Urban Studies, Vol. 37, No. 1, 77± 111, 2000
Globalisation and Urban Transform ations in the
Asia± Paci® c Region: A Review
Fu-chen Lo and Peter J. Marcotullio
[Paper ® rst received, March 1998; in ® nal form, June 1999]
Su m m ary. In th e A sia-P aci® c con text, over the past several decad es, econ om ic glob alisation
perm itted the d eep ening of in tra® rm trad e, foreign direct investm ent and the division of labour
betw een head of® ces and their subsidiaries abroad , thus effectin g a greater interd epen dency
betw een the develop ed nation s and develop ing nation s in the region . The lin kages of this
em ergin g tran sn ation al econ om y are em bedd ed in the region ’ s cities throu gh the world city
form ation p rocess an d have led to the develop m en t of a `function al city system ’ . Urban function s,
w ithin the system include, inter alia , prod uction , ® nance, telecom m unication s, tran sportatio n,
direct in vestm en t and even am en ity provision . The accu m ulation of differen t function s by a given
city provid es for the foundation of its extern al linkage and econ om ic grow th and also und erlies
tran sform ation s in its physical form . W hile all cities have a variety of fu nction s and p lay m an y
roles w ithin the region al econ om y, dom in ant characteri stics found in cities allow for the
identi® cation of differen t types includin g cap ital exp ort cities, region al entrep oÃ
ts, industrial cities
and am enity cities.
Introduction
During the past few decades, the world econom y has experienced structural adjustm ents
affecting production, resource utilisa tion and
wealth creation. Cross-border functional integration of econom ic activities and grow ing
interdependency among regiona l econom ic
blocs are part of a set of processes defined as
`globalisation’ . Important elements in the
evolution of the global system are the expansion of trade, capital flows (particularly direct investm ents) and a wave of new
technolog ies.
The logic of econom ic globalisationdriven grow th has privileged som e regions
and cities over others. In general, the developed world and som e developing and new ly
industrialised econom ies (NIE s) have bene® ted, while many developing countries have
been marginalised. W ithin developed countries, the centres of finance and advanced
business services as well as high-tech industries have bene® ted, while cities dom inated
by traditional blue-collar employm ent have
stagnated. Among developing states, the resulting sets of econom ic arrangements have
bene® ted Asia±Paci® c countries in particular
(W orld Bank, 1993). (The Asia±Paci® c region includes those nations bordering the
South China Sea and the W estern Pacific
Ocean excluding Oceania.)
Cities have becom e nodes in the global
web of econom ic flows and linkages. Until
F u-chen Lo and Peter J. M arcotullio are in the United Nations University Institute of Advanced Studies, 53± 67 Jingumae 5-chome,
Shibuya-ku, Tokyo 150± 8304, Japan. F ax: 1 81-3-5467-2324. E -mail: [email protected] nu.edu and [email protected].
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0042-0980 Print/1360-063X On-line/00/010077-35
Ó
2000 The Editors of Urban Studies
78
FU-CHE N LO AN D PE TE R J . MA RCOTU LL IO
recently, globalisation has had a dram atic and
positiv e effect on cities in the Asia±Pacific
region, a result of the emergence of an industrial belt based on the location of manufacturing firm s in the major metropolitan centres of
the Asian NIEs, ASEAN, China and Indochin a. These cities are becom ing the new
sites of global manufacturing production and
are increasingly playing a key role in econom ic transform ations. Indeed, as the recent
financial crisis dem onstrated, econom ic
growth and developm ent among countries
throug hout the region is highly dependent on
the international activities that take place
within its cities.
Econom ic growth, integration and the resultant interdependency has led to the emergence of a regional city system, called the
Asia±Paci® c functional city system (Yeung
and L o, 1996). A functional city system is
a network of cities that are linked, often in
a hierarchical manner based on a given
econom ic or socio-political function at the
global or regional level (Lo and Yueng,
1996b, p. 2).
As cities articulate to this system, they undergo
a process of developm ent com mensurate with
their dom inant econom ic roles within the set
of transnational flows. W hile local characteristics play an im portant part in mediating
globalisation processes, general patterns of
developm ent can be discerned based upon the
intensity of the prevailing currents.
This review essay presents one understanding of urban and regional developm ent in the
Asia±Pacific region through the lens of econom ic `globalisation’ and the developm ent of
the functional city system. The first section
presents som e of the elements of the globalisation process and how they have played out
within the Asia±Pacific region. The second
section describes the world city form ation
process (Friedm ann, 1986; Friedm ann and
W olff, 1982) as it has im pacted cities in the
region. This part of the paper focuses on how
globalisation flow s have influenced the
growth of major metropolitan centres in the
region. T he third describes the emergence of
an Asia±Pacific urban corridor and the devel-
opm ent of a functional city system (L o and
Yeung, 1996; Lo and Marcotullio, 1998). It
presents som e patterns of urban developm ent
within the city system. Lastly, the im plications
of this mode of growth on the sustainability
of cities will be discussed.
Econom ic Globalisation and the Asia±
Pacific Region
Globalisation ª im plies a degree of functional
integration betw een internationally dispersed
econom ic activitiesº (Dicken, 1992, p. 1).
Functio nal integration is progressing through
increased stretching (geographical widening )
and intensity (deepening) of international linkages. Evidence for the geographical scope of
the processes usually includes the locations of
nodes within the flows. The Asia±Pacific
region has its share of these points in the global
system in the form of urban centres. The
intensity of globalisation is generally given by
a num ber of trend indic ators including trade
and financial flow s, foreign direct investm ents
(FD I), com munications (inform ation flow s)
and personal and business travel. In the Asia±
Pacific region, these trends have taken on a
particular character. In this section we describe
changes in the world and regional econom y
through the presentation of indicators of
globalisation.
Trade and Financia l F low s
W orld trade has been growing rapidly since
1950 (Table 1). From that tim e to 1992, the
annual average grow th rate topped 11.2 per
cent, bringing the net value of globa l export
trade from US$61 billion to over US$3.7
trillion (UNCTAD, 1994). However, this
grow th rate is not only unprecedented, it is also
higher than that of global production. W hile
in 1950 merchandise exports were 7.0 per cent
of world GDP, by 1992 global exports accounte d for 13.5 per cent of total world output
(Maddison, 1995). A pre-1997 financial crisis
W orld Bank figure placed world merchandise
exports at 18 per cent of world GDP. No doubt,
the expansion of trade is a defining characteristic of the post-W orld W ar II global econom y.
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GL OBALISA TIO N A ND TH E AS IA ±PACIFIC RE GIO N
79
Table 1. Regional annual average grow th rates of trade (percent ages)
Region
1950±60
1960±70
1970±80
1980±90
W orld
6.5
9.2
20.3
6.1
Developed m arket econom ies
North Am erica
EC a
7.1
5.1
8.4
10.0
8.7
10.2
18.8
17.0
19.3
7.8
5.9
8.3
Developin g countries
South Am erica b
Sub-S aharan A frica
South and south-ea st Asia
3.1
2.3
4.8
0.2
7.2
5.1
7.8
6.7
25.9
20.6
20.0
25.8
2.2
2.3
2 2.0
10.8
a
Includes Belgium ±L uxem bourg, Denm ark, F rance, G erm any, Greece, Ireland, Italy,
Netherlan ds Portugal, Spain and UK .
b
Includes Argentina , Brazil, Chile, Mexico, Paraguay and U ruguay
Source: U NCT AD (1994, T ables 1.5 and 1.6, pp. 16±25).
East and south-east Asian econom ies
exemplify the world trend in trade (Table 2).
The regional pattern began with rapid increases in Japanese exports, was follow ed by
trade expansion among the Asian NIEs in the
1960s and has, up until recently, been succeeded by explosive grow th rates of trade in
ASEAN countries. While it is true that the
1970s had brough t grow th in trade to most
countries around the world (average annual
world growth rate in trade was 20.3 per
cent), the Asian NIEs and the ASEAN countries experienced a particularly rapid expansion in their exports and im ports (37.2 per
cent for Korea, 28.6 per cent for Taiwan and
28.3 per cent for ASEAN). In the 1980s,
Tab le 2. National annual average grow th rates of trade (percent ages)
Country
1950±60
1960±70
1970±80
1980±90
U SA
UK
France
G erm any
A ustralia
5.1
4.8
6.4
16.6
0.9
7.8
6.3
9.8
11.4
7.7
18.2
18.4
19.8
19.1
15.9
5.9
5.8
7.7
9.6
6.3
Japan
15.9
17.5
20.8
8.9
1.4
0.4
6.5
0.1
39.6
14.5
23.2
3.3
37.2
22.4
28.6
28.2
15.1
16.8
14.8
9.9
0.6
1.1
1.5
4.5
4.3
1.7
5.9
7.5
24.2
35.9
24.7
17.5
19.1
1.3
20.0
12.7
0.2
2.0
3.4
4.8
7.2
6.0
18.0
21.7
25.7
2.1
5.1
2.4
K orea
H ong K ong
T aiw an
Singapor e
M alaysia
Indones ia
T hailand
Philippin es
2
2
China
2
A rgentina
Brazil
M exico
2
2
2
Source: U NCTA D (1994 T ables 1.5 and 1.6, pp. 16±25).
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8.6
1.3
14.0
3.8
80
FU-CHE N LO AN D PE TE R J . MA RCOTU LL IO
world trade slow ed due to the fall in prim ary
com modity prices and a global recession in
the first part of the decade, among other
factors, but trade for countries in Asia continued to grow. The exceptions were Indonesia and the Philippin es. Indonesian trade was
hard hit in the first half of the decade by the
fall in dem and for its agricultural and fuel oil
products and political instability depressed
the Philippin es’ export trade during that period.
Japanese trade with the rest of the Asia±
Pacific region has been the key to both its
own success and the restructuring of many
neighb ouring econom ies (Shinohar a and Lo,
1989). Japanese exports have been increasingly directed to nations in the region. For
example, between 1975 and 1985, the value
of the Japanese products exported to Korea,
Singapor e, Malaysia and Thailand increased
by 202 per cent, 226 per cent, 378 per cent,
and 121 per cent respectively (Akita et al.,
1997). By 1987, Japan’ s trade with the Asian
NIEs had increased so sharply that it was
roughl y the same magnitud e as its trade with
the 12 countries of the then European Com munity (Yeung and Lo, 1996). By 1996,
Japan’ s exports to the world amounted to
US$400.5 billion and over 45 per cent of that
went to Asia (JETRO, 1997).
