Contributions to Economics Rongxing Guo Border-Regional Economics Border-Regional Economics Contributions to Economics Peter R. Haiss Lars Olof Persson/Ulf Wiberg Cultural Influences on Microregional Fragmentation Strategic Planning 1995. ISBN 3-7908-0855-5 1990. ISBN 3-7908-0481-9 Andreas Foerster Manfred Kremer/Marion Weber (Eds.) Institutional Analysis Transforming Economic Systems: of Development Administration The Case of Poland 1995. ISBN 3-7908-0853-9 1992. ISBN 3-7908-0585-8 Emesto Felli/Furio C. Rosati/ Marcel F. van Marion Giovanni Tria (Eds.) Liberal Trade and Japan The Service Sector: Productivity 1993. ISBN 3-7908-0699-4 and Growth 1995. ISBN 3-7908-0875-X Hans SchneeweiB/ Klaus F. Zimmermann (Eds.) Giuseppe Munda Studies in Applied Econometrics Multicriteria Evaluation in 1993. ISBN 3-7908-0716-8 Fuzzy Environment 1g95. ISBN 3-7908-0892-X Gerhard Gehrig/ Wladyslaw Welfe (Eds.) Boris Maurer Economies in Transition R & D, Innovation and Industrial 1993. ISBN 3-7908-0721-4 Structure 1996. ISBN 3-7908-0900-4 Christoph M. Schneider Research and Development Giovanni Galizzi/Luciano Venturini Management: (Eds.) From the Soviet Union to Russia Economics of Innovation: 1994. ISBN 3-7908-0757-5 The Case of Food Industry 1996. ISBN 3-7908-0911-X Bernhard Biihm/ Lionello F. Punzo (Eds.) David T. Johnson Economic Performance Poverty, Inequality and Social 1994. ISBN 3-7908-0811-3 Welfare in Australia 1996. ISBN 3-7908-0942-X Michael Reiter The Dynamics of Business Cycles 1995. ISBN 3-7908-0823-7 Michael Carlberg Sustainability and Optimality of Public Debt 1995. ISBN 3-7908-0834-2 Rongxing Guo Border-Regional Economics With 19 Figures Springer-Verlag Berlin Heidelberg GmbH Series Editors Wemer A. Miiller Peter Schuster Author Professor Dr. Rongxing Guo Senior Research Fellow Fondazione Eni Enrico Mattei (FEEM) Via S. Sofia 27 1-20122 Milano, ltaly and Beijing Graduate School of China Univ. of Min. & Techn. (CUMT) The College Road No. T-ll Mail Box 22 Beijing 100083, China ISBN 978-3-7908-0943-5 ISBN 978-3-662-11268-7 (eBook) DOI 10.1007/978-3-662-11268-7 Die Deutsche Bibliothek - CIP-Einheitsaufnahme Guo, Rongxing: Border regional economicsIRongxing Guo. - Heidelberg: Physica-VerI., 1996 (Contributions to economics) This work is subject to copyright. All rights are reserved, whether the whole or pari ofthe material is con cemed, specifically the rights oftranslation, reprinting, reuse of iIlustrations, recitation, broadcasting, re production on microfilm or in any other way, and storage in data banks. Duplication of this publication Of parts thereof is permitted only under the provisions of the German Copyright Law of September 9, 1965, in its CUrTent version, and permission for use must always be obtained from Springer-Verlag Berlin Heidelberg GmbH. Violations are liable for prosecution under the German Copyright Law. © Springer-Verlag Berlin Heidelberg 1996 Originally published by Physica-Verlag Heidelberg in 1996 The use of general descriptive names, registered names, trademarks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore frec for general use. SPIN 10538178 88/2202-5 4 3 2 1 O - Printed on acid-free paper ACKNOWLEDGEMENTS This manuscript was prepared mainly while I was with the ENI Foundation (FEEM) in Italy. Some preliminary ideas of border-regional economics in the first chapters of this book were presented at an International Colloquium on Border Economics held in Faculty of Economics and Research Institute of Oriental Studies, Gakushiun University, Tokyo, Japan, where I served as an invited speaker and received many valuable ideas from Professor Tatsuhiko Kawashima. I especially benefited from many thoughtful discussions with Professor Eui-Gak Hwang when I was lecturing at Korea University during March to June, 1994. I should acknowledge Professor Hyun Sik Chung and other participants for their important suggestions in' a seminar held in Department of Economics, Sung Kyun Kwan University, Seoul, South Korea. One year research activities in FEEM would have not gone smoothly had they not been helped by Professor Domenico Siniscalco. Dr. Alessandra Lanza, Patrizia Lughezzani, Marcella Pavan and other FEEM researchers and staff extended me much assistance, Marcella Fantinito also helped me to correct many structural and linguistic points of the draft, to whom I am very grateful. During my past researches on border-regions, many helps and constructive ideas have been also received from Professors Chen Baoshu, Gu Jirui, Zhao Renwei, Shen Liren, and Yang Kaizhong. I am also very grateful to Professor John Friedmann at UCLA, who suggested me many useful ideas and materials relating to border-regions. My early research efforts on border-regional economics would