BOOK
REVIEW Keeping China out of focus
Regional Powerhouse: The Greater Pearl River Delta and the Rise of China
by Michael J. Enright, Edith E Scott and Ka-mun Chang
Buy this book
Reviewed by Gary LaMoshi
As China's role in the global economy expands, books and articles about Middle
Kingdom rivals are flying off the assembly line as fast as toys and tank tops
for export. But despite the mushrooming output, a version of the cliche about
the weather applies to economic literature on China: Everybody writes about it,
but no one tells you anything about it.
Regional Powerhouse: The Greater Pearl River Delta and the Rise of China
deepens the available knowledge base without shedding
much useful light. As its fuzzy book cover (that's the printing, not our
website or your computer) suggests, the book isn't clear on a number of key
points.
If you pick up the book, you likely already know that Pearl River Delta (PRD)
refers to the area of southern China that includes portions of the mainland's
Guangdong province, Hong Kong and Macau. (The "greater" in the book's title
distinguishes this grouping from the mainland's Pearl River Delta economic zone
that excludes Hong Kong and Macau.) Maybe you also know that the Yangtze River
Delta, Shanghai's turf, is a second node of export-led prosperity and
innovation.
Are the two deltas closer to each other or to Taipei? Is the PRD closer to
Beijing, Brunei or Bangkok? You won't find out from Regional Powerhouse since
there are no maps to locate the region within China or Asia. There are two
maps, one that pinpoints the PRD economic zone within Guangdong province, as if
that's key geographical reference for most readers, and one that names the
various jurisdictions in the PRD. The authors also assume you already know
China well enough to feel comfortable comparing the PRD with Jiangsu or Shaanxi
(not to be confused with Shanxi) provinces. But if Regional Powerhouse really
was for experts, then it would need to offer more than simple-minded laundry
lists of government policies, the social science affinity for naming rather
than explaining things and results of business surveys on intentions. It would
need hard analysis of real conditions.
Cluster thrust The biggest idea that emerges in Regional Powerhouse is that
clusters of specialty skills associated with the manufacturing and marketing of
various products give the PRD a competitive advantage in those fields, compared
with rivals in China and globally. Clusters are nothing new: Detroit for cars,
Hollywood for movies, Milan for couture, Jerusalem for religion. It's not clear
whether clusters arise to service production or whether the cluster of skills
leads to production; the book prefers to stay within the boundaries of the
self-evident.
Despite that preference, much of the book is inexcusably out of date.
Purportedly key changes in business restrictions under the Hong Kong-China
Closer Economic Partnership Arrangement (CEPA) and similar measures from as
early as 2003 are given without information on the actual impact of those
changes in the months and years since. Details of mainland five-year plans for
2001-05 are cited without progress reports. The last round of comprehensive
economic statistics dates to 2002.
Supplying a modicum of those kinds of hard facts from official sources would
seem in keeping with the book's tone. It's not just that the book sticks to
conventional wisdom where it offers any wisdom at all. There's a bloodlessness,
a lack of passion beyond the norm for government work or academic studies, a
sense that they're only doing this because someone's paying them. We are in the
realm of the consultant.
'Because I said so' In case you forget that or that in addition to his business chair at Hong
Kong University, co-author Michael Enright is a partner with co-author Edith
Scott in a consulting firm (third author Ka-mun Chang heads a Hong Kong think
tank and holds some mainland political appointments), there are dozens of notes
citing "Enright, Scott & Associates Ltd research" alone as the information
source. To me, that seems like a more pompous way of saying "because I said
so", but I have limited experience with academic-style research.
So I referred the case to a half-dozen or so friends who are now or have been
university professors in academic fields. They said this sort of
self-referencing note is a growing, though disturbing trend largely accepted in
legitimate research. It doesn't cross the line to sleazy as long as the actual
research is available upon request. I asked Enright how to see research behind
some noted passages. He referred me to the offices of Enright, Scott &
Associates Ltd, which have yet to reply to my inquiry.
Being a consultant, as opposed to a purely academic researcher, means that you
have a client. Research for Regional Powerhouse was sponsored by The
2022 Foundation, a group of Hong Kong great and good with a vested interest in
not rocking the boat.
A vital marker for navigating mid-channel these days is that closer cooperation
with the mainland, particularly greater integration with its Pearl River Delta
neighbors across the border, is the key to Hong Kong's future prosperity. For
example, in the aftermath of Severe Acute Respiratory Syndrome (SARS), mainland
tourists with deep pockets have finally rescued Hong Kong from its lengthy
recessionary, deflationary cycle, as well as injected the over-priced city and
its over-paid residents with an overdue dose of humility. At the 1997 handover,
who would have imagined rich Hong Kong relying on the mainland for economic
salvation?
Unequal partnership That premise of greater integration leading to prosperity requires
overlooking some basics. Hong Kong's economy has been closely tied to the
mainland and especially the PRD since reforms began in China more than a
quarter century ago. When China needed finance and expertise for those reforms,
it turned to Hong Kong. The partnership has deepened since 1997 with Hong
Kong's return to China and, far more important, the Asian economic crisis that
encouraged Hong Kong firms to retreat from the region and concentrate even more
on China. Yet while China and especially the PRD have registered world-beating
economic growth, Hong Kong has lagged in both percentage and nominal terms.
During the 1995-2000 period, Hong Kong's gross domestic product (GDP) grew 8.5%
overall (not annually), then shrank in 2001 and 2002, according to figures in Regional
Powerhouse. PRD's GDP nearly doubled between 1995-2000, then grew 13.5%
and 12.5% in the next two years. Then and now, the performance gap between Hong
Kong and the PRD persists despite close integration. You can theorize that the
economies aren't close enough yet or that closer ties could bankrupt Hong Kong.
The plot thickens. A one-time foreign chamber of commerce president in a PRD
city notes, "Hong Kong owns Guangdong and Shanghai, too." Hong Kong companies
remain leading investors in China, particularly in the PRD. You can see the
discrepancy in growth rates, at best, as a version of outsourcing/offshoring
dilemma in the West, a couple of decades further along. The lag in Hong Kong's
economy indicates that as lower-value jobs move out, few higher-value jobs are
created, for a net loss in both employment and income.
More interestingly, ask: If Hong Kong companies own big stakes in the PRD boom,
where do those profits go? Who is benefiting from Hong Kong companies'
investments in China? Simple answer: Not Hong Kong at large.
Putting these issues in focus could bring about a compelling public-policy
debate about the direction of Hong Kong and its economic relationship with the
mainland. But with few PRD companies or government agencies interested in
seeing that debate - let alone sponsoring it - Regional Powerhouse sticks
to cheerleading, which often means keeping your back to the action.
Regional Powerhouse: The Greater Pearl River Delta and the Rise of China
by Michael J Enright, Edith E Scott and Ka-mun Chang. John
Wiley & Sons (Asia), Singapore, 2005. ISBN 0-470-82173-6. Price: US$29.95,
325 pages.
Gary LaMoshi has worked as a broadcast producer and print writer and
editor in the US and Asia. Longtime editor of investor rights advocate
eRaider.com, he's also a contributor to Slate and Salon.com.
(Copyright 2005 Asia Times Online Ltd. All rights reserved. Please contact us
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