GPRD-Book Eng Apr2014

The Greater Pearl River Delta A report commissioned by

Invest Hong Kong 7th Edition

Contents

The Greater Pearl River Delta

Executive Summary

Authors

4

Section 1 Overview of the Greater Pearl River Delta Region

Thomas M.H. Chan Justina H.W. H.W. Yung Man-Kit Chung Public Policy Research Institute, The Hong Kong Polytechnic University

1.1. ‘9+2’ Cities from Three Jurisdictions

14

1.2. Greater Pearl River Delta Economic Overview

17

1.2.1.

World-Classs Exporting Region World-Clas

1.2.2. Link b etween

Editorial

1.2.3.

Global Economie s and Mainland China

Coastal China’s Economic Powerhouse

g World-Clas World-Classs Metropolis 1.2.4. Emergin g

Invest Hong Kong

Section 2 Transformation and Development in the

First Published April 2003

Greater Pearl River Delta Region

Second Edition June 2004 Third Edition October 2005 Fourth Edition October 2006 Fifth Edition September 2007

2.1. Development Model Prior to 2000

30

2.2. A Journey of Economic Transformation

33

Sixth Edition May 2010 2.2.1.

Seventh Edition April 2014

The 10th to 1 2th Guangdong Province Five-Year Five-Year Plans

2.2.2. Labour

Issues in the Pearl River Delta Region

© Copyright reserved

2.3. Infrastructure and Regional Regional Connectivity Connectivity ISBN�978�988�97122�7�3

2.3.1.

40

Railways

2.3.2. Expresswa ys

Published by Invest Hong Kong

2.3.3. Airports

Printed by the Government Logistics Department

2.3.4. Ports

Hong Kong Special Administrative Administrative Region Government

2.3.5.

Cross-Border Infrastructure Development between Hong Kong a nd Pea rl River De lta Cit ies

2.4. Urban Governance and Regional Integration

The information and material contained in this report is for reference only and does not necessarily represent the views and positions of the Government of the

2.4.1.

Hong Kong Special Administrative Region. While every effort has been made to

58

Economi c Integ ration

keep information current and accurate, readers are advised to exercise caution and

2.4.2. Spatia l Coordin ation

check that the information is still current before acting upon it.

2.4.3. Knowledge

Collabora tions b etween Hong Kong and

the Pearl River Delta Region

Contents Section 3 Economic Trends in the Pearl River Delta Region 3.1. From Manufacturi ng to Technology

Section 5 Hong Kong’s Role in the Greater Pearl River Delta Region 69

5.1. Regional Economic Roles of Hong Kong in the

3.1.1 . The Development of High-Technology Industries


3.1.2 . Researc Research h and Development Development in the Pearl River River Delta Region and

5.1.1. Investment-Led Service Hu b

Guangdong Province

3.2. From Manufacturing Manufacturing to Services

5.1.2. An Enhanced Two-Way Investment Platform 5.1.3. A Shopping Paradi se and Marketing Arena

76

5.1.4. A Key Investor and Service Su pporter of Macao

3.2.1 . Transformation and Upgrading

5.2. New and Projecte d Advantages of Hong Kong to the

3.2.2 . The Development of Modern Service Sectors

3.3. The Emergence of an Integrated Market in the

84

5.2.1. World-Cla World-Class ss Infrastructure 5.2.2. Jurisdi ction for Knowledge Economy

3.3.1. A Rapidly D eveloping Market

5.2.3. Human Capital and Talent Mobilit y

3.3.2. E-Retailing in Gu angdong Province

5.3. Additional Roles of Hong Kong in the New Era

3.3.3. An Integrated Market with Hong Kong

Section 4 Hong Kong’s Contribution to the Development of

5.3.1. Marketing – A Pl ace to Bu ild Image

5.3.3. Knowledge and Talent – A Place to Innovate

94

Pearl River Delta Region 96

and the Mainland 4.3. Renminbi Internationalisation Internationalisation and Financial Cooperation 98 4.3.1. Hong 4.3.1. Hong Kong in Renminbi Internationalisation 4.3.2. Hong 4.3.2. Hong Kong-Guangdong Financial Kong-Guangdong Financial Coo peration

4.4. Helping Enterprises to Explore the Mainland Market Market

125

5.3.2. Investment – A Place to Facili tate and Prot ect Investor Benefits


4.2. A New Regulatory Framework between Hong Kong

116



4.1. Hong Kong’s Collaborations with the

109

106

Invest Hong Kong and Useful Contacts

132

Contents

The Greater Pearl River Delta

Executive Summary

Authors

4

Section 1 Overview of the Greater Pearl River Delta Region

Thomas M.H. Chan Justina H.W. H.W. Yung Man-Kit Chung Public Policy Research Institute, The Hong Kong Polytechnic University

1.1. ‘9+2’ Cities from Three Jurisdictions

14


17

1.2.1.

World-Classs Exporting Region World-Clas

1.2.2. Link b etween

Editorial

1.2.3.

Global Economie s and Mainland China

Coastal China’s Economic Powerhouse

g World-Clas World-Classs Metropolis 1.2.4. Emergin g

Invest Hong Kong

Section 2 Transformation and Development in the

First Published April 2003


Second Edition June 2004 Third Edition October 2005 Fourth Edition October 2006 Fifth Edition September 2007

2.1. Development Model Prior to 2000

30


33

Sixth Edition May 2010 2.2.1.

Seventh Edition April 2014

The 10th to 1 2th Guangdong Province Five-Year Five-Year Plans

2.2.2. Labour

Issues in the Pearl River Delta Region

© Copyright reserved

2.3. Infrastructure and Regional Regional Connectivity Connectivity ISBN�978�988�97122�7�3

2.3.1.

