Development characteristics and construction prospects for a multi-integrated economic zone in the South China Sea Region

  • JIN Fengjun 1, 2, 3 ,
  • YAO Zuolin , 1, 2, 3, 4, * ,
  • CHEN Zhuo 1, 2
  • 1. Institute of Geographic Sciences and Natural Resources Research, CAS, Beijing 100101, China
  • 2. Key Laboratory of Regional Sustainable Development Modeling, CAS, Beijing 100101, China
  • 3. College of Resources and Environment, University of Chinese Academy of Sciences, Beijing 100049, China
  • 4. Faculty of Geographical Science, Beijing Normal University, Beijing 100875, China
*Yao Zuolin (1990–), PhD Candidate, E-mail:

Jin Fengjun (1961–), PhD and Professor, specialized in economic geography and regional development.

Received date: 2020-06-30

  Accepted date: 2020-09-20

  Online published: 2021-05-25

Supported by

Strategic Priority Research Program of the Chinese Academy of Sciences(XDA19040403)

National Natural Science Foundation of China(41771134)


Copyright reserved © 2021. Office of Journal of Geographical Sciences All articles published represent the opinions of the authors, and do not reflect the official policy of the Chinese Medical Association or the Editorial Board, unless this is clearly specified.


The Belt and Road Initiative (BRI) instigated by China is catalyzing the evolution of a new global economic landscape. To cope with the great changes in the economic landscape, China needs to view the South China Sea Region (SCSR) as a strategic focus and study carefully the characteristics of regional development and explore the possibility for construction of a strategic multi-integrated economic zone which includes China and ASEAN countries. Based on key indicators, this paper outlines the overall development characteristics of the SCSR and analyzes the regional structural characteristics of industry and global trade based on the indexes of industrial structure similarity and trade commodity structure coincidence; the paper also depicts the spatial characteristics of the nine core growth areas (CGAs) in the region and discusses the construction prospects for a multi-integrated economic zone in the SCSR. The results show that, first, from 2000 to 2017, the main economic indicators of the SCSR grew quite well, and the development trend was much better than the global average for the same period. Second, driven by the global industrial transfer stages and spatial paths, the level of comprehensive development in the SCSR has evolved into four categories. Third, the index values for industrial structure similarity and trade commodity structure coincidence for the 11 countries in the SCSR have remained at a high level, and reveal an integration trend not only from the horizontal and vertical perspective, but also from an upgrading and downgrading standpoint. Fourth, nine CGAs have been established in the SCSR and the advantaged industries and the export commodity types between different countries exhibited the characteristics of convergence and complementarity due to the polarization and diffusion effects of the CGAs. Finally, from a long-term perspective, the SCSR has already acquired the internal and external conditions such as the 5th global industrial transfer initiative, the reconstruction of the global value chain, regional production-consumption networks and spatial entities for building a multi-integrated economic zone in the SCSR.

Cite this article

JIN Fengjun , YAO Zuolin , CHEN Zhuo . Development characteristics and construction prospects for a multi-integrated economic zone in the South China Sea Region[J]. Journal of Geographical Sciences, 2021 , 31(3) : 403 -422 . DOI: 10.1007/s11442-021-1850-z

