Understanding the changing geography of China’s state-owned enterprises: a new regionalism perspective

Abstract

The institutional mechanism of transitional socialist economies in general and the growth dynamics of China's state-owned enterprises in particular has been a constant source of stimulation for scholarly enquiry. Competing interpretations from different emphases and theoretical perspectives have been formulated to explain the dramatic change of SOEs' economic performance from pre-reform era to post-reform era. Scholarly debates and controversies have long existed concerning whether the persistence intervention of the state or the gradual expansion of the market is the causal force shaping the changing performance of China's SOEs. Drawing insights from the recently resurgent theories of 'new regionalism' in mainstream economic geography, this study offers an alternative perspective to highlight the active role played by region as nexus of traded and untraded interdependencies in affecting the growth and performance of China's SOEs. Based on the analysis of statistical data from the third industrial census, this study finds that SOEs in the regional economies characterized by dense industrial agglomeration, diversified local labor market and dense corporate networks with non-state enterprises are more capable of benefiting from regional external economies and display higher productive efficiency that their counterparts elsewhere. The investigation of SOEs in the Chinese context challenges the perceived notion of region as the passive outcome of political economic forces in China studies and calls for a place-sensitive and path-dependent treatment of the growth dynamics of SOEs. It provides interesting ground for evaluating the validity and applicability of western-based theoretical discourse of new regionalism.