40

Railways

2.3.2. Expresswa ys

Published by Invest Hong Kong

2.3.3. Airports

Printed by the Government Logistics Department

2.3.4. Ports

Hong Kong Special Administrative Administrative Region Government

2.3.5.

Cross-Border Infrastructure Development between Hong Kong a nd Pea rl River De lta Cit ies

2.4. Urban Governance and Regional Integration

The information and material contained in this report is for reference only and does not necessarily represent the views and positions of the Government of the

2.4.1.

Hong Kong Special Administrative Region. While every effort has been made to

58

Economi c Integ ration

keep information current and accurate, readers are advised to exercise caution and

2.4.2. Spatia l Coordin ation

check that the information is still current before acting upon it.

2.4.3. Knowledge

Collabora tions b etween Hong Kong and









Guangdong Province



76






84

5.2.1. World-Cla World-Class ss Infrastructure 5.2.2. Jurisdi ction for Knowledge Economy







5.3.1. Marketing – A Pl ace to Bu ild Image


94

Pearl River Delta Region 96



125

5.3.2. Investment – A Place to Facili tate and Prot ect Investor Benefits


4.2. A New Regulatory Framework between Hong Kong

116




109

106


132








Guangdong Province



76






116


84

5.2.1. World-Cla World-Class ss Infrastructure


5.2.2. Jurisdi ction for Knowledge Economy







125

5.3.1. Marketing – A Pl ace to Bu ild Image 5.3.2. Investment – A Place to Facili tate and Prot ect Investor Benefits



109


94

132


Pearl River Delta Region 4.2. A New Regulatory Framework between Hong Kong

96



106

Executive Summary

Executive Summary

4

5

E xecutive S ummary

Many academic discussions have focused on the development model of the Greater Pearl River Delta region prior to the handover of Hong Kong and Macao, and China’s accession to the World Trade Organization (WTO). Such discussions have provided fascinating insights into how the Greater Pearl River Delta has been transformed from an agriculture-based region to a newly industrialised one, and Hong Kong’s instrumental role linking global economies to the Mainland. However, few of the discussions have provided thorough discussions on the evolution of the Greater Pearl River Delta post-2001. Indeed, the development of the Greater Pearl River Delta region is equally exciting and challenging – for example, in terms of increased labour costs, industrial upgrading, and economic transformation. Since

2001,

PRD-driven

development

programmes

have

showcased how a newly industralised region has sought its way upwards, beyond its development plateau. At the same time, the changes that have occurred in Hong Kong and Macao have also been journeys of the two Special Administrative Regions, integrating into the economic communities of Greater China, making use of the global economic network and rule of law framework from their days of colonial governance. The two places have converted their inheritances into new advantages, The Greater Pearl River Delta

making them fit to meet present challenges, and

region (GPRD) consists of nine

the emergence of a knowledge economy.

cities in the Pearl River Delta (PRD) region of Guangdong Province: Guangzhou, Shenzhen, Zhuhai, Foshan, Huizhou, Dongguan, Zhongshan, Jiangmen, and Zhaoqing; plus Mainland China’s Hong Kong Special Administrative Region (HKSAR), and Macao Special Administrative Region (MSAR). The region is known for its pioneering role in China’s Open-Door Policy, and its huge economic success since Mainland China’s economic reform.

Executive Summary

Executive Summary

4

5

E xecutive S ummary

Many academic discussions have focused on the development model of the Greater Pearl River Delta region prior to the handover of Hong Kong and Macao, and China’s accession to the World Trade Organization (WTO). Such discussions have provided fascinating insights into how the Greater Pearl River Delta has been transformed from an agriculture-based region to a newly industrialised one, and Hong Kong’s instrumental role linking global economies to the Mainland. However, few of the discussions have provided thorough discussions on the evolution of the Greater Pearl River Delta post-2001. Indeed, the development of the Greater Pearl River Delta region is equally exciting and challenging – for example, in terms of increased labour costs, industrial upgrading, and economic transformation. Since

2001,

PRD-driven

development

programmes

have

showcased how a newly industralised region has sought its way upwards, beyond its development plateau. At the same time, the changes that have occurred in Hong Kong and Macao have also been journeys of the two Special Administrative Regions, integrating into the economic communities of Greater China, making use of the global economic network and rule of law framework from their days of colonial governance. The two places have converted their inheritances into new advantages, The Greater Pearl River Delta

making them fit to meet present challenges, and

region (GPRD) consists of nine

the emergence of a knowledge economy.

cities in the Pearl River Delta (PRD) region of Guangdong Province: Guangzhou, Shenzhen, Zhuhai, Foshan, Huizhou, Dongguan, Zhongshan, Jiangmen, and Zhaoqing; plus Mainland China’s Hong Kong Special Administrative Region (HKSAR), and Macao Special Administrative Region (MSAR). The region is known for its pioneering role in China’s Open-Door Policy, and its huge economic success since Mainland China’s economic reform.

Executive Summary

Executive Summary

6

7

This report consists of five sections; the first section provides an overview

Delta region, and Bohai Rim as ‘National Optimised Development Zones’,

of regional development, before moving onto how the development

the inclusion of Hong Kong and Macao have made the Greater Pearl River

model in t he Pearl River Delta region has evolved, including discussions

Delta the most globally integrated among the three.

on policy orientation, infrastructure development and spatial layout in section two. In section three, recent economic trends such as the emergence of an integrated market and online retailing are explored, while sections four and five focus on Hong Kong’s participation in the Greater Pearl River Delta region, with an emphasis on Hong Kong’s evolving role, and its enhanced and increasingly strategic links to the economic development of Mainland China.