Notwithstanding its magnitud e and rapid
expansion, two im portant aspects of global
trade during the past few decades were the
growing im portance of the service trade and
the growing com plexity of international finance. T he service sector has increasingly
becom e an im portant part of the global econom y. It makes up the largest share of gross
dom estic product of all but the lowestincom e countries. It also accounts for an
increasing share of the gross dom estic product of developed nations. By 1993, it accounted for over two-third s of national
production in these nations (Table 3). The
national im portance of the service sector is
also reflected in trade statistics. Beginning in
the 1970s, service trade internationalised and
by the 1980s service industries were grow ing
faster than any other sector of the world
econom y. From 1986 to 1995, com mercial
Tab le 3. P ercentag e share of service sector in GDP
of G 7 countrie s, 1960±93
Country
1960
1993
Percentag e
change
1960±93
U SA
UK
France
G erm any
Japan
Canada
Italy
58
53
52
41
42
60
46
75 a
65
69
61
57
71
65
29.31
22.64
32.69
48.78
35.71
18.33
41.30
a
1991 ® gure, from Survey of Current Business ,
1993.
Source: W orld Bank, W orld Developm ent
Report (variou s years).
services trade grew at a rate of 12.5 per cent
per year, while merchandise trade grew
at a rate of 9.5 per cent per year. By 1996,
trade in com mercial services was worth
US$1.2 trillion representing 20 per cent of
total world trade (ADB, 1998). Interestingly,
in the Asia±Pacific region as a whole, the
developm ent of manufacturing production
seems not to have been matched by a similar
level of service-sector developm ent, possibly
because of the use of services from outside
the region (Daniels, 1998). However,
service-sector developm ent in cities of the
region has had fundam ental effects upon
metropolitan structure and urban form
(Park and Nahm , 1998; Searle, 1998; Sirat,
1998).
Another significant trade-related phenom enon has been the developm ent of the global
finance system. While in the past, the world
finance system grew to keep the global trade
system working smoothly, the flows of global finance alone have subsequently taken on
unique im porta nce. Peter Drucker (1986) has
suggested that this developm ent represents a
separation of the `real econom y’ of the production and trade of goods and services from
the `sym bol econom y’ of credit and financial
transactions. This separation is significant in
that each `economy’ now operates almost
indepe ndently.
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GL OBALISA TIO N A ND TH E AS IA ±PACIFIC RE GIO N
The im portance of the international finance system can be seen in the absolute size
and increases in foreign currency trade. For
example, in the mid 1980s, foreign exchange
trade exceeded US$150 billion a day, which
annually amounted to 12 tim es the value of
world trade in goods and services. By the late
1980s, the total was up to US$600 billion a
day, no less than 32 tim es the volum e of
international com mercial transactions worldwide (Drucker, 1986; Strange, 1994). Annual
transactions in the E urocurrency markets
have risen from US$3 billion in the 1960s to
US$75 billion in 1970 to US$1 trillion in
1984 (Strange, 1994). These transactions
have been encouraged by access to a 24-hou r
global network of capital markets concentrated in cities such as New York, L ondon
and T okyo (Sassen, 1991).
The institutional structure of the emerging
global financial system contributes to its im portance. Since the global financial system is
a hybrid of states and markets, it is therefore
not solely within the com mand of governments. As the `sym bol’ and `real’ econom ies
have separated, the influence of global markets for money has grown and the power of
governments to influence or control these
markets has dim inished. The hard lesson of
the Asian crisis is that this part of the system
is vulnerableÐ the `Achilles’ heel’ of the
global econom y (Strange, 1994). As has been
dem onstrated, if confidence in the system
fails, decades of achievement can be wiped
out in a relatively short period of tim e. The
1980s debt crises pale in significance when
com pared with current events in Asia. Further, since the financial system is embedde d
in international transactions, `shocks’ in one
place are quickly felt in another. W hile the
Mexican financial crisis raised questions for
investors and policy-makers, it was the 1997
currency and capital market crises that provided undeniable evidence of the interconnected nature of the global finance system.
W ithin a period of days, the stock markets of
Bangkok , Kuala Lum pur, Hong Kong, New
York, London, Tokyo, Frankfurt, Paris, New
Zealand, Brazil, Argentina and Mexico reacted to the ASE AN bursting bubble. The
81
current climate within the global financial
system dem onstrates that, given im petus, the
reaction on the part of investors to reduce
their exposure, even in well-managed econom ies, can be translated quickly around the
world. As a result, in 1997, private capital
flows to the emerging markets fell by onethird, with Indonesia, Korea and Malaysia
experiencing the largest declines (ADB,
1998).
Foreign Direct Investment (FDI)1
Trade linkages have been strengthened
through growing cross-country manufacturing production processes facilitating intrafirm trade through out the world and the
region. In the 1980s, transnational corporations accounted for 70±80 per cent of world
trade outside the centrally planned socialist
countries (Feagin and Sm ith, 1987, p. 3).2
This relationship makes FD I one of the dom inating forces of global integration. The
grow th of FDI has been an integral part of
the general econom ic grow th in the world
econom y (UNCTAD, 1997).
T he major channel of FD I is the transnational corporation (TNC). Global TNC activity was relatively unim portant until the
late 1950s. M uch of these flows were North±
South and were heavily concentrated in resource-based
industries,
transport and
utilities (Graham, 1995). T he total accumulated stock of foreign direct investm ent rose
from US$14.3 billion in 1914 to US$26.4
billion in 1938 before soaring to reach
US$66 billion at the end of the 1950s (Dunning and Archer, 1987).
Notwithstanding fluctuations, beginni ng in
the 1960s, FDI flows began to grow at tw ice
the rate of growth of world gross national
product and 40 per cent faster than world
exports. During the 1970s, total flows of FDI
on an outw ard basis were less than US$13
billion (Graham, 1995). Then, after 1985,
world FDI flows skyrocketed. In the late
1980s, FDI inflow s to countries around the
world grew at the rapid annual average
grow th rate of over 24 per cent (Table 4). In
subsequent years, the rate of grow th of FDI
more than double d that for world trade. By
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317
2866
141
5933 c
7091 c
5848
F DI in¯ ow
F DI inward stock
Cross-border m ergers and acquisitions a
S ales of foreign af® liates
T otal assets of foreign af® liates
E xports of goods and non-factor services
S ource: U NCTA D (1997, Table 1.1, p. 4).
a
M ajority-held investm ents only.
b
1987±90.
c
1993.
d
1994.
e
1991±94.
1995
Item
6111
349
3233
163 b
6412 d
8343 d
1996
Value at current prices (billions of US$)
14.3
24.4
18.7
21.0
17.3
19.9
1986±90
7.4
17.1
11.7
27.1
4.0 e
11.2 e
1991±96
16.2
32.6
18.7
28.8
12.5 c
13.1 c
1995
4.5
10.3
12.8
15.6
8.1
17.7
1996
Annual grow th rate (percentage)
Table 4. Selected indicators of FDI and international production, 1986±96
82
FU-CHE N LO AN D PE TE R J . MA RCOTU LL IO
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GL OBALISA TIO N A ND TH E AS IA ±PACIFIC RE GIO N
1996, FDI inflow s had reached US$349 billion and FD I stocks reached approxim ately
US$3.2 trillion , rising from US$1 trillion in
1987, and the sales of TNC foreign affiliates
(US$6.4 trillion ) were higher than total
world trade of goods and services (US$6.1
trillion ). Cross-border production processes
reflect changes in corporate structures that
are being pursued through foreign investm ent
channels.
FD I has been overwhelm ingly dom inated
by TNCs from developed countries. T he resultant inve stment transactions have been described as mainly lim ited to a `triad’
including the EU, North America and east
and south-east Asia (focused on Japan) as the
dom inant regional blocs (Ohm ae, 1985;
UNCT AD, 1997). In 1996, 59.6 per cent of
world FDI flow s were among OE CD nations.
However, while transnational investm ent
is prim arily concentrated in the developed
market econom ies, developing countries are
increasingly playing an im portant role (Table
5). Cross-investm ent between the major developed market econom ies and developing
econom ies had increased substantially. The
percentage of total global FDI captured by
developing countries had increased from 18
per cent in the mid to late 1980s to over 36
per cent in 1996. Asia has received more
than 60 per cent of FD I flows to the developing world. Recently, China has captured the
role of largest recipient, accounting for a
third of all FD I flows to developing econom ies (ABD, 1998).
The most discernible im pact of the current
financial crisis has been a sharp decline in
private capital inflow s to the five affected
countries (Thailand, Indonesia, Malaysia,
Korea and the Philippin es). Together, they
suffered net private capital outflow s of
US$12 billion in 1997, com pared to net inflow s of US$93 billion in 1996. However,
despite the movem ent of equity capital out of
the region, in 1997, FDI inflow s into these
econom ies remained at about US$7 billion ,
approxim ately the same as in 1996 (ABD,
1998). This may indicate that the regional
manufacturing production system has not
collapsed.
83
A considerable num ber of TNCs from a
small num ber of developing countries, most
obviously som e of the Asian NIEs, have
emerged. Among a list of the 1995 top 50
TNCs based in developing econom ies, 34 are
hom e institutions of the 4 Asian NIE s and
China. T hese 50 firm s have total assets ranging from US$1.3±40 million, total sales
ranging from US$366 000 to 36 million and
total num ber of employees ranging from
7434 to 200 000. T wo of them are include d
in the 1996 list of Top 100 global TNCs
(UNCTAD, 1997).
In the Asia±Pacific region, Japanese
trade grew with the im portanc e of intrafirm
trade among Japanese com panies. Many
Japanese TNCs have subsidiaries located in
the region with which they trade parts and
services. In this way, Japanese trade has
strengthened its econom ic linka ges to developing countries in the region. Therefore
the basis for increased Japanese trade with
the Asian NIEs and ASEAN originated and
developed with Japanese FDI. In 1988, the
region’ s catch of Japanese FDI was 11.7
per cent in 1988 at US$5.2 billion (Yeung
and Lo, 1996). 3 It is the accum ulation of
Japanese FDI and the transfer of know ledgebased intangible assets (for exam ple, production technology, marketing networks,
management systems), which accompanied
these investm ents that have provide d the
im pulse for the region’ s grow th (Hatch
and Yamamura, 1996; Lo, 1994). Two
im portant aspects of Asia±Pacific FDI are
that it is largely regionally based and that the
manufacturing share dom inates total FDI
flows.
T he flow of intra-A sia FDI began with
Japanese industrial expansion in the 1960s.
For example, with early liberalisation of
investm ent regulations in Indonesia, Japan
began inve sting in the country. The num ber
of firm s increased from 22 in 1967 to 48
in 1970 to 123 in 1975 (Syam wil, 1998,
Table 4). Most recently, with increased
liberalisation in China, Japanese FD I has
flooded that country. In 1994, for example,
there were 636 cases of FDI from
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Source: UNCT AD (1997, T able B.1, p. 303±307).
