Topic 5 Globalization and China: Shenzhen

1. Topic 5Globalization and China: Shenzhen

2. I. The Case of Shenzhen SEZ • Questions: • What is the glocalizing process in China? • How is the glocalizing process revealed in the building of SEZ? • Theme: • how SEZs are built as glocalized landscapes in illustrating the process of China entering the global economy

3. Building Glocalized Landscapes • SEZs are the outcomes of China’s engaging into the global economy. SEZs are already a formidable presence in the global economy

4. Building Glocalized Landscapes • The process of glocalization- how the SEZs develop themselves into glocalized landscapes that serve to bring China into the world economy • Focus on the development of Shenzhen SEZ

5. Shenzhen as an immigrant city • Shenzhen is an immigrant city, built quickly with a borrowed population. • In 1979, the Central government and the Guangdong Government decided to upgrade a small town, Bao’an county, to the status of a city named Shenzhen. Shenzhen before 1979

6. Shenzhen as an immigrant city • In May 1980 the Special Economic Zone was set up. • Shenzhen SEZ was erected as a test case as an economic development zone open to the global capital.

7. Shenzhen as an immigrant city • Shenzhen thus was the specific place where global capital and the socialist state encountered each other and worked hand in hand, though not always in harmony, in shaping a new economy. • Shenzhen is on the east of the Pearl River Delta. In the north it is connected to Dongguan, Weiyuan, in the south to Hong Kong, and in the east it faces Daya Bay.

8. Shenzhen as an immigrant city • The Shenzhen SEZ is only part of Shenzhen city. It occupies one sixth of the whole city.

9. Shenzhen as an immigrant city • The SEZ is special not only in its economic but also in its political and social aspects. • There is a long iron curtain from east to west separating the SEZ from the non-special zone of the whole country; those who wanted to enter the SEZ require special permission from the Public Security Branch in their local regions.

10. Shenzhen as an immigrant city • Before the setting up of the SEZ, Shenzhen was only a small town with 310,000 residents and less than 30,000 workers.

11. Shenzhen as an immigrant city • The total population of the whole Shenzhen now was over 7.08 million and the total population of SEZ is 1.90 million. • In its population composition, less than 20% are categorized as permanent residents who have come from major cities and become state officials, entrepreneurs, technicians and skilled workers.

12. Shenzhen as an immigrant city • Over 82% are temporary residents, which means they do not have the official household registration entitling them to recognized citizenship in Shenzhen.

13. Shenzhen as an immigrant city • When they lose their jobs in Shenzhen, they are not officially permitted to stay in Shenzhen. • It is clear that the expansion of Shenzhen and its Special Economic Zone is based on the mobility of migrants as temporary residents.

14. Shenzhen as an immigrant city • In Shenzhen all workers and staff members are categorized into three kinds: • Guding zhigong(固定職工), regular workers and staff members, • Hetong zhigong(合同職工), contract workers and staff members, • Linshi zhigong(臨時職工), temporary workers and staff members. Key concept to remember!

15. Shenzhen as an immigrant city • Guding zhigong refers to those employed by state-owned enterprises or government organs and they enjoy all the state welfare such as housing and food provision. • Hetong zhigong refers to those employed on a contract basis by all kinds of enterprises; the contracts may last for three or five years. Most contract workers in Shenzhen are university graduates who are employed as technicians, skilled workers or management staff Key concept to remember!

16. Shenzhen as an immigrant city • Linshi zhigong, temporary workers are the most disadvantaged in Shenzhen; not until 1988 were they officially given temporary contracts on a yearly basis. • In the second half of the 1980s, the number of temporary workers increased rapidly and surpassed the total number of regular workers and contract workers. Key concept to remember!

17. Shenzhen as an immigrant city • Most manual labour in the SEZ is undertaken by these temporary residents from rural areas. In Shenzhen, as soon as one becomes a legal temporary worker, one is then entitled to be a temporary resident. • A rural laborer can get a temporary hukou(戶口) in Shenzhen only if he/she is hired as a temporary worker.

18. The Transformation of Local Community • Encouraged by the Open-door policies and the economic reforms, the local state of the villages greatly transform themselves by turning into companies. • The local state of Blue River not only merely formed a company, but completely turned itself into a company in 1984.

19. The Transformation of Local Community • The former name Blue River People’s Commune was changed to Blue River Manufacturers’ Chief Company, under which it owned or joint-ventured over thirteen companies. • The old government offices building remained, but it was expanded to include a new wing of four storeys connected to the old one.