Regional Overview Traditionally, the Greater Pearl River Delta region has been known for its export performance, as it continues to be, spurred on by China’s accession to the WTO. In 2012, the consolidated trading transactions of the Greater Pearl River Delta region were behind only two foreign economies – those of the US and Germany; but ahead of Japan. The economic scale of the Greater Pearl River Delta region makes it an economic powerhouse in coastal China, and an undisputed economic centre in southern China.

Transformation and Development in the Greater Pearl River Delta Region Since 2001 the Pearl River Delta region has undergone a series of policy

Comparisons have been made between the development status of the

orientation shifts, with the clear objective to drive economic upgrades

Pearl River Delta region, and that of the Yangtze River Delta region, and

and transformations. These shifts echo changes in both international and

Bohai Rim. The Pearl River Delta region excels both not only in its export

domestic markets, and the policy priorities of the Central Government.

performance and strong tertiary industry but also its high residential

Perhaps more importantly, the shifts in policy reflect the determination

income, and government budgetary revenues that denote wealthy

of local governments to maintain the competitiveness of the region in

persons a nd governments regionally.

the long term.

As a result of the region’s past three decades of industrial and urban

Large scale infrastructure projects have been carried out to improve

development, and the participation of Hong Kong and Macao, a ‘polycentric

regional connectivity, re-define economic space, and encourage regional

metropolis’ is taking shape in the region, encompassing key players such

integration. Among them, the development of railways is arguably the

as Hong Kong, Macao, Guangzhou and Shenzhen. Although the Central

most important, in terms of both the scale of investment and network

Executive Summary

Executive Summary

6

7

This report consists of five sections; the first section provides an overview

Delta region, and Bohai Rim as ‘National Optimised Development Zones’,

of regional development, before moving onto how the development

the inclusion of Hong Kong and Macao have made the Greater Pearl River

model in t he Pearl River Delta region has evolved, including discussions

Delta the most globally integrated among the three.

on policy orientation, infrastructure development and spatial layout in section two. In section three, recent economic trends such as the emergence of an integrated market and online retailing are explored, while sections four and five focus on Hong Kong’s participation in the Greater Pearl River Delta region, with an emphasis on Hong Kong’s evolving role, and its enhanced and increasingly strategic links to the economic development of Mainland China.

Regional Overview Traditionally, the Greater Pearl River Delta region has been known for its export performance, as it continues to be, spurred on by China’s accession to the WTO. In 2012, the consolidated trading transactions of the Greater Pearl River Delta region were behind only two foreign economies – those of the US and Germany; but ahead of Japan. The economic scale of the Greater Pearl River Delta region makes it an economic powerhouse in coastal China, and an undisputed economic centre in southern China.

Transformation and Development in the Greater Pearl River Delta Region Since 2001 the Pearl River Delta region has undergone a series of policy

Comparisons have been made between the development status of the

orientation shifts, with the clear objective to drive economic upgrades

Pearl River Delta region, and that of the Yangtze River Delta region, and

and transformations. These shifts echo changes in both international and

Bohai Rim. The Pearl River Delta region excels both not only in its export

domestic markets, and the policy priorities of the Central Government.

performance and strong tertiary industry but also its high residential

Perhaps more importantly, the shifts in policy reflect the determination

income, and government budgetary revenues that denote wealthy

of local governments to maintain the competitiveness of the region in

persons a nd governments regionally.

the long term.

As a result of the region’s past three decades of industrial and urban

Large scale infrastructure projects have been carried out to improve

development, and the participation of Hong Kong and Macao, a ‘polycentric

regional connectivity, re-define economic space, and encourage regional

metropolis’ is taking shape in the region, encompassing key players such

integration. Among them, the development of railways is arguably the

as Hong Kong, Macao, Guangzhou and Shenzhen. Although the Central

most important, in terms of both the scale of investment and network

Government has prioritised the Pearl River Delta region, Yangtze River

coverage. The concepts of a ‘city-region’, an intra-regional ‘One-Hour

Executive Summary

Executive Summary

8

9

Intercity Commuting Circle’, and a ‘Multi-Tier Development Space’ have

7.9 percent of total retail sales in the Mainland, and Guangdong Province

been adopted in the co-commis sioned plans of the three jurisdictions.

recorded the highest number of online shoppers, 12.2 percent of the

Cross-boundary transportation facilities are currently under construction,

national total. The booming of Guangdong Province’s e-commerce

and set to fundamentally alter the spatial layout of the Greater Pearl

activities has been driven by the increasingly higher incomes of local

River Delta region.

residents, and larger quantity of Pearl River Delta enterprises and

The reunification of Hong Kong and Macao to China has enabled them to conduct knowledge collaboration with the Pearl River Delta region in the sectors of technology and education, enabling the three jurisdictions to develop into a knowledge-based economy.

individuals active in the e-supply chain – including the smartphone giants in the region. These enable the economic entities in the region to capitalise on the Mainland’s fastest growing consumer market segment, and ride on the future consumption wave driven by ‘digital revolutio n’. Hong Kong is also in the picture

Recent Economic Developments in the Greater Pearl River Delta Region The economic development of the Greater Pearl River Delta region since 2000 can be seen from three perspectives: 1) the technologydriven upgrading of the manufacturing sector; 2) the shift in economic orientation from the manufacturing sector to the service sector, and 3) the emergence of the Greater Pearl River Delta market. In the last 10 years, the Pearl River Delta governments have dedicated a great deal of fiscal and policy resources to transform the region from processing trade-oriented manufacturing clusters into a high technologyoriented exporting region.

regarding an integrated Greater Pearl

River

Delta

market,

in

particular, servicing Pearl River Delta residents from middle to high income groups, and young enthusiasts of western lifestyles, who prefer to purchase luxury and top quality items from Hong Kong.

