Port Cities and Trading Networks in China, Japan and Southeast Asia, 13th–21st Century
Chapter 14: Hong Kong versus Shanghai: Rivalry between Middlemen
14. Hong Kong versus Shanghai: rivalry between middlemen The Asian system of production does not rest solely on a manufacturing belt subject to the new organisational rules that we reviewed in the previous chapter. It operates thanks to platforms allowing for high added value services and permitting the power of manufacturing to be fully deployed. They enable commercial intermediation and the appearance of global logistics hubs. The interconnections between container traffic and air freight operations, or financial functions and the coordination of international subcontracting, create a network between cities rather than between countries. During the industrial revolution, investments were made in the communications of the time (roads or canals), but they have now shifted into airports and harbours with multiple functions. In other words they are more focused on the nodal points than on the lines of communication in this new network. And their profitability does not arise from their control over the trade routes alone. It is essentially derived from their command of research and innovation, the creation of new technical and legal norms and the coordination of international subcontracting. All these operations are based on service integration platforms. In order to grasp the full extent of this change, let us first take a further look at the ambiguity in the definition of a service. THE END OF THE DISTINCTION BETWEEN MATERIAL PRODUCTION AND SERVICE PROVISION The economic role of intangible activities has not always been immediately recognised. Unlike the Physiocrats, Adam Smith was the first to emphasise that...
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