Provincial agency and ‘competitive internationalisation’

At the start of this book I set out two themes of wider relevance for this case study of China’s political and economic relations with its neighbours. The first was provincial roles, or agency, in China’s global interactions – issues of ‘provincial… foreign policy preferences and influence’, to borrow Susan Shirk’s (2007) phrase again. The second was the implications for understanding China’s relations with its Asian neighbours, and beyond for global political economy. I now consider in turn the implications of this study in these areas.

This account of Yunnan has in many ways been a story about provincial agency in issues of contemporary Chinese political economy, not just within domestic realms but also when it comes to global interactions. As shown in the analysis of Yunnan’s role in regional institutions such as GMS or the Bangladesh-China-India-Myanmar initiative, as well as in the development of border trade, there are significant, though issue-variant (Li, 2006), roles for provincial actors – including academics and researchers – in the ideas behind and practice of such transborder engagement. To understand what is normally described as a question of ‘centre-province relations’ (for example, Chung, 1995, 2001; Jia and Lin, 1994), I find it more helpful to think in terms of ‘provincial agency’, namely the ability of provincial officials and other elites both to shape Yunnan’s transborder interactions and to influence the setting of national-level policies which are relevant to Yunnan.

This is not to argue for some form of semi-independent provincial foreign policy, or even the sort of de facto federalism suggested by some (Zheng, 2007). It is important to stress that Yunnanese elites cannot act alone in these areas, and their agency is constrained by the structures of Yunnan’s national belonging within the PRC, including the national policy environment and the need for major initiatives to be reported to or approved by parts of the central bureaucracy. Donaldson (2011: 46) argues that Yunnan’s development policies from the 1990s followed the centre more closely than those of some other provinces. Interaction with the centre and the resonance of Yunnan’s regional imaginings at a national level help explain why some ideas – including that of a ‘bridgehead’ – gain more traction than others. Indeed, the national-level affirmation of the ‘bridgehead’ strategy from 2009 has strengthened the efficacy of this idea at a provincial level.

This study has found that Yunnan’s national belonging has been strengthened during the processes of ‘bridgehead’ formation. From the early 1990s onwards, the central authorities have played an important role in providing policy support and financial assistance for the various infrastructure projects and the promotion of trade and investment which this repositioning has engendered. The centre’s role was also brought to the fore with the implicit strengthening of the western regions’ national belonging envisaged with the launch of Develop the West in 2000, and in the encouragement of investment from richer coastal provinces, which has been an important part of Yunnan’s economic growth over recent years. Developmental imperatives, therefore, speak to national belonging as well as to transborder ties.

This intertwining of central and provincial approaches also helps understand questions of the exercise of control over activities at a local level along or across Yunnan’s borders, touched on only very briefly in this book. The contradictions these activities raise are often presented in terms of the provincial authorities’ development imperatives getting in the way of the centre’s wider security objectives (for example, Zhao, 2010). I suggested above, however, that there is a more complicated dialectic in play between developmental and security concerns; these are felt at both national and local levels, for example in the responses to HIV/AIDS (Hyde, 2007). In addition, the relevant actors cannot solely be categorised in binary terms as either central or local authorities, an approach which fails to take account of the functional policy linkages between those levels (the vertical tiao part of the tiao-kuai matrix structure of Chinese political institutions – Zhong, 2003); furthermore, there is a wide range of players involved, such as representatives of transnational and domestic capital (some linked to the state at various levels), or non-governmental organisations, including in environmental issues (less touched on in this book). There is provincial agency, but the precise context and ways in which it is exercised are complex, and vary from issue to issue.

Further reflection on the fact that Guangxi, as well as Yunnan, has been active in developing ties with southeast Asian neighbours can help clarify the nature of this ‘provincial agency’ further. As seen in Chapter 5 on regional institutions, Yunnanese efforts to appropriate CAFTA and develop GMS cooperation as part of its bridging role between China and southeast Asia are subject to challenges from Guangxi, especially in CAFTA.³

I suggest that the dynamics of this can be characterised as ‘competitive internationalisation’, drawing on Yang’s (1997) concept of ‘competitive liberalisation’ to explain the relationships between provinces in the reform era. In this case, it refers to competition between Yunnan and Guangxi in developing closer economic and commercial ties with various parts of southeast Asia.⁴ Within this framework, therefore, Yunnan needs to find areas of comparative advantage vis-à-vis Guangxi (and vice versa).

The response can be seen in two ways. The first has been an emphasis by Yunnan elites on Yunnan’s primacy in GMS, as set out in Chapter 5. The second – perhaps less conscious than the first – is to be found in the south Asian component of Yunnan’s regional positioning, and the desire to develop transport, trade and tourism links with south Asia. Unlike Guangxi, Yunnan offers a land route through Myanmar to south Asia and the Indian Ocean, which allows infrastructure development to be appropriated by Yunnanese actors to speak to the ideas of linking to south Asia. These are symbolised by BCIM cooperation, and may help explain the rhetorical emphasis given to this institution in Yunnan policy statements, even though its substantive achievements are relatively limited.

