Regional Planning and Impact on the Environment:

Peter M. Hutchinson
Saint Vincent College
This emphasis on regional planning is evident in each of the following policies, organizations, or activities pertaining to the PRD:

• The initial establishment of Special Economic Zones (SEZs) in the PRD
• The concept of the Greater Pearl River Delta, consisting of nine prefecture level cities and the two Special Administrative Regions (SARs) of Hong Kong and Macau
• The establishment of the Pan Pearl River Delta regional cooperation framework consisting of nine contiguous provinces and the two SARs
• The Closer Economic Partnership Arrangement (CEPA) involving Hong Kong and the mainland
• The Guangdong-Hong Kong Cooperation Conference
• Plans to build the Hong Kong – Macau/Zhuhai bridge
• Detailed urban plans in a number of PRD cities including Shenzhen, Guangzhou, Shantou, and Zhaoqing, as well as in Xiamen

On the other hand there appears to be a lack of true regional cooperation, and instead a sense of rabid competition that exists among the various cities of the PRD. Each city seems fixated on building the largest container port, the highest capacity airport, the tallest skyscraper, and the most extravagant convention and exposition center. The apparent focus of this "size matters" strategy is to attract the greatest amount of foreign direct investment, and to achieve the most rapid rate of GDP growth. In addition, it all seems to take place without consideration of wasteful duplication of services or misallocation of resources. In many cases this is true because decisions to move ahead with these plans are political decisions rather than true economic decisions that would have to pass market rate of return on investment criteria.

Contributing to this lack of cooperation is the labyrinth of administrative levels existing within the Chinese government. The following vertical administrative levels were identified in various lectures and meetings with government officials, with some of them having subdivisions within themselves:

• Central government
• Provincial
• Prefecture
• County
• Township
• Village

A horizontal technical supervision system also exists, with many locales finding themselves trying to serve two masters, one an administrative control and a second a technical control. Compounding the problem is that often the vertical/administrative and horizontal/technical levels of supervision have different visions of appropriate development policy.

All of these governmental units and levels of supervision make it difficult to get the players together to talk with one another, and make it extremely difficult to establish a true regional perspective. This point was effectively espoused in the lectures of Dr. Xu Jiang and Dr. Chun Yang from Hong Kong University. In a sense, it reminds me of the political situation close to home in the Pittsburgh/Southwestern Pennsylvania region. This region has been a model of fragmented local governments for decades, which has been blamed for the failure of effective regionalism in Western Pennsylvania at least since the time of the first Pittsburgh Renaissance following World War II. The same fragmentation exists in China with similar results.

Finally, there are restrictions on the mobility of resources and the free movement of goods and services as a result of various economic and political policies. For example, the vestiges of the Hukou System inhibit the mobility of labor. There are also artificial restrictions on capital investment between the mainland provinces and the SARs of Hong Kong and Macau. Free movement of goods and services within the PRD also does not completely exist within the Greater PRD. The Special Internal Administrative Boundary between Shenzhen and Hong Kong, for example, inhibits the movement of goods between the mainland and Hong Kong. As it was described to the Fifth Dragon group, this boundary could be likened to establishing an internal border between New York and New Jersey through which goods would have to clear customs in order to be shipped between the two jurisdictions. All of these factors inhibit true regional economic cooperation and planning.

I sense that one of the fundamental underlying causes of this failure to develop a true sense of regionalism in economic planning is the current incentive system for local government officials. These government officials are appointed by the Central Party, and are beholden to the Party for personal advancement. In addition, all local plans, including the detailed plans for each urban district, must be approved in Beijing. The basis of evaluation of these officials’ performance is closely linked to what I would consider a narrow focus on GDP growth and a series of related measures such as unemployment rates and the like. In order to be considered successful, and in order to progress on the road to advancement, local officials must focus on these traditional growth targets. The slavish focus on these measures of local development makes it extremely difficult for officials charged with local economic growth to incorporate plans that advance the overall economic well-being of a more broadly defined region at the possible expense of lower indicators of success at their local level.

As a necessary condition to achieving a true sense of regionalism and encouraging broader regional planning, I believe this incentive system emphasizing local GDP growth must first be addressed. Effective regional economic planning will not be achieved until the basis of evaluation of local officials shifts to a broader matrix of economic targets as opposed to a narrow set of measures focused primarily on local GDP growth. In order to be effective, these targets must include broader regional growth and development targets, as well as efficiency measures related to the regional allocation of resources. There must also be an enhanced focus on improving the efficiency of government as a necessary condition for greater regional cooperation.