24.7
8.1
12.4
4.2
116.7
52.7
53.9
10.2
Developed countries
European Union
North Am erica
Other
Developing countries
Latin A merica
South, east and south-east Asia
Other
141.9
W orld
Host region/Economy
Annual average
1985±90
41.7
15.4
21.2
5.1
114.8
78.8
25.5
10.5
158.9
1991
128.7
38.6
81.2
8.9
208.2
99.4
91.3
17.5
349.2
1996
479.9
140.6
298.3
41.0
929.7
526.3
317.6
85.8
1455.3
Cum ulative
grow th
1991±96
80.0
23.4
49.7
6.8
155.0
87.7
52.9
14.3
242.5
Average
FD I in¯ ow
1991±96
Tab le 5. F DI in¯ ows by host region and econom y, 1985±96 (in billions of US$)
25.3
20.2
30.8
11.8
12.6
4.8
29.0
10.8
17.1
P ercentage
change
1991±96
84
FU-CHE N LO AN D PE TE R J . MA RCOTU LL IO
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GL OBALISA TIO N A ND TH E AS IA ±PACIFIC RE GIO N
Japan alone, slated for the Chinese mainland
(Hatch and Yamamura, 1996).
Japan has maintained a considerable investm ent positio n in the region despite its
sagging post-bu bble econom y. In the early
1990s, Japanese manufacturers, particularly
machine-makers, continu ed to inve st heavily
in the Asia±Pacific. The share of Japanese
manufacturing FD I in Asia has grow n from
19.8 per cent in 1990 to 32.9 per cent in 1993
while falling from 43.9 per cent to 37.2 per
cent in North America and from 29.7 per
cent to 18.3 per cent in E urope during the
same period (Fukushim a and Kwan, 1995).
Japanese FDI increased sharply in Thailand
during 1993 and 1994 as Casio, Sony, T oyota and Honda expanded their production
capacities. Japanese firm s also have recently
increased investm ents in the Philipp ines,
Indonesia, Malaysia and China (Hatch and
Yamamura, 1996).
Recently intraregional non-Japanese FD I
has increased significantly. By the early
1990s, the region experienced increased investm ents from the Asian NIEs and ASEAN
countries. By 1994, FD I from the individ ual
Asian NIEs into the region was approaching
the levels of flow from Japan and in the case
of Hong Kong tripled Japanese investm ents.
During that year, the investm ents from these
countries were prim arily directed at ASEAN
and China (Table 6).
The growth of manufacturing FDI was
related to changes of econom ic structure
within developing econom ies in the region.
These shifts were recorded in their export
com positio ns. During the period 1980±90,
manufacturers’ share of exports almost
tripled from 21.8 per cent to 59.8 per cent for
all ASEAN countries. Indonesia’ s percentage
increase was 15.6 tim es, while Singapore and
Thailand also made im pressive gains (Yeung
and L o, 1996). In general, the exports from
the Asia±Pacific region increased dram atically after 1985. The four Asian NIEs and
the ASEAN countries accounted for only 9
per cent of world exports in that year, but by
1997 their share had climbed to 14 per cent.
This dem onstrates the intim ate relationship
betw een FDI and trade and the im portance
85
of capital-exporting countries, like Japan,
Korea and Taiwan to the region’ s econom ic
grow th.
Com munication Networks
The world is in the m idst of a `revolution ’
led by advanced digital technologies. Com munication networks and interactive multimedia applications are providi ng the
foundation for the transformation of existing
social and econom ic relationships into an
`Information Society’ . T he grow th of the
telecom munications industry has been dramatic. In 1994, worldw ide, there were more
than 500 million connections to telephone
main lines leaving the 25 leading telecommunications com panies with revenues of
US$400 billion and 38 million new subscribers. In that same year, the 10 largest of
these com panies made bigger profits than the
25 largest com mercial banks (OECD, 1997).
T hese telecom munication technologies
have made markets more transparent and
they continu e to steer globalisation processes
as they push dow n prices for long-distance
transactions. A 3-m inute telephone call between New York and London has fallen from
US$300 (in 1996 dollars) in 1930 to US$1 in
1997 (The Econom ist, 1997).
T he main drivers for the com munications
explosion are infrastructure and new service
developm ent. Most of this developm ent has
been in industrialised nations. The OE CD
nations retain 67 per cent of the world’ s
telecom munication main lines. From 1990 to
1995, OECD nations’ telephone main line
provision grew at an annual rate of 3.9 per
cent. By 1995, there was an average of
47 main lines per 100 inha bitants in these
countries. OECD cellular mobile subscribers
have increased at a com pound rate of 45 per
cent per year over the same period and
now reach 71 million users. Sim ilarly, their
num bers of Internet hosts has increased
from 0.6 million in 1991 to 12.4 million in
1996. The current diffusion rate is 12
Internet hosts per 1000 populat ion. TV penetration per househo ld in OECD countries is
90 per cent. In terms of installed PC base, the
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Ð
Japan
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7
China
6
1
5
0
0
6
Ð
65
43
20
128
428
Korea
NA
1
3
3
0
8
5
Ð
224
174
402
391
T aiwan
19
0
15
NA
1
15
NA
3
Ð
10
13
249
H ong Kong
NA
NA
NA
NA
NA
0
NA
NA
NA
Ð
0
598
Singapore
Source: Japan Developm ent Bank (1996, Appendix, Table 5).
0
0
1
0
1
A SE A N 4
T hailand
Malaysia
Philippines
Indonesia
T otal
NIE s
Korea
66
T aiwan
25
Hong Kong
77
Singapore
58
T otal
226
Japan
From
NIEs
25
2
23
3
1
29
5
68
267
203
543
1 667
Total
89
Ð
68
6
0
74
29
475
211
567
1 282
2 556
Thailand
Ð
7
1
0
5
4
156
1 059
333
405
1 989
673
M alaysia
17
56
160
Ð
0
216
15
268
288
60
631
103
Philippines
ASE AN
849
488
042
664
043
91
12
422
36
Ð
470
1
2
6
1
12
1 563
Indonesia
Table 6. Intraregional ¯ ows of FDI in east and south-east A sia, 1994 (m illions of U S$)
2
4
6
2
15
2 075
China
89
72
650
43
0
765
Ð
235
201
140
116
692
049
723
325
3 391
874 19 665
697
1 180
945 24 959
4 894
Total
843
809
883
138
673
121
309
874
187
117
1 487
2
7
26
4
41
8 636
Total
F DI
out¯ ows
86
FU-CHE N LO AN D PE TE R J . MA RCOTU LL IO
GL OBALISA TIO N A ND TH E AS IA ±PACIFIC RE GIO N
87
Table 7. Changes in telephon e services in Asia and selected L atin Am erican N IE s
(m ain lines per 100 inhabita nts)
Percentag e
change
1990±94
Country
1990
1991
1992
1993
1994
Japan
44.1
45.4
46.4
47.1
48.0
8.8
Singapor e
Hong Kong
Korea
39.0
43.2
31.0
39.9
45.9
33.7
41.5
48.5
35.7
43.5
51.0
37.9
47.3
54.0
39.7
21.3
25.0
28.1
Thailand
Indonesi a
Malaysia
Philippin es
2.4
0.6
8.9
1.0
2.7
0.7
10.0
1.0
3.1
0.9
11.2
1.0
3.8
1.0
12.6
1.3
4.7
1.3
14.7
1.7
95.8
116.7
65.2
70.0
China
Vietnam
0.6
0.2
0.7
0.2
1.0
0.2
1.5
0.4
2.3
0.6
283.3
200.0
Argentina
Brazil
Mexico
9.6
6.3
6.6
9.8
6.7
7.2
11.1
6.9
8.0
12.2
7.4
8.8
14.1
8.1
9.3
46.9
28.6
40.9
Source: United N ations (1996, T able 19, pp. 135±144).
US averaged 30 PCs per 100 inhabitants in
1994. Europe’ s and Japan’ s penetration rates
are closer to 10 PCs per 100 inhabitants
(OECD, 1997).
In general, developing countries have
low er levels of telecommunications infrastructure developm ent. Low-incom e econom ies in the world have an average of 1.97 main
lines per 100 inhabitants. The low er middleincom e econom ies have 9.17 main lines per
100 inha bitants (OECD, 1997). In parts of
developing Asia, how ever, telecommunications advances are progressing at increasingly advanced rates. In terms of telephone
hook-u ps, developing nations in Pacific Asia
have increased their connectivity at a faster
rate than either Japan or Latin American
NIEs (Table 7). Between 1990 and 1994, the
num ber of main lines per 100 inhabitants
quadrupled in China, tripled in Vietnam and
double d in T hailand and Indonesia. The percentage ownership of TVs and radios is increasing much faster in these developing
countries than in other developin g nations
(Table 8). Further, liberalised m arkets in
Hong Kong, China, Singapor e, Japan,
Malaysia and Indonesia for telecommunications firm s are having dram atic im pacts on
not only hook-u ps, but cellular phone and
Internet services (FEER, 1998).
Transpo rt Linkages
W hile the major breakthrough s in the transport of goods and services occurred in the
19th and early 20th centuries, modern enhancementsÐ such as large cargo freighters
and jum bo jetsÐ have continu ed to im prove
the movem ent of people, goods and services.
Since 1980, the num ber of scheduled international passengers globally has double d
(Table 9).
M ore im portantly, the expansion and developm ent of com mercial high-sp eed passenger transport have allow ed for a rise of
annual distance travelled with personal incom e. That is, while people from different
classes and societies are spending the sam e
average amount of tim e travelling per day,
those with higher incom es are travelling farther.4 Thus, as world GDP per person has
increased, so has total person kilom etre miles
(PK M). For example, total PK M travelled
has increased more than fourfold from 5.5
trillion PKM in 1960 to 23.4 trillion PKM in
1990 and is expected to more than double by
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88
FU-CHE N LO AN D PE TE R J . MA RCOTU LL IO
Table 8. T elevision and radio receiver s (per 1000 persons)
Percentag e change
1980±93
Country
Japan
Singapor e
Hong Kong
Korea
Thailand
Indonesi a
Malaysia
Philippin es
China
Vietnam
Argentina
Brazil
Mexico
1980
1985
1990
1993
Radio
TV
Radio
539
678
579
786
611
899
618
911
34.4
TV
Radio
TV
Radio
TV
Radio
311
373
221
506
165
525
332
606
234
596
189
946
377
636
272
666
210
1011
381
644
286
671
215
1013
TV
Radio
TV
Radio
TV
Radio
TV
Radio
21
140
20
99
87
411
22
43
81
156
38
128
115
421
27
91
106
185
57
145
148
429
44
141
113
189
62
148
151
430
47
143
TV
Radio
TV
Radio
4
55
93
9
112
33
100
30
181
39
103
38
184
42
104
TV
Radio
TV
Radio
TV
Radio
183
427
124
313
57
134
214
594
185
363
113
199
218
670
207
384
146
254
220
672
209
390
150
255
TV
14.7
22.5
72.7
29.4
32.6
30.3
93.0
438.1
35.0
210.0
49.5
73.6
4.6
113.6
232.6
850.0
234.5
11.8
20.2
57.4
68.5
24.6
163.2
90.3
Source: United N ations (1996, T able 16, pp. 116±123).
