The Role of Local Government
in Developing Economy
Wanxia Li
16th, Feb., 2012
CLL, The University of Warwick
CONTENTS
 Taking Songjiang District of Shanghai
Municipality as an example.
 The Comparison with UK Counterparts.
China is the second largest economy in the world
 Gross Domestic Product 2010)
Above US$ 6 trillion 11.3% growth,
Second after U.S. (14 trillion)
 Imports and Export
US$ 3 trillion 35% growth
(import: 1.4 trillion, Export: 1.6 trillion)
Second after U.S.
 Foreign Direct Investment
Above US$100 billion, up 17.4%,
Ranked 1st in developing country
 Foreign Currency Reserve
US$ 2.8 trillion , ranked 1st in the world
Why? Two possible answers?
 The developmental state?

These two differing orientations toward private economic
activities, the regulatory orientation and the developmental
orientation, produced two different kinds of businessgovernment relationships. The United States is a good
example of a state in which the regulatory orientation
predominates, whereas Japan is a good example of a state in
which the developmental orientation predominates. --Chalmers Johnson, (1982). MITI and the Japanese Miracle.
Stanford, CA: Stanford University Press.
 The local governments of China?
The Map of Songjiang District
Songjiang : one of
Shanghai’s 16 districts
Area: 605 Sq.km.
10% of Shanghai
Population:1.46million
6% of Shanghai
Industrial Output:
335.4 billion
13.47% of Shanghai
Two Transformations of Songjiang
Urbanization： From an mainly rural area into mainly urban area
Two Transformations of Songjiang
Industrialization : From an agricultural area into
Million
RMB
433800
2010
353800
2007
213000
2005
116700
2003
10,000
1990
0.5
1953
Year
exporting center
The Roles of Government
Economy Adjustment
Market Supervision
The Roles
of Gov.
Public Service
Society Management
The Main Functions of Local Government
 To make the decisions
 To find the Resources
 To provide the Services
The Location of Songjiang Government
Central
government
Shanghai
municipality
government
Songjiang
District
government
Township
government
Other
District
Government
Provincial
government
Municipality
Government
County
Government
Township
Government
The Annul Fiscal Revenue of Songjiang
250
200
150
total fiscal revenue
Songjiang part
100
50
0
19921993199419951996199719981999200020012002200320042005200620072008
Events
1990.12
Hu-Song High way opened to traffic
1994.05
Shanghai government approved it
2001
Songjiang New City started to built
Events
1990.12
2002.08
University Town started to built
2006.10 Thames Town opened
2007.12
2009.12
Metro No. 9 opened to traffic
Started to Extend Metro No. 9
Songjiang New City
(2001- )
Songjiang New City
Thames Town
(2002- )
Finding the Resources
offering
Capital
creating
Borrow money
chasing
Attracting
Investment
Land
Policies
Establish
Companies
the approval
of higher level
Resources-Offering
+
200 hectare land
30million RMB
Songjiang
Industrial Zone
(1992- )
Songjiang
Export
Processing
Zone (2002-)
Songjiang University Town
(2002- )
Resources-creating
Purpose
For Industrialization
Companies
Songjiang Industrial Zone Co., Ltd.
Songjiang Export Processing Zone Co., Ltd.
……
For Urbanization
Songjiang New City Construction Co，Ltd
Songjiang Fangsong Construction Co. Ltd
Songjiang University Town Construction Co., Ltd.
Songjiang Metro Line Construction Co., Ltd.
……
Metro Line 9
Resources-Chasing
Exporting Value of Songjiang Export Processing Zone
45
40
35
30
25
Exporting Value(billion USD)
20
15
10
5
0
2000
2005
2010
Providing Services
1
2
3
Demolish
Coordination
Panel for the
Key projects
Service
teams
Comparison
 1. Different development stage
 2. Different definition of local government
 3. Different structure of local government
 4. Government and Governance
 5. Different expectation of local government
Comparison
 One thing important in common?
CLL, The University of Warwick