Shanghai pushes for financial dominance

The approaching 2010 Shanghai World Expo raises the question of the financial future of China's Special Economic Zone, according to a February 24 New York Times article. Shanghai investment firms have recently looked to improving infrastructure to attract greater foreign investment and also keep mainland Chinese financial workers from leaving for Hong Kong for jobs. The China State Council has officially appointed Shanghai as the financial capital of the country, and to put the city on the map as a fiscally influential city. The government has been quick to spend whatever needed to make Shanghai an attractive center of investment, leading up to the creation of the World Expo to be held later in this year. Among the changes to be put in place in Shanghai's financial community are a lessening of taxation and currency restrictions, both indicators of China's growing liberalization of the economy. Recent investment ventures by foreign investment group Blackstone Group included environmental and energy initiatives in and around Shanghai, demonstrating the joint involvement of domestic and foreign financial firms.

Shanghai's new economic initiatives most obviously serve as an example of trends of economic change. With China close to the second largest economy in the world, it would be natural for Beijing to loosen the governmental restrictions in Shanghai to promote foreign investment. By opening up Shanghai to the rest of the financial world, China has demonstrated a growing focus in the private sector. This shift towards economic liberalization has brought about several public policy changes in infrastructure, economic liberties (specifically applied to Shanghai as a Special Economic Zone), and social welfare to attract more financial workers, who often go overseas or to Hong Kong. By building up Shanghai's economic performance, the Chinese government is working towards promoting domestic interests while attracting foreign interests. The need for greater foreign investment shows the onset of globalization, especially in cases such as China's, an economic powerhouse that depends heavily on the fiscal participation of other nations. China's willingness to privatize sectors of the Shanghai economy illustrates the huge impact of foreign companies' needs in order to do business in China.


Photo source: "riggslau," www.flickr.com/photos/riggslau




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China tackles conflict in Tibet through development

After the increase of Tibetan dissent in 2008, the Chinese government has turned to economic development to decrease conflict in not only the Tibetan Autonomous Region, but other heavily concentrated Tibetan communities in eastern China as well. Chinese president Hu Jintao called a Tibet planning conference to discuss the efforts that are to be made in the area. It seems clear that Beijing's tactic of economic development in Tibet is to enrich the lives of uprising Tibetans through material wealth. In the past, Tibet has resented the increasing presence of Han Chinese in Western China, and although the Chinese government has already allocated over $45 billion in Tibet since 2001, resentment seems to continue in the Tibetan region. The Tibet issue remains a bone of contention between the United States and China, as President Obama plans to meet with the Dalai Lama this year. To read more, click here.

This development in the conflict between Tibet demonstrates the relationship between political and economic change. China sees economic development as the key to smoothing over Tibet relations. It is easy to see how building up Tibetan wealth would reduce tensions with Beijing, however, the social cleavage between the Tibetans and the Han Chinese seem too deep to be solved through purely economic means. The cleavage that exists between the Tibetans and Han Chinese is ethnic, religious, and regional. As the Tibetans are one of the 57 ethnic groups living in China besides the Han Chinese, the case of Tibet shows the wide array of ethnic cleavages that exist in China even today. Religion also plays a big factor in this divide, as the Tibetans feel that their unique form of Buddhism is jeopardized by communist China's relative atheism. The Tibetans can be considered an independent nation as they have a unique cultural identity from that of the Han Chinese. Although Tibet is relatively independent in comparison with other regions in China, the country still desires greater autonomy. Many Americans see the issue in Tibet as a civil rights breach due to the influx of Han Chinese migrants in the region. Lastly, the case demonstrates domestic and international factors influencing policy-making and implementation, as American and other countries' sympathy for the Tibetans have influenced the Chinese government to take a path of economic development to stabilize the region.

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