2020 to 53 trillion PK M (Schafer and Victor,
1997). T his has helped to create a com munity of global travellers with increasingly
significant social consequences.
The trend in international travel for Asian
passengers re¯ ects these advances. As Table
9 dem onstrates, from 1980 to 1994, the num ber of passengers scheduled for international
services increased, in most cases by tw ice the
world average rate and faster than the rates
of increase in com parable NIEs in Latin
America.
In general, the increased widening and
intensity of globalisation processes have
been uneven around the world but, until
recently, have affected the Asia±Pacific
region in positiv e ways. The intensity and
diversification of international connectivity
among nations within the region and between
those of the Asia±Pacific region and the
world have created regional interdependency.
Notwithstanding the com ments of those that
are less im pressed by these trends (for one of
many sceptical view s of globalisation, see
Harris, 1998), the im portance of econom ic
globalisation processes is predicted to increase in the m edium to long term (Lo,
1994). The stability of FDI inflow s into the
highly affected econom ies during the 1997
financial crisis is a good sign that the econom ic base of the region is still on a sound
footing.
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G LO BALIS AT ION A ND T HE A SIA - PA CIFIC RE GION
89
Tab le 9. Civil aviation trends (schedul ed internat ional service passenger s, in
thousand s)
Country
Percentag e
change
1980±94
1980
1992
1993
1994
163 222
299 612
318 424
343 712
110.6
Japan
4 499
11 589
11 260
12 700
182.3
Singapor e
K orea
3 827
2 105
8 477
5 633
9 271
6 372
9 929
7 368
159.4
250.0
T hailand
Indones ia
M alaysia
Philippin es
1 924
922
1 822
997
5
2
5
2
6
2
5
2
6
3
6
2
775
285
402
356
252.1
256.3
251.4
136.3
W orld
China
V ietnam
A rgentina
Brazil
M exico
343
773
081
113
203
932
597
229
360
6
4 500
130
4 667
137
4 909
137
1 263.6
2 183.3
1 300
1 330
2 777
1 787
2 707
3 976
1 661
3 062
3 703
1 999
3 372
3 540
53.8
153.5
27.5
Source: U nited Nations (1996, Table 65, pp. 575±589).
W orld City Formation
The emergence of the functional city system
is defining roles for cities. The factors
that help to explain the emergence and
maintenance of the system encom pass the
econom ic flow s among cities integrated into
the system. These include the decisions
made by TNCs to locate their activities
within urban borders and the ways in which
governments prom ote developm ent. Much
of the econom ic activity associated with
growth and investm ent has occurred in the
major metropolitan centres in the region
(Table 10).
Given the type of developm ent in the
Asia-Pacific region (i.e. export-o rientation,
manufacturing production with accompanying inform ation and technology-in tensive
service developm ent), cities are the spaces of
the most intensive change (Yeung, 1993).
How ever, othe r cities within the Pacific
Rim are increasingly being included within
the regional city system (for example, Sydney, Vancouver and Los Angeles). `W orld
city form ation’ is the process by which
the global econom y im pinges upon cities
and transform s their social, econom ic and
physical dim ensions. At one level, cities
within the region and within the functional
city system are growing more alike. They are
converging (see also Armstrong and M cGee,
1985). In this section, we discuss the im pacts
of the flow s of FDI, trade, inform ation and
people on cities in the Asia±Pacific to dem onstrate ways in which they have becom e
similar.
W orld City Formation A sia± Pacific Style
In general, world city form ation can be
thought of as the process in which the
world’ s active capital becom es concentrated
in cities (Friedmann and W olff, 1982). In
exploring the world city form ation process,
many scholars have focused on the role of
com mand-and-control activities in large urban agglom erations (see, for example,
Sassen, 1991, 1994). These authors concentrate on the location of headquarters for
transnational corporations, international institutions, business-services, transport access,
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293
115
555
793
826
953
606
265
1061
816
100.0
6.5
9.9
13.6
4.6
0.8
100.0
12.7
24.4
6.7
N ational
share
(percentage)
551
71
531
175
201
262
1164
305
819
5254
A m ount
(U S$100 000)
b
100.0
11.2
42.6
32.2
12.7
4.4
100.0
13.5
24.6
12.4
National
share
(percentage)
G ross dom estic product
FDI data do not include oil-related investm ents.
T he extended m etropolitan area includes the entire Yangtse delta area.
c
FDI percentages for Seoul from Hong (1997, T able 5, p. 291).
Source: Japan Development Bank (1996).
a
Singapore
Kuala L um pur
Bangkok
Manila
Jakarta a
Shanghai b
Hong Kong
Taipei
Seoulc
Tokyo (23 wards)
City
Num ber
(10 000)
Population
Ð
0.4
Ð
14.7
15.2
8.9
Ð
NA
36.0
NA
Inner
city
(percentage)
Ð
20.5
46.8
56.1
45.7
20.6
Ð
NA
52.6
NA
E xtended
m etropolitan
area (percentage)
S hare of FDI
Table 10. The com parative scale of m etropolitan econom ies in the A sia±Paci® c region
90
FU-CHE N LO AN D PE TE R J . MA RCOTU LL IO
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GL OBALISA TIO N A ND TH E AS IA ±PACIFIC RE GIO N
popula tion size, research and education facilities, and convention and exhibition functions (Friedm ann, 1986; Rim mer, 1996).
This focus, however, lim its the num bers and
types of cities included as `world’ or `global’ . On the other hand, a num ber of scholars
have also included the role of industrial production activities and trade (Feagin and
Smith, 1987; Lo and Yeung, 1996a ). Regional and world cities include those that
have becom e major centres of manufacturing
and service-related activities.
The world city form ation process im plies
that, in order to be effective in global and
regional econom ies, cities have unde rgone
physical restructuring. Som e im portant
physical characteristics that are part of
the world city form ation process include
the developm ent of transport facilities
and com munication infrastructure (including
teleports). Many tim es these are incorpo rated
into public projects financed by governments. At the same tim e, the private sector
is also heavily involve d in the production
of urban mega-projects and `prestige buildings’ , usually as part of inne r-city development (Olds, 1995). These developm ents
often include land reclamation. Further,
urban transformations include the development of R&D com plexes just outside the
city’ s bounda ry.
The term `infrastructure’ includes a variety
of public structures such as utilities (pow er,
telecommunications, piped water supply,
sanitation and sewerage, solid waste collection and disposa l), works (roads and major
dam s and canal works for irrigation and
drainage) and transport edifices (urban and
interurban railways, urban transport, port and
waterways and airports) (W orld Bank, 1994).
In developing countries, these investm ents
account for up to 20 per cent of total investment and 4 per cent of their GDP (W orld
Bank, 1994). Good quality infrastructure is
not only conducive to econom ic produc tion,
but is also im portant in attracting investm ent
(Peck, 1996). In a survey by the Far E astern
Econom ic Review, infrastructure issues were
considered crucial to investm ent decisions by
91
firm s. Telecommunications and transport infrastructure were among the top seven determinants of investm ent location decisions
(FE ER, 1997).
Central gove rnm ents have been im portant
to the developm ent of urban infrastructure.
Asia±Pacific governments have taken note of
the W orld Bank’ s (1994) conclusions that
infrastructure investm ent was positiv ely correlated with econom ic grow th and have acted
accordingly. 5 Table 11 dem onstrates investments in infrastructure among econom ies in
the region com pared to other fast-growing
econom ies in South America. W hile there
has been progress, infrastructure gaps have
been one of Asia’ s bottlenecks. Because of
rapid growth, Asia±Pacific nations have had
a shortfall in infrastructure investm ent. Most
countries in the region have grown by between 7 and 8 per cent since the 1980s, but
they have only invested about 4 per cent of
their GDP in infrastructure resulting in a 2±3
per cent investm ent gap (Thornton , 1995).
Although , on the whole, national infrastructure investm ent has not been sufficient to
keep up with dem ands country-w ide, much
of the infrastructure inve stment has been
concentrated in major metropolitan centres,
which has intensified the effects of globalisation processes in those spaces. Further, there
has also been a specific and similar set of
urban infrastructure developm ents across
Asia±Pacific cities.
W hereas the emphasis in Latin America
and in E astern Europe has been on the privatisation of existing infrastructure facilities,
Asia has been investing heavily in, inter alia,
new transport and telecommunications
projects (OXAN, 1998). These investm ents
were made to cope with rapidly growing
global traffic. One popula r project has been
the large futuristic airport, such as the recently opened Chek Lap Kok airport in Hong
Kong, Kansai airport in Osaka, the Seoul
Metropolitan Airport and Nong Ngu Hao in
Bangkok. Indeed, the concept of the `Pearl
River delta’ could be marketed only because
of the plethora of new airport openin gs in the
region. Locations include Hong Kong, an
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22 712
12 703
25 667
Ð
910
720
238
460
57 280
161 503
82 022
Ð
39
27
22
116
34 248
2 757
1 484
782 041
1990
152.2
1 171.4
219.6
1 356.6
187.4
249.9
961.3
4 572.3
753.6
56.5
1 969.7
Percentage
change
b
1970.
1980.
Source: World Bank (1994, Tables A1 and A2).
a
Argentina
Brazil
Mexico
China
740
646
356
973
Thailand
Malaysia
Philippines
Indonesia
2
9
6
10
733
323
948
37 785
Japan
South Korea
Singapore
Hong Kong
1960
Country
Paved roads (km)
10 460
22 865
10 812
58 500
594
a
3 543
2 731
1 400
1 758
659
1 301
115 498
1960
180
722
329
255
50 904
222 199
122 482
621 200
46
24
26
44
118 740
15 620
28 938
857 347
1990
386.7
871.8
1 032.8
961.9
7 674.4
597.8
864.1
3 061.1
6 654.3
2 270.3
2 124.3
642.3
Percentage
change
Electricity production
(millions of kw-hours)
000
000
000
400
1 678 000
2 457 000
1 853 000
3 262 000
237
194
304
219
3 325 000
249 600
910 000
34 444 000
1975
b
3 086 964
9 409 230
5 354 500
6 850 300
1 324 522
1 585 744
610 032
1 069 015
13 276 449
1 040 187
2 474 998
54 523 952
1990
84.0
283.0
189.0
110.0
458.9
717.4
100.7
387.2
299.3
316.7
172.0
58.3
Pecentage
change
T elephone main lines
(number of connections)
Table 11. Physical m easures of infrastructure provision in selected countries, 1960±90
100
100
020
640
43 905
38 287
23 369
Ð
2
2
1
6
2 976
b
38
56
27 902
1960
35 754
22 123
26 334
Ð
3 940
2 222
478
6 964
3 091
38
b
92
23 962
1990
12.7
2 42.2
2 18.6
2
87.6
5.8
53.1
4.9
3.9
0.0
64.3
2 14.1
Percentage
change
Railroad tracks (km)
92
FU-CHE N LO AN D PE TE R J . MA RCOTU LL IO
GL OBALISA TIO N A ND TH E AS IA ±PACIFIC RE GIO N
airport capable of receiving large aircraft in
Shenzhen, a modern new air facility in
Macau, another in Zhuhai (city adjoining
Macau) and approval from Beijing for one in
Guangzhou (Vittachi, 1995). Before the
Asian financial crisis of 1997, 11 new airports were planne d for openin g within the
next 10 years in different cities through out
this area (Yeung, 1996). T hose cities that
already have large airport terminals are in the
process of upgrading them . Cities such as
Taipei and Singapor e already have modern
facilities, but are plannin g for future expansions (Japan Development Bank, 1996). Singapore, for exam ple, plans to enlarge Changi
airport, so that it can handle over two and a
half tim es more airplane take-offs (360 000)
a year.
