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(Dis)connecting the Pearl River Delta: Case study of a borderland telecommunications infrastructure in South China, 1978-2002
Unformatted Document Text:  10 fiscal capacity and surmounting demand in telecom services. China’s postal and telecom sector could barely strike even up to late 1970s (Zhang and Sheng, 1998). In order “to support telephone by telephone (yihua yanghua)” and ensure investment in infrastructure development, Beijing allowed city-level telecom operators to charge urban telephone installation fee in 1980, and provincial governments to collect supplemental fee on top of existing telegraph and long-distance call prices in 1986 (ibid.). Tax privileges were also granted. Since 1982, telecom operators nationwide were allowed to keep 90% of their income, including 90% of its foreign-currency revenues. Meanwhile, local investment in telecom sector was also encouraged to meet the unusually high demand in certain areas with more rapid economic development such as the Pearl River Delta in Guangdong Province. 16 Guangdong and the Delta: General economic development Setting in the global and national action contexts, telecom developers in Guangdong and the Pearl River Delta enjoy several advantages. First, the area is geographically adjacent to Hong Kong and Southeast Asia and historically rich in connections with Chinese immigrants overseas. Second, except for Guangzhou, most of Guangdong Province was not emphasized in the Maoist central planning for industrialization (Lin, 1997a:174-177), which, while accounting for poor telecom development in the region until late 1970s, also contributed to a void of conservative legacy that facilitates the establishment of a local political infrastructure in favor of policy innovations. Third, the Delta region has been formally granted favorable policies since 1980, when Special Economic Zones (Shenzhen and Zhuhai) and Open Coastal City (Guangzhou) were established, and the entire Pearl River Delta recognized as Open Area. 17 These preferable conditions contributed to an outstanding economic boom: while the national annual GDP growth rate was 9.6% between 1980 and 2000, it was 13.8% for Guangdong Province, and 16.9% for the Pearl River Delta. 18 The average annual GDP per head in the Delta reached US$3,300 in 2000, which was 2.2 times that of Guangdong and 3.9 times that of the entire country. 19 16 See Ma, H. & Fang, W. (eds). (1991). Regional development and industry policy in China (in Chinese). China Financial Economy Publications. pp. 883-897. and Li, X., Qiu, C. & Lu, G. (1990). “Industry Policy in Guangdong.” in Zhou, S. et al (eds). China regional industry policy studies (in Chinese). China Economics Publications. pp. 205-212. 17 Wang, G., Zhang, B. & Zhao, R. (eds). (1993). Studies of economic, social, and cultural development in the Pearl River Delta (in Chinese). Shanghai People’s Publications. p.5. 18 Guangdong Statistics Yearbook (2001). p. 34. 19 Ibid.

Authors: Qiu, Jack.
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10
fiscal capacity and surmounting demand in telecom services. China’s postal and
telecom sector could barely strike even up to late 1970s (Zhang and Sheng, 1998).
In order “to support telephone by telephone (yihua yanghua)” and ensure
investment in infrastructure development, Beijing allowed city-level telecom
operators to charge urban telephone installation fee in 1980, and provincial
governments to collect supplemental fee on top of existing telegraph and long-
distance call prices in 1986 (ibid.). Tax privileges were also granted. Since 1982,
telecom operators nationwide were allowed to keep 90% of their income, including
90% of its foreign-currency revenues. Meanwhile, local investment in telecom sector
was also encouraged to meet the unusually high demand in certain areas with more
rapid economic development such as the Pearl River Delta in Guangdong Province.
16
Guangdong and the Delta: General economic development
Setting in the global and national action contexts, telecom developers in Guangdong
and the Pearl River Delta enjoy several advantages. First, the area is geographically
adjacent to Hong Kong and Southeast Asia and historically rich in connections with
Chinese immigrants overseas. Second, except for Guangzhou, most of Guangdong
Province was not emphasized in the Maoist central planning for industrialization (Lin,
1997a:174-177), which, while accounting for poor telecom development in the
region until late 1970s, also contributed to a void of conservative legacy that
facilitates the establishment of a local political infrastructure in favor of policy
innovations. Third, the Delta region has been formally granted favorable policies
since 1980, when Special Economic Zones (Shenzhen and Zhuhai) and Open Coastal
City (Guangzhou) were established, and the entire Pearl River Delta recognized as
Open Area.
17
These preferable conditions contributed to an outstanding economic
boom: while the national annual GDP growth rate was 9.6% between 1980 and 2000,
it was 13.8% for Guangdong Province, and 16.9% for the Pearl River Delta.
18
The
average annual GDP per head in the Delta reached US$3,300 in 2000, which was 2.2
times that of Guangdong and 3.9 times that of the entire country.
19
16
See Ma, H. & Fang, W. (eds). (1991). Regional development and industry policy in China (in Chinese).
China Financial Economy Publications. pp. 883-897. and Li, X., Qiu, C. & Lu, G. (1990). “Industry Policy in
Guangdong.” in Zhou, S. et al (eds). China regional industry policy studies (in Chinese). China Economics
Publications. pp. 205-212.
17
Wang, G., Zhang, B. & Zhao, R. (eds). (1993). Studies of economic, social, and cultural development in
the Pearl River Delta (in Chinese). Shanghai People’s Publications. p.5.
18
Guangdong Statistics Yearbook (2001). p. 34.
19
Ibid.


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