An Asian perspective on the global city

An Asian perspective on the global city

Yue-man Yeung

Following the oil crises of the 1970s which put an end to the post-war uninterrupted economic growth on a worldwide basis, every country and every region has been undergoing restructuring and adjustment to the new global economic order. In the midst of an era of stirring changes since the 1980s, Asia has figured prominently, largely because of the extraordinary economic performance of certain Asian countries, most notably Japan, the Four Little Dragons, the ASEAN countries and China. Even countries in South Asia performed quite impressively, well above the average of developing countries. Asian countries have grown so rapidly in recent years that some scholars have declared that the Asian century has arrived, or that the next millennium will begin with the Pacific century (Yeung, 1993a).

In the present period of global economic interdependence, the differential

cities have become linchpins of the global economy. Only certain cities in Asia that have stra- tegic functional roles in the global economy are here viewed as global cities. Demographic weight is not a determining factor. In this respect, global cities in Asia are predominantly concentrated in East and South-East Asia (or Pacific Asia), although Bombay in India has been viewed as the closest to becoming a global city (Yeung, 1993b). Beijing and Shanghai are

Yue-man Yeung is Professor of Geogra- phy and Director of the Hong Kong Institute of Asia-Pacific Studies at the Chinese University of Hong Kong, Shatin, NT, Hong Kong. A geographer trained in Hong Kong, Canada and the United States, he worked in Singapore and Canada before returning in 1984 to Hong Kong. His latest edited volumes are: Pacific Asia in the 21st Century (1993), and with David Chu, Guangdong (1994). Another edited volume, with F. C. Lo, Emerging World Cities in Pacific Asia, will appear in 1995.

impact that globalization has on cities and regions has been sharply felt. It has been shown elsewhere that among developing regions and, indeed, all regions in the world, the Western Pacific Rim countries have to date derived the greatest benefit from the prevailing modes of global production, marketing and distribution (Yeung, 1993b). Under these global regimes, the dominance of certain very large cities - world cities or global cities, as they may be called - has come to the fore. These global

not yet global cities, not- withstanding their huge populations and rapidly expanding and growing international connections, and Calcutta, which has a large population but a stag- nating economic status, is likewise not a global city. To be sure, these and other large cities in Asia make sig- nificant contributions to the global and regional economies, but this paper never- theless focuses only on global cities in the region,

specifically on their functions, formation, changing socio-economic milieu, and daily life.

Asian global cities

In a recent study mounted by the United Nations University, the global cities in Asia included Tokyo, Seoul, Taipei, Hong Kong, Manila, Bangkok, Kuala Lumpur, Singapore and Jakarta (Lo and Yeung, forthcoming). Obviously there

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26 Yue-man Yeung

are other global cities in Asia, notably Osaka, Nagoya and possibly others. The central thesis of the study is that the global cities in Pacific Asia are networked in a functional system built around transportation, telecommunications, finance, production services and others. They fulfil at least four roles for the global economy, namely personal services, goods and commodity transactions, information flows, and financial services. As global cities, their importance is gauged by the functions they perform as control and management centres in the global economy, headquarters of transnational corporations (TNCs), and providers of advanced services, such as banking, finance, insurance, management consulting, engineering, advertising services, accounting, etc.

In Asia, the pre-eminent global city is Tokyo, whose metropolitan area is home to some 25 million inhabitants. Tokyo has 79 of Fortune’s 500 private firms concentrated in it, representing the first-ranking city in the world (Rimmer, 1986, p. 131). One-tenth of Japan’s manufacturing plants are located in Metropoli- tan Tokyo, most of them in small plants with four to nineteen workers. Tokyo has also become a centre of manufacturing innovation, a special type of global city, because of needs arising from the globalization of Japanese production. It has the highest concentration of small pilot production plants, venture busi- nesses, R&D centres, corporate headquarters, banks, information industries, foreign residents and institutions of higher education (Fujita, 1991). Indeed, Machimura (1992) has argued that Tokyo is primarily a world city distinguished by its economic importance. This is attributable to the rapid transnationalization of Japanese capital in the wake of the Plaza Accord in 1985. The number of Japanese manufacturing TNCs increased from 35 in 1975 to 90 in 1987. The Tokyo Stock Exchange is the second largest in the world, after New York, in terms of market capitalization. As the number of Japanese TNCs increased, a globalization of regional banks fol- lowed. In providing better services to their cli- ents, 34 of Japan’s regional banks had 77 over- seas bases, mostly in New York, London and Hong Kong. At the same time the globalization of the Japanese economy has been paralleled by an influx of foreign companies in Tokyo. In 1989, of the 1,251 foreign companies, 84.6 per

cent had headquarters in Tokyo, especially in manufacturing, service and finance (Fujita, 1991).