1 Introduction

The South China Sea Region (SCSR) is playing an increasingly important part in the global economy. The region is developing in the direction of a diversified and integrated economic zone because of its superior geographical location, rapidly growing production-consumption networks, and potential for huge international trade and cooperation policies. Since 2008, East Asia, which may be represented as China and Southeast Asia, has become a new driving force for global economic growth with the region making a great contribution to world economic growth after the subprime crisis (Lipsky, 2017). From 2000 to 2017, the annual GDP growth rate of the SCSR reached 10.3%, which is much higher than the global annual average growth rate of 1.34%. Especially after 2008, the SCSR's annual average GDP growth rate was 8.3%. In contrast, the global average growth rate was just 1.23% for the same period. The SCSR has broken through the low-level equilibrium barrier which has been in existence for a long time, and its horizontal coordinated development model and vertical multi-level gradient structure are continuously improving the level of regional integrated development (Doppler, 2016). To cope with the evolution of the global political and economic landscape catalyzed by the Belt and Road Initiative (BRI), China needs to take into consideration the economic growth and opening-up policies at the domestic level and to structure the SCSR as a strategic pivot so that a strategic multi-integrated economic zone which includes China and ASEAN countries can be developed. This would represent an appropriate response to the global economic evolution of integration and localization in the new light of globalization, and it would have great significance in terms of gaining long-term strategic value for the reconstruction of China's bilateral and multilateral opening-up policy.
The essence of an integrated economic zone is a regional economic feature with clear geographical characteristics and rich multi-disciplinary connotations. Factors, such as regional resources, socio-economic conditions, spatial governance, and cooperation, will promote its formation and development (Cao, 2018). An economic zone is produced by the interaction of the natural geographical environment and the socio-economic activities from the perspective of formation and evolution (Chen, 2018). Elements of physical geography include geographical boundaries and natural resources, and socio-economic activities include unified administrative management frameworks, systems of regional industrial division, convenient regional transportation networks and cultural backgrounds which originate from similar sources (Liang, 2011; Liu, 2013; Hao and Zhang, 2017). Three characteristics of the economic zone, namely, homogeneity, limitations, and the boundary effect of regional resources, endow the economic zone with a profound concept of geographical scale, and the socio-economic activities with economic connectivity directly reflect the social aspect of the economic zone. An economic zone also exhibits features of internal unity and external independence with internal unity being manifested in its supranational and cross-regional management institutions, regional planning, financial systems and interdependent collaborative relations; meanwhile, the independence from external influences is more often caused by the industrial sectors and reproduction processes connecting to each of its internal regions (Wang, 2004; Zhang and Han, 2015; Wang, 2016). With regard to the dynamic mechanism, the formation and development of the economic zone are based on the support of natural resources, and this relies on both internal and external forces. Internal forces include regional natural resources, socio-economic dividends, mechanisms of government management and opening up cooperative frameworks, while external forces, which typically originate from the positive promotion of global industrial transfer and spatial agglomeration of capital, include technology, intelligence and other factors linked to the surrounding developed economies and international organizations (Shi and Wu, 2002; Wan and Xia, 2007; Sun et al., 2019).
Historically, the emergence and development of the integrated economic zone are mainly affected by global economic integration and localization processes. The concept of an integrated economic zone was proposed in the early 1950s, and can be used to describe the state or process transformed from individual economies into a multi-national economic community (Li and Luo, 2007; Wang, 2013). Since the 1970s, the promotion of integrated economic zones has become a main feature of global economic growth, as exemplified in multi-national economic communities such as the EU (European Union), NAFTA (North American Free Trade Area), APEC (Asia-Pacific Economic Cooperation) and other global integrated economic zones, which have gradually been established, not only to promote the rapid economic development of their own regions but also to change greatly the layout of the global economic landscape (Liang and Chen, 2007; Quan, 2015). At the beginning of the 1980s, China's economic development, driven by economic globalization and localization, grew rapidly under the stimulation of the 4th global industrial transfer plan, and Southeast Asia emerged as the next “hot area” during the 5th global industrial transfer plan after the first decade of the 21st century, meaning that the relay baton for global economic growth was handed over to Southeast Asia from China; this changeover officially opened the renaissance era of the Asian economy (Li and Nie, 2015).
Looking back to the 1980s, researchers have studied the economic networks between China and Southeast Asian countries based on historical trade exchanges, and these studies have revealed that due to the geographical proximity and cultural homology of both sides, the economic relationships between China and Southeast Asian countries are quite close, hence there are good prospects for strategic developments in the future. However, it has also been pointed out that the evolution of global geopolitical patterns and the intervention of great powers from outside this region will bring great uncertainty to the relationship between China and Southeast Asia (Liao, 1987; Zhang, 1988; Sun, 1989). At the beginning of the 21st century, based on strong manufacturing output and huge marketing demands, the degree of economic connections between China and Southeast Asia increased rapidly, and the call to build an integrated economic community between China and Southeast Asia became increasingly urgent, hence the recent development of the CAFTA (China-ASEAN Free Trade Area) became a reality. The CAFTA cooperation framework specifies a unified framework for industrial transfer, service trade, foreign investment, tax policy, monetary policy, and other fields, and significantly improves the level of integrated development between China and Southeast Asia (Jin, 2010; Chen, 2011; Fan and Hou, 2011; Chen, 2012; Liu, 2013). With the BRI initiative proposed by China in 2014, Southeast Asia has naturally become the frontier zone for implementation of this strategy. How to find a strategic focus for this initiative and enhance the level of integrated development between China and ASEAN has, therefore, become a hot topic from the standpoint of China (Zhou, 2015; Zhao, 2016; Gu, 2018).
To better cope with the great changes brought by the global and regional economic evolution, this paper seeks to outline the characteristics of the industrial and trade commodity structure of the SCSR, characterize the spatial growth patterns of the core growth areas (CGAs) in the SCSR, discuss the prospects for establishing a multi-integrated economic zone, and put forward targeted countermeasures and suggestions. These aspects will be conducive to the construction of China's strategic system for cooperative governance and opening up policy in the new era of globalization and localization, and, thereby, meet by proactive strategic adjustment, the demands brought by evolution of the new global economic landscape.

2 Research framework

2.1 Research area

The SCSR, which embodies a vast area of land and sea surrounding the South China Sea, is located in the southern part of the Chinese mainland and surrounded by Taiwan, the island of Java, the Andaman Islands and the Philippine Islands, and with a total area of about 12.5 million km2 (Figure 1). The administrative subjects in the SCSR include the provinces and the SARs (Special Administrative Regions) of China, as well as 10 countries of ASEAN. Specifically, part of China involves the Hong Kong Special Administrative Region and the Macao Special Administrative Region, and six provinces, Yunnan, Guangxi, Guangdong, Fujian, Hainan, and Taiwan. In 2017, the total GDP of the SCSR reached USD 557.5 billion, which accounted for 8.9% of the world's total. The total population of the SCSR in 2017 was 694.6 million with a global share of 9.2%. The per capita GDP of the SCSR reached USD 8027.2, which was slightly lower than the global average of USD 10,737.6. The total import and export volume of the SCSR was USD 577.5 billion, which represented 16.2% of the global total.
Figure 1 The study area (SCSR, South China Sea Region)

