Trans regional communities and external coupling a geographical perspective on regional development of the chaoshan region, china

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TRANS-REGIONAL COMMUNITIES AND EXTERNAL COUPLING: A GEOGRAPHICAL PERSPECTIVE ON REGIONAL DEVELOPMENT OF THE CHAOSHAN REGION, CHINA CHEN RUI NATIONAL UNIVERSITY OF SINGAPORE 2012 TRANS-REGIONAL COMMUNITIES AND EXTERNAL COUPLING: A GEOGRAPHICAL PERSPECTIVE ON REGIONAL DEVELOPMENT OF THE CHAOSHAN REGION, CHINA CHEN RUI B.A. and M.SSc. (Peking University) A THESIS SUBMITTED FOR THE DEGREE OF DOCTOR OF PHILOSOPHY DEPARTMENT OF GEOGRAPHY NATIONAL UNIVERSITY OF SINGAPORE 2012 Acknowledgements I remain extremely thankful for this page to acknowledge the vital contributions of many that have impacted on this dissertation and my academic journey. It has been an unforgettable learning experience in Singapore that I will always cherish. I am grateful for the financial support that I have received from the National University of Singapore which has made my stay and research in Singapore and China possible. First of all, I extend my deepest thanks to my supervisor, Professor Henry Yeung, for his guidance, encouragement, and his faith in my work. I came to Singapore without any background of Geography. He has guided me into this journey, and always supported me to persist in the topic of Teochews that I was interested in, although it sounded not so “geographical” at the beginning. No words can express my appreciation and respect to him, a wonderful mentor in my life. The other members of my committee, A/P Godfrey Yeung and Dr Jun Zhang, have greatly contributed to my learning and writing process through their thoughtful comments, insightful critiques, and sound advice. I am particularly grateful for their time and effort in reading and commenting my dissertation, which used to be rather long-winded and discursive. I appreciate the input from Tracey Skelton, Natalie Oswin, T.C. Chang, Carl GrundyWarr, Pow Choon Piew, Maribeth Erb, Lily Kong, Harvey Neo, Karen Lai, who, at various points during my study in NUS, enhanced my academic capability, understanding of Geography, and reflection on my research. I also thank Pauline for her administrative support. Thanks to International Society of Chaozhou Studies and all my respondents who share their knowledge and insights with me. I especially thank those who utilized their own resources to help me extend the networks of interviewees, including Mr. Yang Ximing, Liu Yi, Chen Lin, Mr. Huang Zexiong, Uncle Chen, and Uncle Zhang Zhiren, to name just a few. My fellow post-graduates have offered me advice, friendship, and companionship, in particular: Jiajie, Liu Song, Rana, Menusha, Lina, Lishan, Xiankun, Kanchan, and Diganta. I am truly grateful to my friends Cuifen, who has been accompanying me from Beijing to Singapore in the past eight years, and never hesitated to give me her generous kindness; and Liu Yi, who has been working with me side by side during our Ph.D. candidatures, not only as my classmate, but also as my comrade. I feel extremely fortunate to have such a fabulous friend to study together and share our research and life. Finally, I would like to thank my family. Located on the other side of the globe, Yang Ming has put great effort to generate a relational proximity with me and to support me. I am particularly indebted to my parents, Chen Jinhao and Zhang Zhixiang, who have been offering me endless and unconditional love all these years.     i         This  page  is  left  blank  on  purpose.       Table of Contents Acknowledgements . i Summary . vi List of Figures . viii List of Tables . ix Abbreviations . x Chapter Introduction . 1.1 “Fifth Avenue style shows its origins”: global networks of Chaoshan commodities . 1.2 A trans-regional perspective on regional development 1.3 The Chaoshan region and the Teochew community 1.4 Organization of thesis . 15 Chapter Literature review of regional development: organizational, cognitive and socio-institutional approaches 18 2.1 Introduction . 18 2.2 Organizational approaches to regional development . 19 2.2.1 Intra-regional analysis: Marshallian districts and new industrial spaces . 20 2.2.2 Trans-regional processes: neo-Marshallian nodes and the diversification of industrial districts 23 2.3 Cognitive approaches to regional development 27 2.4 Socio-institutional approaches to regional development . 32 2.4.1 Sources of theoretical ideas: embeddedness, conventions, and the mode of social regulation 33 2.4.2 Intra-regional analysis: institutional arrangements and social norms 36 2.4.3 Trans-regional processes: governance, transnational communities, and strategic coupling with global production networks . 40 2.5 Concluding remarks: towards a multi-scalar analysis 45 Chapter External coupling in regional development 48 3.1 Introduction . 48 3.2 Reinterpreting external coupling from a multi-scalar perspective . 49 3.2.1 Theoretical background: endogenous assets and external coupling 50 3.2.2 A multi-scalar framework for analyzing external coupling . 55 3.2.3 Unpacking the mechanisms of external coupling 59   ii     3.3 Trans-regional communities and external coupling . 63 3.3.1 Community embeddedness of trans-regional business system 65 3.3.2 State institutions and trans-regional communities: the role of organizations 68 3.4 Propositions 72 3.5 Concluding remarks: trans-regional communities, external coupling, and regional development . 76 Chapter Methodology . 78 4.1 Introduction . 78 4.2 Negotiating the “field” of guanxi research 79 4.2.1 Conducting guanxi in a guanxi study . 