What is most notable during the past two decades is that countries in Pacific Asia have displayed greater structural interdependence from the standpoint of production and marketing. By the mid-l980s, Japan had already out- stripped the US in inter-industrial relations with the newly industrializing Asian economies (NIEs) and the Association of South-East Asian Nations (ASEAN) countries, in terms of fin- ished goods and raw materials. A non-treaty trading bloc is fast becoming a reality along the Western Pacific Rim and in this process, the global cities in the region have been playing pivotal roles in advancing and restructuring their economies (Lo and Yeung, forthcoming).

Hong Kong and Singapore, for instance, have witnessed rapid growth as financial centres, transport nodes in air and container traffic, and providers of advanced services in the global and regional economies. The rise of Hong Kong as a financial centre can be perceived in the transformation of its banking system during the period 1969-90. For example, the balance sheet size of the banking sector increased 263 times to HK$5,234 billion (US$671 billion), while customers’ deposits soared 100 times to HK$1,231 billion (US$l58 billion). At the same time, the amount due to banks abroad increased by 1,695 times, and loans and advances abroad increased 4,000 times. Of the largest 500 commercial banks in the world, 220 are present in Hong Kong in one form or another (Jao, 1993, p. 51). Indeed, nineteen of the twenty largest banks in the world maintained a fully fledged licensed bank in Hong Kong in 1989. Apart from Hong Kong and Singapore, Taipei and Bangkok also have aspirations to be financial centres in the region.

One facet of the globalization process in Asia has been subregional economic development across boundaries to harness differential factor endowments for the benefit of countries and subregions concerned. Termed growth triangles, Hong Kong and Singapore have been playing key roles in advancing co-operative economic development in, respectively, South- ern China and a subregion centred on Singapore involving Johore in Peninsular Malaysia and the Riau Islands in Indonesia. This is a new mode of

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An Asian perspective on the global city 27

transnational development geared to the world market and global economic processes (Yeung, 1995).

As the Asian NIEs continue to accumulate wealth and technological know-how, they have become exporters of capital in their own right. Their global cities have become control and management centres in manufacturing and service provision in the region and beyond. Hyun- dai, Goldstar and Samsung (South Korea), Singapore Airlines and HongKong Bank are eminent examples of TNCs from these countries. Thus, while Hong Kong is a major focus of foreign direct investment (FDI) from Japan, China and the US, it is also an important exporter of capital to many parts of the world, most notably to China and ASEAN countries, with Indonesia and Thailand being the favoured destinations. Between 1984 and 1988, the average outflows of Hong Kong FDI reached US$2,536.5 million (Yeung, 1994).

Global city formation

In order to better prepare themselves for the roles they are expected to play as global cities, many such cities in Asia have spared no efforts or costs in infrastructure investment, creating space within their territory, and facilitating in other ways for the global economic system to operate. These activities are designed to strengthen the platform from which global cities are to launch their initiatives as players in the global and regional economies.

Many Asian cities have invested heavily in physical infrastructure in recent years to cope with the new demands of a global age. One example is the construction of massive and futuristic airports in many global cities, such as Changi in Singapore, Chek Lap Kok in Hong Kong, Kansai in Osaka, the Seoul Metropolitan Airport and Nong Ngu Hao in Bangkok. The Kansai, Chek Lap Kok and Seoul airports are all built on reclaimed land. Indeed, many global cities in Asia have created urban space from reclaimed land on which new functions can be carried out. A new commercial and business centre in Singapore’s Marine Parade, along with large-scale highway construction, was created in the 1980s. Tokyo has been expanding through

landfills along the Tokyo Bay since the 1960s for its booming industries and a new airport. The Haneda airport, only 15 km from the city centre, was originally built as an international airport but has since the opening of Narita airport been used as a domestic one. Similarly, Hong Kong has been reclaiming more and more land from its beautiful and natural harbour, to such a degree that future reclamation plans have recently raised a public outcry about their speed and coverage. However, there is no doubt that Hong Kong is in need of more level land for further development.