Asian countries have made significant
strides in providi ng road and rail transport
access to large cities. During the period
1965±75 annual highw ay usage increased at
the rate of 10.7 per cent and annual truck
tonnag e increased by 7.19 per cent, while the
growth rate of the region was only 4.7 per
cent (Yeung, 1998). In road and rail transport, Hong Kong and Japan have been high
infrastructure investors. During the post-w ar
years Japan successfully pioneered highspeed trains (Shinkan sen) that revolutionised
short-distance travel in the country . Between
1990 and 1993, Hong Kong truck tonnag e
grew at 15.3 per cent annually and passenger
growth grew by 8.9 per cent (Yeung, 1996).
This represents the results of heavy investment in roads. Both Tokyo and Hong Kong
have also invested heavily in bridges. In
1994 alone, Hong Kong awarded six `considerably sized’ bridge contracts to international
construction conglom erates (com pared with
one awarded during that year in all of
France) (Thornton , 1995), including the Tsing M a BridgeÐ the biggest railw ay suspension bridge in the world. Hong Kong recently
finished a US$20 billion transport project
and is com mitted to spending another US$30
billion on future transport infrastructure over
the next 5 years (Leung, 1998).
Other nations in the region have also invested in road and rail transport infrastruc-
93
ture to connect their cities. South Korea
started its transport inve stment with the
Seoul±Pusan, Seoul±Incheon and Daejon±
Jeonju express highw ays in the late 1960s
and by 1990 had com pleted over 1551 km of
expressways (Hong, 1997). South Korea has
also been working on a high-speed railw ay
system (T hornton , 1995). Kuala Lum pur in
Malaysia recently finished the first line of an
urban light rail system and their Renong
group com pleted an 800-km North±South
Highw ay for US$2.3 billion in 1994. Renong
may also build a US$725 million high-sp eed
`tilting -train’ that would significantly reduce
travelling tim es between Rawang, Kuala
Lum pur and Ipoh, 174 km to the north
(Jayasankaran, 1997).
T he volum e of trade generated by the region has facilitated the developm ent of the
world’ s largest cargo ports. Most of the im port and export traffic flow s throug h selected
cities. Of the world’ s `top 25’ container ports
in 1992, 12 are located in the region; these
include (in rank order) Hong Kong (1), Singapore (2), Kaohsing (4), Pusan (5), Kobe
(6), Keelung (10), Yokoham a (11), Tokyo
(14), Bangkok (19), Manila (21), Nagoya
(24) and Tanjung Priok (25) (Rim mer, 1996).
In 1984, the league of largest ports was
headed by Rotterdam and bi-state New York/
New Jersey ports, but by 1992 Hong Kong
and Singapor e had moved up to first and
second positio ns respectively (Rim mer,
1996). As entrepoÃ
ts, both Singapor e and
Hong Kong represent extreme cases of tradecity nexus. Singapor e’ s exports of goods and
non-factor services were 190 per cent of its
GDP in 1990 and, during the same year,
Hong Kong’ s exports were 137 per cent of
its GDP (W orld Bank, 1992). Eighty per cent
of Korea’ s im ports and exports go through
Pusan (Thornto n, 1995). In Jakarta, Indonesia, the 1989 value of the city’ s exports
accounted for one-third of all Indonesia’ s
exports (excluding oil and gas) and the city’ s
share of trade has been increasing since
1986. During 1989, 50 per cent of all im ports
to the country moved through the city
(Soegijoko, 1996).
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94
FU-CHE N LO AN D PE TE R J . MA RCOTU LL IO
Another type of urban developm ent
project encouraged by the world econom y
is the construction of high-sp eed inform ation
transm ission infrastructure. This is particularly im portant for service-sector grow th
and maintenance. As mentioned previously,
althoug h the region is lagging behind the rest
of the world, business services are of growing im portance in selected cities (Edgingto n
and Haga, 1998). In general, large cities
in the region are the best provide rs of
telecommunication services among the
nations of east and south-east Asia. Two to
three tim es the percentage of urbanites enjoy
telecommunications links in the cities of
Bangkok , Manila, Jakarta and Shangh ai,
com pared with the inhabitants of the smaller
cities and the rural areas in their respective countries (Japan Developm ent Bank,
1996).
In som e Asian cities, inform ation technologie s have taken on special im portance.
Singapor e has attempted to restructure its
econom y tow ards the creation of an information city. 6 A 1991 gove rnm ent publication
set out the key role of the inform ation econom y in m eeting the city-state’ s needs. The
city-state is aiming to make itself a hub of
com munications, finance and travel. Information technology is at the core of plans for
the city’ s future (Perry et al., 1997). The
Teleport project in Tokyo, less than 6 km
from downtow n, was planned as an information and futuristic city. T he estimated construction cost of the area’ s infrastructure
alone is approxim ately US$20 billion (TMG,
1996). Malaysia is holding to its prom ise to
develop a `Multim edia Super Corridor’ , Cyber Jaya, that will stretch from Kuala
Lum pur 50 km to the south, ending at a new
international airport. It will be connected to
both the airport and the capital via several
form s of transport (see Figure 1). Despite the
nation’ s current fiscal situation, the project is
still moving ahead (Hiebert et al., 1997).
This project is envisaged as a setting for
multim edia
and
inform ation-technology
com panies and is being prom oted throug h
government incentives.
An additional inform ation-related type of
developm ent that is changing the urban region’ s landscape in the Asia-Pacific region is
the construction of large R&D facilities.
Asian cities have inve sted in R&D com plexes that are typic ally located outside the
city core. In Japan, the government has encouraged the construction of entire technologically advanced cities or `technopolises’
such as Tsukuba Science City located northeast of T okyo (see below). Taiwan used this
model to create Science Park, a new R&D
and high-technolog y manufacturing centre
located in Hsinchu outside Taipei.
L ocation decisions for TNCs not only include consideration of the amount of infrastructure, but also of its type and quality as
particular industries have specific requirements (Peck, 1996). Asia±Pacific gove rnments, in efforts to provide incentives to
firm s, have developed `industrial parks’ at
the outskirts of their cities. Much of this
developm ent has been concentrated in and
around major metropolitan cities in the region (T able 12). In Singapore, T aipei and
Seoul, industrial parks have operated with
success, prom pted and support ed by gove rnment and private investm ents.
One im portant and controversial device to
stim ulate exports and foreign investm ent has
been the developm ent of export-processing
zones (E PZs). An EPZ is a relatively small,
separated area that is designa ted as a zone for
favourable investm ent and trade conditions
(com pared with the host country ). In effect,
they are export enclaves within which special
concessions applyÐ including extensive incentives and often exem ptions from certain
kinds of lim iting legislation. The government
provide s the physical infrastructure necessary
for industries. EPZ s are set up for manufacturing. W hile som e E PZs have been incorporated into airports, seaports or com mercial
free zones located next to large cities, others
have been set up in relatively undeveloped
areas as part of a regional developm ent strategy. Asia contains 60 per cent of all EPZ
employm ent in developing countries. Hong
Kong and Singapore are zones of intensive
export-processing activities concentrated in a
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GL OBALISA TIO N A ND TH E AS IA ±PACIFIC RE GIO N
95
MALAYSIA
Kuala
Lumpur
KLIA
Cyber
Jaya
Putrajaya
NS
ER
L
St
ra
its
of
Me
lak
a
ERL
Express Rail Link
KLIA
Kuala Lumpur International
Airport Expressway
NS
North-South Expressway
Kuala Lumpur
International
Airport
0
15 km
Figure 1. Cyber Jaya, M alaysia. Source: Sirat (1998, F igure 3).
num ber of industrial estates. In 1986, total
employm ent in such zones was 89 000 and
217 000 persons respectively. The other major concentrations are in T aiwan (80 469 employed in 4 EPZ s), Malaysia (81 688
employed in 11 EPZs), South Korea
(140 000 employed in 3 EPZs) and the
Philippin es (39 000 employed in 3 EPZs)
(Dicken, 1992). This type of developm ent is
in stark contrast to that of South America
where with the exceptions of Mexico and
Colum bia, EPZ s have not played a prom inent
role in the industrialisation process.
Apart from infrastructure, the public and
private sectors in Asia±Pacific cities have
been involve d in redevelopm ent efforts.
Changes in the global econom y are inducin g
cities through out the world to look at largescale developm ent projects as a way to restructure land uses and stim ulate the local
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96
FU-CHE N LO AN D PE TE R J . MA RCOTU LL IO
Table 12. T he location share of industria l parks
around selected Asian cities, 1993
Percentag e share of
total industri al parks
City
Kuala L um pur
Bangko k
Manila
Jakarta
Inner city
0.5
1.9
9.7
Extended
metropol itan area
8.1
23.6
70.2
66.9
Source: Japan Developm ent Bank (1996).
econom y (Amborski and Keare, 1998).
For example, in many cities in developed and
som e developing countries, large, welllocated areas previously occupied by railroad
facilities, related transport and industrial uses
have been left abandoned as more goods are
now shipped in containers from a smaller
num ber of ports and terminals. These
deserted areas represent opportu nities for redevelopm ent and have helped to advance
megaprojects, which have com e into vogue
at the end of the 20th century. Over three
dozen such projects have been identified
around the world (Olds, 1995). In Tokyo, for
example, over the last decades the four
largest redevelopm ent projects were the
Tokyo Metropolitan government office
buildin g in Shinjuk u, the Ebisu Garden
Plaza, the Tokyo International Forum and the
Tokyo Teleport. These proje cts represent a
redevelopm ent effort that has been com pared
to the rebuilding undertaken after the great
Kanto earthquake in 1923 and reconstruction
after the 1945 W orld W ar II bom bings. The
city has been expanding (more quic kly during the 1980s) in all directions possible: up
to new heights, out to the edges of the Kanto
plain; off into Tokyo Bay and down below
the ground (Cybriw sky, n.d.).
