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clear and comprehensive way in the last couple of years. The North- East and to a lesser extent Xinjiang look to the Soviet Union, and Japan; the Shandong peninsula and Liaoning look to both Koreas, and Japan; Fujian to Taiwan; the Southern coastal zones and SEZs to Hong Kong, Japan, South-East Asia and the Pacific; Yunnan to Burma, Laos and eventually Vietnam; and the inland Western provinces, with their large Muslim population, to the Arab world. In all these cases the economic relationship with neighbouring countries or provinces has its own logic, because of the convenience of cross-border activity and often a degree of natural complementarity in labour and/or other resources. The decentralisation of China's economic system allows experimentation with many forms of cooperation, including enterprise-to-enterprise links, normally not requiring central approval. But the political advantages are also clear, especially where the partners are countries with which China does not have a normal diplomatic relationship. The benefits of dialogue, and channels for passing messages, can be achieved without having to implicate the centre and ties of interdependence can be developed which should help constrain the other country from acting against China's interests in future. Of course the constraint also applies the other way, and with this in mind some analysts have suggested that regional initiatives for economic cooperation may be starting to act as an influence on central external policy making rather than the other way round. There certainly is at least one danger for the central government in the whole process, if taken to extremes: ie that the various provinces and zones might adapt so well to the evol- ving needs of their outside partners that they can no longer be accommodated within any sensible framework of overall economic planning for China itself. The social and political consequences if things went this far, creating serious regional inequalities and clashes of interest both between regions and with the centre, could of course be even more fateful for China's future.
17. Perhaps because of the effort put into these bilateral links, the Chinese have so far taken little part in the discussion of possible international economic frameworks for the Asia/Pacific region as a whole. On instinct they are against any initiative of this kind coming from Japan, which they see as a revival of old ideas for a 'co-prosperity zone". They have kept quiet so far about Australia's "Hawke Initiative" though making clear informally that they would be upset not to be invited to take part, and particularly sensitive to the handling of Taiwan. The only similar idea to emerge from China itself has been the notion of a North-East Asian economic zone covering East Siberia, Northern China, the two Koreas and Japan which was put forward by an economists' gathering early in 1988. This might well reflect official preferences in as much as it would build on the already fast developing Sino-Soviet regional relationship and would also ensure Japan did not cut China out of the Siberian trade (or sneak up from behind in North Korea). But so far the proposal has not been presented in any formal guise. One interpreta- tion would be that the Chinese are waiting to see how Hawke gets on before deciding if it suits them to espouse an alternative (or
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