2.2 Research methods

(1) Multi-index evaluation of entropy
To date, the multi-index comprehensive development level evaluation system for economies issued by the UN (United Nations) and other international agencies includes the OECD (Organization for Economic Cooperation and Development) social indicators proposed by the OECD in the 1970s, the HDI (Human Development Index) proposed by the UNDP (United Nations Development Plan) in 1990, and the SDIS (Social Development Index System) proposed by the United Kingdom (UK) in 1996, and these are widely recognized throughout the world. The selected evaluation systems mentioned above include indexes covering many fields, such as nature, economy, politics, culture, and society including economic indexes, the internationalization indexes, the education indexes, the employment indexes, the gender equality indexes, the democracy indexes, and the natural environment indexes. To measure systematically the level of comprehensive development of economies in the SCSR, this study focuses on the current level of economic development and takes into account indexes relating to industry, society and infrastructure in order to compile a comprehensive evaluation index system as outlined in Table 1.
Table 1 Multi-index evaluation system of the comprehensive development level of the South China Sea Region
Target layer Criteria layers Indexes Units
comprehensive development level
GDP per capita 1000 USD
GNI per capita 1000 USD
GDP growth rate per capita %
Proportion of GDP of non-agricultural industry %
Contribution rate of non-agricultural industry to GDP %
Manufacturing production index -
Unemployment rate %
Per capita consumption expenditure 1,000 USD
Dependency ratio %
Internet penetration %
Density of newly registered enterprises Per 1,000 persons
Density of class highway km/100 km2
To evaluate the level of comprehensive development of each research unit in the SCSR, this study uses the entropy method to measure the weight of each index based on the above multi-index evaluation system. It should be noted that the extreme value method is used to normalize and undertake dimensionless calculations for the two negative indicators of unemployment rate and dependency ratio. The basic model is expressed as:
where L represents the level of comprehensive development of the research unit, n is the number of units to be evaluated, Sij is the standardized index of indicators to be evaluated, and Wj is the weight of index j. According to the principle for calculation of the entropy method, the larger the value of L is, the higher will be the level of comprehensive development of the evaluation unit, and vice versa.
(2) Economic Development Index
a. Industrial structure similarity index. This study adopts the industrial structure similarity index proposed by the UNIDO (United Nations Industrial Development Organization) to calculate the similarity index of the industrial structure between economies within a certain period of time (Ouyang and Sun, 2018), and the basic model is expressed as:
${{S}_{ab}}=\sum\limits_{j=1}^{n}{\left( {{S}_{aj}}*{{S}_{bj}} \right)}/\sqrt{\sum\limits_{j=1}^{n}{S_{aj}^{2}}*\sum\limits_{j=1}^{n}{S_{bj}^{2}}}$
where Sab represents the industrial structure similarity index of economies a and b, Saj and Saj represent the proportion of industry j in the gross national product of economies a and b, and n is the number of industries in the economies. This part of the study adopts the data of the UNED (United Nations Economic Database) to retrieve industrial values for agriculture, forestry, animal husbandry and fisheries, mining and public utilities, manufacturing, construction engineering, wholesale and retail and catering, transportation, storage and communication; the corresponding output codes of the seven major industries and other industries in the ISIC (International Standard Industrial Classification) are A-B, C-E, D, F, G-H, I and J-P.
b. Trade structure coincidence index. The index for trade structure coincidence is used to study the degree of coincidence of commodity structure in the global trade of different economies. This part uses the export commodity similarity index model proposed by Finger et al. in 1979 to study the trade structure coincidence index of economies in the SCSR (Xue, 2018). The model is constructed as:
$FK{{S}_{ab}}=\left[ \sum\limits_{k=1}^{n}{\left( E{{P}_{ak}}E{{P}_{bk}} \right)} \right]*100$
where FKSab represents the degree of coincidence index for the commodity structure in the global trade of economies a and b; EPak represents the share of the commodity k exported from country a to a third country in the total commodity exported scale from country a to the third country; EPbk means the share of commodity k exported from country b to a third country in all products exported from country b to a third country. This part of the study uses the data of the UNTD (United Nations Trade Database), which focuses mainly on 14 major categories including the chemicals industry and related industrial products, plastics and their products, rawhide leather and their products, etc. The corresponding commodity code numbers in the international customs HS code system are 28-93.
(3) Revealed comparative advantage analysis
The location entropy, also known as the specialization rate, is commonly used to measure the spatial distribution state of elements within a certain area and reflect the specialization degree of a certain industrial sector or the role within a higher-level area; the term is widely used to identify industrial sectors with comparative advantage (Chen, 2017). The basic model is expressed as:
$L{{Q}_{ij}}=\left( {{L}_{ij}}/{{L}_{j}} \right)/\left( {{L}_{i}}/L \right)$
where LQij represents the value of the location entropy, Lij represents the output value of industrial sector i in country j, Lj represents the total output value of all industrial sectors in country j, Li represents the total output value of industrial sector i in the whole world, and L represents the total output value of all industrial sectors in the whole world. According to the connotation of the index, if the value of LQij is higher than 1, this indicates that this industry or sector possesses a comparative advantage globally.

2.3 Data sources

The data used in model (1) are from the UNSED (United Nations Social Economic Database,, the Annual Socio-Economic Statistical Reports of Southeast Asian Countries and the Statistical Yearbooks of Provincial Administrative Regions of China. The industrial data of model (2) are derived from the UNSED (United Nations Economic Database, The international commodity trade data of model (3) is derived from the UNTD (United Nations Trade Database, The main national industry and trade commodity data of model (4) are from the UNED (United Nations Economic Database, unsd/snaama/index) and the UNTD (United Nations Trade Database, https://comtrade. Other relevant data of Southeast Asian countries, such as the first-level administrative area, population, GDP, import and export volumes, are all derived from the official website of the corresponding National Bureau of Statistics. This study also collected data from the China Statistical Yearbook, the International Statistical Yearbook and the Southeast Asia Blue Book including the Southeast Asia Regional Development Reports.

