English summary
English summary
Introduction and research approach
This research was concerned with large-scale urban area development in general, and in particular with gaining an understanding of the role played by global-local interaction in shaping the area development strategies in one particularly explosive urban project, the development of Shanghai’s
Pudong New Area. The Pudong development provides an extreme example of a situation in which interaction between global and local forces took place in a location whose boundaries had been closed to the outside world for almost forty years and in a period when doors and windows were beginning to open. The research led to a concrete interpretation of the tensions developing at district level and provided an example capable of representing the complexity and dynamics of current area developments. The practical question addressed by the research was: What were the main factors responsible for the speed achieved by the Pudong development?
The associated theoretical question was To what extent did the development of the Pudong New Area reflect the characteristics of a developmental state?
The starting point of the research was a theoretical analysis of global–local interaction and its impact on the creation of urban space. Urban theories, theories related to the network society and the global city, were used to explain the significant changes taking place in the creation of urban space. A number of significant influences were observed. One such influence was the rise of the network society, transforming the relationship between traditional organisations operating within cities into a more intertwined and interdependent relationship and leading to a new style of urban governance. Another was the formation of a global urban network resulting from economic globalisation and global financial flow. The paradigm of the world city, as developed in pioneering research into global cities (Sassen 1991, 1994) and the world city hierarchy (Friedmann 1986, 1995), recognises that cities have become the driving forces behind economic globalisation and at the same time have become increasingly dependent for their survival on their articulation with the global economy. The essential finding of these urban studies was the key role played by global capital flow and knowledge transfer in interlinking global and local economic systems and creating urban space.
Even when the impact on cities of global forces has been recognised, it is still necessary to recognise the global-local dualism expressed in an area development process. The formulation of area development strategies is rooted in the local political and economic situation but is increasingly influenced by the uncertainty imposed by global forces. The success with which area development strategies are formulated to deal with the complexity, dynamics and uncertainty of the development process is directly affected by the way the locality views itself and the outside

English summary world and the way political and economic institutions function, adjust and adapt. Thus formulating an area development strategy is more a learning process, in which emerging situations need to be addressed and adjustments need to be made to suit changing requirements. As China chose to base its economic reforms on the model of the East Asian developmental state, it naturally introduced many of the same institutional structures that had helped other countries and regions to generate economic growth. This same strategy was adopted by Shanghai and played a role in shaping
Shanghai’s institutional system. Although each East Asian developmental state has its own individual system, the central concern is always to achieve a steady high rate of economic growth.
In general the state plays an active role, laying down industrial policy and promoting economic development. Ensuring a high rate of economic growth requires the state to create a significant degree of trust from and a close relationship with the market. The complex character of the
Pudong development provided a unique opportunity not only to test the application of the theory of the developmental state at local level, but also to link two different domains, political economics and urban study, in an examination of the complexity of the impact of context on urban management and area development.
Case study
To explain how global-local tension was controlled to achieve speed in the Pudong area development, the research focused on the two sets of interrelated variables, local and global. The case study analysed in depth the practical measures which affected the speed of the development, including the decision-making process, management strategies affecting land development, infrastructural development and the closely related local real estate market and the way in which investment and finance was mobilised. To provide a comprehensive picture, the research made use of a variety of different methods, including literature review, internet searches, formal open-ended interviews, group discussions, workshops, symposiums and conferences. Data was collected from archives, interviews, questionnaires, and fieldwork observations. The case study revealed ample evidence for the evolutionary nature of the policies applied in Pudong to manage a changing environment and the different challenges faced during the course of the development. The different policies and the ways in which they were implemented displayed a number of distinct characteristics defining the approach taken to steering the development.
Findings
The theory of the developmental state was applied to explain the relationship between the speed of the development and the interaction between state and market. The analysis considered the motives which underlay the different responses to global-local tension, especially the response of local government and its effect on the strategies formulated by local government. The analysis examined two key relationships, the relationship between state and market and the relationship between local and global forces, paying particular attention to those aspects that directly affected the speed achieved by the 15-year development.
State-market networking