These publicly and privately financed
megaprojects often include high-pr ofile
`prestige’ buildin gs to portray their status. As
one architect sugge sted, ª many Asian countries see the tall building as a device to move
them quickly into the 21st century, to catch
up quickly º . 7 According to the Tall Building
Council, in 1986, the 10 tallest buildin gs
were all in the US. In 1996, 4 of the top 10
were in Asia (Petronas Towers, Malaysia;
Central Plaza, Hong Kong; Bank of China
Tower, Hong Kong; Shun Hing Square;
Shenzen) (Gebhart, 1997). Typically these
projects are usually conceived of as landmarks to ª sym bolise the prosperity of the
city ¼ and embody the hopes and lofty ideals of the peopleº . 8 The Mitsui New No. 2
Building in Tokyo, com pleted in 1985, is
regarded as the first built in Asia. Since then
Manila has com pleted a 32-storey Stock Exchange Centre in 1992, which is run by an
electronic nerve centre able to monitor the
internal conditions of the building by regulating air conditioning and lightin g. Seoul’ s
Sixty-four Building is also one of similar
design and significance.
An aspect of many Asian projects is that
they are on `reclaim ed’ land. For example,
much of the central-city area of Singapore
since 1960s has been reclaimed, including
the East Coast area, which over the past tw o
decades has seen the arrival of new com mercial and business centres such as Marine
Parade. The Kansai, Chek Lap Kok and
Seoul airports are all built on reclaimed land.
Tokyo has been expanding through landfills
along the Tokyo Bay since the 1960s to
provide sites for its boom ing industries and a
new airport. The Haneda airport, only 15 km
from the city centre, was originally built as
an international facility, but has only supported a dom estic role after the openin g of
Narita. T he dem and for space in Hong Kong
since the mid 19th century has necessitated
land reclamation from its deep-w ater harbour.
W orld city form ation is a continuin g and
varied process. The few examples of related
urban physical transform ations in the Asia±
Pacific are presented as com mon features. A
description of this process, how ever, neither
provide s a prediction as to whether a particular city will continu e to participate in globalisation-driven growth in the future, nor does
it make possible the determination of a defined developm ent path for all cities. The
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GL OBALISA TIO N A ND TH E AS IA ±PACIFIC RE GIO N
next section presents generalised patterns of
differentiated developm ent among sets of cities in the region. The categorisation is not
meant to be exhaustive, but rather dem onstrates the ways that international functional
netw orks have im pacted city grow th and developm ent differently.
The Region al Function al City System
Although globalisation connotes an increasingly hom ogenised world, and has led to the
use of such labels as `global village’ , `global
market-place’ or `global factory’ , claims of
movem ents towards seamless urban space
are oversim plifications. T he `global city’
concept connote s a uniform developm ent that
obscures the multifaceted dynam ics of
growth for cities in the world city system.
Thus, rather than focus on the singular form
of `global cities’ , we present world city formation as a multifaceted process. E conom ic
interdependency and government interventions have also allowed for dive rgence in
urban growth and developm ent patterns
among cities in the region. As cities outside
the Asia±Pacific region, as defined in the
beginn ing of this paper, incorporate into the
regional city system, they too take on unique
and im portant functional characteristics. As
the functions of cities within the regional
system vary, so do their developm ent patterns.
Although directed in many ways, the
government-backed
pursuit
of
grow th
throug h the free market has privile ged the
process of capital accumulation. Many city
public officials have form ed coalition with
either land-based entrepreneurs or business
conglo merates. The weak tradition of local
autono my and lack of decentralisation am ong
nations in the region have inhibite d the formation of intermediate institutions and organisations for tighter regulation. Hence,
growth has follow ed the broad outlines delim ited by the particular unique functional
role of the city in the regional and global
econom y (Kim , 1997; L o, 1994; L o and Marcotullio, 1998; Yeung and L o, 1998).
Among a variety of developing urban net-
97
works within the Asia±Pacific region, the
emergence of a large urban corridor stretching betw een Tokyo and north-east China, via
the two Koreas, to Malaysia, Indonesia and
the Philipp ines, makes up the east Asian
regiona l system. The large urban corridor
consists of a set of smaller-scale urban corridors including the Pan-Japan Sea Zone, the
Pan-Bohai Zone and the South China Zone,
among othe rs (Figure 2). Choe (1996) provides an illustration of a mature transnational
sub-regional urban corridor, in which an inverted S-shaped 1500-k m urban belt from
Beijing to T okyo via Pyongyang and Seoul
connects 112 cities with over 200 000 inhabitants each into an urban conglo meration of
over 98 million people (Figure 3).
Cities networked into the functional city
system in the Asia±Pacific region have not
developed uniformly. The dem ands of the
emerging city system in the region have been
different for each city depending on a variety
of factors, but predom inantly upon the econom ic functions perform ed. Those cities that
are on the top of the urban hierarchy include
the major capital exporters. W ithin these cities, busine ss firm s play im porta nt com mandand-control roles within the world and the
region (for example, T okyo, Japan, and to a
lesser extent Seoul, Korea, and Taipei, Taiwan). These cities are developin g differently
from the major industrial FDI recipients (for
example, Jakarta, Indonesia, Shangh ai,
China, and Bangkok , T hailand). Further, tw o
entrepoÃ
ts (Hong Kong and Singapore) have
dem onstrated a level of cross-border developm ent not experienced as intensely as other
metropolitan centres. Lastly, som e cities in
the system have been developing as `amenity’ cities. These, urban centres are taking
steps to enhance their ecological environments in such a way as to attract investm ent
and econom ic activity.
Capital Exporters (Post-industrial Cities)
The post-industrial city is dom inated by the
processing of inform ation and know ledge
(Savitch, 1988). Tokyo, Seoul and to a lesser
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98
FU-CHE N LO AN D PE TE R J . MA RCOTU LL IO
Population (million)
20
15
10
6
3
1
Harbin
Changchun
Shengyan
BEIJING
I
III
II
Taiyuan
SEOUL
IV
Tianjin
JAPAN
Taegu
Jinan
Xi’a n
CHINA
KOREA
Nanjing
Chengdu
Wuhan
Chongqing
V
Pusan
TOKYO
Osaka
Shanghai
VI
PACIFIC OCEAN
VII
Taipei
Guanghou
IX
Myanmar
VIII
TAIWAN
LAOS
Urban cor ridor
G rowth triangle
Hong Kong
Natur al econom ic r egion
THAILAND
PHILIPPINES
BANGKOK
Manila
CAMBODIA
VIETNAM
X
Ho Chi Minh
XI
MALAYSIA
I
II
III
IV
V
VI
VII
VIII
IX
X
XI
XII
XIII
XIV
Turm en River Delta G rowth Triangle
The East Sea Rim (Sea of Japan) Econom ic Region
BESETO Ur ban Corr idor
Bohai Rim Economic Region
Yellow Sea Economic Region
Yangzi River Urban Corridor
Southern China Growth Triangle
Taiwan-Fujian Gr owth Triangle
Pearl River Delta G rowth Triangle
Baht Econom ic Region
Norther n M alaysian G rowth Triangle
SIJORI Gr owth Triangle
JABOTABEK Urban Corridor
Davao-M anado- Sabah Natural Econom ic Region
XIV
SINGAPORE
XII
Surabaja
Jakarta
Bandung
0
500
XIII
INDONESIA
1000 km
F igu re 2. Urban corridor s in east Asia. Source: Choe (1998, F igure 7.3).
extent T aipei exemplify the Asia±Pacific
style of post-industrial developm ent. Sassen
(1991) has identified the econom ic and social
order of `global cities’ , of which New York,
London and T okyo are examples. By now,
the argum ent is familiar to the reader. These
cities are the sites of concentrations of TNC
headquarters, multina tional banks and producer and business services. In T okyo, employm ent in manufacturing is decreasing and
employm ent in the service sector is increasing (Honjo, 1998). It houses a high concentration of central management functions
(CM Fs), research and developm ent firm s and
government agencies within Japan. At the
same tim e, the city is expanding, leaving
inner-city workers with longer com mutes
as many of the jobs rem ain in the innercity area.
L ike Tokyo, Seoul has a disproportionate
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Xingtai
Shijiazhuang
Beijing
Zhangjiakou
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Zibo
Qingdao
NORTH-KOREA
Pyongyang
Kitakyushu
Fukuoka
Kumamoto
Funabashi
Chiba
Yokohama
Tokyo
1000
500
200
5000
10 000
Population (1000)
Hamamatsu
Osaka
Amakasaki
Sakai
Nagoya
Kawasaki
JAPAN
SOUTH-KOREA
Sungnam
Kyoto
Kobe
Inchon
Suwon
Okayama
Taejon
Ulsan
Hiroshima
Taegu
Pusan
SEOUL
Nampo
Dalian
Anshan
Benxi
Fushun
F igure 3. T he Beijing±T okyo urban corridor. Source: Choe (1998, Figure 7.2).
Jinan
Tianjin
Tangshan
Jinzhou
Shenyang
Fuxin
CHINA
GL OBALISA TIO N A ND TH E AS IA ±PACIFIC RE GIO N
99
100
FU-CHE N LO AN D PE TE R J . MA RCOTU LL IO
share of the national popula tion (23 per cent
in 1995). Service and high-tech activities are
also highly concentrated within the Seoul
metropolitan area. In 1992, 57 per cent of the
total industrial establishm ents and 51 per
cent of their workers were located in the
Seoul M etropolitan Area (Hong, 1997). All
of Korea’ s TNCs are based in the capital city
and enjoy close contact with the central
government, a necessary condition for Korean business deals. While new `downtow ns’ , across the Han River have been
created by moving the various back offices
into locations close to the new towns of
Pyongch on, Sanbon and Bundang , Seoul
City retains the most im portant control-andmanagement functions (Kwon, 1996, 1998).
Also, like Tokyo, the amount of inboun d FD I
is small com pared to that of outboun d flow s.
In the single year of 1996, outboun d flows of
FDI from Seoul reached US$4.2 billion .
Com pare this with US$6.25 billion , the total
accumulated stock of inbound FD I in the city
as of 1996.
These relations take on specific form s in
the urban landscape. Both cities have con-
centrations of large megaprojects, particularly those with large high-rent residential
and com mercial spaces, R&D centres, and
recreational/entertainm ent facilities for the
upper-incom e
service-sector
employees.
Teleports for the smooth transm ission of inform ation and gleaming `intelligent’ buildings housing banks and other im portant
financial institut ions are developed in central
business districts. Nodal clusters of spatially
differentiated econom ic activities have appeared. This multicentric structure is seen in
Tokyo (Figure 4) where areas such as
Shibuy a, Ikebukuro, Ueno and Shinjuk u each
capture different econom ic roles within the
city’ s econom y. W hile other cities in the
region have similar types of developm ent, in
Tokyo they have highly evolved to meet the
needs of a post-industrial urban centre.
