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The Constitutive Role of State Structures in Strategic Coupling: On the Formation and Evolution of Sino-German Production Networks in Jieyang, China

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  • Wenying Fu
  • Kean Fan Lim

Abstract

Research on the strategic coupling between regions and global lead firms has largely assumed that the regional assets for coupling are ready made and are largely unchanging throughout the coupling process. This article takes this assumption as its critical point of departure and presents a new framework that considers how regional assets are actively (re)configured across multiple scales in ways that could redefine the prevailing mode of strategic coupling. The empirical basis of this framework is derived from a long-term case study on the formation and evolution of Sino-German production networks in environmental goods and services (EGS) in Jieyang, a relatively peripheral city in Guangdong province in China. The analysis draws from thirty-three interviews and seven focus group discussions, conducted between 2014 and 2020, with nonstate and state actors in Jieyang. Findings highlight how Zhongde, a coalition of Jieyang-based firms, transcended the limitations of structural coupling, which exemplifies uneven power relations between regions and lead firms, and attained more balanced coupling relations with German-led EGS global production networks (GPNs) through realigning interests with those of national-level institutions. Responding positively to the structural constraints and opportunities within a Chinese state structure based on experimental governance, Zhongde connected German EGS lead firms to the highly profitable but protected EGS market in China. This ability to jump between scales underscores the cross-scalar and dynamic aspects of strategic coupling: Zhongde was able to meet German-led EGS GPNs’ demand for market access and enhanced localization economies through reconfiguring regional assets. Abstracting from these findings, the article enhances the explanation of the evolution of strategic coupling by conceptualizing its intrinsic dynamism and incorporating state structural effects. Finally, it presents two directions for further research on GPN reconfigurations.

Suggested Citation

  • Wenying Fu & Kean Fan Lim, 2022. "The Constitutive Role of State Structures in Strategic Coupling: On the Formation and Evolution of Sino-German Production Networks in Jieyang, China," Economic Geography, Taylor & Francis Journals, vol. 98(1), pages 25-48, January.
    • Handle: RePEc:taf:recgxx:v:98:y:2022:i:1:p:25-48
    DOI: 10.1080/00130095.2021.1985995
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    Cited by:

    1. Sarfraz Hussain & Mohammad Enamul Hoque & Perengki Susanto & Waqas Ahmad Watto & Samina Haque & Pradeep Mishra, 2022. "The Quality of Fair Revaluation of Fixed Assets and Additional Calculations Aimed at Facilitating Prospective Investors’ Decisions," Sustainability, MDPI, vol. 14(16), pages 1-14, August.
    2. Gavin Bridge & Alexander Dodge, 2022. "Regional assets and network switching: shifting geographies of ownership, control and capital in UK offshore oil [Temporality and the evolution of GPNs: remaking BHP’s Pilbara iron ore network]," Cambridge Journal of Regions, Economy and Society, Cambridge Political Economy Society, vol. 15(2), pages 367-388.
    3. Huiwen Gong & Robert Hassink & Cassandra C Wang, 2022. "Strategic coupling and institutional innovation in times of upheavals: the industrial chain chief model in Zhejiang, China [Institutional change in economic geography]," Cambridge Journal of Regions, Economy and Society, Cambridge Political Economy Society, vol. 15(2), pages 279-303.

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