This second part of this response has become particularly powerful because of the ways in which it has spoken to national energy strategy and the diversification of energy imports (Chen, 2011). Yunnan’s potential to link with the Indian Ocean gives China at a national level the (partial) ability to tackle the ‘Malacca Straits dilemma’ outlined in Chapter 1 through the construction of oil and gas pipelines – as Che and Zhou (1992) hinted it might back in the 1990s. As highlighted in Chapter 7, these are subject to political and diplomatic realities, in particular the state of China’s relations with Myanmar, and the local security situation in Myanmar, through whose territory the pipelines must pass. These are significant concerns: as I write in early 2012, further reports are emerging of fighting between the Myanmar military and groups along the border with Yunnan (for example, Financial Times, 2012).

In the context of the engagement between Yunnan and its Asian neighbours, Myanmar is therefore important on several counts: in its own right, given the actual and potential trade and investment volumes for Yunnan, and because of where it leads on to. Put another way, Myanmar’s position is ambiguous: as well as a commercial counterpart, it can be a route to southeast Asia, the south Asian subcontinent or the Indian Ocean.

The dynamics of Yunnan’s bridgehead role are therefore about much more than provincial positioning or even provincial development. They relate to wider questions of China’s relationships with its Asian neighbours, and – given the global significance of China’s growing economy and rising energy demands – to China’s changing place in the world.

China, Asia and global political economy

To conclude, let us look beyond Yunnan. As I researched this book, I kept coming across the use of phrases such as ‘bridgehead’ by representatives of various local administrative units in China. Officials from Fujian, for example, talk about their province as a bridge between Taiwan and China’s interior were trading relations across the Taiwan Straits to develop further. Xinjiang has been positioned in a similar way with respect to economic and commercial interactions with central Asia (Millward, 2008), and the ideas have influenced the ways that China’s northeastern provinces think about their transborder interactions. At the subprovincial level, the party secretary of a city in Guangdong province told me that the city was a ‘bridgehead’ for enterprises moving inland from the Pearl River delta. And so on.

In China’s southwest, other places have sought hub, or bridging, roles between China and parts of Asia. Sichuan’s provincial capital, Chengdu, competed with Kunming in the early 1990s to be the host of annual trade fairs focused on southeast Asia (d’Hooghe, 1994), and some of my more recent discussions in Chengdu suggest that officials there have not given up the idea of developing its external engagement in this way. The city’s links also broaden out to south Asia, for example through the hosting of consuls-general from Pakistan and Sri Lanka.

To Chengdu’s east, the Chongqing government has also spoken of a desire to increase the number of transport routes to destinations in southeast Asia, and develop this provincial-level municipality as a hub for regional interactions. This is part of a wider and more ambitious plan developed in the late 2000s, but still in its early stages, to make Chongqing an inland trade centre with connections across two Eurasian ‘land bridges’. The first is north through Xinjiang and central Asia to Europe, and train services carrying exports from Chongqing began to leave for Europe in spring 2011. The second part of these plans was to develop routes south from Chongqing to Kunming, and thence along the ‘southwest Silk Roads’ discussed in this book to southeast Asia and beyond. Yunnan’s visions of being a ‘bridgehead’ to Asia have found echoes among other subnational actors in China.

This relates back to the argument in Chapter 2 that the incorporation of the PRC into the global economy in the era of reform and opening up has been – at least in economic terms – effectively an incorporation of coastal China, and global interactions by much of inland China were relatively limited. This study raises the possibility that this may be beginning to change, by highlighting the growing extent of – and greater ambition for – engagement between Yunnan and southeast and south Asia, even west Asia (the Middle East). These trends are substantiated by the development of infrastructure, trade and investment, and regional institutional engagement outlined in this book, and in Yunnan’s case are given strategic national importance by the potential role it might play in energy security.

As Robert Barnett (2010) pointed out, there is a tendency in many Western discussions of China – and in particular, one might add, when it comes to China and southeast Asia – to focus on ocean thinking and military might. This is perhaps a consequence of the manner in which both Great Britain historically and the United States today have projected their global power, as well as the importance of ocean transport for global trade. Recent debate over China’s relations with its neighbours has focused on tensions between the PRC and some maritime southeast Asian states. These tensions are undeniable, though their causes, consequences and relative weight may benefit from more dispassionate debate than they often receive.