3 Regional development trends and characteristics of the SCSR

3.1 Regional development trends and spatial differentiation characteristics

(1) The fastest-growing region in the world
The regional economic development of the SCSR has become closely integrated into the world economy because the evolution of the main development indicators is highly consistent with the global economic development process, and the rate and benefits of regional economic development are significantly better than that of the global average levels. The total GDP of the SCSR increased from USD 1,086.0 billion in 2000 to USD 5,575.3 billion in 2017, a more than 4-fold increase. The annual average growth rate of GDP in the SCSR reached 10.3% for the period 2000 to 2017, which is much higher than the global average during the same period, and its share in global GDP also increased from 3.23% to 6.89%,
indicating the importance of economic growth in the SCSR, which clearly impacted on the global economic landscape. As for the GDP per capita in the SCSR, it reached a relatively high level of USD 8,027.2 in 2017, which was reasonably close to the upper-middle national income standards set by World Bank in 2015, despite it varying greatly within the inner areas of the SCSR. The demographic dividend was the comparative advantage of the SCSR in bringing strong development momentum, not only due to the total population reaching 69.5 million in 2017, which provided a huge consumer market for regional development, but also because of the population structure. The proportion of the labor force aged between 20 to 54 in the 10 ASEAN countries in 2017 was higher than 45%, thus laying a solid foundation for regional industrialization and urbanization for the next stage of global development. Meanwhile, the SCSR had become deeply connected to global production-consumption networks, because the global commodity trade of the SCSR had improved significantly to USD 5,775.2 billion in 2017, increasing by 2.6 times compared with the year 2000; and the annual average growth rate of total imports and exports reached 8.4%, which was far ahead of the global average growth rate (Figure 2).
Figure 2 Evolution trends of the main development indicators of the South China Sea Region
(2) Clear spatial differentiation of the level of comprehensive development
Regional development can be considered as a process that extends from a low-level equilibrium state to a high-level equilibrium state, and the SCSR had been in a transition from a non-equilibrium situation to a high-level equilibrium situation up to 2017. Although there has been significant progress in the overall level of economic development of the SCSR in recent years and the overall level of development has greatly improved compared with the beginning of the 21st century, there still exists a large level of spatial differentiation concerning comprehensive development within this region. In 2017, the countries in the SCSR had evolved into four grades or categories: the first group included Macao, Singapore, and Hong Kong; the second included Guangdong, Fujian, Taiwan, Brunei, and Malaysia; the third included Yunnan, Guangxi, Hainan, and Thailand, Indonesia, the Philippines, and ietnam; the fourth group comprised Myanmar, Laos, and Cambodia, which still remained at a relatively low level of development (Figure 3). The level of comprehensive development of each administrative subject was profoundly affected by the economic and global political environments in the respective countries, especially by industrial transfer at a global level. Hong Kong, Taiwan Province and Singapore, which are also called NIEs (New Industrial Economies), were the first tranche of regions to gain dividends from the 3rd global industrial transfer plan since the 1960s, and they belonged to the first or second group of the SCSR in 2017. Thailand, the Philippines, and Indonesia, which are in the third group, are all members of the TCEs (Tiger Cub Economies); they developed rapidly in the early 1990s due to the industrial transfer-in from Asian, American, and European countries, and their industrial development and global commodity trade still has a relatively solid foundation in spite of suffering heavy losses during the Asian financial crisis in 1997. Vietnam became the main beneficiary for the 5th global industrial transfer plan, the country gradually undertaking global industrial transfer-ins from the southeastern coastal areas of China and developed countries in Asia, Europe and America; the momentum of economic development for countries with emerging economies, in particular Vietnam, was strong based on the regional and global development trends.
Figure 3 Spatial pattern of comprehensive development level of the South China Sea Region in 2017

