10.3 China’s Periphery

The heartland of China has always been part of China Proper. Surrounding China Proper are a number of autonomous regions, associated territories, and independent countries. These peripheral areas buffer China Proper from the rest of the world. They also provide China with either access to trade relationships or access to raw materials needed for development. Each peripheral political unit has its own unique physical and cultural characteristics and, in many cases, a minority population that is other than Han Chinese.

From the theory of how countries gain wealth, recall that manufacturing was traditionally the method with the highest value-added profits. Hong Kong is a good example of this in action; that is, manufacturing was a successful method of gaining wealth for Hong Kong. First, low-level goods such as clothing and textiles were produced with Hong Kong’s cheap labor and low costs. As business increased, higher-level technical goods were produced, such as radios and other electronic products. Incomes increased. Soon, Hong Kong was a business and banking center trading with all global markets. International trade attracted a strong financial network that enhanced the free market system in Hong Kong. Business in Hong Kong attracted attention in Beijing. Chinese leader Deng Xiaoping, who had begun China’s open door policy in the 1980s, viewed Hong Kong as a major access point to establish trade and commerce with. In the 1990s, the special economic zone of Shenzhen became an important development area for Chinese industries and multinational corporations. China once again used Hong Kong as a major trade corridor so that about one-fourth of all the country’s imports and exports were being shipped through the port of Hong Kong.

During the 1990s, as China actively invested in its industrial sector, it sought ways to attract the business generated by Taiwan and Hong Kong, two economic tigers. Opportunity came knocking in 1997 when the ninety-nine-year lease of the New Territories to Britain expired. China did not want to renew the lease. A deal covering all of Hong Kong was struck between China and Great Britain. Britain would relinquish all its claims to Victoria, the port, and all of Hong Kong if China would allow the area to remain non-Communist and under its own autonomy for fifty years. China agreed, and Britain left Hong Kong in 1997. Hong Kong became associated with mainland China as a special autonomous region, but remained capitalist and democratic in its operations. This opened the door for Taiwan and other trading partners to increase trade with China through Hong Kong. Shenzhen, a special economic zone (SEZ) across the border from Hong Kong in China, was ready to capitalize on its accessibility to the port and the enormous trade that had been established by Hong Kong. Shenzhen became one of the fastest growing cities in the world and has become a center of manufacturing and trade for the global economy. It grew from a moderately sized city of about three hundred fifty thousand in the early 1980s to a city of ten and half million by 2010, and is still growing. One of Shenzhen’s largest trading partners is the Walmart Corporation, as factories in the city produce goods for export to the United States and sale in Walmarts around the country. Shenzhen has established a port of its own and is a magnet for international trade.

More than 95 percent of the seven million people living in Hong Kong are ethnically Chinese. The people have strong ties to mainland China but highly value their separate and independent economic and political status. Hong Kong is a major financial and banking center for Asia and has been working with the Chinese government to provide private banking services for Chinese citizens. The small land size of Hong Kong makes it a high-priced real estate destination. The cost of living is high, and space is at a premium and expensive. Nevertheless, Hong Kong attracts millions of visitors per year and has established itself as a tourism hub for people desiring to visit southern China. Tens of millions of tourists each year use Hong Kong as a base or stopover point to enter China’s southern provinces. Hong Kong offers visitors immense shopping possibilities in a safe and modern environment that is attractive to people from all over the world. Cantonese is the official language, but English is widely spoken in Hong Kong because of Britain’s influence and because of world trade relationships.

Figure 10.18

Victoria Harbor in Hong Kong, with its deepwater port and solid bedrock island, allows oceangoing vessels to dock right next to high-rise business and office complexes.

Across the Pearl River Estuary to the west is the former Portuguese colony of Macau. The arrangement between China and the British government over Hong Kong provided a pattern that was also applied to Macau. At the end of 1999, Portugal relinquished its claim to Macau and the colony was turned over to the Chinese government under an agreement similar to the agreement between Britain and China regarding Hong Kong. Macau was able to retain its autonomy and free-market economy for fifty years as it became a special administrative region (SAR) of China. Macau is a much smaller territory than Hong Kong, and home to only about half a million residents.

In 2000, Taiwan renewed its efforts to be internationally recognized as a sovereign nation and announced tentative plans to formally secede from China. China responded with many threats and conducted military exercises across the strait from Taiwan. The military exercises were seen as another threat, essentially a show of military might, meant to intimidate Taiwan into retreating from its secessionist position. The United States supported Taiwan by parking a naval fleet nearby, which incensed the mainland government. In 2005, China passed a law authorizing the use of military force to stop any secessionist actions by Taiwan.

