Spatial disparities of adaptation to crisis in China and its consequences

1. Spatial disparities of adaptation to crisis in China and its consequences Maria Csanádi Institute of Economics Hungarian Academy of Sciences

2. Outline • Hypothesis: impact of external dynamics on system transformation • Analytical approach: the concept of transformation • Adaptation pressures caused by the crisis • Sensitivity to adaptation pressures • Spatial impacts of the crisis • Spatial disparities in efforts to overcome the crisis • Long-term spatial impact of short-term interventions

3. Hypothesis: sensitivity to the impact of global dynamics • Global growth, economic integration • Direct impact: macroeconomic growth • Indirect impact: • Acceleration of economic transformation • Increase of political legitimacy • Postponement of preconditions for political transformation • Global recession, economic integration • Direct impact: macroeconomic decline • Indirect impact: • Slow-down of economic transformation • Decline of political legitimacy • Formation of preconditions for political transformation

4. System transformation in party-states The party-state network is retreating as a social system from politically monopolized economic, political and social sub-spheres, while The sub-spheres of a new social system are emergingoutside of it Order, speed, conditions of transformation of sub-fields vary according to the distribution of power in party-state networks Directions and speed of development of one subfield may change temporary or for longer-term due to external and internal impacts Retreating party-state network Emerging new system

5. Transformation during global growth

6. External impact: decline of export- and import growth

7. Decline of the GDP and FDI growth

8. No contraction, only slow-down of relative speed

9. Uncertainties • Time-span of prevalence of external and internal adaptation pressures • Sensitivity of the transformation process to adaptation pressures and to their extension in time • Extent of political sensitivity and adaptive reactions on the short term • Reversibility of the slow-down process due to changes in external and internal impacts • Spatial propagation of adaptation pressures and reactions

10. Adaptation pressures prevailed short-term Source: ChinaData Center MU

11. Adaptation pressures prevailed short-term Source: ChinaData Center MU

12. Even short-term pressures provoqued sensitive reactions Source: ChinaData Center MU

13. Even short-term pressures provoqued sensitive reactions Source: ChinaData Center MU

14. Behind the scene: expanding state role through the stimulus plan 4,000,000,000,000.00 CNY = 612,062,609,166.63 USD = GDP 13% (2008) Source: Economic observer On-line eeo.com.cn China's Stimulus Package: A Breakdown of Spending. 2009.03.07

15. Compensatory role of state intervention: infrastructure building Source: ChinaData Center MU

16. Spatial focus of increased FDI Source: ChinaData Center MU

17. Spatial focus of growth of investment in fixed assets Source: ChinaData Center MU

18. The dynamics of output of the state-owned field in the manufacturing Source: ChinaData Center MU, NBS Regional Statistics

19. Activized market field at central-western regions in manufacturing Source: ChinaData Center MU, NBS Regional Statistics

20. Dynamics of the output at state-owned field in the construction industry Source: ChinaData Center MU, NBS Regional Statistics

21. Activized market: dynamics of the market field in the construction Source: ChinaData Center MU, NBS Regional Statistics

22. Global crisis impact on system transformation • Time-span of external and internal adaptation pressures • Global crisis exerted temporary adaptation pressures • Incite different adaptations that have different consequences on transformation • Differences in impact and reactions in space • Direction of transformation dynamics: • No simultaneous contraction of the state and market fields • Speed of transformation: • Instead of contraction, only temporary slow-down occurred • Reason of slow-down: the temporary decline of the market field and expansion of the state-owned field due to intervention • Short-term adaptation preserved political legitimacy

23. Mismatch of state intervention and crisis impact

24. Longer term consequences of short-term intervention • The focus mismatch of crisis and government intervention has multiple dimensions and multiple consequences • Regional focus of state intervention might decrease spatial disparties of development in several dymensions • Sectoral focus of state intervention in infrastructure compensated decline in manufacturing: growth of internal demand activates other sectors and decreases export dependency • Ownership focus of state intervention expanded the state sphere but also activized the market sphere • Size focus of state intervention also activized SMEs

25. Questions for further research • How do these consequences appear in • The spatial disparities of regional development, • The economic, export and labor force structures • Enterprise investment behavior, trade orientation and spatial strategies • What are the differences among those activized by state intervention and those directly impacted by the crisis • The temporary and longer-term migrant spatial routes, migrant motivations and bargaining capacties and living conditions and migrant gender structure • Economic transformation • Field-work in collaboration with BNU, Fudan, IE CASS

26. Thank you for your attention