This book suggests that the areas around China’s land borders might be worth at least as much attention, but for different reasons. The PRC shares land borders with 14 countries, and in the second half of the 2000s reached border agreements with all of these apart from India, a further step in a process of improving relations with the neighbourhood which had begun in the 1980s and accelerated from the early 1990s. From a commercial and economic perspective, the potential for growth in these relationships is substantial. As noted in Chapter 2, total PRC trade with ASEAN was around US$40 billion at the beginning of the decade, but had grown to US$363 billion in 2011, though coastal provinces such as Guangdong and Fujian still dominate that trade. The desire and rationale for the PRC to continue to develop mutually beneficial strategic relationships with its land neighbours remain, and the organic economic and commercial attraction of this to Chinese businesses is strong.

This book has presented a case study of these trends by recounting the changing role of Yunnan in structuring China’s relations with Asian neighbours to its southwest. The province has been a significant part of the intensification of interactions over the last two decades, and its role reflects the growing scale of institutional, infrastructure and economic elements in these relationships. In turn, this highlights the potential for western China to complement and diversify existing PRC trade and investment ties, just as the energy pipelines into Yunnan through Myanmar serve to diversify energy supplies.

When we look across borders to China’s west, however, we find polities and economies which are notably different from the global economy into which I argue the coastal regions of China have become integrated through production networks, trade and investment. The economic and commercial engagement discussed in this study of Yunnan has been with Asian neighbours, or to put this differently, with what are often other developing economies. Indeed, I was struck in researching this book how little the United States or the European Union featured in discussions of Yunnan’s global interactions.

This is therefore a story of interactions within and between different parts of the global South.⁵ The theme is one that has gained more prominence in the wake of the global financial and economic crisis which struck in 2008. The prospects for South-South interactions to act as a major driver of future global economic growth, and in turn reshape the global economy, have been discussed by experts ranging from HSBC’s global chief economist to a prominent and influential Chinese academic, Hu Angang, whose vision of China in 2030 is partly based on rapid growth in South-South commercial interactions (King, 2010; Hu et al., 2011; see also Dirlik, 2007, for a different approach).

It might not even be too fanciful to think further from a global perspective about the ways in which such interactions might be structured geographically. Here some historical perspective can stimulate thinking about future possibilities. Writing about a world system of intensive commerce across much of Eurasia and beyond in the thirteenth century, Janet Abu-Lughod (1989) argues that the interactions between the (then Mongol) Chinese empire and neighbouring societies to the west and north were an important element in keeping the world trading system together, and the breaking of these frontier links was a significant factor in the decline of this mediaeval world system. From this perspective, a renewed dynamism in economic and commercial interactions to China’s west across the Eurasian land mass might be part of the sort of wider rebalancing of the global economy of which Ben Simpfendorfer (2009) writes in his thought-provoking study of China and the Arab world.

This is actually something that Owen Lattimore ([1940] 1951) discussed in the introduction to the 1951 edition of his great work The Inner Asian Frontiers of China. Based on the idea of a historical shift from continental interactions, the age of Marco Polo, to maritime dominance, or the age of Christopher Columbus, Lattimore’s concern was the relationship between land-based interactions and those across the oceans, in particular what the re-emergence of intensive Eurasian connections might mean. This sounds rather similar to the idea behind the comment of then Yunnan Vice Governor Qin Guangrong in 2006 that the twenty-first century is one of the ‘joining together of ocean and land’ (Qin, 2006: 27).⁶ The explosive growth in air travel suggests that we should add this element to the mix.

Lattimore also wrote about the limitations of geography, and even bearing in mind the history of ‘Silk Roads’, the topography and scale of land masses such as the Eurasian continent have at times limited the extent to which societies have been able to influence or engage with each other across land – what has been called the ‘tyranny of distance’ (Beeson, 2007: 3). The challenges remain, as seen in a project such as the Pan-Asian railway. But here, Yunnan at the beginning of the twenty-first century hints at the potential for change, as it not only demonstrates the ideational power of developing transport infrastructure, but also the ability over recent years for this to be substantially delivered.

What is new is what John Garver (2006) termed the ‘technological subjugation of distance’, in effect an ability to overcome the tyranny of distance through the large-scale development of modern transport infrastructure to bring places much closer together. As Thant (2011: 58, 247) puts it, ‘[i]n pre-colonial times, demographics and geography kept both India and China far away’, but one day, he surmises (bearing in mind the caveats above), India and China might be one day’s drive away. If so, Yunnan would be the bridgehead.

The ways this might play out remain an open question for the moment, and in terms of trade volumes, ocean routes will probably remain dominant for some time. But it raises the possibility that the spatial structure of global interactions and global commerce could change quite fundamentally. If China’s western borderlands, cut off from the global economy for much of the twentieth century, could indeed become ‘bridgeheads’ to emerging economies in the rest of Asia, the consequences would not just be felt in places such as Yunnan, but could be part of a more radical global restructuring in which China would again play an important role, though a rather different one from that seen in the latter decades of the twentieth century.