Hong Kong’s Contribution to the Development of the Pearl River Delta Region Hong Kong’s interaction with the Pearl River Delta region is not static, but

As of 2006, the region has been keen to develop tertiary industries

a dynamic trajectory evolving in step with Mainland China government

and highlighted these intentions in the Guangdong Province Five-Year

policy shifts, and changes in the global economic environment. Since

Plan under the ‘Modern Services Sector’. Three districts of Qianhai

2003, Hong Kong has actively sought a new regional role in the post-

(Shenzhen), Nansha (Guangzhou), and Hengqin (Zhuhai) have been

WTO era, in order to re-establish and re-strengthen its economic ties with

designated for the development of modern services sectors. In the past

Mainland China and the Pearl River Delta region.

five years, the growth rate of Guangdong Province’s tertiary industry has surpassed the overall GDP growth rate of Guangdong. An even more exciting change in the Greater Pearl River Delta region has

With support from the Central Government, Hong Kong’s efforts have led to the establishment of a new institutional framework between Hong Kong and the Mainland in the form of a preferential trade agreement — the

Executive Summary

Executive Summary

8

9

Intercity Commuting Circle’, and a ‘Multi-Tier Development Space’ have

7.9 percent of total retail sales in the Mainland, and Guangdong Province

been adopted in the co-commis sioned plans of the three jurisdictions.

recorded the highest number of online shoppers, 12.2 percent of the

Cross-boundary transportation facilities are currently under construction,

national total. The booming of Guangdong Province’s e-commerce

and set to fundamentally alter the spatial layout of the Greater Pearl

activities has been driven by the increasingly higher incomes of local

River Delta region.

residents, and larger quantity of Pearl River Delta enterprises and

The reunification of Hong Kong and Macao to China has enabled them to conduct knowledge collaboration with the Pearl River Delta region in the sectors of technology and education, enabling the three jurisdictions to develop into a knowledge-based economy.

individuals active in the e-supply chain – including the smartphone giants in the region. These enable the economic entities in the region to capitalise on the Mainland’s fastest growing consumer market segment, and ride on the future consumption wave driven by ‘digital revolutio n’. Hong Kong is also in the picture

Recent Economic Developments in the Greater Pearl River Delta Region The economic development of the Greater Pearl River Delta region since 2000 can be seen from three perspectives: 1) the technologydriven upgrading of the manufacturing sector; 2) the shift in economic orientation from the manufacturing sector to the service sector, and 3) the emergence of the Greater Pearl River Delta market. In the last 10 years, the Pearl River Delta governments have dedicated a great deal of fiscal and policy resources to transform the region from processing trade-oriented manufacturing clusters into a high technologyoriented exporting region.

regarding an integrated Greater Pearl

River

Delta

market,

in

particular, servicing Pearl River Delta residents from middle to high income groups, and young enthusiasts of western lifestyles, who prefer to purchase luxury and top quality items from Hong Kong.

Hong Kong’s Contribution to the Development of the Pearl River Delta Region Hong Kong’s interaction with the Pearl River Delta region is not static, but

As of 2006, the region has been keen to develop tertiary industries

a dynamic trajectory evolving in step with Mainland China government

and highlighted these intentions in the Guangdong Province Five-Year

policy shifts, and changes in the global economic environment. Since

Plan under the ‘Modern Services Sector’. Three districts of Qianhai

2003, Hong Kong has actively sought a new regional role in the post-

(Shenzhen), Nansha (Guangzhou), and Hengqin (Zhuhai) have been

WTO era, in order to re-establish and re-strengthen its economic ties with

designated for the development of modern services sectors. In the past

Mainland China and the Pearl River Delta region.

five years, the growth rate of Guangdong Province’s tertiary industry has surpassed the overall GDP growth rate of Guangdong.

With support from the Central Government, Hong Kong’s efforts have led to the establishment of a new institutional framework between Hong

An even more exciting change in the Greater Pearl River Delta region has

Kong and the Mainland in the form of a preferential trade agreement — the

been its robust retail sale s. In 2012, the Pearl River Delta region represented

Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA).

Executive Summary

Executive Summary

10

11

New Business Trends The financial development of Hong Kong has attracted many Mainland companies to list on the Hong Kong stock market. As at January 2014, Mainland companies accounted for about 50 percent of all companies listed on the Hong Kong Stock Exchange. In 2013, 127 China Fortune-500 firms, with a total revenue of US$778 billion and profit of US$74 billion, listed Hong Kong as t heir headquarters. Hong Kong has seen itself evolve from being a source of unilateral investment into a two-way investment platform linking Pearl River Delta region investors to the global market, and global investors to the Pearl River Delta region and China markets. Thanks to the Individual Visit Scheme, Hong Kong attracts more than 40 million Mainland Chinese visitors annually. These visitors are keen on The inclusion of Hong Kong into China’s 11th and 12th Five-Year Plans

shopping for luxury products in Hong Kong, believing in the quality that

(2006-2015) allows for a strategic position of Hong Kong in the Mainland’s

Hong Kong’s retail sector offers. This has transformed Hong Kong into a

development, as shown by a more active role in certain business sectors,

shopping paradise and marketing arena for prestigious consumer brands.

specifically, financial development and renminbi internationalisation. These strengthen Hong Kong’s business relationship with Mainland

New Advantages

China, to go beyond the merchandise trading that is often confined

Driven largely by Hong Kong government and public institutions, various

within the Pearl River Delta region and to penetrate a wider scope of

changes have taken place since the new millennium, which have created

service cooperation.