3.2 Structural characteristics of economic development

(1) Low-level complementarity and competition in industrial sectors
Resource endowment is an important factor that promotes the formation and evolution of industrial structure. The similarity and complementarity of industrial structure in the SCSR can be used to illustrate the structural characteristics of the level of integrated industrial development in this region. From 1970 to 2017, only 3 of 45 industrial structure similarity index groups were ​​lower than 0.5, which accounted for just 6.7% of the total. This indicated that the industrial structure similarity indexes among the 10 ASEAN countries remained at a relatively high level in 2017 (Figure 4a). The industrial structure similarity index between Indonesia and Thailand was the highest because the leading industrial types in the two countries were completely the opposite. For the same reason, the industrial structure similarity index between Brunei and Myanmar was the lowest because of the relative similarity in industrial types. Statistical analysis indicated that the similarity indexes of industrial structure among countries in the SCSR during this period also showed a converging trend, which continued to improve and become consolidated as a result of integrated development of the economies of the China-Southeast Asian countries, all of which were driven by economic globalization and the 5th global industrial transfer plan. From the perspective of China, the industrial structure similarity index between China and the 10 ASEAN countries was 0.77, which was slightly lower than that of 0.80 for the 10 ASEAN countries with the exception of Singapore and Brunei. The overall industrial structure similarity indexes of China and the above eight ASEAN countries showed a declining trend. In terms of the structural characteristics of the seven major industries in the SCSR countries, the proportions of output values (ranking order: high to low) per sector are as follows: mining, primary manufacturing, and public utilities (32.8%), others (29.10%), wholesale, retail, catering and hotels (12.39%), agriculture, hunting, forestry and fisheries (8.63%), construction engineering (6.75%), manufacturing (5.15%), transportation, storage and communications (5.15%). It may be seen that due to the structure of the natural regional resources and the level of economic development, the low-level characteristics of industrial structure in the SCSR is clear, while the volumes and proportions of the industrial sectors such as primary manufacturing, wholesale, retail, and catering are relatively large. With the exception of Singapore, the R&D capabilities for the other ASEAN countries are insufficient, making the proportions of high-end manufacturing and high-end service industries inadequate. As a whole, the industries and sectors for R&D in most ASEAN countries are still at the cultivation stage.
Figure 4 Relationship matrices of industrial and trade structure between the South China Sea Region countries(Note: Country names in Figure 4 and Table 2 are abbreviated with codes from GB/T 2659-2000)
(2) Integration trend of multi-level commodity trade at a global level
According to the structural characteristics for global trade in the SCSR, it was confirmed that the SCSR was in a process of rapid integrated development. From the ASEAN perspective, 15 of the 45 global commodity trade structure coincidence indexes were lower than 0.5, which accounted for 33.3% of the total (Figure 4b). The overall global commodity trade structure similarity index between the 11 countries was 0.93, which was clearly higher than the 0.81 value for the industrial structure similarity index. By contrast, the average global commodity trade structure coincidence index between China and the 10 ASEAN countries was 0.9, which was lower than the 0.94 value for the internal ASEAN countries. Single comparison group analyses showed that the global commodity trade structure coincidence index between Singapore and Thailand was the highest because these countries basically have similar global trade commodity types, whereas Brunei and Laos had the lowest index because the global trade commodity types were dissimilar. Similarly, from 1970 to 2017, the global commodity trade structure coincidence index in the SCSR still exhibited a converging trend, which indicated that the category of regional trade commodities in the SCSR had a trend of gradual homogenization, and this also demonstrated that the formation of an integrated production market in the SCSR was progressing smoothly. It was also found that the standard deviation for the global commodity trade structure coincidence index attained 0.064, which was higher than that of the industrial structure similarity index of 0.027. It may be concluded that, compared with the industrial structure, the types of export commodities in the SCSR were more diverse and hierarchical. Among the 14 main types of global trade commodities, mechanical products (39.75%), transportation and aviation equipment (29.17%) were the two main commodity types having a dominant position; precision instruments (8.51%), plastics and rubber products (8.36%), natural metals products (4.61%) and base metals products (4.18%) also accounted for a relatively large volume of the global trade. In general, the global commodity trade structure displayed a combined trend of both high-end and low-end trends due primarily to the heterogeneities in the geographical distribution of natural resources, the global trade network node functions, and the global commodity value chains for the economies of the SCSR (Table 2).
Table 2 Industrial and global trade commodity structures for countries in the South China Sea Region
Types Sectors ISIC/
Proportion (%)
Industrial structure Agriculture, hunting,
forestry, fisheries
A—B 8.4 1.0 21.3 11.3 16.9 7.3 19.2 8.1 0.0 6.8 14.6
manufacturing, utilities
C—E 34.4 50.0 16.6 24.9 25.8 28.1 24.1 19.6 17.2 25.6 26.3
Manufacturing D 0.0 11.1 14.6 17.3 7.8 18.4 19.1 16.3 16.1 21.3 14.6
Construction F 6.8 2.2 11.3 8.9 6.3 4.0 5.2 5.9 3.6 2.0 5.4
Wholesale, retail trade, restaurants
and hotels
G—H 11.3 5.5 12.7 13.6 14.6 15.9 16.7 17.0 16.6 16.5 13.8
storage and communication
I 4.5 3.5 7.4 7.9 3.0 7.4 10.5 5.1 9.6 5.9 3.2
Other activities J—P 34.5 26.8 16.0 16.0 25.5 19.0 5.3 28.0 37.0 21.9 22.2
Global trade
commodity structure
28-38 1.5 0.3 0.0 3.2 40.6 1.8 1.5 1.6 0.4 0.7 3.5
Plastic and rubber 39-40 6.9 0.6 27.6 9.4 0.6 15.1 3.9 4.8 14.0 15.4 10.7
Leather and gut 41-43 0.1 0.1 0.6 0.3 0.0 0.1 0.6 0.0 0.1 0.8 1.5
44-46 1.3 0.6 9.5 15.8 7.5 7.1 17.8 9.0 0.1 3.3 8.0
Cellulose and pulp 47-49 0.0 0.5 0.0 9.6 0.2 0.0 0.2 0.7 0.4 0.2 0.0
Textile raw
50-63 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.3
Shoes, hats, and feathers 64-67 0.4 0.0 3.5 0.2 0.0 0.1 0.4 0.1 0.0 0.1 1.1
Stone and
68-70 1.1 0.2 0.0 0.6 0.0 0.9 0.2 0.4 0.1 0.7 1.3
Natural metal 71 1.8 4.9 47.5 22.1 42.7 6.1 30.6 8.7 16.3 19.3 2.2
Base metal 72-83 4.2 4.5 0.0 13.2 1.0 4.7 27.6 0.7 1.5 1.3 10.8
84-85 37.8 27.2 10.5 23.1 4.1 48.2 12.0 58.1 50.1 50.4 36.4
Transportation equipment 86-89 37.8 0.9 0.0 0.1 0.0 0.1 0.0 0.0 0.1 0.6 0.0
90-92 7.0 60.3 0.8 2.3 3.3 15.9 5.2 15.6 16.8 7.2 24.2
Weapons and
93 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.3 0.0 0.0 0.0

4 Development characteristics of core growth areas (CGAs) in the SCSR

Nine CGAs have been established in the SCSR with the aim of achieving world-leading impact, and a dominant and radiating influence in the region up to 2017. In line with various factors including global economic influence, the level of regional economic development and national policy priorities, these nine CGAs could be classified into two groups, the first group comprising two world-class CGAs, namely, the Guangdong-Hong Kong-Macao Greater Bay Area and the Singapore-Kuala Lumpur Economic Corridor, while the second group included seven regional CGAs, that is, the Gulf of Thailand Economic Belt, the Taiwan Strait Economic Circle, the Central Yunnan Economic Zone, the Philippines Capital Economic Zone, the Beibu Gulf Rim Economic Circle, the Jakarta-Bandung Economic Belt and the Vietnam Mekong Delta Economic Zone. The total population, the GDP, the population density, the GDP per capita and the spatial GDP output efficiency of the above nine CGAs were much higher than the average level of the entire SCSR. The CGAs have played the role of a spatial carrier in promoting the rapid development of the SCSR, and, in addition, have been an important driving force for optimizing the spatial growth pattern of the SCSR (Table 3).
Table 3 Key development indicators of the CGAs in the South China Sea Region
NO. CGAs Area
(USD billion)
Population density (person / km2) GDP density
(USD billion
/ km2)
GDP per capita (USD)
1 Guangdong-Hong Kong-Macao Greater Bay Area 56,508.2 69.5 1,515.5 1230.2 26.8 21,801.3
2 Singapore-Kuala Lumpur Economic Corridor 36,333.9 27.7 594.4 763.4 16.4 21,429.9
3 Gulf of Thailand
Economic Belt
22,962.0 13.3 254.9 581.2 11.1 19,099.0
4 Taiwan Strait
Economic Circle
282,185.6 104.3 1,121.7 369.8 4.0 10,750.6
5 Central Yunnan
Economic Zone
114,600.0 21.1 150.6 184.1 1.3 7,135.1
6 Philippines Capital
Economic Zone
221,81.6 24.1 146.9 1086.3 6.6 6,098.5
7 Beibu Gulf Rim
Economic Circle
140,764.0 66.5 386.9 472.5 2.5 5,817.5
8 Jakarta-Bandung
Economic Belt
35,261.0 47.8 271.8 1356.1 7.7 5,683.1
9 Vietnam Mekong Delta Economic Zone 47,100.0 27.0 105.0 572.3 2.2 3,895.7
Total 757,896.3 401.4 4,547.7 529.6 6.0 11,329.2

