Mt. Hua (Huashan) is located near the southeast corner of

the Ordos Loop section of the Yellow River basin, south of

the Wei River valley, at the eastern end of the Qinling

Mountains, in southern Shaanxi province. Mt. Hua is

usually referred to one of the birthplaces of the ancestors of

the Hua-Xia (Han) Chinese now living in Hong Kong,

Macau, Taiwan, and mainland China.

Mt. Hua, ShaanxiSource: http://en.wikipedia.org/wiki/Mount_Hua

Chapter 15

15. Understanding the Chinese-Speaking Economies

15.1 The greater China area

15.2 A multiregional economic comparison

15.3 Cross-Strait economic relations

15.4 Overseas Chinese economics

Keywords:

• greater China,

• spatial (dis)economies,

• complementary condition,

• Hong Kong,

• Macau,

• Taiwan,

• cross-Strait relations,

• peaceful reunification,

• overseas Chinese

15.1 The greater China area

15.1.1 Hong Kong

15.1.2 Macau

15.1.3 Taiwan

15.1.4 Summary

Figure 15.1 Hong Kong and Macau

Figure 15.2 The Taiwan Strait

15.2 A multiregional economic comparison

15.2.1 Social and economic differences

15.2.2 Complementary conditions

15.2.3 Summary

Indicator Taiwan Hong Kong Macau Mainland

Area (sq. km) 36188 1098 19 9600000

Population (million persons) 22.5 6.8 0.4 1284.5

GDP (2003, billion US$) 286.8 158.6 7.9 1416

GDP per capita (2003, US$) 12751 23311 17782 1090

Average growth rate of GDP per capita (1978–2002, %)

5.50 3.98 2.03a 8.04

Exports (2003, billion US$) 144.2 224.6(15.7b) 2.6 438.4Life expectancy (1990s, Female/male, years)

77/71.8 81.2/75.8 71/68

Adult literacy rate (1990s, Female/male, %)c 86/96 88/96 95.7d 73/90

(a): Growth rate for 1982–2002.(b): Exports of Hong Kong goods (re-exports are excluded).(c): ADB (1996, pp. 11 and 28), SSB (1996, pp. 769, 781 and 803);(d): Xie (1992, p. 115) for labor population.Source: websites of the respective governments except those that are noted otherwise.

Table 15.1 Basic indicators of the greater China area

Economy Advantages Disadvantages

Mainland China

Adequate and various agricultural products, energy, industrial materials, excess labor, some high-tech products, and huge domestic market.

Relatively shortage of advanced equipments; shortage of international management experience and economic infrastructures, especially in the western, inland provinces.

Taiwan High capital saving, advanced equipment ready to move out, vanguard agricultural and industrial products, and management experience.

Shortage of energy and industrial resources, limited domestic market, and insufficiency of and high costs of labor supply.

Hong Kong and Macau

Capital surplus, favorable convenient conditions for international trade, the freest economic environment, and management experience in commercial and financial markets.

Severe shortage of agricultural and industrial resources, especially fresh water, foodstuff, energy, and land and deficiency of labor; limited domestic market.

Table 15.2 Mutually complementary conditions in the greater China area

15.3 Cross-Strait economic relations

15.3.1 Historical evolution

15.3.2 Bilateral economic cooperation

15.3.3 Direct air and shipping services

15.3.4 Future perspective

Item TaiwanMainland

China

Defense expense (US$ 100 million) 104 562

Forces (1000 persons) 442 3,031

Defense expense as % of GNP 4.7 2.7

Defense expense as % of budget 20.0 16.2

Per capita defense (US$) 494 48

Forces per 1000 population 21.0 2.6

Sources: The US Academy of Defense Agency (1993) and SSB (1996, pp. 230 and 580).

Table 15.3 Military expenses, Taiwan and mainland China

Figure 15.3 Links for air and shipping services between Taiwan and mainland China

15.4 Overseas Chinese economics

15.4.1 A history of Chinese emigration

15.4.2 Distribution of overseas Chinese

15.4.3 Global economic contributions

Explaining the remarkable growth of the overseas Chinese economy:

• (1) the thriftiness and hard-working nature of the overseas Chinese;

• (2) an elite group of intellectuals;• (3) a positive role of overseas Chinese

organizations; and• (4) closer socioeconomic ties with mainland

China.

Case study 9

Location, size and political economy of Chinese dynastic cycles

Unified Shilla (AD 668-933)

Koryo (AD 915-1391)

Chosen (AD 1392-1910)

Tang

(AD 618-907)

Song

(AD 960-1279)

Ming

(AD 1368-1644)

Qing

(AD 1644-1911) Yua

n (A

D 1

279-

1368

)

Figure 15.4 A comparison of the Chinese and Korean dynasties

0

100

200

300

400

500

600

700

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

Land area (million sq. km)

Lif

e sp

an (

year

s)

Zhou

Shang

Xia

Song

Han

Ming Tang

Jin

Qing

Yuan

(a) Chinese dynasties: lifespan versus territorial sizeSource: Tables 15.4 and 15.5 and the author’s calculation.

0

100

200

300

400

500

600

700

0 1000 2000 3000 4000 5000

Distance between capital and farthest frontier (km)

Lif

e sp

an (

year

)

Zhou

Shang

Song

Xia

Han

Ming

Tang

Yuan

Qing

Jin

(b) Chinese dynasties: lifespan versus distanceFigure 15.5 Location, territorial size and Chinese dynastiesSource: Tables 15.4 and 15.5 and the author’s calculation.

