In recent years, academics and experts have tended to move from a micro perspective to a relatively macro perspective in their research on China's economy.
Since beginning the process of reforms and opening up to the outside world, China has been an economics laboratory. Various policies to stimulate economic growth have been considered and put into practice in different areas. Rural industrial enterprises, for instance, were often the focus of study by China studies scholars in the past. In contrast, today's scholars are concerned with larger issues, such as China's direction after entering the WTO. But if we do not continue to observe the elements that constitute China's grass-roots economy, the result may be that we see the forest but not the trees in relation to China's economy.
This was the tendency of many foreign researchers, whose explanations of Taiwan's economic miracle took into account only a "highly capable government" and largely ignored the small and medium-sized enterprises which had their origins in the country's dynamic society.
In the process of China's opening up, the Wenzhou model (
But the success of each was achieved under different conditions and with different allocations of capital.
The Pearl River Delta model enjoys superior resources compared to the other two because of the geographic proximity of Hong Kong to the delta. The common language of Cantonese, capital coming in from Hong Kong and the network of business relationships that were later established all caused this model to adapt successfully and thrive. This is also a quintessential "expatriate Chinese capital model."
By comparison, with far fewer resources available, the Wenzhou model and the Southern Suzhou model had no choice but to develop their own paths. In the Wenzhou model, the relationship between local government and business enterprises is one in which enterprises are primarily privately managed and individually owned while the local government provides services to businesses.
The Southern Suzhou model proceeds according to what foreign scholars refer to as "Local State Corporatism." That is, the local government single-handedly plans and intervenes in the economy, becoming the owner and controller of rural industrial enterprises. In short, the Southern Suzhou model is a form of collective economy with public ownership of property.
The success of these three regional economic development models in the initial stage of reforms naturally also became something for other provinces and regions to imitate.
There has been a great deal of discussion in China's economic circles and opinion forums, however, with competitiveness of the Southern Suzhou model declining in recent years.
Actually, although China's economists and others have discussed strategies for economic development from a macro perspective, how to stimulate the dynamism of the people in order to develop small and medium-sized enterprises is a matter that has received equally weighty attention recently.
After all, small and medium-sized enterprises may be one of the key pillars of future economic development. This is also why the way in which the Southern Suzhou model should be adjusted has been seen as an important indicator for the development of small and medium-sized enterprises in China.
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