English summary
As compared with the traditional way of managing area development in China - closed, top-down, opaque, bureaucratic and government-controlled - the development of Pudong showed an evolutionary trend, more open and interactive, governed by a hybrid form of control characteristic of a specifically Chinese development model. Use of a networking strategy was essential to facilitate the development, allowing government and the market to begin to find ways of approaching and understanding one another. Cooperation between government and the market was generally achieved by institutional adaptation on the part of government, leading to the creation of new rules to accommodate the admission of market forces and allow them to operate. Four aspects of the networking strategy were found to be particularly significant:
Developmental goal . The urban development of Shanghai Pudong was facilitated by the adoption by a developmental state of an open-door policy. The aim of the development strategy employed for Pudong was to achieve economic development. All the way through from decisionmaking to implementation, local government actively influenced the development process, sometimes openly, sometimes discreetly, according to circumstances and the requirements of the moment. The application of the national SEZ concept to a large-scale urban development project and the wide range of experimental policies followed in Pudong was reminiscent of the tactics used by China to stimulate its economic growth and foreign investment, following the developmental state model. Like other SEZs, Pudong serves Shanghai in particular and China in general as a ‘shop window’ and a ‘base’, creating opportunities for interaction between western culture and Chinese culture, giving foreign investors the opportunity to gain a better understanding of China’s social and economic traditions and the Chinese greater opportunities to learn about western technology, management and expertise. Thus Pudong’s SEZ status not only gave
Shanghai sufficient autonomy to hook into the global capital market but also allowed global players to penetrate the local market, providing a deregulated zone in which to carry on their activities within a China that was still largely regulated. Moreover the significance of the Pudong development to Shanghai’s economic restructuring and linkage with global economy, meant that locating in Pudong gave investors an important stepping stone to the market, both internal and external.
Local-central synergy . The active function played by the state in the Pudong development, was achieved by a coalition between state and local government, each supported the other’s approach to development and each needing valuable resources that only the other could provide.
Once the two sides had recognised their shared interest in economic development and the need each had for assistance from the other, the initial conflict between supporters of local development and central government could be resolved, and the two parties were able to reach a consensus, each, for its own reasons, supporting the start-up of the development. It is interesting to consider the efforts made by central government to balance the conflicting interests of Shanghai and other provinces. In fact central government helped to create an enabling environment that local government could never have created alone. In the Chinese version of the developmental state, the relationship of ‘interdependence’ and ‘mutuality’ between the state and local development initiatives allowed central government, Shanghai, Pudong and the hybrid development companies to share in decision-making, the design of a development strategy for Pudong and implementation.
Local government played its part as initiator of the Pudong development, designing the development concept and strategies, lobbying central government, negotiating the level of support required from central government and marketing its development ambitions to the outside world.

English summary
The role of the state in facilitating the operation of the market was reflected in the use of lowerlevel agents and development companies, sensitive to changes in the market and responsive to those changes, to work closely with those individuals and organisations which became involved in the market. The need for the role played by central government also changed as time went by.
Once the Pudong development was under way, central government was able to reduce its intervention and budgetary support, though when the development ran into trouble, as for example during the Asian economic crisis, central government stepped in to give a helping hand. Analysis of the decision-making process and subsequent developments in Pudong clearly showed how in the long term the role of government changed from intervention to enabling, and to continued efforts to build a strong cooperation between state and market. This sharing of tasks between local and central government demonstrated the flexibility with which a developmental state was able to carry out a particular project.
Institutional adaptation . The development of Pudong demanded urgent institutional redesign, or more precisely institutional adaptation, if the market was to become involved in local development. To achieve such adaptation, Shanghai concentrated on two things, a market-oriented administrative structure with sufficient calibre to advance the development strategy effectively and a market-friendly legal system to ensure the achievement of synergy between state and market.
To increase transparency and provide an efficient and effective service, the institutional design adopted by Pudong combined ‘small government’, employing as few personnel and offices as possible, ‘big service’, putting the emphasis on bureaucratic efficiency, and ‘big society’, transferring functions other than supervision and regulation to associations and NGOs. In its creation of an effective Pudong New Area Administration Committee, Shanghai put a good deal of effort into emphasising the autonomy of that committee. A ‘one-stop’ system was introduced to facilitate the obtaining of administrative approvals, to avoid the usual bureaucratic delays and ensure that investors found the business of getting approval for investment projects fast and relatively painless. To facilitate investors’ entry into and operation in Pudong’s market, new laws were introduced to prepare the ground for the introduction of a market economy, but the details were kept vague to allow for later interpretation and implementation. Some of the new laws even contradicted one another, requiring continued amendment and adjustment as China’s economic reform deepened and the operation of the market became better understood. To support area development, the local authority made special efforts to create land institutions which would facilitate the operation of the market, and to dismantle barriers to outsiders looking to enter the real estate market and sectors previously barred to private developers. The changes to the legal system, though not without risk, provided scope and flexibility for local authorities to carry out further experiments to discover what suited them best. Furthermore, a strong regime (strong government) combining capable political leadership with a highly-educated economically aware bureaucracy and supported by technical expertise, ensured that the implementation of the Pudong project was conscious of and responsive to developments in the market.
Selective strategy . One of the most successful lessons learnt by the developmental states concerned selective intervention. As interpreted in China, a selective strategy involved a pragmatic approach to sharing limited resources in a vast land with many different local interests.
The state was able to push through area development in a particular favoured area, in this case the
Pudong New Area, by exploring the highly selective SEZ strategy to attract western capital, technology, management skills and experience. A selective strategy also involves the limitation of

