The Efficiency of Location Determination in ChinaS Market Socialist Economic Development

Abstract

Location theory is often downplayed in the orthodox development economics discipline because the limitations of natural endowments are less restrictive in the wake of mass transformation and industrialization. However, good determination of location-friendly economic development policies has largely been responsible for the development in China. Moreover, these policies have sacrificed the balanced development discipline, which has been regarded as an untouchable rule in the traditional socialist method of development. By first reviving the importance of location theory using the economic development in China as a primary example, this paper then extends location theory to the Korean international development strategy and the East Asian region. While the Chinese regional development strategy was based on economically plausible conditions supported by location theory, Korea's strategy was biased toward a political rationale, which disregarded the logic of the market. The long-term success of government initiated special economic zones depends heavily on finding compatible location elements supported by economic factors. Thus, regional development should be based on rational consideration of economic needs, practical comparative advantages, and diversified promotional stimulations faithful to location theory.