4.1 Coexistence of polarization and diffusion effects in the CGAs

A regional growth pole is the core power source for promoting regional economic development. This growth pole allocates mainly comprehensive resources and facilitates spatial networks through the effects of polarization and diffusion, which directly promote regional economic growth. Of course, these two effects usually do not operate at the same time but follow a trend of phased alternation and succession. With wide geographical scope, the SCSR displayed various implementation characteristics in the different economies. In general, the SCSR was still at the stage when polarization effects were dominant, and most of the areas, with the exception of the nine CGAs, were still at a relatively early stage of development. Also, the dominant mode of regional economic growth was still resource-driven, and the stages of high-level development such as globalization, urbanization, industrialization and informatization were modest, and the systems of infrastructure and social security were still lagging. As viewed from within, the diffusion effect existed primarily within these nine CGAs, in which strong allocation and organizational function for natural and social resources such as human resources, capital, information and policies occupied the main position. With respect to space, these nine CGAs had formed axis-spoke spatial diffusion type networks in terms of the regional production networks, urban systems, spatial forms, and infrastructure construction. Among the nine CGAs, the Guangdong-Hong Kong-Macao Greater Bay Area and the Singapore-Kuala Lumpur Economic Corridor were the areas where the diffusion effects of growth were most pronounced within the SCSR.

4.2 Service-oriented characteristics of regional economies continued to undergo consolidation

The regional economic structure of the SCSR gradually underwent an optimization process, and the primary feature was that the service sectors had become the main driving force for regional economic growth. In 2017, the proportions of three industries contributing the most to the GDP were 8.5%, 42.6%, 48.9%, respectively, and the proportion of services was higher than that of manufacturing, thus services were the dominant industrial sector. Specifically, among the nine CGAs, four CGAs, including the Guangdong-Hong Kong-Macao Greater Bay Area, the Singapore-Kuala Lumpur Economic Corridor, the Jakarta-Bandung Economic Belt and the Philippines Capital Economic Zone, had higher service proportions than manufacturing, and the service proportions in the other five CGAs, including the Gulf of Thailand Economic Belt, the Taiwan Strait Economic Circle, the Beibu Gulf Rim Economic Circle, the Central Yunnan Economic Zone and the southern Vietnam Economic Zone, were just slightly lower than manufacturing, but the proportion of services for these five CGAs had increased since 2015. As to the specific service sectors, the development of service sectors in the two world-class CGAs had become closely integrated into the globalization process, and productive service sectors such as business services, modern material circulation services and knowledge services had become the leading industrial sectors in the Guangdong-Hong Kong-Macao Greater Bay Area. The service sectors of the Singapore-Kuala Lumpur Economic Corridor followed the new evolutionary trend of the international trade mechanism, making it one of the most prominent regions for building bilateral free trade networks all over the world (Wang, 2017). Regional CGAs such as the Gulf of Thailand Economic Belt, in which traditional service sectors like wholesale and retail, maintenance, catering, transportation, finance, real estate and housing leasing, public services and residential services, also achieved rapid development driven by the spatial polarization effect.

4.3 Competitive advantages in global competition with respect to industry and trade

The results of the entropy model showed that some industry categories and global trade commodity types in the SCSR already had secured advantages in global competitiveness, especially in the resource-intensive and labor-intensive manufacturing sectors formed on the basis of superior regional resources and sufficient labor supply. It has been acknowledged that the SCSR had entered the stage of large-scale output production, specialization, market-orientated trade and globalization, and this was the stage where trade in merchandise occupied a high global market share. Specifically, the two world-class CGAs, the Guangdong-Hong Kong-Macao Greater Bay Area and the Singapore-Kuala Lumpur Economic Corridor, had competitive advantages in the service sectors such as wholesale and retail trade, transportation, storage and communications, and in the production of major types of precious metal products, mechanical products, electrical equipment and precision instruments, which can be taken as their dominant industrial products in global trade. In terms of the seven regional CGAs, there were two major industrial sectors and their corresponding products that had become highly competitive in the global consumer market. The first category was resource-based processing sectors that rely on particular regional resources, such as agriculture, forestry, animal husbandry and fisheries, and this was very clear in the Gulf of Thailand Economic Belt and the Philippines Capital Economic Zone. Also, the mining sectors in the Taiwan Strait Economic Circle and the Beibu Gulf Economic Circle had gained global advantages in agricultural products, primary minerals, stone products, plastics, and rubber products, base metals, and their products. Another category was labor-intensive manufacturing sectors driven by the 5th global industrial transfer plan, which was mainly concentrated in CGAs which had sufficient supply of labor and low production costs, such as the Beibu Gulf Economic Circle, the Vietnam Mekong Delta Economic Zone and the Gulf of Thailand Economic Belt; products with competitive edge included fur products, knitwear, textiles, feather products, electrical products, mechanical products and electronic equipment.

