Jason Young

Space for Taiwan in regional economic integration Cooperation and partnership with New Zealand and Singapore

Taiwan businesses and policymakers recognise the importance of actively participating in regional economic integration agreements in the Asia-Pacific to avoid marginalisation from the emerging economic community. This has been a challenge due to Taiwan’s position in the international system and Beijing’s opposition to Taipei negotiating state-to-state agreements. The signing of the economic cooperation agreement with New Zealand (Agreement between New Zealand and the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu on Economic Cooperation, July 2013) and the economic partnership agreement with Singapore (Agreement between Singapore and the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu on Economic Partnership, November 2013) shows that an alternative pathway for participating in regional economic integration is possible. Based on extensive interviews in Taipei, the article identifies a framework for this pathway with three enablers and constraints: first, the use of the World Trade Organization nomenclature (Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu); second, improved cross-strait relations and the signing of the Cross-Strait Economic Cooperation Framework Agreement (2010); and, third, growth in the number of countries with existing preferential economic agreements and good relations with the People’s Republic of China. This framework is discussed as one of four possible pathways to greater participation in regional integration with reference to potential trade agreements in the region and Beijing’s one China policy.

Hukou Reform for the New Century

Over the last few decades incremental transformation of the hukou system is evident even as the fundamentals of the system have survived and adapted to the growth of the market economy. The introduction of temporary residency permits and new competitive hukou transfer categories have significantly liberalised labour flows and hukou transfer. While recent regulations have sort to standardise and centralise hukou guidelines local officials at the city and provincial level have issued their own policies, guidelines and planning goals since the 1990s and maintain the power to shape inward migration and settlement patterns to meet the perceived requirements of local development in the new century. The hukou system remains an important intervening variable in migration, employment and settlement patterns and continues to exert influence on the opportunities available to China’s internal migrants.

Markets, Migrants and Institutional Change

Economic development in the post-Mao era has caught the eye of developing and developed countries alike. For the developing world, China and the other East Asian economies represent much of what they are hoping to emulate in their own development projects. For the developed world, China is no longer considered the ‘sick man of Asia’ (亚洲病夫) and is now an integral part of the global economic system attracting high levels of foreign direct investment and maintaining high levels of economic growth and a healthy balance of trade surplus with the developed world. This development success is particularly striking considering the many setbacks, impediments and false starts in China’s modernisation drive since the 19th century.

The Forgotten Sector: Institutions, Market Linkages, and Concurrent Growth in Rural China and Japan

The rapid economic growth of China has occurred in tandem with massive urbanization and labor transfer to urban industries. Urban areas have been the primary growth arena through the creation of highly profitable secondary and tertiary employment opportunities, many involved in export-led development activities. Consequently, the rural sector is primarily seen as a source of labor or completely forgotten in the analysis.

The Hukou System

The long history of hukou division has had a profound influence on how the modern Chinese state has unfolded. Premodern forms of the hukou system were an integral part of the state building process, the centralisation of power and authority and restrictions on migration and social mobility. State building in the republican era revolutionised the Chinese system of governance but failed to end the age-old use of hukou to govern society. The hukou system was maintained when and where possible for conscription and agricultural and industrial organisation. At the dawn of the communist era, the hukou system was radically adapted to play an integral role in the establishment of the planned economy and to make possible state emphasis on socialist control and transformation. These roles were maintained and strengthened over the three decades before policies of reform and opening brought new forces to bear on the age-old institution.

Institutional Change at the National Level

The hukou system was central to the functioning of the dual economy of the Mao years. But even before the establishment of the centralised command economy hukou played a crucial role in imperial and republican systems of governance. It is therefore unsurprising to find that as China’s economy moves away from an overreliance on planning, the state continues to promote a role for itself shaping the growth of the market-oriented economy. Hukou are considered key to the process of intervention that shapes the social and economic decisions of more than a billion Chinese citizens. This chapter argues hukou regulations have been guided by three fundamental state objectives over the reform era: promote economic development; maintain social stability; and, manage, restrict and direct migration and urbanisation. These interrelated objectives provide continuity from which to better understand the wide variety of reforms proposed and implemented by state actors in the post-Mao era.

Institutional Change in Beijing, Shenzhen and Chongqing

Beijing, Shenzhen and Chongqing present very different cases of city development over the reform era. Beijing is an example of an established city with a large existing non-agricultural hukou population that played a central role in the planned economy of the Maoist era. As a developed city, the seat of national government and one of China’s economic and cultural centres, Beijing attracts some of China’s most qualified and talented migrants. This has led to not only natural growth in the hukou population but also to a steady but relatively small stream of inward hukou transfers selected and recruited by local government who pick China’s best and brightest through competitive hukou transfer policies. The majority of Beijing’s migrants however fail to obtain inward hukou transfer. Since the 1980s, the growth of this ‘temporary population’ has created a large institutionalised temporary working class that has facilitated Beijing’s construction and the development of the service industry. This ‘temporary’ labour migration has become increasingly permanent illustrating a significant divergence from the regulations for temporary hukou permits. This divergence has been followed by increased allocation of civic rights in education and social security schemes and a reduction in the hukou/non-hukou division. However, the fundamental institutional division remains and continues to shape migration and settlement patterns in Beijing.