Taiwan’s economy continues to use its skilled labor base. In years past, Taiwan’s factories produced textiles and light clothing. As incomes and skills advanced, production shifted to electronics and high-end goods, which it has since been exporting around the world. Taiwan has achieved a high standard of living for its people. When trade opened up through Hong Kong with mainland China, many Taiwanese industries shifted production to the SEZs along China’s coast. Labor in SEZs is less expensive, leading to a corresponding rise in profits. Unfortunately, this has resulted in higher unemployment levels in Taiwan.

Figure 10.20 Street in Taiwan, ROC, Illustrating Modern Businesses and Use of Scooters for Transportation

In 2008, Taiwan elected a government that, though nationalist in its ideology, worked toward  strengthening trade and investment with China. Taiwan entered the World Trade Organization (WTO) in 2001 using the name Chinese Taipei. That move started a cascade of actions that improved “cross-strait” trading conditions, and within just a few years, direct trade between China and Taiwan became extensive.  Tensions and vacillations in relations have continued to the present, with displays of PRC military force in waters near Taiwan recently in focus.

Autonomous Region of Tibet

Tibetans revolted in 1956. Backed by the United States, the revolt continued even as China indicated it would suspend the transformation of Tibet. China brutally crushed the revolt in 1959, leaving tens of thousands of Tibetans dead or imprisoned. The Dalai Lama and thousands of Tibetans fled to Dharamsala, India, where they established a government in exile. At this point, China had a firm grip on Tibet, and in 1965 the reorganization of Tibet into a Chinese socialist region began in full force.

During the 1980s and early 1990s, China expressed some willingness to relent in its authoritarian control of Tibet. However, they demanded that the Dalai Lama renounce claims of Tibetan independence, which he refused. Demonstrations and continued violence occurred throughout this period. Chinese-Tibetan relations were further damaged when the Panchen Lama died mysteriously shortly after criticizing socialist reform in Tibet. The Panchen Lama is the next-highest Buddhist official under the Dalai Lama. There is now a controversy with the Chinese government over the selection of the eleventh Panchen Lama. China and Tibet both claimed authority over choosing the Panchen Lama and each named a different person to take the role. The situation illustrates the conflict over the minds and people of Tibet.

In 2008, a peaceful protest led by Buddhist monks turned violent. Chinese authorities responded with a harsh crackdown. The world’s attention was focused on China at the time because the Olympic Games were under way in Beijing. China has often been a target for protests because of its human rights violations against Tibetans and other minority groups. Little attention was drawn to Tibet during the 2008 Olympic Games. China wanted to showcase its advancements in industrial development and culture and did not want the world to focus on the issues with Tibet or any other part of China.

The population of Tibet is only about three million. They mainly live in the mountain valleys, below seven thousand feet. Lhasa is Tibet’s main urban center as well as its capital. In recent decades, China has softened its treatment of Tibetans and restored some of the monasteries. China has also moved thousands of ethnically Chinese people into Tibet to shift the ethnic balance of the population. A major rail line now directly connects Beijing with Lhasa, Tibet. Lhasa will soon have a majority Chinese population with cultural similarities that reflect more the attributes of China Proper than Tibet. The Tibetans who live there are being compromised simply by population dilution.

Figure 10.23

The core-peripheral spatial relationship can be appropriately applied to Tibet and its relationship with China. Tibet is a peripheral region with raw materials that provide benefits to the core areas of China, which require the raw materials for industrial development.

As indicated previously, China wants to maintain the mountainous, rural region—with little inhabitable land and very few people—as a buffer state between India and the Han Chinese heartland of China Proper. Tibet is also becoming more important to the government of Beijing and the business people in Shenzhen and Shanghai. This is an example of an unbalanced core-periphery relationship. The mountains of Tibet potentially hold vast natural resources that could support the growing industrial economy in China, which is based on manufacturing goods for global export markets. China will continue to see to it that Tibet becomes economically integrated with the rest of China in spite of their cultural differences.

Mongolia’s economy has traditionally been centered on agriculture, but mining has grown in recent years to be a major economic activity. Mongolia has rich mineral resources of coal, molybdenum, copper, gold, tin, and tungsten. Being landlocked isolates Mongolia globally, but its large mineral reserves are in demand by core industrial areas and should boost it’s impoverished economy. China has increased its business presence in Mongolia and has been drawing it away from its former Soviet ally to become a major trading partner.