Tsukuba Science City, one of Japanese first
technolopolis centres is only 60 km from
central T okyo and includes both living and
working facilities within a satellite tow n
(Figure 5). It has attracted 120 private research establishm ents, including international
giants such as Du Pont, ICI, Intel and Texas
NARITA A.P.
Ikebukuro
Ueno
Makuhari
Shinjuku
Tokyo 6km
10km
Shibuya
Chiba
Rainbow Town
HANEDA A.P.
TOKYO BAY
Kawasaki
MM21
Yokohama
Tokyo-wan Bridge
F igu re 4. The T okyo region. Source: T okyo M etropoli tan Governm ent (1996).
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GL OBALISA TIO N A ND TH E AS IA ±PACIFIC RE GIO N
101
to Mito
NEC
AY
PR
LW
EX
AI
N
Intel Japan
T.R.Consortium
R
BA
Hitachi
JO
BA
N
JO
Tsukuba
University
to Mito
LI
ES
High
Energy
Physics
NE
SW
AY
TSUKUBA SCIENCE CITY
Eisai
Tsuchiura
Station
Fujisawa
Victor
Hitachi
Maxwell
Lake Kaum igaura
Science & Engineering
Life
Science
Centre
Sanyo
Biology &
Agriculture
Canon
Kyowa
Hakko
Japan
Texas
Instrum ents
to
Tokyo
0
500 km
Kirin
Beer
Residence and business areas;
National research institutes
Canon
NEC
to Tokyo
Business and research parks
Corporate laboratories
F igure 5. T sukuba Science City, Japan. Source: Edgingto n (1994, Figure 1.9).
Instrum ents and since 1985 the num ber of
private com pany researchers and their support staff have risen to 5000Ð almost matching the 6700 government researchers
(Edgingto n, 1994).
Seoul also has undergone significant industrial restructuring and spatial reorganisation since the 1980s. Manufacturing
industries have decentralised while advanced
services are concentrated in the core regions
of the city. Seoul’ s emerging multicentric
structure is closely related to intraregional
specialisation of producer services as each
centre has distinctive characteristics in term s
of local interfirm networks and firm structure
(Park and Nahm , 1998). Because of Seoul’ s
continu ed growth, the government is considering abandoning the `green belt’ ring concept and therefore intensifying use of a once
protected area.
Sites of F DI: Industrial Cities
Industrial manufacturing processes are vitally im portant to the growth and development of the regiona l production system and
hence these centres play an im porta nt role in
the functional city system. Industrial centres
include urban areas such as Bangkok (Krongkaew , 1996), Jakarta (Soegijoko, 1996)
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102
FU-CHE N LO AN D PE TE R J . MA RCOTU LL IO
and Shangh ai (Cui, 1995). These urban centres have recently experienced a decline in
agriculture and an increase in industrial concentration in the outer rings of the city. Employm ent data for Jabotabek dem onstrate this
trend (Tables 13 and 14). From 1971 to
1990, despite absolute increases, the share of
employm ent in all sectors declined in
Jakarta, and increased in the outer adm inistrative districts (kabupate ns) of Bogor,
Tangerang and Bekasi. Manufacturing developm ent continues to be stim ulated by various
governmentally sponsored activities including the creation of industrial parks within
these districts (Figure 6).
Areas outside the urban cores have relatively more available land and som ewhat less
stringent regulatory controls on manufacturing-related growth and investm ent by multinational corporations. Hence, industrial
activity start-ups result from the inflow of
foreign direct investm ent. Global integration
has affected the pattern of developm ent by
producing a ring of manufacturing plants
concentrated in a `dough nut’ fashion around
the city cores. In Jabotabek during the early
1990s, real estate, mining and industrialactivity-oriented FD I dispersed to the outer
area while construction, trading and serviceoriented FDI concentrated in the centre
(Table 15).
Tab le 13. T rends in the spatial distribu tion of
em ploym ent by sector in Jabotabe k, 1971±90
(percent ages)
Region/ District
1971
1980
1990
D KI Jakarta
Prim ary
Secondar y
T ertiary
12.3
66.4
74.2
7.1
64.9
71.8
5.3
51.0
59.6
B otabek
Prim ary
Secondar y
T ertiary
87.7
33.6
25.8
92.9
35.1
28.2
94.7
49.0
40.4
The Bangkok metropolitan region (BMR)
of Thailand is located centrally, adjacent
to the Gulf of Thailand. The Bangkok metropolitan
region
includes the Bangkok
metropolitan area (BMA) and the administrative regions of Nonthaburi, Pathum Thani, Samut Prakan, Samut Sakhon and Nakhon
Pathom . In the 1980s, manufacturing value
added in the BMR accounted for more than 75
per cent of the nation’ s total manufacturing
production. In the early 1990s, however, there
was a significant shift of industrial production
to the outer sections of the BMR and to
Rayong, Chon Buri, Chachoengsao, (the Eastern Seaboard Region). The Thailand Board of
Table 14. Trends in the spatial distribu tion of employm ent by
sector in Jabotabek , 1971±90 (thousan ds)
Region/District
1971
DKI Jakarta
Prim ary
Secondar y
T ertiary
46 122
202 901
895 377
Botabek
Prim ary
Secondar y
T ertiary
329 087
102 848
311 089
Jabotabe k
Prim ary
Secondar y
T ertiary
375 209
305 749
1 206 466
1980
1990
51 510
428 533
1 447 591
49 910
810 231
2 071 711
674 662
232 067
568 222
900 085
777 681
1 404 191
726 172
660 600
2 015 813
949 995
1 587 912
3 475 902
Source: BAPPE NA SÐ N LI Research Institute (1996).
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GL OBALISA TIO N A ND TH E AS IA ±PACIFIC RE GIO N
103
F igure 6. Jabotabe k: actual and proposed industri al estates, 1990 and 2010. Source: E xecutive Agency
D irectorat e (1990, Figure 4.4).
Table 15. Spatial distribut ion of foreign direct investm ent in Jabotabe k, 1990±94
(percent ages)
Sector
Constructi on
Trading
Hotels and restaura nts
Agricultu re
Transpor t, warehouse s and com m unicatio ns
Other services
W ood industri es
Non-m etal mineral industri es
Food industri es
Textile industrie s
Metal product s and m achinery
Chem icals
Other industrie s
Paper industrie s
Basic metal industri es
Mining
Real estate
DK I Jakarta
Botabek
100.0
100.0
94.3
90.9
86.0
83.5
24.2
22.8
19.4
14.2
10.7
6.7
4.4
3.1
2.0
0.0
0.0
0.0
0.0
5.7
9.1
14.1
16.5
75.8
77.3
80.6
85.8
89.4
93.3
95.6
96.9
98.0
100.0
100.0
Source: BAPPE NAS Ð NL I Research Institute (1996).
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104
FU-CHE N LO AN D PE TE R J . MA RCOTU LL IO
Investm ent suggests that Eastern Seaboard’ s
share of industrial investm ent increased from
23 to 63 per cent from 1991 to 1996 (Kittiprapas, 1998).
The flow s of FDI into the industrial cities
of Bangkok and Jakarta create an urban form
that includes industrial developm ent in the
suburb an or ex-urban fringes and com mercial
developm ent in the centre. W hile we have
only described these two cities, similar
changes are happening in other places such
as Shanghai. This developm ent is distinc tly
different from that associated with the capital
exporters.
The EntrepoÃts: Borderless Cities
Econom ic globalisation has stim ulated subregional econom ic co-operation in several
locales. Successful grow th triangles, a
unique ly Asian developm ent pattern, are localised econom ic zones involving several
countries; the centre of each is a major
metropolitan area. T hese can be viewed as
`borderless’ econom ies where the international division of labour has developed to
the urban centre’ s advantage (Thant et al.,
1994). Cities that have been im pacted by
borderless econom ies can no longer be considered distinct econom ies, but are really part
of a larger extended metropolitan region
(EM R) (Ginsburg et al., 1991; Macleod and
McGee, 1996). EMRs may stretch up to
100 km from an urban core and are characterised by high levels of econom ic diversity
and interaction, a high percentage of nonfarm employm ent and a ª deep penetration of
global m arket forces into the countrysideº
(Macleod and M cGee, 1996, p. 418). EMR
growth im plies the increasing need for developm ent to be seen as regional rather than
rural or urban.
An existing `borderless’ econom y has
grown between Singapore, Malaysia (Johore )
and Indonesia (Riau Islands) and is called
SIJORI. It revolves around the city-state of
Singapor e, which has recently reached out to
acquire the benefits that rural industrialisation can provid e. The grow th of the outer
reaches of Singapor e’ s core was directly related to Singa pore’ s maturing econom y. The
flows of people and goods from the city to
the outlyin g areas have accompanied an increasing level of cross-border capital flows.
Another exam ple of cross-border cooperative developm ent, involvi ng capital,
technological and managerial inputs, concerns the integration of Hong Kong, Taiwan
and China ’ s southern provin ces of Guangdong and Fujian. Hong Kong is the centre of
the Zhujiang Delta and has emerged as a
financial and headquarters centre. A large
propor tion of the manufacturing production
in Hong Kong has been relocated to southe rn
Guangdo ng
in
China.
Apart
from
Guangzhou, Shenzhen, Zhuhai and Huizhou,
most other cities within the delta are basically labour- and land-intensive production
areas. They are dom inated by m anufacturing
with a small tertiary sector. About 3±5 million workers in this part of China are reportedly employed in factories funded, designed
and managed by Hong Kong entrepreneurs.
Further, by 1990, about 20.8 per cent of
Hong Kong’ s im ports were from the interior
of China and 31 per cent of her exports went
to China (Sung, 1991). During 1990, as m easured in standard 20-foo t equivalent units
(TEUs), the trade volum e entering Hong
Kong was over 1 m illion TE Us. T he volum e
of trade by road betw een Hong Kong and
Shenzen totalled 805 000 TE Us and the volum e ferried in by vessels from all over the
Zhajiang delta totalled anothe r 281 000
TEUs (Chu, 1996).
In July 1997, China reabsorbed Hong
Kong. However, the `borderless’ econom y of
the city still exists, perhaps even more so.
Taiwanese capital has been attracted to the
city and much of it has been channelled
through Hong Kong interm ediaries to the
mainland. This is particularly true for Taiwanese investm ents in rapidly growing cities
such as Shanghai (Ning and W ang, 1996).
Also, trade relations between China, Hong
Kong and T aiwan are highly integrated and
considered an im portant part of each country’ s continu ed growth (Hwang, 1995).
