Tracing Developmental States: Dynamic Strategic Coupling and Economic Development between Shenzhen and Hong Kong

• In Event: 20459 - New Frontiers of Globalization

Abstract

The concept of developmental states assumes that a rationalized and autonomous neo-Weberian state is a sine qua non for economic development. This paper argues that state capacities and cohesiveness are dynamic rather than static, and their evolution over time influences the trajectory of regional development. Using the case of the local developmental state in Shenzhen, I demonstrate that the patterns of strategic coupling between its local firms and foreign firms have been extensively influenced by central-local government relations and bureaucratic cohesiveness. Three distinct periods of strategic coupling between Shenzhen and Hong Kong firms can be identified: (1) from the 1980s to the mid-1990s, when Shenzhen firms coupled with Hong Kong firms; (2) from the late 1990s to the mid-2000s, when the former decoupled from the latter and coupled with the global market; and (3) from the late 2000s to 2020, when Shenzhen firms recoupled with Hong Kong firms. These processes of re/decoupling were driven by institutional and political arrangements within the Shenzhen local state and its interactions with other bureaucratic entities. Drawing on archival data and process tracing, this article presents an evolutionary perspective on developmental states and examines how these changes shape industrial policy and local firms’ participation in global production networks/global value chains.

Author

• I-Hsuan Hsu, University of Virginia