Organised Informality and Suitcase Trading in the Pearl River Delta Region

The Political Economy of Border Checkpoints in Shadow Exchanges

“…In another article in this issue, Mahanty (2019) notes that in Cambodia revenues extracted from shadow exchanges have been used to support the ruling regime. In southern China, more than 20,000 suitcase traders have been crossing the sub-national border between Shenzhen and Hong Kong every day, as reported in the article by Hung and Ngo (2019). These traders formed an indispensable link between local and global value chains that connect the domestic Chinese economy and the world market.…”

“…One can expect that the nature of informality (in terms of the reach of networks, levels of sophistication, and forms of transaction) changes in relation to different shades of grey. For instance, Hung and Ngo (2019) find that suitcase trade involving daily consumption goods has been carried out by either occasional traders working in solitude or professional couriers with open networks; while suitcase trading of valuable products and illicit goods is undertaken by professional couriers with a closed network. In general, the "darker" the operations, the closer and stronger the networks will be, and the more covert the transactions will be.…”

“…In contrast, in the Pearl River Delta, shadow trade is highly organised and commercialised, while still relying on informal networks. Hung and Ngo (2019) have identified several modes of operation with different degrees of sophistication. Together they appear almost like a logistics sector of their own, catering for different types of clients and goods.…”

“…Besides, these syndicates oversee the trade flow, respond to market signals, co-ordinate sourcing and distribution, arrange transportation and co-opt/manipulate border control. Hung and Ngo (2019) call this "organised informality," since it contains both informal and organised aspects. While the network is stable, resilient and well-coordinated, individual traders can come and go, join and exit the network, in a casual and informal manner.…”

“…Shadow exchanges adapt to particularistic governance mechanisms and proliferate under collaborative schemes. The cases studied span shadow exchanges across internal borders in southern China (Hung and Ngo 2019) to exchanges along the Cambodia-Vietnam frontier (Mahanty 2019), Thailand-Laos checkpoints (Elsing 2019) and the China-Pakistan border (Rippa 2019), to transregional exchanges in Central Asia (Karrar 2019) and to transcontinental exchanges between China and Africa (Haugen 2019).…”