Globalization and specialization of Chinese cities 2010-2019: diffusion waves of foreign and domestic multinational firms

Celine Rozenblat, Mehdi Bida


Chinese cities integrated very quickly global economic networks since 2010. Internationalized firms transformed the economies of these cities, reinforcing previous specializations or introducing new ones. Cities’ development largely depends on their industrial performance and conversely, industries’ development is supported by a set of specialized cities. Activities evolve according to product cycles and are more profitable for cities’ growth when they are in emerging stages. However, activities do not develop independently of each other, since a final product is often the result of a necessary contribution of different activity sectors. Their combinations create a potential for innovation, especially in cities that combine them. We assume that diversified cities, because of potential recombination of activities, are expected to have higher growth rates and because of their diversity, are more resilient to economic uncertainty than specialized ones. The aim of the paper is to describe the fast integration of Chinese cities in global networks and the evolution of the activities of foreign and domestic global firms. We test the hypothesis of the end of a wave of diffusion of the foreign firms, which first concentrated in large cities until 2010, reaching medium and small cities in 2013-2019, while a new wave of Chinese firms expanded, fostering largest cities. Therefore, the paper proposes to evaluate the extent to which cities were hierarchized from 2010 to 2019 by foreign or by domestic firms. In addition, we will evaluate how far cities benefited from specialization, diversity or related variety for both kinds of firms during these periods of time, for their resilience against unemployment and regarding the increase of wealth (GDP per inhabitant) considering the structural properties of their activities, and the interplay between activities’ dynamics.

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