new advantages for Hong Kong. With

Hong Kong’s Role in the Greater Pearl River Delta Region Since 2001, the Pearl River Delta region has moved into a new development phase, while the global financial crisis of 2008 has also led Hong Kong into a new stage. On an institutional level, the Hong Kong Government has sent out a clear message for economic transformation, and progressive reappraisal of its role within the Greater Pearl River Delta region. On a business level, changes have also followed.

respect

to

infrastructure

development,

multi-dimensional

transportation systems between Hong Kong and the Greater Pearl River Delta region are in construction and planning stages. The Hong Kong SAR Government also accords priority to developing the innovation and technology industries. Five research and development (R&D) centres were set up in Hong Kong and they have been working closely to conduct industry-oriented R&D and proactively promote technology transfer to the relevant industries. Combined with the Pearl River Delta region’s world-class manufacturing base, the competitive advantages of industry

Executive Summary

Executive Summary

10

11

New Business Trends The financial development of Hong Kong has attracted many Mainland companies to list on the Hong Kong stock market. As at January 2014, Mainland companies accounted for about 50 percent of all companies listed on the Hong Kong Stock Exchange. In 2013, 127 China Fortune-500 firms, with a total revenue of US$778 billion and profit of US$74 billion, listed Hong Kong as t heir headquarters. Hong Kong has seen itself evolve from being a source of unilateral investment into a two-way investment platform linking Pearl River Delta region investors to the global market, and global investors to the Pearl River Delta region and China markets. Thanks to the Individual Visit Scheme, Hong Kong attracts more than 40 million Mainland Chinese visitors annually. These visitors are keen on The inclusion of Hong Kong into China’s 11th and 12th Five-Year Plans

shopping for luxury products in Hong Kong, believing in the quality that

(2006-2015) allows for a strategic position of Hong Kong in the Mainland’s

Hong Kong’s retail sector offers. This has transformed Hong Kong into a

development, as shown by a more active role in certain business sectors,

shopping paradise and marketing arena for prestigious consumer brands.

specifically, financial development and renminbi internationalisation. These strengthen Hong Kong’s business relationship with Mainland

New Advantages

China, to go beyond the merchandise trading that is often confined

Driven largely by Hong Kong government and public institutions, various

within the Pearl River Delta region and to penetrate a wider scope of

changes have taken place since the new millennium, which have created

service cooperation.

new advantages for Hong Kong. With

Hong Kong’s Role in the Greater Pearl River Delta Region Since 2001, the Pearl River Delta region has moved into a new development phase, while the global financial crisis of 2008 has also led Hong Kong into a new stage. On an institutional level, the Hong Kong Government has sent out a clear message for economic transformation, and progressive reappraisal of its role within the Greater Pearl River Delta region. On a business level, changes have also followed.

respect

to

infrastructure

development,

multi-dimensional

transportation systems between Hong Kong and the Greater Pearl River Delta region are in construction and planning stages. The Hong Kong SAR Government also accords priority to developing the innovation and technology industries. Five research and development (R&D) centres were set up in Hong Kong and they have been working closely to conduct industry-oriented R&D and proactively promote technology transfer to the relevant industries. Combined with the Pearl River Delta region’s world-class manufacturing base, the competitive advantages of industry players in the Greater Pearl River Delta region should be further enhanced.

Executive Summary

Executive Summary

12

13

In terms of tapping into the knowledge economy, Hong Kong has

brand image, and tap into this enormou s market potenti al. Hong Kong

strengthened its jurisdiction framework in relation to knowledge sectors,

can also help Mainland investors to build a well-respected corporate

for example, developing arbitration services and collaborating with

image to meet the demands of a knowledge economy.

Guangdong Province on the protection of intellectual property rights. Through knowledge ties with human

Invest ment – A Plac e to Facil itate and Prot ect Invest or Bene fits

capital and talent exchange, Hong

Hong Kong’s CEPA framework allows foreign investors to enjoy

Kong is using its higher education

progressive market liberalisation of market access granted by Mainland

system to enrich its talent pool,

China. Hong Kong’s business practices and talent are assets to Mainland

attracting young Mainland talent to

enterprises in terms of managing global business in a regulated way,

Hong Kong to create new prospects

which eventually grants them better business exposure. A strong

for Mainland-Hong Kong cooperation.

presence of legal practitioners well-versed with commercial best

The Hong Kong visa-free arrangement

practice in Hong Kong provides an international standard of legal

scheme covers a majority of countries

services to s afeguard the economic interests of foreign investors.

and territories, while the mobility of international talent and Hong Kong residents enables foreign investors to serve the Greater Pearl River Delta market, and Mainland investors to serve the global market from their Hong Kong headquarters.

Knowle dge a nd t alent – A Plac e to Innova te

The marketing, commercial, and incubation support that Hong Kong’s public institutions and government renders to foreign innovators provides a better chance of success for the commercialisation of innovative ideas into Mainland China. Meanwhile, Hong Kong’s protection of intellectual property (IP) rights offers higher levels of confidence to international innovators, and assists Mainland innovators

Additional Roles

in carrying out a wider scope of international collaboration. More

Hong Kong continues to advance and

importantly, Hong Kong is an ideal meeting place for innovation talent

ready itself to embrace the emerging

from the east and the west, providing an ideal business environment

opportunities

knowledge

marked by the rule of law, vigilant intellectual protection regime, world-

economy. An enhanced two-way platform is transforming Hong Kong

class infrastructure, a cosmopolitan lifestyle, and remuneration of

into a meeting point for key decision makers to start their dialogue,

knowledge and experience.

of

the

develop new forms of collaboration, and conclude business deals. Market ing – A place to b uild imag e

Hong Kong is an ideal place for foreign enterprises to demonstrate their

Executive Summary

Executive Summary

12

13

In terms of tapping into the knowledge economy, Hong Kong has

brand image, and tap into this enormou s market potenti al. Hong Kong

strengthened its jurisdiction framework in relation to knowledge sectors,

can also help Mainland investors to build a well-respected corporate

for example, developing arbitration services and collaborating with

image to meet the demands of a knowledge economy.