English summary the number of parties involved in decision-making, in the selection of sectors to form an outwardoriented economic structure and the limited use of state budgetary funds. Because the local authority’s budget was limited, it too adopted a selective strategy, concentrating its spending on a selected priority area in each zone. Pudong could be used as a laboratory for specially designed pilot projects, a place to try out new strategies and policies, reflecting the nation’s pragmatic and gradualist approach to reform. These kinds of experiment, involving administrative restructuring or new mechanisms such as BOT and PPP, coupled with a pragmatic approach, made possible the rapid introduction of efficient and effective measures to help Pudong speed up its development and attract more investment. A belief in utility rather than ideology led to many new ideas being tried out in Pudong. Although the old regime erected enormous barriers to the introduction of new ideas that it saw as being in conflict with the existing structure or existing methods, it was still possible to try out new ideas in designated test areas. Measures that proved successful could then be tried out in other places. The Pudong development showed that the planning approach to development was still alive and kicking. This approach owed its rebirth to a growing marketawareness, the responsiveness of new-style planning to changes in the international economy and an ability to take advantage of market awareness through selective government intervention.
Planning transformed its function to become a demonstrative tool, a promotional device to attract the attention of the public and investors from the outside world, and a bargaining tool to develop consensus between different organisations and interest groups.
Local-global articulation
A thorough examination of the way the project developed left no doubt that Pudong was an example of a temporary process of urban transformation executed in an era of increasing globalisation. National government and Shanghai's local government treated Pudong as a stimulus to Shanghai’s internationalisation by seeking to benefit from the growth of the global financial market, the expansion of the international trade in services, and the restructuring of foreign direct investment. In a local project of this kind, local, global, national and regional forces interact with one another. The Pudong development demonstrated the dynamics of local-global articulation, in which an individual locality takes an active role in responding and adapting to global challenges, and in some cases even takes the offensive to take advantage of the opportunities presented.
Although the state treated the impact of knowledge transfer and global capital inflow with caution
(for fear of negative influences), it was also aware of how significant global capital and advanced knowledge could be to a local area development project and to the efficiency and effectiveness of urban governance so long desired by local authorities. To benefit from external influences rather than being swallowed up by them, local authorities (in collaboration with central government) spent a substantial amount of time on study and research before taking ideas accepted internationally - particularly in the West - and adapting them to suit their particular localities. This progressive pragmatism was not only applied to global capital flow, but also to the transfer of knowledge from the outside world. The designation of Pudong as an SEZ created a ‘national enclave’ within which bold experiments could be carried out on various market concepts, helping to accelerate a pragmatic adaptation to information inflow and knowledge transfer.
Global-local financial flow . Pudong was presented as a nexus between global players and domestic players. To hook Pudong into the global economy and the global financial market, the project’s initiators borrowed the concept of the Special Economic Zone (SEZ) to free Pudong

English summary from rigid institutional constraints and so allow it to bypass the administrative, political, and economic barriers limiting Shanghai’s economic activity and to experiment with the development of an outward-looking, market-oriented economic system. Pudong’s preferential policies to attract
FDI were not limited to the financial and manufacturing sectors, the two sectors which Pudong hoped to establish quickly as its main economic supports. It was hoped that inviting foreign investors and foreign investment into Pudong’s urban development, especially in areas formerly restricted to the Chinese public sector or Chinese private investors, would encourage sufficient inflow of foreign investment to make good the shortage of capital. Land development projects and infrastructure development were thrown open as the local authority showed its willingness to involve global players into Pudong’s urban development and real estate market. Although
Pudong’s property market brought with it huge uncertainties, the opportunities offered - an untapped market and the chance of high return – persuaded a significant number of developers to try their luck. The dramatic increase in prices and rents for housing and offices in Pudong, coupled with the booming property market in Shanghai, revealed the danger that continuing integration with the global property market could lead to an uncontrollable separation from the local Chinese market and a loss of state influence. It is noteworthy that in Pudong’s financial structure, the unusually large proportion of FDI contributed by Hong Kong, Taiwan and Southeast Asian countries demonstrates the importance of the global Chinese business network to directing the inflow of FDI into China generally and Pudong in particular.
Global-local information flow . Pudong also provided an interesting example of the influence exerted by foreign expertise, directing and assisting Shanghai’s urban development, participating in different phases of the planning and architectural design, establishing a land regime and setting up public-private partnerships. Architecture and urban planning were two of the areas most active in adapting knowledge from the outside world to suit the Pudong situation.
Local professionals, encouraged by their own professional curiosity and the eagerness of local politicians to hear outside opinions, were largely responsible for initiating interaction with the outside world, although the earliest initiatives were more a matter of ‘importing’ than interaction.
Interacting and conferring with outside experts gave local professionals an insight into how to examine local projects in the light of western planning concepts. The lack of Chinese experience meant that the locality could be treated as a tabula rasa . Hardly any of the creative references used by foreign architects were derived from Chinese cities, nor did they relate in any significant way to the existing situation or take much account of implementation problems such as the relocation of existing residents. In fact the local context was largely ignored. Nevertheless, all this information and knowledge was not without value to planning practice. The different proposals were actually used by local Shanghainese planners in a more pragmatic and practical way, adapted to suit local conditions.
Pudong’s land regime was largely based on the experience of other developmental states, particularly Singapore and Hong Kong, which had established successful land institutions to leverage state ownership of land and had profited from large amounts of revenue from their land.
Pudong did not in fact copy what had been done in other successful cases, but went to great lengths to adapt the various techniques to suit its own locality and different economic situation.
The institutionalisation of land development therefore became part of the process of China’s transition, facilitating the development of the market while maintaining the developmental state