4.4 Remarkable achievements in internal sub-regional integration

Internal sub-regional integration was another major feature of the SCSR in terms of the spatial effects from the geographical standpoint. The synergy associated with the combined effects of polarization and diffusion of the SCSR continuously promoted the sub-regional integration process with the result that integrated regions could be formed which could typically be represented by the nine CGAs. Judged from the development level in 2017, the CGAs with the highest level of integration in the SCSR included the Guangdong-Hong Kong-Macao Greater Bay Area, the Singapore-Kuala Lumpur Economic Corridor, the Jakarta-Bandung Economic Belt, and the Philippines Capital Economic Zone. Specifically, the Guangdong-Hong Kong-Macao Greater Bay Area included nine cities in Guangdong Province and the two SARs of Hong Kong and Macao. The Outline Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area issued in 2019 will continue to guide the regional integrated development in systematic innovation, regional coordination, ecological protection, win-win cooperation and infrastructure construction. The Singapore-Kuala Lumpur Economic Corridor, which connects Singapore and the Kuala Lumpur Federal Autonomous Region, Selangor, Sembilan, Melaka, and Johor in Malaysia, has overseen the construction of regional transportation systems including railway networks. The integrated development model and the inter-dependence between these two countries, whereby the frontier city of Johor Bahru has become the core city which links Malaysia and Singapore, are expected to be replicated for Shenzhen and Hong Kong (Rizzo, 2013). The Jakarta-Bandung Economic Belt is located on the island of Java which has one of the highest population densities of 1,356.1 persons per km2 in Indonesia and even in the world. A high-speed railway will connect the nation's largest city Jakarta with the country's fourth largest city, Bandung. This line will serve as the main communication artery within Java and this primary spatial axis will greatly drive the economic development of the island and Indonesia in the future (Wang, 2018). The Philippines Capital Economic Zone consists of two first-level administrative regions including the National Capital Region and the Central Luzon Region, which together accounted for more than 45% of the national GDP in 2017, thus explaining why the region has become an area with the highest population density, and the highest levels of development and integrated development.

5 Prospects for establishing a multi-integrated economic zone in the SCSR

5.1 Promotion effect associated with the new round of global industrial transfer

The main driving force that promotes the evolution of the current global economic landscape in the SCSR is the 5th global industrial transfer plan. Compared with the previous four plans, the current transfer plan shows many different characteristics in terms of the transfer paths, the contents, and the methods. From the perspective of the transfer path, China was the country that benefited most during the 4th transfer plan and is the origin of the main transfer-out for the 5th transfer plan, the main transfer-in countries being Vietnam, Cambodia, and Thailand. With regard to the nature of the industrial transfer, the labor-intensive manufacturing sectors are the main targets of the transfer plan. From the perspective of the transfer method, the transfer adopts a hierarchical differentiation transfer model due to the increasingly clear trends of clustering, modularization and supply chains being associated with the manufacturing process. This means that the demands and motivations of industrial transfer for departments like strategic management, production research and information exchange are insufficient because of strong dependence to the transfer-out space, while departments like workshop production and parts assembly are more willing to affect transfer based on the anticipated benefits such as lower unit production costs, cheaper land costs and lower labor costs, elements which are priority issues in industrial transfer. In summary, the new transfer paths, the new contents, and the new methods of the 5th global industrial transfer plan will be depicted as a value chain in the SCSR especially between China and Southeast Asian countries. Assuming a multinational labor-intensive manufacturing company had established its East Asia headquarters on the southeastern coastal areas of China during the 4th global industrial process, and it plans to transfer, for example, the production department function in the middle of the value chain to a neighboring country like Vietnam to pursue lower production costs, it may be more appropriate for it to retain the R&D and marketing departments at both ends of the value chain in China to take advantage of the convenience of mature infrastructure and information. On the whole, the 5th global industrial transfer plan will raise the level of interconnectivity and interdependence between China and Southeast Asian countries, such that a more integrated economic zone involving China and Southeast Asia will begin to take shape.

5.2 Organization of global value chain for regional production-consumption networks

As one of the regions with the fastest global economic growth and the largest population, the SCSR has formed sub-regional labor division systems and production-consumption networks closely matching the regional characteristics of East Asia through the formation of unified value organization modes in production, sales, recycling, and other measures linking goods and services (Lin, 2018). Based on the resource endowments of different economies, as well as the internal industrial structures and trade networks, the SCSR places multiple subjects such as China and Southeast Asian countries into one integrated system of labor division by allocating scientifically production systems and organizing collaboratively labor division networks. This approach makes a great contribution to the overall efficiency of the CGRs taking advantage of the strengths of the different regions and subjects, and finally building a labor division system via the regional value chain. Regarding the production-consumption networks of the SCSR, this has basically been established between China and Southeast Asian countries because China is the only country in the world that has all the industrial sectors cited in the UN industry classification. Meanwhile, Southeast Asia is accelerating its level of integrated development with China through the 5th industrial transfer plan via the BRI. In terms of the production-consumption network, the total population of the SCSR exceeded 690 million and the per capita GDP level exceeded USD 8,000 in 2017, which made the SCSR a huge consumer market with spatial hierarchical differentiation. It is widely believed that this huge consumer market will play the role of reverse support for building the regional production-consumption networks as well.

5.3 Spatially integrated point-axis form built by space entities

Urban agglomerations are the highest stage of spatial organization, and high-speed transportation networks are the spatial corridors that connect multiple urban agglomeration nodes with large-scale geographic scope; these corridors may be considered as the embryo of the spatially integrated point-axis form. It has been reported in 2019 that the SCSR has 10 of the world's top 50 urban agglomerations, which include the Jakarta Metropolitan Area, the Manila Metropolitan Area, the Guangzhou-Foshan Metropolitan Area, the Bangkok Metropolitan Area, the Shenzhen Metropolitan Area, the Ho Chi Minh City Metropolitan Area, the Taipei Metropolitan Area, the Dongguan Metropolitan Area, the Hanoi Metropolitan Area and the Kuala Lumpur Metropolitan Area. ( 1Demographia World: Urban Areas, 15th Annual Edition: 201904) hese metropolitan areas will be the core carriers for the integrated development of the SCSR in the future. As to the regional transportation networks, they are currently dominated by low-level roads and railways, the proportions of highways and high-speed railways being rather small. Due to the special physiographical environment, only four countries, Vietnam, Thailand, Malaysia and Indonesia, whose population densities are relatively high, have built large-scale transport infrastructure. In 2016, ASEAN announced the Master Plan on ASEAN Connectivity 2025 (MPAC2025), whereby the interconnection level of transportation infrastructure can be rapidly elevated from then on, and there are reasons to believe that an upsurge of new transport construction and connectivity within the SCSR is realistic as a result of the ongoing promotion and execution of the BRI (Figure 5).
Figure 5 Spatial structure of multi-integrated economic zone in the South China Sea Region