79 4.2.2 Limited gatekeeping and snowballing in a guanxi-emphasized context 82 4.3 Stay open: reframing research in the field 85 4.4 Data collection 88 4.4.1 Document . 89 4.4.2 Observation 90 4.4.3 Interview 92 4.4.4 Questionnaire . 94 4.5 Ethics and positionality . 96 4.6 Concluding remarks: contextualizing methods in the field . 97 Chapter Economic development of the Chaoshan region . 99 5.1 Introduction . 99 5.2 Evolution of Chaoshan’s regional economy between 1980 and 2000 . 100 5.2.1 Taking off through overseas Teochews: 1980-1990 103 5.2.2 External coupling with international markets: 1991-2000 . 105 5.3 Hybrid external coupling: contemporary economic development of Chaoshan . 110 5.3.1 Emerging industrial clusters in the Chaoshan region 112 5.3.2 Hybrid external coupling: the global-domestic market . 116 5.4 Key industries in the Chaoshan region: ceramics, toys, and wedding and evening dresses . 119 5.4.1 Ceramics 121 5.4.2 Toys 123 5.4.3 Wedding and evening dresses 124 5.5 Concluding remarks: Teochew communities still matter? . 126 Chapter Transnational coupling of Chaoshan: changing roles of Teochew communities . 128 6.1 Introduction . 128 iii       6.2 Overseas Teochews and transnational coupling . 129 6.2.1 Overseas Teochews: initiating investment and promoting exports . 130 6.2.2 Declining significance of overseas Teochews . 135 6.3 New global-local bridges: alternatives to overseas Teochews . 140 6.3.1 Exhibitions as temporary clusters 141 6.3.2 Business websites as cyber clusters . 145 6.3.3 Cluster economies 146 6.4 Concluding remarks: changing role of transnational communities . 150 Chapter Trans-regional coupling of Chaoshan in China: continual roles of Teochew communities 153 7.1 Introduction . 153 7.2 Trans-regional Teochews in China and Chaoshan firms’ domestic business networks . 154 7.2.1 Marketing toys and ceramics: more than just exports . 156 7.2.2 Entering new markets through trans-regional Teochews . 161 7.2.3 Teochew distributors in Chaoshan firms’ domestic marketing networks 164 7.3 Teochew trans-regional communities and relational clusters in distant specialized markets . 169 7.3.1 Teochew communities within specialized markets 171 7.3.2 Connecting Chaoshan and its relational clusters in specialized markets . 175 7.4 Concluding remarks: trans-regional communities, relational clusters, and external coupling 178 Chapter External coupling sustained by institutions: Teochew associations and Chaoshan governments . 181 8.1 Introduction . 181 8.2 Teochew associations in China: building a trans-regional associational economy . 183 8.2.1 Institutionalizing Teochew communities within China . 184 8.2.2 Sustaining a trans-regional supportive institutional environment . 189 8.2.3 Collaboration among trans-regional community organizations, state institutions and local industrial associations 192 8.3 Overseas Teochew associations: mismatching the demand of Chaoshan’s external coupling 198 8.3.1 The evolution of overseas Teochew associations 199 8.3.2 Failure in supporting the external coupling of Chaoshan 202   iv     8.4 Concluding remarks: synchronizing firms, Teochew associations, and state institutions 207 Chapter Conclusion 210 9.1 Teochew communities and the external coupling of Chaoshan: summary of findings . 210 9.2 Policy implications: exploiting extra-regional relational assets 216 9.3 Looking back: an auto-critique 219 9.4 Looking forward: the future research agenda 222 References . 226     v       Summary This research derives from dissatisfaction with the analysis of regional development in the new regionalism literature and the global production networks (GPN) literature, which either lacks an extra-regional dimension or overemphasizes global-local connectivity. My thesis seeks to shed light on a trans-regional dimension of regional development by examining the case of the Chaoshan region in China and its Teochew communities that transcend regional boundaries. This research argues that regional development is a dynamic outcome of coupling between local firms and extra-regional actors within and outside a country, while transnational/trans-regional communities sustain this process in special historical and institutional contexts. Grounded in the GPN studies, this thesis further develops a trans-regional analytical framework on regional development, arguing for three mechanisms to explain the external coupling of a region: (1) trans-regional organization of production and marketing; (2) transregional communities; and (3) state institutions. This research identifies causal mechanisms of communities in facilitating external coupling: reducing information asymmetry, smoothing communication, and building trust. Meanwhile, local firms can take advantage of the organizational relations between community organizations and state institutions to enhance their external coupling process. In empirical levels, this thesis uses Chaoshan to illustrate the roles of transnational/trans-regional communities in external coupling from a multi-scalar perspective. Chaoshan is the common origin region of Teochews within and outside China, and exports and domestic sales of local firms both significantly contribute to the regional economy. This thesis has found that overseas Teochews triggered the Chaoshan economy in forms of facilitating foreign investment and exports during the early post-reform era. From the mid 1990s, overseas Teochews became less significant due to local institutional obstacles for foreign investment and alternative approaches to international markets for local firms. In   vi     contrast, domestic Teochews continued to sustain Chaoshan firms’ domestic marketing by enhancing market entry, sustaining flexible transactions, frequent communication, and mutual trust between local firms and their trans-regional business partners, and strongly connecting extra-regional specialized markets of Chaoshan products to the Chaoshan region. In this way, local firms benefited from the buzz and market advantages of distant specialized markets. These connections also helped foster the growth of local firms with the capability to couple within the domestic market. In addition, although overseas Teochew associations failed to significantly enhance Chaoshan’s external coupling, domestic Teochew associations provided organizational platforms for Chaoshan firms and governments to construct a supportive transregional institutional environment and a trans-regional associational economy for prompting the external coupling process. 