As global cities are network-dependent and technologically oriented, the establishment of infrastructures for information networks is viewed as indispensable in the trend towards a post-industrial society or an ‘information society’. This trend is best exemplified by the Teleport project in Tokyo built upon a landfill in Tokyo Bay, only 5 km from downtown. It is conceived as an information and futuristic city consisting of elegant apartment blocks for 60,000 people and high-tech companies offering 110,000 jobs, in fields such as telecommunications, business information functions, international business, information networking, advertising, printing, etc. These will be featured in a telecommunications centre and a business intelligence centre, designed to assist in the globalization of flexible production and TNCs (Fujita, 1991, p. 280).

Along with the general trend to com- puterize and automate, many Asian cities have striven to construct intelligent buildings which have ‘beauty and brains’, following similar inno- vations in American cities. The Mitsui New No. 2 Building in Tokyo, completed in 1985, is regarded as the first one built in Asia. Since then, many intelligent buildings have mush- roomed in Tokyo and elsewhere. Manila’s 32- storey Stock Exchange Centre, completed in 1992, is run by an electronic nerve centre able to regulate air conditioning and lighting by moni- toring the weather. Seoul’s Sixty-Four Building, Hong Kong’s Central Plaza, and Kuala Lum- pur’s Petrona Towers are tall buildings of similar construction. The Petrona Towers, due for com- pletion in 1996, will dominate the landscape of Kuala Lumpur and at 1,475 feet will replace the Sears Towers in Chicago as the world’s tallest building. It will be taller than Hong

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28 Yue-man Yeung

Central Tokyo from the air, 1978. Georg GersteriRapho

Kong’s Central Plaza, at present the tallest building in Asia, by 250 feet. All these tall buildings not only vie for prestige, but they create at considerable cost much needed office and other space.

In a drive towards technology and knowledge, many global cities in Asia have invested in focused development of R&D, often in con- junction with tertiary institutions. In Japan the construction of a number of intelligent cities or ‘technopolises’ has been encouraged by the government. These are small cities built for high-tech industries, research institutes and col- leges. The best example is Tsukuba Science City located some 60 km north-east of Tokyo. In Singapore, Taipei and Seoul, science parks with substantial investment by governments have operated with distinct success, although Hong Kong is still to catch up with the other Asian NIEs in this respect.

Land reclamation and vertical development of space through tall and intelligent buildings are ways to increase space production, but global cities have also intensified urban renewal for the same reason. This process has taken different forms in different cities, but the redevelopment of much of the central city area of Singapore since the 1960s has been facilitated by legislation and the co-operation of the public and private sectors. Hong Kong only recently moved with vigour in this direction, with the establishment of the Land Development Corporation. On a smaller scale, many cities have witnessed neigh- bourhood gentrification, with a physical and economic uplift of the area. The revitalization of Lan Kwai Fong on the fringe of Hong Kong’s town centre as an upbeat recreation and commercial area is a classic example.

Urban redevelopment on any sizeable scale depends critically on a successful public-private

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sector partnership, as the experience of Japan has shown. Since the 197Os, private capital has been attracted to public development through incentives such as low tax, large subsidies, deregu- lation, etc. Even some nationally owned land within central Tokyo was sold to private real estate companies. Consequently, the urban space of Tokyo has become an arena for capital accumu- lation on a huge scale (Machimura, 1992, p. 120). By the same token, global cities in Asia have strenuously sought FDI through continual relax- ation of restrictive regulations and market opening. The stage is set for them to be more active players in the global and regional economies.

The changing socio-economic milieu

As global cities have evolved and changed to enable them to discharge functions that are by and large externally driven, they experience urban restructuring, spatially, economically and socially.

