Understanding the Uneven Growth of Service Industries in China: State, Market and the Changing Geography of Consulting Services

This dissertation, "Understanding the Uneven Growth of Service Industries in China: State, Market and the Changing Geography of Consulting Services" by Fan, Fiona, Yang, 楊帆, was obtained from The University of Hong Kong (Pokfulam, Hong Kong) and is being sold pursuant to Creative Commons: Attribution 3.0 Hong Kong License. The content of this dissertation has not been altered in any way. We have altered the formatting in order to facilitate the ease of printing and reading of the dissertation. All rights not granted by the above license are retained by the author. Abstract: Abstract of thesis entitled "Understanding the Uneven Growth of Service Industries in China: State, Market and the Changing Geography of Consulting Services" submitted by YANG Fan, Fiona for the Degree of Doctor of Philosophy at the University of Hong Kong in September 2006 China has experienced dramatic economic restructuring and urban transformation since 1978. Prior to the reforms, the Chinese economy was characterized by an overemphasis on industrial production at the expense of the service sector because service activities were regarded as 'unproductive'. The implementation of economic reforms and opening up to the outside world has ushered in new forces of marketization and globalization to facilitate a process of tertiarization. Since the 1980s, the service sector has undergone dramatic expansion to become a main source of output and employment generation for the Chinese urban economy. Existing literature on the service economy has been dominated by the discourses that construe the growth of service industries as a market-driven economic phenomenon. While the process of tertiarization has been well documented in western advanced economies, relatively little has been written about the nature and dynamics of service development in China after socialism. This study argues that existing theories on the growth of the service economy are inadequate to explain the forces underlying the growth of services in China where the state interacts with market forces in a distinct manner. The service sector has been identified by the Chinese state as a possible solution to the problems of unemployment in the post-reform era. A systematic analysis of the growth of service industries in the national economy suggests that economic tertiarization in China is a process shaped by the change in state-market relation. Market mechanism that used to be internalized by the socialist state has been significantly externalized by the post-reform regime. As a result, service industries have been growing dramatically over the past two decades. This thesis examines the growth and location of service industries in the Chinese context in a political economy perspective. After an analysis of the uneven growth of service industries in the national economy, consulting services in Beijing and Guangzhou are selected as cases for detailed investigation. The study reveals how state socialism under transition and the intrusion of globalization forces have affected the growth of service industries under different geographic and political situations. State-market relations have influenced the ways in which economic actors secure their access to resources and markets. In the case of Beijing, the central state forms an alliance with market forces, which has led to the concentration of service industries in the national capital. In contrast, state and market coexist almost independently in Guangzhou to affect the growth of consulting services. Service development in Guangzhou has benefited significantly from its commercial tradition and the upsurge of the Pearl River Delta. The uneven growth of service industries in the Chinese context has underscored the need to incorporate state-market relation into existing theorizations to shed light on the growth of services in the "socialist Third World."