Broken Circle: Premature Deindustrialization, Chinese Capital Exports, and the Stumbling Development of New Territorial Industrial Complexes

Abstract While inherited models of industrial development and the role of Foreign Direct Investment (FDI) in the developmental process associate urbanization and rising industrial output with the industrialization of employment, suggesting that the structural shift to a service-based job market is a sign of developmental “maturity,” such models fail to explain the secular tendency toward “premature deindustrialization” that has become increasingly evident in poor countries worldwide. These models cannot account for the deep bifurcations between output and employment, formality and informality, and industrialization and urbanization observable on the ground in the world's fastest growing cities. Meanwhile, the alternative models of critical development theorists tend to focus on failures of industrial takeoff and classic relations of dependency, none of which adequately account for the phenomenon being observed today. This paper explores an alternate explanation for premature deindustrialization, drawing from Marxian theories of technical change and the secular tendencies of capitalist development. The argument is illustrated with examples taken from the author's field work in Dar es Salaam, Tanzania, and the Pearl River Delta in China. Ultimately, the phenomenon of premature deindustrialization suggests that the great circle of development may collapse under its own contradictions before industrialization circumnavigates the globe.