English summary model. The adoption of an active land policy increased the speed of development by encouraging new players to invest and earn increased revenue from land leasing.
The introduction of public-private partnership (PPP) was another interesting aspect of
Pudong’s pragmatic approach to foreign management techniques. For the first time, urban planning and urban development was not just a public task, but the collective responsibility of a broadly based group of stakeholders. This interactive approach, which became even more common in the implementation stage because of the need to gain financial and public support, was very different from the traditional Chinese approach to urban redevelopment, in which the central role was generally played by the public sector and public finance. The main concern was how private sector investment could be involved in Pudong, not just in real estate but in the industrial and service sectors generally.
The Pudong example demonstrated that urban development is a complex process, dynamic and diverse, involving interaction between the state and the market in parallel with increasingly dynamic global-local interaction. Policy making, consequently, was not pre-planned but rather emerged from the interaction between private companies and bureaucratic agencies, with mediatory organisations playing an essential role. As Mintzburg has said, policy-making is
‘emergent’, not designed.
Conclusions and practical implications
The research applied urban theories and the theory of the developmental state to understanding the nature of a large-scale area development in a specifically Chinese context in an era of globalisation. The speed of the Pudong development was made possible by a number of different factors interrelated in such a way as to perform a unique function not achievable by any one of those factors in isolation. The theory of the developmental state made it possible to clarify a number of features of the Pudong development, especially the powerful motives underlying government intervention in local affairs and the network approach exploited by local government to deliberately construct a coalition between state and market, global and local. However, the decision by the state to take an active role in this local development project was not taken blindly or subjectively, but resulted from a careful observation and understanding of global economics followed by a progressive adaptation to the potential and opportunities offered by the global economy. The pragmatic adaptation of advanced know-how derived from the outside world to suit conditions in Pudong was a distinctive developmental strategy introduced by local government, allowing the developmental state to use all possible means to achieve its developmental goal. The most representative example of pragmatic adaptation in the field of urban development was the active land policy, creating an intermediary between state and market and attracting global players to a local development. The active land policy not only generated substantial income for the further development of local infrastructure, but also led to changes in entry rules allowing the private sector to become involved in what was traditionally the domain of the public sector. The same experiment was carried out with infrastructure development. Later, with the development of housing reform and the emergence of a real estate industry, the private sector and private finance began to play a significant role in the property market, leading public and private finance to combine in support of the Pudong development. One striking characteristic of Pudong’s financial mechanism was the role played by the global Chinese business network as nodes in the global

English summary financial network linking a local area development and financial market to global capital. This network not only played a key role in attracting global capital to the Pudong development, but also encouraged speculative investors hoping to earn a quick return from Pudong’s booming real estate market.
Although the Pudong development demonstrated the strength with which a developmental state could combine the advantages of global openness with flexibility and efficiency in adapting global changes to suit the local context, there are a number of limitations that need to be recognised. First it is necessary to be realistic about the exploitation of networks and network strategies and to take account of the need to conform to the well-defined rules of the global economic system. Second, while the use of a selective strategy is effective, it needs to be applied in such a way as to avoid the escalation of spatial segregation and economic polarisation. Third, it has to be appreciated that the local financial system will be increasingly unable to deal with the uncertainty imposed by global economic integration.
Research into the Pudong development has given some understanding of the complexity and dynamics that feature in today's area developments and the nature of the interaction between global and local influences. The Pudong development was found to be a unique configuration of context–dependent processes. While different strategies for urban development and redevelopment can be expected to have much in common, each strategy evolves and is adjusted to fit the particular situation. Each individual approach, as in the case of the approach taken for the Pudong development, needs to be realistically evaluated to determine its suitability for transplanting from one situation to another. Generally the patterns on which cities base their development strategies for large–scale urban development projects can be borrowed and adapted, pragmatically, to suit other locations where circumstances are different. The question of applicability can therefore better be reframed in terms of the extent to which the particular local, regional or organisational context can be changed to benefit from the lessons learned from the Pudong development.