City repositioning and competitiveness building in regional development: New development strategies in Guangzhou, China

Abstract

Competition among cities for mobile capital in the twenty-first century has intensified. The urban hierarchy of regions is undergoing transformation, causing economic fortunes to vary markedly among different localities. In China, these global forces and regional restructuring have caused a relative economic decline in some historically powerful cities, and have also brought about the emergence of new economic centers. In response to these forces, many Chinese cities have been driven into adopting a series of new competitive strategies, which seek to win back and build up their leading positions and competitiveness. To translate these strategies into concrete actions, local governments have promoted high-profile and face-lifting projects and investments. The extensive new urban development in Guangzhou is a particularly interesting case. As the provincial capital of the Guangdong Province, and a historically central city in the Pearl River Delta region, Guangzhou's importance has recently declined. This article attempts to reveal the general strategies and specific projects initiated in Guangzhou as important promotion devices in its revitalization program, and to examine the rationales behind them. The ambitious new strategies are most likely to occur under the 'soft budget constraint' syndrome in China, and these strategies could be risky. Although the extent to which these strategies actually do stimulate business and lure investment is yet to be seen, the citizens are immediately and directly benefiting from them and consequently they have gained much popularity and support. However, the competitiveness building in Chinese cities has called into question the legitimacy of local state governance, and the validity of large projects that lack financial discipline, social objectives and accountability for unsuccessful investments. © Joint Editors and Blackwell Publishing Ltd 2005.