City arena for world competition

The recent China International Import Expo (CIIE) was a grand gathering for businesses. Apart from being a stage for products from various countries and regions, the expo provided an arena for industries to display their international competitiveness.

The CIIE also confirmed Shanghai’s standing in the trade and exhibition service, and affirmation of the city’s leading role in the Yangtze River Delta economic circle, shaping the competitive edge of Chinese industries. History proves that regional economic circles in developed countries, which centered on metropolises, are crucial to building advantages for countries’ representative industries. Take Japan for instance. The city cluster around Tokyo enjoys a leg up in advanced manufacturing in the Asia-Pacific region, which helps generate huge brand influence.

The leading city in the regional economic circle is the “absorber” of high-end elements in industries, technologies and human resources. Meanwhile, it is also the hinge that connects the domestic and overseas market. The leading city is the pioneer and demonstration in cultivating the market and mapping out a new pattern for economic growth. The economic transformation and upgrading that takes place in an urban agglomeration will be, first and foremost, reflected in the development of its leading city.

China has realized the all-round construction of the modern industrial system through institutional reform and opening up. China started out from keeping the pace with the international market, gradually integrating itself into the international economic circulating system and forming its own drivers of industrial growth that stands on the frontline of the world’s economy. Other than winning itself a globally influential edge in the competition of the modern industrial systems, China’s journey of transformation has also breathed new life into the global value chain and improved the distribution of resources.

Undoubtedly, cities and urban agglomerations at the forefront of China’s reform and opening up are the most important vehicles of the development of modern industrial systems. China’s development is concentrated in its cities, and the cities’ competitiveness is key to improving regional industries. City clusters are the platform and vehicle that gather core elements of industrial competitiveness and propel institutional innovation, so that structural transformation and interaction among cities can be realized. The fundamental driver of industrial competitiveness, in China’s coastal regions, lies in the export-led growth of manufacturing. Through trade, most coastal cities promptly boosted the competitiveness of an array of labor-intensive industries.

The Yangtze River Delta, as the most representative economic circle in China, achieved its initial growth through foreign trade. With the support of human resources, enterprises in the Yangtze River Delta facilitated technology transfer through foreign investeded projects, integrated high-end elements essential to long-term growth and achieved upgrading of the industrial system.

The 19th National Congress of the Communist Party of China highlighted the strategy of regional coordinated development. The coordinated development pattern with integration at its core has huge potential to take the Yangtze River Delta’s industrial transformation and urbanization to another level.

In the medium and long term, the development planning of the Yangtze River Delta economic circle will be to build a relatively mature world-class city cluster. Based on the network of infrastructure and unified regional governance, the Yangtze River Delta aims to establish the interactive mechanism of regional coordinated development.

The author is professor and director, Division of Globalizing Economy at Institute of World Economy, Shanghai Academy of Social Sciences.