SOAS Research Online

Abstract

This thesis seeks to illuminate and compare two different ‘models’ of economic development trailed by two different prefecture-level cities in China: Nanjing and Suzhou. Although both are considered affluent cities, and located in the same broad economic area, the Yangtze river delta, and in the same sub-provincial region, Southern Jiangsu, the cities in case present markedly distinct patterns of local institutional configurations and of economic growth outcomes. While Suzhou features an industrial base more heavily concentrated on information and communication technologies, traditionally dominated by foreign-invested enterprises, geared towards external markets and reliant on lower wages, Nanjing, by contrast, has an industrial base dominated by state-owned enterprises, is more sectorially diversified, and is less reliant on exports and cheap labour. In order to make sense of these structural characteristics of both cities, the concept of institutional complementarities is employed, and it is argued that each city benefits from the coherence of institutional interconnections present at the city-level. After analysing the singular structural-institutional characteristics of each city, the thesis focuses on their respective economic performances. It is observed that in the years prior to the 2008 global financial crisis Suzhou clearly outperformed Nanjing, but after 2009 the scenario is reversed, with Nanjing taking the lead. Hence, one cannot assert which local ‘model’ is unambiguously superior to the other in terms of growth outcomes. The research aims to demonstrate how different local institutional-structural characteristics render distinct growth performances, and under which macroeconomic conditions one particular local ‘model’ outperform the other, elucidating, thus, the ability of city-specific institutional complementarities to spur regional growth in different periods of time. Following demand-led theories on economic growth, it will be argued that it is the match between the national-level aggregate demand composition and the local-level structural-institutional characteristics which will render localities relatively faster (or slower) growth rates.