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GL OBALISA TIO N A ND TH E AS IA ±PACIFIC RE GIO N
Amenity Cities
Notwithstanding the lack of attention given
to environm ental issues in som e predom inantly industrial cities within the regional
city system, globalisation provide s the im petus for the developm ent of ecologically
`sustainable’ policies. Evidence of this trend
can be seen emerging in Sydney and Vancouver. These tw o cities have three im portant
aspects in com mon: post-industrial econom ies integrated into the Asia±Pacific regional
econom y; `invitin g’ natural environm ents or
high concentrations of `amenities’ ; and, a
sufficiently high level of per capita welfare
accompanied by politica l acceptance for the
enhancement of the environm ent.
Globalisation forces im pacting Vancouver
and Sydney include financial and capital
flow s consistent with their post-industrial
econom ic structures, trade in goods (for Vancouver) and im migration flow s. Sydne y is
the capital of New South W ales and Australia’ s most global city. Vancouver, as part
of `Cascadia’ , has been considered an emerging `sub-global world city’ (McGee, 1998).
Among Australia’ s cities, Sydney has the
largest share of regional headquarters of
transnational corporations serving the Asia±
Pacific region. Sydney hosts three-quarters
of the international and dom estic banks operating in Australia. It also has the country’ s
largest stock exchange and its only futures
exchange. Sydney is increasingly the preferred location for multinational regional
HQs in the Asia±Pacific region. Of the regional head offices of the top 20 firm s in 4
sectorsÐ accounting, advertising, management consulting and international real estateÐ 39 per cent are in Sydney. These
concentrations of functions relate to both the
city’ s post-industrial econom y and its roles
as com mand-and-control centre (Murphy and
W u, 1998).
Trade is to Vancouver as inform ation and
financial flows are to Sydney. Among the
trading connections the Vancouver±Hong
Kong relationship has received the most attention. How ever, the Vancouver region has
also had significant linkages with Japan. Due
105
to the need to secure large quantities of
Canadian agricultural and industrial resources, 11 of Japan’ s major general trading
com panies, called sogo shosha, established
subsidiaries in Canada. Of these 11, 5 chose
Vancouver as their local headquarters. This
is because 60 per cent of the sogo shosha’ s
trade is done through the Port of Vancouver.
W hile Japan accounted for only 6 per cent of
Canadian export destinations in 1988, it
made up 27 per cent of that of British
Colum bia. Further, Japanese trade with
Canada expanded betw een 1960 and 1990
and the Canadian-based branches of the
Japanese sogo shosha generated most of the
business (McGee, 1998).
Both Vancouver and Sydney have recently
becom e popula r destinations for Asian
im migrants. In 1991, Sydney had 28.5 per
cent of Australia’ s born-o verseas popula tion.
Approxi matley 42 per cent of all recent
im migrants to the country were from Asia.
For Sydney, the growth of foreign-born residents is twice as fast as the grow th of the
total populat ion. Sydne y’ s greater integration
with the global econom y, including the local
airport’ s (Kingsford Sm ith) dom inance as a
hub of air traffic, plays an im portant role in
these flow s (Murphy and W u, 1998). Vancouver is one of the most rapidly growing
urbanised regions in North America. Between 1981 and 1996, the population of the
region increased from 1.2 million to 1.6 million. Of these, 600 000 people, almost onethird, arrived in the years 1991±94. Most
signific antly, net internationa l migration increased from 33 per cent in the 1980s to 59
per cent during 1991±94. Many of these migrants are from Asia (McGee, 1998).
T he cities’ environm ental amenities (climate, harbour, beaches, mounta ins, low levels of pollutio n), and m ulticultural character
are key to their com petitive advantages. Vancouver is part of a wide region of `geographical affinity’ which stretches from Southern
Oregon to the ski resort of W histler, 120 km
north of the city. How ever, one problem for
Vancouver is managing grow th as city expansion is sandwiched between the ocean
and the foothills of the Rocky Mountain s.
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106
FU-CHE N LO AN D PE TE R J . MA RCOTU LL IO
Sydney has many beaches, a beautiful harbour and climatic attractions that can be considered environ mental amenities. The state of
New South W ales and many local governments have com e to appreciate that these
amenities need protection. In large part, this
is because both Sydney and Vancouver are
major tourist stops within the region. Because of their natural amenities, they attract a
large and econom ically im portant num ber of
tourists.
The local factor in the creation of amenity
cities is essential. In the state of New South
W ales, plannin g includes tw o phases (strategic and developm ental). Consideration of
im plications of developm ent on the environment is mandated in both phases. As a result,
large areas of land earm arked for urban developm ent in Sydney’ s west and south-w est
were put on hold in the early 1990s due to air
polluti on concerns. At the project level, environm ental im pact assessment applies to
both public and private developers. Further,
citizens and non-go vernm ental organisations
continu e to press for more regulation and
greater consideration of environ mental im pacts of developm ent (Murphy and W u,
1998). In Vancouver, the urban region has
attempted to develop strategic plannin g processes that provide for both liveability and
reinforced com petitiveness. The Greater
Vancouver Regional District Authority
(GVRD), made up of 20 municipalities and 2
electoral areas, has developed a `Liveable
Region Strategic Plan for 2021’ . Important
com pone nts of this plan include, inter alia,
im plem enting a transport plan that involve s a
mix of private and public systems, im plem entation of environm entally acceptable
policies of waste removal and treatment, water provision and pollutio n control and com mitting more than tw o-thirds of the GVRD’ s
land base to a green zone to protect watersheds, parks, ecologically im portant areas,
working forests and farmland (Figure 7)
(McGee, 1998). Togethe r, Vancouver and
Sydney are carving out niches within the
regional city system that includes the provision of a high-q uality environ ment. This
environm ent invites both business (TNCs)
and im migrants and can be view ed as part of
their com parative advantages.
T he developm ent patterns described for
these urban categories are, at best, general.
Therefore it is not expected that every city in
the Asia±Pacific functional city system will
fit into this typolog y. The patterns represent,
we believe, the im pacts of international influences on the growth and developm ent of
cities in the region.
Conclusions
At the centre of global econom ic integration
and structural adjustm ent is the interlinkage
of megacities and other major metropolises.
In the Asia±Pacific region, econom ic and
social linkages form the basis of a functional
city system. Cities are the engines of econom ic grow th in the new global and regiona l
econom y. In the Asia±Pacific region, because of intense econom ic integration and
interdepende nce, an urban corridor has develope d.
T hose cities integrated into the functional
city system are undergoing the process of
world city form ation. W hether they are labelled as `world cities’ is irrelevant. Their
inclusion in the system has had direct effects
on their form and grow th. The dem ands of
the new econom ic and social order within the
region have selectively included cities within
the urban corridor running from Tokyo to
JakartaÐ i.e. large coastal cities with good
transport and com munication access. Econom ic interactions are translated directly into
a growing num ber of airports, containe r
ports, road and rail transport linkages and
teleports. These major infrastructure provisions are but a few examples of the world
city form ation process in action.
T he urban system in the region is com posed of hierarchically integrated cities.
Typical examples of cities that are considered the nerve centres of the system are
Tokyo, Seoul and Taipei. W hile they have
retained the com mand-and-control roles of
the regional and global econom ies, other aspects of production and distribution have
decentralised to locations in other NIEs and
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GL OBALISA TIO N A ND TH E AS IA ±PACIFIC RE GIO N
107
F igure 7. The G reater Vancouve r region’ s green zone plan. Source: G reater Vancouve r Regional D istrict
(1996).
ASEAN countrie s. At a low er intensity of
decentralisation, cities such as Hong Kong
and Singapor e have developed `borderless’
econom ies, althoug h their econom ies have
retained a strong neighb ourhoo d character.
Industrial centres, such as Jakarta, Shangh ai
and Bangkok, have developed an urban
growth pattern resembling a `doughn ut’ , with
com mercial developm ent occurring in the
centre of the city and manufacturing firm s
locating around the periphery. Amenity cities
are increasingly becom ing im portant to the
regional city system. They are highlig hted as
im portant urban nodes where econom ic activity is prom oting a certain level of `sustainable’ urban policy. E ach of these types of
cities are integrated into the developing urban corridor of east and south-east Asia and
each make up an essential com ponent of the
Asia±Pacific city system.
T he functional city system has both
grow th and sustainability policy im plications
for regional developm ent. Increasingly, cities
cannot be considered outside their role in the
regiona l or world city system. Enhancing
investm ents and future grow th will depend
on the strength of these linkages until a new
global or world econom ic form ation develops. Given that Asia, and hence the world,
can overcome the current crisis, econom ic
developm ent under globa lisation is expected
to continu e for the medium term. In terms of
sustainability, each city must develop local
responses that mediate the negative environmental externalities and unw anted social
im pacts accom panying this type of development. W hile som e cities are encouraged to
maintain and enhance their local environments and ethnic diversities, because of their
roles within the functional city system, others
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108
FU-CHE N LO AN D PE TE R J . MA RCOTU LL IO
are not. However, all cities in the system will
increasingly run up against lim iting factors to
growth, in all varieties. T he challenge for
current and future city managers will be both
to circum vent those lim its and to provid e a
basic quality of life for all citizens. These
tensions will only becom e both more sharply
defined and more im portant in the new millennium .
Notes
1.
2.
3.
4.
5.
6.
7.
8.
Foreign direct investm ent is defined as an
investm ent involvin g a long-ter m relation ship and reflectin g a lasting interest and control of a resident entity in one econom y
(foreig n direct investor or parent enterpr ise)
in an enterpri se resident in an econom y other
than that of the foreign direct investor (UN CT AD, 1997, page 295).
It is sim ply direct investm ent that occurs
across national boundar ies, but differs from
`portfo lio investm ent’ in that it is structur ed
to gain control of the firm .
Feagin and S mith cite Clairm onte and Cavanagh (1981, p. 5) for this num ber.
Since that point, the relative share of
Japanese FDI has decreased , yet Japan is still
a m ajor influenc e in the Asia±Pacific region.
T he average `travel- tim e’ budget is typically
betw een 1.0 and 1.5 hours per person per day
in a wide variety of econom ic, social and
geograp hical settings.
T he W orld Bank reports that ª a 1 per cent
increase in the stock of infrastr ucture is associated with a 1 per cent increase in gross
dom estic product º (W orld Bank, 1994, p. 2).
T his form ula w as used by the Asian Developm ent Bank to calculate the US $7 trillion
(US$280 billion annual) need for investm ent
in urban infrastr ucture in the region over the
next 25 years (see Brockm an and W illiam s,
1996).
In 1998, Singapore announc ed that it intended to turn itself into an `Intelli gent Island’ by the year 2000.
E ugene Kohn, architect in firm of K ohn
Pedersen Fox architect s in New York, as
quoted by Gebhart (1997).
Yoshito K ato, m anaging director of M ori
Bini Architects & E ngineers in Tokyo, as
quoted by Gebhart 1997.
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