20. The Transformation of Local Community • The “bureaucratic” structure of the Chief Company was changed and expanded as well. • Now there was a General Office, an External Trade Department, a Finance Department, an Administrative Department, a Population and Birth Control Department, a Labour Regulation Department, and a Mass Organization Division which included a Youth Committee, a Women’s Federation and Trade Union.

21. The Transformation of Local Community • The Company itself was a mixture of pre-existing socialist “politics” and a reform market “economy”, a hybrid reflection of the ongoing development of the socialist market economy. Key concept to remember!

22. The Transformation of Local Community • the Blue River government gained complete independence in regulating foreign investment and local trade without any intervention from the upper levels. • Blue River was not an exceptional case.

23. The Transformation of Local Community • It was the state, or political forces rather than capital, which served as the locomotive of economic development. • Land was distributed to the families for less than two years in Blue River and requisitioned again in 1984 for the use of industrial development.

24. The Transformation of Local Community • Every household, according to the number of household members, was to be allocated a share each year in the yearly profit made by the Chief Company, formerly their village government. • Every year, households obtained share dividends ranging from RMB 15,000 to 20,000.

25. The Transformation of Local Community • A local cadre proudly told, It was almost ten times what the family could earn before. Nowadays people don’t need to do anything but just wait for their share dividend at the end of the year. What’s more, the family can free hands from farming and they can choose to do business.

26. The Transformation of Local Community • The local residents suddenly became rich, with their official identity changed from rural people to urban citizens and, with their economic status or class position totally altered. • In terms of occupation, almost 80% of the local working population was self-employed persons.

27. The Transformation of Local Community • 10% were managerial or supervisory staff in the companies newly set up in the village. • 10% worked outside the village, some holding a position in the District government or employed in big companies in Central Shenzhen or Guangzhou.

28. The Transformation of Local Community • The living standard of the village was comparatively higher than any other cities in China. Every family was well furnished with electric appliances, a color TV set, hi-fi disc and air-conditioners. • not without worry - an economic recession in Shenzhen from 1997 till, as more and more foreign capital moved out of the SEZ to the much cheaper area in the internal cities.

29. The Transformation of Local Community • Foods, goods and daily necessities here were relatively very expensive. The prices were one-third higher in Guangzhou and probably double those in other northern cities.

30. The Transformation of Local Community • Yet as long as a family could afford it, they still preferred to buy imported foreign-labeled. • Shenzhen ren- the people of Shenzhen, a broad cultural identity signifying a modern cosmopolitanism attached to the space and the people who lived there.

31. The Transformation of Local Community • The majority of economic producers, or the working class in the village, on the other hand, were not local residents. • Of the total population, over 75% were temporary residents, migrant workers who had moved in from outside the village

32. The Transformation of Local Community • The socio-economic structure of Blue River village was thus conditioned mainly by a two-tiered system: • One tier was local urban residents who not only possessed the means of production but also the space, the right of abode. Key concept to remember!

33. The Transformation of Local Community • The other tier consisted of rural migrants who had to sell their labor to the factories in which they worked, while having no right to stay permanently where they worked. • These migrant temporary labour were three times the number of the local residents, and were the lowest status workers in the community. Key concept to remember!

34. HK Company in Shenzhen • The HK company, named Meteor, is located in “Blue River” in Nanshan District, Shenzhen, within the confines of the Special Economic Zone. • The history of the HK Company in Shenzhen has demonstrated the development of the industrial village, Blue River village in SEZ, and the changing social relations of the local community for more than one decade.

35. Hong Kong Company in Shenzhen • The Meteor was set up in 1985, a year after the village, formerly a rural commune, had undergone a dramatic change. • It was an electronics enterprise which produced mobile phones and electronic route-finders for Phillips.

36. Hong Kong Company in Shenzhen • Headed by five HK managers in each department, there were almost no communications between HK and local staff and workers. • Huge income gaps and class status created mistrust among each other.

37. Hong Kong Company in Shenzhen • Except for most of the engineers, technicians, managers, supervisors and some office clerks who came from urban areas, more than 80% of the work force formerly held a rural hukou. • The work force in the Meteor, and in manufacturing industry as a whole was mainly made up of the rural population.

38. Conclusion • Shenzhen is a dual city. • A hukou is attached to employment, and once a migrant worker was dismissed, or left the job, he or she was not granted the right to stay in Shenzhen. • Shenzhen is a place by them, but not for them. Key concept to remember!