Guangdong Province on the protection of intellectual property rights. Through knowledge ties with human

Invest ment – A Plac e to Facil itate and Prot ect Invest or Bene fits

capital and talent exchange, Hong

Hong Kong’s CEPA framework allows foreign investors to enjoy

Kong is using its higher education

progressive market liberalisation of market access granted by Mainland

system to enrich its talent pool,

China. Hong Kong’s business practices and talent are assets to Mainland

attracting young Mainland talent to

enterprises in terms of managing global business in a regulated way,

Hong Kong to create new prospects

which eventually grants them better business exposure. A strong

for Mainland-Hong Kong cooperation.

presence of legal practitioners well-versed with commercial best

The Hong Kong visa-free arrangement

practice in Hong Kong provides an international standard of legal

scheme covers a majority of countries

services to s afeguard the economic interests of foreign investors.

and territories, while the mobility of international talent and Hong Kong residents enables foreign investors to serve the Greater Pearl River Delta market, and Mainland investors to serve the global market from their Hong Kong headquarters.

Knowle dge a nd t alent – A Plac e to Innova te

The marketing, commercial, and incubation support that Hong Kong’s public institutions and government renders to foreign innovators provides a better chance of success for the commercialisation of innovative ideas into Mainland China. Meanwhile, Hong Kong’s protection of intellectual property (IP) rights offers higher levels of confidence to international innovators, and assists Mainland innovators

Additional Roles

in carrying out a wider scope of international collaboration. More

Hong Kong continues to advance and

importantly, Hong Kong is an ideal meeting place for innovation talent

ready itself to embrace the emerging

from the east and the west, providing an ideal business environment

opportunities

knowledge

marked by the rule of law, vigilant intellectual protection regime, world-

economy. An enhanced two-way platform is transforming Hong Kong

class infrastructure, a cosmopolitan lifestyle, and remuneration of

into a meeting point for key decision makers to start their dialogue,

knowledge and experience.

of

the

develop new forms of collaboration, and conclude business deals. Market ing – A place to b uild imag e

Hong Kong is an ideal place for foreign enterprises to demonstrate their international image and convince Mainland consumers of their global

Section 1

Section 1

Overview of the Greater Pearl River Delta Region


14

15

Overview of the

Greater

coastal region of China, and one of the prominent exporting regions of the world. It is also an emerging world-class metropolis. Figure 1-1: The Greater Pearl River Delta Region

Pearl River Delta Region Guangzhou

Huizhou

Zhaoqing Foshan Jiangmen

Dongguan

Zhongshan

Zhuhai

Shenzhen Hong Kong

Macao

The Greater Pearl River Delta region is perhaps best known for its pioneering role in Mainland China’s Open Door Policy launched

1.1. ‘9+2’ Cities

in 1979. The Central Government authorised two of the first four

from Three

Special Economic Zones (SEZs) to be located in the Pearl River

Jurisdictions The

Greater

Pearl

Delta region in 1984. The two concerned SEZs, Shenzhen and Zhuhai, were so entrusted due to their proximity to

River

Hong Kong and Macao. Incentives such as preferential

Delta region (GPRD) consists of nine cities in the Pearl River Delta

Traditionally and particularly in the 1980s and 1990s, only parts of Huizhou (the urban

1

(PRD) region of Guangdong Province: Guangzhou,

Shenzhen,

Zhuhai,

Foshan,

Huizhou, Dongguan, Zhongshan, Jiangmen, and 1

Zhaoqing ; plus the Hong Kong Special Administrative Region (HKSAR), and Macao Special Administrative Region

district of Huizhou, Huidong County, and Boluo County), and parts of Zhaoqing (the urban district of Zhaoqing, Gaoyao, and Sihui) were categorised as the Pearl River Delta region. As of 2000, certain statistics, government plans and academic discussions had begun to include the entire territory of Huizhou and Zhaoqing in the PRD regional discussions. This report adopts the later approach to analyse Huizhou and Zhaoqing.

Section 1

Section 1



14

15

Overview of the

Greater

coastal region of China, and one of the prominent exporting regions of the world. It is also an emerging world-class metropolis. Figure 1-1: The Greater Pearl River Delta Region

Pearl River Delta Region Guangzhou

Huizhou

Zhaoqing Foshan Jiangmen

Dongguan

Zhongshan

Zhuhai

Shenzhen Hong Kong

Macao

The Greater Pearl River Delta region is perhaps best known for its pioneering role in Mainland China’s Open Door Policy launched

1.1. ‘9+2’ Cities

in 1979. The Central Government authorised two of the first four

from Three

Special Economic Zones (SEZs) to be located in the Pearl River

Jurisdictions The

Greater

Pearl

Delta region in 1984. The two concerned SEZs, Shenzhen and Zhuhai, were so entrusted due to their proximity to

River

Hong Kong and Macao. Incentives such as preferential

Delta region (GPRD) consists of nine cities in the Pearl River Delta

Traditionally and particularly in the 1980s and 1990s, only parts of Huizhou (the urban

1

(PRD) region of Guangdong Province: Guangzhou,

Shenzhen,

Zhuhai,

district of Huizhou, Huidong County, and Boluo County), and parts of Zhaoqing (the urban district of Zhaoqing, Gaoyao, and Sihui) were categorised as the Pearl River

Foshan,

Delta region. As of 2000, certain statistics, government plans and academic

Huizhou, Dongguan, Zhongshan, Jiangmen, and

discussions had begun to include the entire territory of Huizhou and Zhaoqing in the PRD regional discussions. This report adopts

1

Zhaoqing ; plus the Hong Kong Special Administrative

the later approach to analyse Huizhou and Zhaoqing.