not be possible without the financial grants from National Natural Science Foundation of China (NSFC #49301007) and National Social Science Foundation of China (NSSFC #901.196). I would like to thank Professors Yang Wuyang of Peking University and Guo Tingbing, division Director of the NSFC for their research helps. In addition, I should acknowledge all of my relatives and friends who have been supporting me through all and different aspects. My wife, Ms Liu Xiaohui, always understands me and bears most of the housework without any complaint. I am also indebted to my mother and my mother-in-law, both VI Acknowledgments of whom have brought up their children dutifully and additionally helped to take loving cares to their grandchildren, including my son. The last but not the least, I would like to acknowledge the FEEM, which financed me with an Annual Senior Research Fellowship and encourage me to publicize the manuscript. The views and errors produced in this book, however, are the author's sole responsibilities and should not be necessarily ascribed to the supporters. Guo R. X. ViaS. Sofia, Milan January 1996 CONTENTS v ACKNOWLEDGEMENTS LIST OF TABLES IX LIST OF FIGURES X NOTES FROM THE AUTHOR XI INTRODUCTION 1 -Motivation of the Research 1 - Organization of the Book 2 1 SOME BASIC CONCEPTS 9 1.1 Political Region 9 1.2 Regional Border 12 1.3 Border-Region 25 2 BORDER-REGIONAL ECONOMICS 32 2.1 Recent Literature 32 2.2 Definition 36 2.3 Objectives 38 2.4 How to Study Border-Regional Economics? 47 3 FROM CORE TO PERIPHERY 60 3.1 An Autarkic Economy 60 3.2 How to Calculate Border Effects? 63 3.3 Cross-border Separation 66 3.4 Evidence from 117 Counties 71 VIII Contents 4 IN SEARCH FOR ECONOMICS 78 4.1 Proposition 1 78 4.2 Proposition 2 84 4.3 Proposition 3 87 4.4 More Evidences 89 5 CAN BORDER-REGIONS BE ECONOMICALLY OPTIMIZED? 97 5.1 Necessary Assumptions 97 5.2 AN-dimensional Static Model 100 5.3 The Case Study 10 6 6 BORDER-REGIONAL DEVELOPMENT 116 6.1 The Basic Approaches 116 6.2 Mexico's Border Industrialization Program (BIP) 121 6.3 China's Frontier Development Programme 126 6.4 Shenzhen Special Economic Zone (SEZ) 131 7 TRANSBORDER CO-OPERATION: CASE STUDIES 137 7.1 The European Cross-border Co-operation Programmes 13 7 7.2 The US-Mexican Border Environment Co-operation 143 7.3 China's Transprovincial Border Economic Zones (BEZs) 146 7.4 The Tum en River Area Development Programme (TRADP) 151 8 BORDER-REGIONAL DYNAMICS 161 8.1 An Isolated Country: Some Assumptions 161 8.2 Does the Isolated Economy Exist Any Optimal Size? 163 8.3 Extensions 168 BIBLIOGRAPHY 173 INDEX OF BORDER-REGIONS 181 LIST OF TABLES 1-1 Forms of Governments/Ruling Powers of the W odd's Independent States 11 1-2 The First-class Administrative Regions, Selected Countries 12 1-3 The Principal Mountains in the International Borders 15 1-4 The Principal Rivers along the International Borders 16 1-5 The Principal Rivers as the Inter-state Borders, USA 17 1-6 The Principal Rivers as Internal Borders, Brazil 18 1-7 The Principal Lakes in the Inter-provincial Borders, China 20 3-1 Network Densities for Rail and Road on Borderlines of Europe, 1989 69 3-2 Geographic and Economic Conditions of 42 Border Counties, China 73 3-3 Average NIPCs of 12 Kind Regions, 117 Counties, China 75 4-1 Number of Socio-economic Activities Per Peasant, Fengxian County, China 81 4-2 Estimated Number of Socio-economic Activities by DTB 82 4-3 Population Change in U.S. SMSAs Bordering Mexico, 1970-80 92 4-4 Per Capita Income Change in the 25 Border Counties, USA, 1969-79 93 5-1 Agricultural Productivities of Shanxi-Hebei-Shandong-Henan Border-Region 107 5-2 Specification of Policy Variables 108 5-3 Outputs for the Border-Region, 1985 110 5-4 Optimal Solutions for Three Regional Systems 113 5-5 Maximized Outputs for the Three Different Regional Systems 114 6-1 Geographic Locations ofMexico's Assemble Plants, 1973-81 124 6-2 Population Change in Major Mexican Cities Bordering the U.S., 1970-80 125 6-3 Natural and Geographical Conditions of China's Nine Frontier Regions 127 6-4 China's Policies, Measures, and Regulations Concerning the Frontier Development, 1984-92 129 6-5 Budget for the Development Plan ofLancang-Mekong Border Area 131 6-6 The Development Program of Shenzhen Special Economic Zone 133 6-7 Major Indicators for Shenzhen's Economy, 1979-92 136 7-1 The European Border-Regions under Co-operation 13 8 7-2 Natural and Social Conditions of China's Transprovincial BEZs 148 7-3 The Mutual Complementary Conditions ofNortheast Asian Countries 154 7-4 The Tumen River Delta under China, North Korea and Russia 156 7-5 The TRADP's Input-output Effects on Northeast Asian Countries 159 8-1 Border-Regions with Different Compositions 170