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ABSTRACT
This article analytically foregrounds the role of logistics, infrastructure, and the transformation of capitalist circulation as an integral component of Chinese capitalism’s changing developmental paradigm. Based on a historical-comparative study of two developmental paradigms, the Open Door Policy (1978–2013) and New Normal (2014–2021), we argue that two layered logistical fixes have shaped Chinese capitalism, while driving unequal regional development between the coastal and inland regions. During the Open Door Policy, the initial logistical fix was centered around the coastal region as an export platform and logistical hub. Consequently, networked spaces of capital accumulation were formed based on the transfer of raw materials and intermediary inputs from the inland to the coastal region, followed by their processing into marketable commodities valorized in global export markets. Following China’s transition to the New Normal, the emergence of a new spatial division of labor between the coastal and inland regions necessitated a new logistical fix. This new logistical fix is notably centered around the inland region as a logistical hub, from which capital circulation and infrastructural linkages with neighboring Asian and coastal regions are being built.
Disclosure statement
No potential conflict of interest was reported by the author(s).
Notes
1. Here, it is possible to disambiguate two different meanings of capital circulation that is often conflated. The first usage in the “abstract” sense, which is well-established in the literature on spatial fixes, refers to the metaphorical interface between analytically distinct moments of capital accumulation, exemplified by how commodities are produced and exchanged between different stages of production until they finally reach the end-consumer and become valorized. The second usage that is underemphasized in the extant literature on spatial fixes refers to the “literal” sense of circulation as a source of value creation, that is, the physically embedded processes of logistics, infrastructural linkages, and modalities of transportation that facilitate the physical movement of tangible commodities (and intangible commodities such as finance) between different moments of capital accumulation.
2. The concept of developmental paradigms draws on regulation theory, which can be theoretically elaborated as the set of complementary institutional regularities and relations in production, circulation, and consumption that produce a relatively coherent process of capital accumulation. The assumption is that each developmental paradigm, exemplified by the Open Door Policy and New Normal, exerts differential functional and spatial demands on the bounded spaces of capital accumulation to secure its structured coherence in terms of the spatial organization of logistical development and integration. Consequently, every transition from one developmental paradigm to another upends inherited geographies of capital accumulation and creates moments of crisis. In this sense, to successfully move to its new developmental paradigm, China must reconfigure its prior logistical system while also dealing with the crisis tendencies of its prior logistical fix.
3. These types of joint ventures were not just good in terms of providing necessary financing, but also in introducing technology and operational know-how into local economies. Foreign firms received many benefits from these joint ventures, such as leasing lengths above 30 years, exemptions from customs, tax duties while the projects were being set-up, and a reduction of duties once the projects became profitable. Of course, foreign investors also had to give away operational knowledge and ultimate control as the joint ventures were always limited to 49% foreign control. Over time, foreign investors were afforded further privileges, such as operating in the domestic freight transport system, owning their own infrastructure, or undertaking cargo operations independently.
4. TEU is a measure used in the Container shipping market, meaning a Twenty Foot Equivalent Unit, referring to the size of a standard container that is 20 feet long.
5. This furthermore incentivized local governments, such as Shanghai and Shenzhen, to innovate in terms of investment financing and human capital reforms, creating incentive-based remuneration for all workers in ports and providing operational efficiencies.
6. Master plans also have a shared lineage with the notion of harmonious development inherited from the Hu Jintao administration. Such master plans preserve a degree of local autonomy as each province has interpretive leeway to adjust the policies to their local, although their strategic maneuvering must comply with the broader functional planning of the central government agencies, revealing a delicate rebalancing of its system of regionally decentralized authoritarianism. As stated in the 13th FYP (2016–2020), it emphasizes the importance of the government in its steering role, thus aiming “to improve the systems by which the market plays the decisive role in resource allocation and the government plays a more effective role” (NDRC Citation2016, 14).
7. A relevant parenthetical remark is that SIPG started this integration independently from state support or mandate, and rather followed this strategy to establish a larger market share against other port competitors such as the port of Ningbo.
8. Dry ports are logistical infrastructures inland within inland regions which are granted “port status” meaning that they can serve as the point of entry and exit of goods jurisdictionally speaking, as customs services are provided. This aids in logistical efficiency and the overall reduction of trade costs for firms utilizing these services. It allows cargoes to be processed and sealed for export away from ports, thus allowing for a minimum idle time before embarking into a vessel. Similarly, imported containers can be lifted directly into rail or trucks from the vessel and be first processed further inland before entering the national market.
9. Accompanying the rise of the e-commerce industry has been the buildup of a supporting digital infrastructure, which has accelerated information circulation and, in turn, increased turnover rates of consumer goods by mitigating idle capacity through the more efficient allocation of logistical resources. The digital hardware infrastructure has partly been supported by the investments by the state into the network of 5 G internet. However, private investments by the pioneering e-commerce retailers, such as Alibaba and Taobao, have in parallel served an integral role in building the software infrastructure and organizational capacity to coordinate the large flows of orders, which has produced spillover effects in terms of human capital and technology that have benefited the overall e-commerce industry.