Brexit, Texit, Calexit, and the Future of China



Should the U.S. encourage China to further decentralize economic and political authority? Soft or full partition has been advocated for Iraq, Syria, and Libya. The politically-decentralized canton-nation of Switzerland, and past and modern city-states show the success of devolving political authority.

Hong Kong and Taiwan, followed by Chinese SEZs like Shenzhen and Shanghai Pudong New Zone, are now the most free and prosperous places in greater China.

Political decentralization is in the news with English voters choosing (just barely) to exit the European Union. Before the last election, when most expected Hillary Clinton to win, Texas citizens and politicians openly called for a similar Texit (see: “From Brexit to Texit? Renewed calls for Texas secession after EU vote,” (CBS News,” June 25, 2016).

Donald Trump unexpectedly won, which led many in California to call for “Calexit” instead: “‘Calexit’ movement says Trump win helps their calls for California to secede,” (LA Times, November 9, 2016).

Stephen Greenhut, though against ‘Calexit,’ outlines reasons for smaller Californias: “California break-up idea won’t go away — for good reason,” (Orange County Register, April 9, 2017):

California’s approximately 39 million population equals the total combined population of the nation’s 22 smallest states. I can regale you with geographic trivia, but the closer you look, the harder it is to fathom why talks of breaking up California are not taken more seriously. California is too large in size and population to be governed fairly.

Though he is a libertarian, Greenhut argues the problem is one of political philosophy not political ideology:

In California, we have one Assembly member for every 483,000 residents. That’s the worst ratio in the country. In New Hampshire, which has the best ratio, there are approximately 3,200 residents for every member of the statehouse. What are your chances of influencing or even reaching your legislator — or even his or her staffers — in California?

In a state as big as ours, only the big guys — the political parties, labor unions and other special interests — matter. Breaking up one mega-state into multiple reasonably sized states, where people with like-minded interests can better govern themselves, is a great idea that gives voters more power. If that won’t happen, then we at least need more representative districts.

Breaking up California or Texas into smaller states offers many political and economic advantages. Texas already has an okay to break itself up. “The Five States of Texas,” (D Magazine, July 2009) notes Texas can’t draw on the U.S. Constitution to succeed, but:

What Texas could do, however, is divide itself into as many as five states, a privilege given to it as a unique condition of its annexation to the Union in 1845. For Dallas-Fort Worth, this is a no-brainer: North Texas produces a disproportionate amount of revenue for the state, and it would get to keep that money in a state where Dallas is the capitol.

Economically, then, it would be a huge benefit to the area. But politically, what would Texas as a whole look like if it chose to do this? Would dividing a large, red state into five smaller, reddish states benefit Republicans in the Senate? In the Electoral College?

Back to political decentralization in China, this page, “China’s Special Economic Zones,” offers a valuable outline and history of China’s SEZs. And here is 2011 World Bank post on SEZ Success and Challenges.

Just this month China launched a new SEZ, “China to launch special economic zone in province hit by layoffs,” (April 3, 2017):

The Xiongan New Area, about 100 kilometers from Beijing, will house “non-capital functions” moved from the capital city. This is part of a wider initiative to support the economy, and to integrate Hebei with the capital city and nearby Tianjin, according to state media. …

Ones that have fared better were in Shenzhen and Shanghai. Established in 1980, the Shenzhen special economic zone helped jumpstart reforms and turned the fishing village into today’s manufacturing and high-tech center, while the Pudong area in Shanghai is now a major financial center.

See also, “China Hopes Xiongan New Area Will Relieve Pressure On Congested Beijing,” (Forbes, April 9, 2017)

This Economist article is skeptical of SEZs: “Political priority, economic gamble,” (April 4, 2015):

Special economic zones (SEZs) are all the rage among governments hoping to pep up their trade and investment numbers. Such havens are appearing even within havens: the Cayman Islands has a new one. “Any country that didn’t have [an SEZ] ten years ago either does now or seems to be planning one,” says Thomas Farole of the World Bank.

How can U.S. policy reforms best embrace and encourage the advantages of political and economic decentralization, innovation, and competition? For students debating the U.S./China resolution, could U.S. policy reforms engage Chinese SEZs is ways similar to US policy toward Chinese city-states like Hong Kong. Taiwan, and Singapore?

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