5.4 Institutional guarantee of regional cooperation policies and platforms

The opening-up cooperative policies and platforms from internal and external sources are crucial for the establishment of the multi-integrated economic zone in the SCSR. The ASEAN is the most important regional economic cooperation organization in Southeast Asia. The establishment of a free trade area in 1992 was earmarked as the beginning of the integration process within ASEAN, the aim being to improve the level of internal cooperative development by reducing or eliminating tariffs, and also this cooperative framework gives top priorities to strengthening regional economic integrated development and initiating dialogues in the fields of politics, ecology, and society. At the same time, ASEAN is also actively engaged in communicating with countries and regional economic organizations outwith the immediate region. Except for the 10 founding members, ASEAN also includes an observer country Papua New Guinea, and 10 dialogue partners including China, Australia, and Japan. As for the process of cooperation between China and ASEAN, since The First China-ASEAN Leaders Joint Declaration issued in 1997, the aforementioned countries are getting closer and closer in terms of economic development, especially in regional commodity trade (Liu, 2019). By 2017, China had become the largest trading partner of ASEAN for eight consecutive years and ASEAN had also become the 3rd largest trading partner of China during the same period.

6 Conclusions and discussion

6.1 Conclusions

This article has analyzed the overall development status of the SCSR from the aspects of the current status and evolution of the main indicators, as well as the level of regional comprehensive development. A summary has been given of the development characteristics of the CGAs in the SCSR and the prospects for establishing a multi-integrated economic zone in the SCSR have been explored. The conclusions are as follows:
(1) Considering the four main economic indicators, GDP, GDP per capita, population and trade volume, the overall development trend of the SCSR from 2000 to 2017 was consistent with development at the global level. The evolution trajectory, and the speed of establishing and the benefits afforded by the SCSR were much higher than the global average level over the same period. The huge economic scale and high economic growth rate in the SCSR are expected to provide a strong impetus for the next stage of regional economic development.
(2) The level and pattern of comprehensive development of the SCSR were formed according to the development order of the global industrial transfer periods and the spatial evolutionary processes, which had evolved into four groups. The first group included Macao, Singapore, and Hong Kong; Guangdong, Fujian, Taiwan, Brunei, and Malaysia were in the second group; the third group was composed of Yunnan, Guangxi, Hainan, Thailand, Indonesia, the Philippines and Vietnam. Myanmar, Laos, and Cambodia were in the fourth group.
(3) The indexes of industrial structure similarity and trade structure coincidence among the 10 ASEAN countries remained at a relatively high level, and the indexes also showed composite characteristics that combined horizontal integration and vertical cascading at the same time. The low-level characteristic of the industrial structure was clear in primary manufacturing, which accounted for a relatively high level, and high-end industries were at the cultivation stage. The global commodity trade structure showed characteristics of both high-end and low-end activities due to the strong dependence on natural resources at a regional level.
(4) Nine CGAs were established in the SCSR up to 2017. The population density and the level of economic development for each CGA were much higher than the overall level of the entire SCSR. Meanwhile, the advantageous industries and export commodity types between different regions showed the characteristics of similarity and complementarity because of the polarization and diffusion effects of the nine CGAs, these effects also being helpful for building integrated production-consumption markets in global competitive scenarios.
(5) The SCSR meets the basic conditions for establishment of a multi-integrated economic zone in the long run. The 5th round of the global industrial transfer plan and the corresponding global value chain for restructuring will build a regional production-consumption network that closely matches the characteristics of the regional resources, and this will better guarantee the formation and construction of an integrated economic zone by continuously deepening and improving the opening-up cooperation policies and promotion platforms.

6.2 Suggestions

To further elevate the level of integrated development of the SCSR and build a world-class multi-integrated economic zone, the following suggestions and countermeasures are proposed:
First, the regional subjects in the SCSR should be given more decision-making autonomy with respect to the opening-up policies and cooperation on the basis of the existing “10+1” and “10+3” cooperation frameworks of the CAFTA. In particular, the Chinese regional administrative subjects within the SCSR should be given broader autonomy with respect to opening-up policies and cooperation in order to undertake more policy-making initiatives in areas such as tariff negotiating, customs clearance facilitation, free trade agreements, market access, capital exchange and intellectual property protection.
Second, an integrated transportation infrastructure network should be built by accelerating the planning of top-level design in transportation networks, connecting high-speed railway networks between China's transportation planning network and the MPAC2025. Also, promotion of the construction of Pan-Asian railway networks which link the China-Laos, the China-Vietnam and the China-Myanmar railways and encourage Chinese enterprises to participate in key transportation infrastructure projects such as high-speed railways, highways and ports in Southeast Asia is advocated.
Third, the global value chain should be rebuilt to guide the integration of regional industries. According to the differentiated characteristics of the resources, the economies, the industrial structures, the population structures and the market demands of the nine CGAs, divisions of regional industrial sectors and labor should be carried out in accordance with the integrated industrial value chain. It should be noted that the southeastern coastal areas of China should also pay attention to strengthening industrial cooperation with the central and western regions of China, which would be helpful for ensuring the power and interests of central and western regions to undertake the industrial transfer-in from the southeastern coastal areas.
Fourth, the construction process to achieve integrated market elements should be promoted with the goal of accelerating the free flow ability of the elements and reducing the market transaction costs. Under the guidance of market-oriented mechanisms, regional subjects should make full use of the regulatory function of the market mechanisms, enhance the mobility of resources, funds, technology, talents, and other factors in order to finally lead the development elements which are freely and evenly distributed within the SCSR.
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