Region (HKSAR), and Macao Special Administrative Region (MSAR) of Mainland China. The region is an economic powerhouse in the

Section 1

Section 1



16

17

tax concessions, the bonded system on processing trade, and simplified


examination procedures on foreign investment were provided, making the region attractive for foreign investment. Since then, the Greater Pearl River Delta region has been considered an ‘integrated force’, combining the economic and institutional strengths of the Pearl River Delta region, Hong Kong, and Macao. Despite their different jurisdictions, the three places have worked closely together, jointly entering an export-oriented development phase, new to the People’s Republic of China. Over the past three decades, a massive inflow of foreign investment to the Greater Pearl River Delta region has led to numerous infrastructure projects, and the migration of thousands of international talent and millions of domestic workers. The region has undergone a comprehensive transformation in terms of its economic

1.2.1. World-Class Exporting Region Since 1979, the Mainland Chinese government has launched numerous reforms in the Pearl River Delta region to drive merchandise trade, and to attract export-oriented foreign manufacturing investment. As of the end of 2012, the merchandise trading volume of the Greater Pearl River Delta region stood at US$1,778.2 billion.2 This was US$93.8 billion higher than that of Japan in the same period, making the Greater Pearl River Delta region equivalent to the fourth largest trading economy in the world. Table 1-2: Milestones of Merchandise Trade in the Greater Pearl River Delta Region

structure, spatial layout, population mass and institutional setups. Period

As a result of this development, the Pearl River Delta region is widely

1990

Milestone Equivalent to 10th largest trading economy globally, ahead of Spain, Korea

recognised to be a role model, exemplifying the transition of a developing

and Switzerland. Trading activities were primarily driven by Hong Kong, and

phase into a newly industrialised one. Indeed, through implementing

Much intra-regional trade took place in the region, and Hong Kong accounted

supported by Hong Kong-invested companies in the Pearl River Delta region. for 73.7 percent of merchandise trade in the Pearl River Delta region.

an accelerated industrialisation strategy, and utilising the institutional advantages of different jurisdictions to the full, the Pearl River Delta

1995-2000

Equivalent to sixth largest trading economy globally, ahead of Italy and Canada. This standing was supported by strong manufacturing development

region has evolved from an agricultural-based region into a modern

in the Pearl River Delta region, inclusive of Taiwanese companies in the region.

industrialised zone to grasp the lion’s share of the economic benefits of

Hong Kong and Macao continued to be major trading partners of the Pearl River Delta region, representing 27.2 percent of merchandise trade in 1995.

Mainland China, despite its limited natural resources.

Since then, the Pearl River Delta region has actively developed direct trade with world economies, and Hong Kong’s and Macao’s share of merchandise trading in the Pearl River Delta region has stabilised at around 20 to 23 percent.

Table 1-1: The Pearl River Delta Region in 2012: Limited Resources, Enormous Output Endowed with:

0.57% of national land area

2005

4.2% of national population

River Delta region came in behind the four foreign economies of the US,

Generated:

GDP Sectoral Performance

9.2% of national GDP

Germany, Japan, and France. The Pearl River Delta region quickly narrowed its

219.6% of per capita GDP of national average

gap with Hong Kong.

10.4% of national industry output

2010

8.9% of national saving deposits by urban and rural residents

Equivalent to fifth largest trading economy globally, ahead of France, and behi nd t he t hree forei gn e cono mies of t he US , Ge rmany, a nd J apan .

10.7% of national tertiary industry Residents’ Wealth

Equivalent to sixth largest trading economy globally, ahead of the UK. After China ranked as the third largest trading economy in 2005, the Greater Pearl

2012

Equivalent to fourth largest trading economy globally, ahead of Japan, and behi nd t he two forei gn e cono mies of the US, a nd G erma ny. Hong Kong and the

Market Potential

7.9% of total national retail sales

Pearl River Delta region swiftly recovered from the global financial crisis, and

Foreign Economic Cooperation

26.7% of national export, 21.8% of national import

picked up exporting momentum.

19.3% of foreign direct investment (FDI) actually utilised

Section 1

Section 1



16

17

tax concessions, the bonded system on processing trade, and simplified


examination procedures on foreign investment were provided, making the region attractive for foreign investment. Since then, the Greater Pearl River Delta region has been considered an ‘integrated force’, combining the economic and institutional strengths of the Pearl River Delta region, Hong Kong, and Macao. Despite their different jurisdictions, the three places have worked closely together, jointly entering an export-oriented development phase, new to the People’s Republic of China. Over the past three decades, a massive inflow of foreign investment to the Greater Pearl River Delta region has led to numerous infrastructure projects, and the migration of thousands of international talent and millions of domestic workers. The region has undergone a comprehensive transformation in terms of its economic

1.2.1. World-Class Exporting Region Since 1979, the Mainland Chinese government has launched numerous reforms in the Pearl River Delta region to drive merchandise trade, and to attract export-oriented foreign manufacturing investment. As of the end of 2012, the merchandise trading volume of the Greater Pearl River Delta region stood at US$1,778.2 billion.2 This was US$93.8 billion higher than that of Japan in the same period, making the Greater Pearl River Delta region equivalent to the fourth largest trading economy in the world. Table 1-2: Milestones of Merchandise Trade in the Greater Pearl River Delta Region

structure, spatial layout, population mass and institutional setups. Period

As a result of this development, the Pearl River Delta region is widely

1990

Milestone Equivalent to 10th largest trading economy globally, ahead of Spain, Korea

recognised to be a role model, exemplifying the transition of a developing

and Switzerland. Trading activities were primarily driven by Hong Kong, and

phase into a newly industrialised one. Indeed, through implementing

Much intra-regional trade took place in the region, and Hong Kong accounted

supported by Hong Kong-invested companies in the Pearl River Delta region. for 73.7 percent of merchandise trade in the Pearl River Delta region.