In terms of spatial outcome, an increase in control and management functions in a global city means urban functions and land-use patterns have been transformed. In Tokyo, the main trends of spatial restructuring entailed, among others, the formation of space for global control functions, the expansion of space for domestic control functions in central area districts, relo- cation of regional control functions from the central area to subcentres, and the location of an R&D division of high-tech industries in suburban areas. In essence, the urban functions worth locating in central districts are selected, old and unnecessary functions are removed, and new space for new functions is created. As a result, many districts within Tokyo have been forced to change their economic functions and spatial forms (Machimura, 1992, pp. 122-23). There is in general a differentiation of urban land use and hence location for functions for the global and domestic markets. For land use for the global market, there is a huge demand, resulting in the rapid escalation of rent. The extraordinary increase in the rental of office space in the central areas of Hong Kong, Tokyo and other cities in the region is a manifestation of this phenomenon. In 1994 Hong Kong had the dubious distinction of having the most expensive

office rental space in the world, but the situation has since eased, with sales values having report- edly decreased by 32 per cent from their peak to HK$10,500 per square foot in April 1995. It has also been observed that in Jakarta, Bangkok and other global cities in Asia, peri-urban areas have witnessed more rapid growth than the city proper in a process that has been described as extended metropolitanization (Ginsburg et a f . , 1991).

The new international division of labour has redefined the employment structure of global cities. While control, management and service functions have increased, manufacturing has declined in relative importance. Rimmer (1986, p. 144) has shown that in Tokyo, in contrast to industrial activities, wholesaling and retailing, finance, insurance and real estate, and a multi- farious range of services continued to grow between 1960 and 1980; only the government sector has shown little or no growth. More than 200 foreign financial institutions, including 82 banks, have set up in Tokyo, and the number of people involved in the market-oriented financial community is expected to grow from 25,000 in 1987 to 75,000 by 1997 (Fujita, 1991, p. 280). Similarly, as they restructured their economy, both Hong Kong and Singapore have experienced a sharp decline in the manufacturing sector in employment and contribution to GDP. Only 483,926 people were employed in manufacturing jobs in 1993 in Hong Kong, compared with 907,463 in 1980.

Equally pronounced as an outcome of their global orientations has been the changing population composition of Asia’s global cities. The presence of the Filipino population, primarily working as domestic maids, in the global cities of the Asian NIEs is widely accepted. They represent the largest concentration of foreign population in Hong Kong, totalling 90,700 in 1992. Filipinos, Thais and Canadians have more than tripled their populations in Hong Kong between 1980 and 1992. In Japan, too, international migration appeared for the first time in the mid-1980s. Illegal workers from Pakistan, Bangladesh and the Philippines have grown rapidly in recent years. Many converge in Tokyo and other large cities, contributing to the phenomenon observed in New York and Los Angeles, called the informalization of the core (Sassen-Koob, 1989). Excluding Koreans and

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Chinese, the legal foreign population in Greater Tokyo has been estimated to be around 300,000, representing only 1 per cent of its population (Masai, 1989, p. 158). Since the mid-l980s, the Tokyo Government has formulated a policy of ‘internationalization’, which provides for the physical and cultural conditions for accommo- dating foreign capital and foreign residents (Machimura, 1992, p. 125).

Daily life

The internationalization of Asian life which inevitably follows the development of global cities, has its costs as well as benefits. What are some of the negative dimensions?

One obvious consequence of the increased demand for space is the rapid appreciation of housing costs. This has been acutely felt by residents in Tokyo for the past three decades. They have been pushed further and further from Tokyo to the surrounding prefectures, as far away as 100 km. Long commuting time and the distance to work and services have been increasingly painful, so much so that the Tokyo Government has passed an ordinance that new office buildings must also have residential accommodation (Fujita, 1991, p. 282). The cost of residential property has similarly risen dram- atically in most global cities in Asia over the past two decades and has, as a result, sharpened social inequalities and tensions.

Although global cities in Asia have invested massively in infrastructure, growing affluence and the attendant widespread ownership of automobiles have led to horrendous traffic problems in Jakarta, Bangkok, Hong Kong and other cities. Singapore has had in place since 1975 a highly successful policy of limiting vehicular access to the central city area during the morning rush hours, but most other global cities in the region prefer other more palatable options, sup- plemented by mass transit systems. Theoreti- cally, advanced communication and telecommunications systems should reduce the need for face-to-face contacts, but they have not lessened the demands for intra-urban transport to date.

