience), where they can see the books that are displayed as exhibits rather than as commodities on the bookshelves, and see the people such as the authors that stationed in the stalls.

Property politics in China

This week's readings shed light on three issues that I consider essential to our discussion on the process of urbanization in China: (i) land as an important resource to generate state revenue; (ii) the power struggle in maneuvering China’s resources, and (iii) the development of an institutional structure that regulate the maneuvering of resources.

Last week, we have briefly touched on the question that, “how does China transit its economy and lead to a development that is now unstoppable?” This question is not easy to answer; yet, I am sure that two major transitions, both relate to the mean of production, have made China’s economy with tremendous vigor: (i) the transformation of huge agricultural forces in the countryside into industrial forces; and (ii) the creation of the land leasing market. Personally, I consider China's strategy to separate the land ownership with land use right as a brilliant idea. On one hand, it maintains the socialist ideology that the state is the sole owner of land; on the other hand, it allows the commodification of land tenure without privatization. The development of the land market also allows the implementation of the dual-track system, in which private enterprises are able to develop on leased land, while SOEs remain in the public land. The dual-track system is crucial to China’s gradual transition to market economy, for it not just allows the co-existences of SOEs and private enterprises; it also provokes the reform of SOEs when facing with the increased competition with the private enterprises in the market.

Yet, who is going to control and maneuver land – the valuable resource in China? In the past weeks we have discussed the process of urbanization in both US and China. The former is characterized by the concentration of development in the cities, while the latter is characterized by the decentralization of development in the country. Because of these differences, their corresponding patterns of resources extraction are also varied. To allow the development of land market in a decentralized spatial structure, the state requires the imposition of an institutional framework that is multi-layered in nature, which in return induces the power struggles among these institutional layers. This week’s readings unfold the evolution of institution arrangement in China that seeks to cater for the expanding land market, as well as its implications and consequences, such as the power reshuffling in different administrative levels (Hsing, 2006; Lin and Ho, 2005), the exploitation of peasants’ land (Cai, 2003), the variability of policy implementation at local level (Grinspoon, 2002), the variation of land policy across regions, sectors and time (Walder and Oi, 1999), and the institutional indeterminacy (Ho, 2001).

Despite all these seemingly harmful consequences, I do believe the shift in land policy is an unavoidable process in China's transitional economy. The Chinese authority is experimenting various institutional changes to cater for the ever-changing situation; and China definitely needs times to consolidate its experience and develop an appropriate institutional framework. Meanwhile, the current ambiguity in land management provides an undefined space for some privileged people to exercise power and to extract resources. These privileges are essential at this moment – they provide the incentives for people to carry out the economic reform. Hopefully, these privileges will be deprived once an institutional framework is imposed. As Deng Xiaoping said, “let's have a small group of people to get rich first! (yixiaocuo ren xian fu qilai)”