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Environment and Planning A 37, 1113-1134. 247     [...]... organizations, transnational communities, and state institutions By understanding regional development as a trans- regional interactive process, this thesis is situated in the above debate on regional economic development in the globalization era In particular, my research contributes an important and novel dimension to understanding regional development in globalization within a trans- regional framework:... of transnational /trans- regional communities and local economic actors, and to uncover some critical and grounded insights on regional economic growth Regional development results from dynamic interactions of economic, social, and institutional actors within and outside regional territorial boundaries The trajectory of regional development may be conditioned by transnational /trans- regional communities, ... and relational perspective, this thesis interprets regional development through a multi-scalar framework It focuses on the relations of transnational /trans- regional communities and a region’s external economic activities by using the case of the Chaoshan region and Teochew communities 1.2 A trans- regional perspective on regional development In recent years there has been a resurgence of research interest... transnational and trans- regional communities within a country in   6     regional development, particularly in terms of the external economic transactions of regional firms In doing so, I demonstrate different mechanisms of transnational /trans- regional communities in facilitating regional firms’ external coupling activities: (1) reducing information asymmetry; (2) enhancing trans- regional communication; and. .. as a coupling process, this framework takes into account the organization of production and marketing, trans- regional communities, and state institutions in a region’s external coupling Local firms’ external coupling is realized through their trans- regional organization of production and marketing With a research focus on trans- regional communities, this chapter unpacks their mechanisms of facilitating... of transnational /trans- regional communities and state institutions with regards to local firms’ external coupling activities Teochew associations within China offered a platform for local firms to benefit from non-local assets and to smooth their trans- regional transactions Furthermore, these associations cooperated with local industrial associations and governments to build up a trans- regional associational... local firms’ connections with the extra -regional economic world It is thus central to this thesis to elaborate on the mechanisms of transnational /trans- regional communities, based on the common region of origin, in facilitating local firms’ external connectivity and in regional development processes Here, I am not arguing that transnational /trans- regional communities should be considered as a necessary... highlighted a strong institutional presence crucial for regional collaborative networks and hence regional development Trans- regional community organizations on the one hand serve as an organizational channel for regional firms to deal with external business issues; and on the other hand cooperate with regional institutions to conduct collective actions that enhance the coupling process In light of Cooke and. .. Morgan’s (1998) view on an associational economy, these community organizations cooperate with local institutions and build up a trans- regional associational economy for regional development Hence, regional development is dependent on local actors’ interactions with external ones During this coupling process, trans- regional communities offer relational proximity for local actors and their non-local partners... for the contemporary economy of Chaoshan If the answer is yes, then the case of Chaoshan helps further the understanding of regional development facilitated by non-local communities If not, unpacking the reasons and changes provides rethinking of the role of these communities in regional development Third, the case of Chaoshan offers both international and domestic dimensions with regards to external . on the relations of transnational /trans- regional communities and a region’s external economic activities by using the case of the Chaoshan region and Teochew communities. 1.2 A trans- regional. between regional and extra -regional actors, conditioned by the organization of production and marketing, transnational /trans- regional communities, and state institutions. Adding the domestic. interactions of economic, social, and institutional actors within and outside regional territorial boundaries. The trajectory of regional development may be conditioned by transnational /trans- regional

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