Economic and social upgrading of the Pearl River Delta, China

Abstract

Despite having been a global manufacturing center for several decades, China has encountered certain internal and external limits to its economic development (e.g. increasing labor and land costs, deteriorating environment), since 2000. In this context, academic studies have focused primarily on promoting economic upgrading, while ignoring the social consequences of such actions. This is common in many developing countries. Recently, some studies have attempted to relate economic upgrading to social upgrading from the perspective of GPN and GVC; however, they have few implications for local development. To fill these gaps, this research aims to enrich the literature on the relationship between economic and social upgrading from the cluster perspective, which is useful to reduce inequality and urban poverty. The Pearl River Delta, where economic upgrading is in full swing, was selected as the research area. This thesis has applied methods of documentary study, questionnaire, and case study. This thesis first examines the empirical context of economic and social upgrading in the Pearl River Delta. Second, it explores the patterns of economic and social upgrading and their aggregate relationship in the Pearl River Delta to portray a macroscopic picture. Third, it analyzes how economic upgrading influences social upgrading of workers, to disclose the details of individual workers. Four, based on the previous chapters, it attempts to illustrate the mechanisms of how economic upgrading influences social upgrading. This study argues that social upgrading is a broad term. Social upgrading shows different patterns regarding different aspects, thus, they should be analyzed separately. Economic upgrading may not necessarily generate social upgrading, and greater economic upgrading may not necessarily translate into greater social upgrading. In China, government is an impactful actor in balancing the relationship between economic and social upgrading. Central government promulgates laws and plans, while local government often acts as its executor; local government serves as a flexible adjuster to balance the interests of both capitalists and workers. Nowadays, China’s government has gradually shifted its focus from facilitation, to redistribution and regulation. The moderation mechanisms for different aspects of social upgrading vary. Although most workers would likely enjoy objective social upgrading, the increased consumption and working pressures result in a trade off, turning it into subjective social downgrading. Despite this up-down governance has some advantages, it also has certain limitations; for example, its effect is only limited on measurable standards, rather than enabling rights, which is likely to involves reallocating political power. In the process of economic upgrading, numerous workers face unemployment, reemployment, or migration back to hometown. It is urgent that government initiates training programs that promote skills upgrading for low-end workers, to meet the new occupational structure. Simultaneously, social insurance benefits should be provided to reduce the economic burden they face during their reemployment and training. Public housing is very important for low-end workers, as reducing their living costs will help them to realize subjective social upgrading. It is necessary to protect rural migrant workers’ farmlands, so that the unemployed could choose to do farming to avoid becoming displaced workers.