Subject to further research and verification, the globalization process has apparently led to growing polarization along class, gender and ethnic lines. Where sizeable foreign immigration

has occurred, legal or illegal labourers earning less than normal wages and living in dilapidated and congested neighbourhoods are bound to suffer. This has surfaced as a social problem in Tokyo, where ethnic segregation engenders social tensions (Machimura, 1992, p. 125). On the other hand, despite the economic imbalance between rich and poor, most Tokyoites are more or less content with their present situation (Masai, 1989, p. 157). The juxtaposition of wealth and poverty has never been a stranger to Asian cities, but recent development in Hong Kong, Bangkok and Jakarta has heightened social problems.

Another type of social tension has been reported in Tokyo. With the expansion of business space into traditional urban neighbourhoods, there arose direct conflict between the central districts and inner areas. Enormous land purchases by private developers have adversely affected living conditions and destroyed stable community relations nurtured over a long time (Machimura, 1992, p. 126). Similar neighbour- hood disruptions have also been experienced in Singapore, Hong Kong and Taipei, where urban redevelopment has proceeded. In the final analysis, one must question the meaning of development, and for whom.

On a daily basis, living in Asia’s global cities means being part of global development, constantly exposed to global chains of mass consumerism, finding easy access to technological gadgets, being fully informed of political and economic events around the world, earning a comfortable salary and living in decent living quarters. These conditions apply especially to active participants of the global economy. As for other residents, they can still partake of some of them. For a minority, life is the same as before, mired in poverty. However, as Prud’homme (1989, pp. 54-56) has observed for selected cities of the world, the quality of life has tended to improve over time, in the air we breathe, at home and at the workplace. At the risk of simplification, the generalization is probably applicable to global cities in Asia.

Concluding remarks

Global cities have emerged in Pacific Asia over the past two decades. They have been increasing


their contribution to the global and regional economies by successfully preparing themselves in various ways. In this regard, Singapore’s intentional differentiation and continual upgrad- ing of its functions over time is particularly noteworthy. It has established as its national mission to evolve into a developed country by the 1990s, with commensurate investment in human resources, technology and knowledge industry. No global city in Asia has set a clearer goal of achievement and delineated a more defined route to reach it.

In enunciating the process of city building in a global society, Knight (1989, p. 326) has summed up well:

Given the nature and power of the global forces that are now shaping them, all cities must redefine their role in the context of the expanding global society. Global cities . . . will not be determined by locational or geo- political considerations but by their capacity to accom- modate change and provide continuity and order in a turbulent environment.

In this turbulent environment, global cities in Asia appear to have fared well in creating global linkages and seizing global opportunities. Together, they have the potential to establish the Western Pacific Rim as a powerful centre of economic growth in the closing years of this century and beyond.

References

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GINSBURG, N.; KOPPEL, B.; MCGEE, T. G. (eds.), 1991. The Extended Metropolis: Settlement Transition in Asia. Honolulu: University of Hawaii Press.

JAO, Y.C., 1993. ‘Hong Kong as an International Financial Centre: Evolution and Prospects.’ In Lin, T. B.; Chyau, T. (cds.), The Asian NIEs: Success and Challenge. Hong Kong: Lo Fund Learned Society, pp. 39-82.

KNIGHT, R. V., 1989. ‘City Building in a Global Society’. In Knight and Gappert (eds.), pp. 326-34.

KNIGHT, R . V.; GAPPERT, G. (eds.), 1989. Cities in a Global Society. Sage: Newberry Park.

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SASSEN-KOOB, S., 1989. ‘New York City’s Informal Economy’. In Portes, A,; Castells, M.; Benton, L. A. (eds.), The Informal Economy: Studies in Advanced and Less Developed Countries. Baltimore: Johns Hopkins University Press, pp. 60-77.

YEUNG, W. C. H., 1994. ‘Hong Kong Firms in the ASEAN Region: Transnational Corporations and Foreign Direct Investment’, Environment and Planning A , 26, pp. 1931-56.

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YEUNG, Y. M. 1995. ‘Growth Triangles in Pacific Asia: A Comparative Perspective’. In Lew, S. J. (ed.), Tumen River Area Development Project: The Political Economy of Cooperation in Northeast Asia. Seoul: The Sejong Institute, pp. 57-80.

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An Asian perspective on the global city