IndicatorZhou

(1046--221BC)

Han(206BC--AD220)

Jin(265--420)

Tang(619--907)

Song(960--1279)

Ming(1368--1644)

Qing(1644--1911)

Capital city

Hao (Xi’an)a;

Luoyi (Luoyang)b

Chang’an (Xi’an)c; Luoyangd

Luoyange; Jiankang

(Nanjing)f

Chang’an (Xi’an)

Kaifengg;Lin’an

(Hangzhou)h

Nanjingi;Beijingj Beijing

Distance between capital and farthest frontier (km)k

1200a; 950b 3200c; 3300d

3500e; 2000f 3500 2000g; 1700h 2000i;

2600j 3900

Area of territory (million km2)l 3.4 8.9 9.2e; 2.3f 12.5--8.0 4.6g; 4.0h 7.1 13.1

Length of existence (years)

825 (571)m 426 155 289 319 276 267

Major force(s) for collapse

Endogenous EndogenousExogenous

& Endogenous

Endo-genous

Exogenous

Endo-genous &

Exo-genous

Endo-genous

Notes: (a): from 1046 to 771 BC. (b): from 771 to 221 BC. (c): from 206 BC to AD 25. (d): from AD 25 to 220. (e): from 265 to 316. (f): from 317 to 420. (g): from AD 960 to 1127. (h): from AD 1127 to 1279. (i): from AD 1368 to 1420. (j): from AD 1421 to 1644. (k): estimated by the author based on the maps of ancient China. (l): available at http://bbs.zanba.com/message/122377/122377304.html. (m): figure within parenthesis does not include the “Warring States” period (from 475 to 221 BC).Source: Calculated by the author except those that are specifically cited.

Table 15.4 A comparison of selected Chinese dynasties in terms of location, size and other parameters

IndicatorQin

(221 – 206 BC)

Sui(AD 581 –

618)

Yuan(1279 – 1368)

Capital cityXian’yang

(near Xi’an)Chang’ana; Luoyangb

Dadu (Beijing)

Length of lifespan (years), which is 15 37 89Less than that of its predecessor by 810 (556)c 118 230Distance between capital and farthest frontier (km)d, which is

2000 3200a; 3100b 4000

Longer than that of its predecessor (km) by

800e; 1050f -300a; 1100b 2000g; 2300h

Area of territory (million sq. km)i, which is

3.6 8.4 16.8

Larger than that of its predecessor (million sq. km) by

0.2 -0.8a; 6.1b 12.2g; 12.8h

Major force for collapse Endogenous Endogenous Endogenous

Compared to that of its predecessor EndogenousExogenous & Endogenous

Exogenous

Notes: (a): from AD 581 to 605. (b): from AD 606 to 618. (c): figure within the parenthesis is based on that the Zhou dynasty does not include the “Warring States” period (from 475 to 221 BC). (d): estimated by the author based on relevant maps of ancient China. (e): based on the Western Zhou dynasty (1046 to 771 BC). (f): based on the Eastern Zhou dynasty (771 to 221 BC). (g): based on the North Song dynasty (AD 960 to 1127). (h): based on the South Song dynasty (AD 1127 to 1279). (i): available at://bbs.zanba.com/message/122377/122377304.html. Source: Calculated by the author based on Table 15.4 except those that are specifically cited.

Table 15.5 A comparison of China’s three short-lived dynasties and their predecessors

Chapter conclusion:

Despite their common history and cultural homogeneity, the greater China area has followed during the past decades divergent political and economic systems, from which different social and economic performances have resulted. In this chapter, the social and economic influences of Hong Kong, Macau, Taiwan, and overseas Chinese, as well as their influences on the economic development of mainland China, are examined. Our focus is due to the great potential of comparative advantages as well as the close cultural linkages between Hong Kong, Macau, Taiwan and mainland China. The remaining part of this chapter analyzes the cross-Strait economic relations and the overseas Chinese economics.

Suggested reading

Alesina, A. and E. Spolaore (1997). “On the Number and Size of Nations,” The Quarterly Journal of Economics, Volume 112 (Nov.), pp. 1027-56.

Alesina, A., E. Spolaore, and R. Wacziarg (2000). “Economic integration and political disintegration,” American Economic Review, Volume 90, pp. 1276–96.

Bolton, P., and E. Spolaore (1996). “ Economic Theories of Integration and Break-up of Nations,” European Economic Review, Volume 81, pp. 697-705.

Bolton, P., and G. Roland (1997). “The Breakup of Nations: A Political Economy Analysis,” The Quarterly Journal of Economics, Volume 112, pp. 1057-89.

Friedman, D. (1977). “A Theory of the Size and Shape of Nations,” Journal of Political Economy, Volume 85(1), pp. 59-77.

Gao, T. (2003). “Ethnic Chinese networks and international investment: evidence from inward FDI in China,” Journal of Asian Economics, Volume 14, pp. 611–629

Suggested reading

Goyal, S. and K. Staal (2003). “The political economy of regionalism,” European Economic Review, Volume 48, pp. 563-93.

Harding, Harry (1993). "The Concept of 'Greater China': Themes, Variations and Reservations," The China Quarterly, Volume 136 (Special Issue: Greater China), pp. 660-84.

Rauch, James E. and Vitor Trindade (2002). “Ethnic Chinese Networks in International Trade,” Review of Economics and Statistics, Volume 84, Issue 1, 116-30.

Shambaugh, David (1993). "Introduction: The Emergence of 'Greater China'," The China Quarterly, Volume 136 (Special Issue: Greater China).

Smart, A. and J. Hsu (2004) “The Chinese Diaspora, Foreign Investment and Economic Development in China,” The Review of International Affairs, Volume 3, Issue 4, pp. 544 – 566

So, Alvin Y. (2011). “‘One Country, Two Systems’ and Hong Kong-China National Re-unification: A Crisis-Transformation Perspective,” Journal of Contemporary Asia, Volume 41, Issue 1, pp. 99-116.