The Origins and Transformation of the Growth Alliance in Guangdong, China

“Guangdong model,” as the prototype of the “China model,” led the Chinese export-oriented industrialization during 1980s-1990s and made the initial impetus for China to rise economically. In this model, the labor-seeking FDIs were the leading sector. The world-system theorists characterized this particular type of industrialization as the “labor-seeking flying geese model.” It set forth the topics of the peculiarities of labor-seeking FDI, the triangle manufacturing, and the role of the Taiwanese capital. Scholars have explored the conditions and structure of the Guangdong model and the China model, but we still do not fully understand the “politics of FDI” in that how the FDIs collaborated with local government and coped with rampant rent-seeking activities in its initial stage of development and survived or failed the pressures for transformation (upgrading) since the mid 2000s.

This paper uses “growth alliance” to analyze the dynamics of rapid growth in Guangdong. Growth alliance is defined in the context of China’s industrial development as “a closely knit alliance among the central government, local officials, foreign capital and rural cadre built around an authoritarian government-business relationship.” Specifically, this paper explores the constellation of structural conditions, policy environment, institutional matrix, and enterprise and official interaction that have made the growth alliance in Guangdong operable. Why and how did the local growth alliance in Guangdong achieve remarkable success in the 1990s? When the growth alliance met with major crisis in the mid-2000s, how did it adapt or realign itself in order to survive the new conditions and policies? What role has Taiwanese capital played in the local growth alliance? And how has the Taiwanese business community responded to the pressures for transformation?

The author has been following Guangdong’s development for more than two decades and accumulated plenty of field interviews, aggregate data, and policy document analysis. This paper composes part of a monograph under preparation.