an accelerated industrialisation strategy, and utilising the institutional advantages of different jurisdictions to the full, the Pearl River Delta

1995-2000

Equivalent to sixth largest trading economy globally, ahead of Italy and Canada. This standing was supported by strong manufacturing development

region has evolved from an agricultural-based region into a modern

in the Pearl River Delta region, inclusive of Taiwanese companies in the region.

industrialised zone to grasp the lion’s share of the economic benefits of

Hong Kong and Macao continued to be major trading partners of the Pearl River Delta region, representing 27.2 percent of merchandise trade in 1995.

Mainland China, despite its limited natural resources.

Since then, the Pearl River Delta region has actively developed direct trade with world economies, and Hong Kong’s and Macao’s share of merchandise trading in the Pearl River Delta region has stabilised at around 20 to 23 percent.

Table 1-1: The Pearl River Delta Region in 2012: Limited Resources, Enormous Output Endowed with:

0.57% of national land area

2005

4.2% of national population

Equivalent to sixth largest trading economy globally, ahead of the UK. After China ranked as the third largest trading economy in 2005, the Greater Pearl River Delta region came in behind the four foreign economies of the US,

Generated:

GDP Sectoral Performance

9.2% of national GDP

Germany, Japan, and France. The Pearl River Delta region quickly narrowed its

219.6% of per capita GDP of national average

gap with Hong Kong.

10.4% of national industry output

2010

Residents’ Wealth

Equivalent to fifth largest trading economy globally, ahead of France, and behi nd t he t hree forei gn e cono mies of t he US , Ge rmany, a nd J apan .

10.7% of national tertiary industry 8.9% of national saving deposits by urban and rural

2012

residents

Equivalent to fourth largest trading economy globally, ahead of Japan, and behi nd t he two forei gn e cono mies of the US, a nd G erma ny. Hong Kong and the

Market Potential

7.9% of total national retail sales

Pearl River Delta region swiftly recovered from the global financial crisis, and

Foreign Economic Cooperation

26.7% of national export, 21.8% of national import

picked up exporting momentum.

19.3% of foreign direct investment (FDI) actually utilised Source : China Statis tical Yearbook 2 013 and Guangdo ng Stat istical Yearbook 20 13.

Section 1

2

US$ 1,999.8 billion before deducting the double counting of trade transactions among the three jurisdictions.

Section 1



18

19

Table 1-3: Merchandise Trade in the Greater Pearl River Delta Region (US$ Billion)

demonstrate Hong Kong’s institutional advantage as a free port serving the region.5

1990

1995

2000

2005

2010

2012

Pearl River Delta 3

41.9

94.3

159.1

411.1

751.3

943.4

Being the cornerstone of intra-regional trade, processing trade has

Hong Kong

167.1

369.9

416.7

592.3

842.1

1,046.4

enabled Hong Kong’s financial portfolio to carry out cross-border trade

3.2

4.0

5.2

7.0

6.5

10.0

Doub le cou nt trade 4

( 32 .3 )

( 26 .5)

( 35 6 . )

(87. 1)

( 15 4. 5)

( 22 1.6 )

settlements. Processing trade also generates huge trade surpluses to

Greater Pearl River Delta

180.0

441.8

545.4

923.3

1,445.4

1,778.2

Mainland China, particularly to the Pearl River Delta region. Meanwhile,

(Equivalent World Rank)

(10th)

(6th)

(6th)

(6th)

(5th)

(4th)

intra-regional trade, largely in the form of processing trade, is not only

US

910.6

1,355.6

2,041.2

2,633.8

3,247.7

3,881.2

China

115.4

280.9

474.3

1,421.9

2,974.0

3,867.1

Germany

776.8

987.3

1,049.0

1,748.0

2,313.7

2,574.3

Japan

522.9

779.0

858.8

1,110.8

1,463.9

1,684.4

financing services as in the past, and, in recent years, to provide Hong Macao

Kong with a huge trading mass to develop renminbi cross-border trade

a key driving force for Greater PRD development, and differentiating the region from other Chinese regions, but the most important vehicle linking the economic players of the region for joint development. In 2011, Hong Kong trade involving outward processing in Mainland

Source: WTO database and Guangdong Statistical Yearbook, various years.

China amounted to US$174.7 billion, 98.6 percent of which transactions were with Guangdong Province. Within the province, the Pearl River Delta cities of Shenzhen and Dongguan accounted for 34 percent and 31

It should be pointed out that a fairly large share of trading activities in

percent of processing trade value, respectively. In addition, the frequent

the Greater Pearl River Delta region are processing trade and intra-

transactions between small and medium-sized enterprises (SMEs) in

regional trade which may give rise to a double counting of trading

the region, arising from processing trade and intra-regional trade, make

transactions. Some academic discussions tend to estimate intra-regional

heavy demands on the cross-border logistic, financial, and professional

trade and delete this from economic analysis. However, this analytical

services that are instrumental for the rapid development of service

approach may overlook the contribution of processing trade to Pearl

sectors in the region.

River Delta development. In reality, processing trade assists exportled manufacturers, cutting short the lengthy process of dealing with Mainland Chinese Customs, and improving cash flow by minimising pre-paid import duties. More importantly, processing trade allows manufacturers to retain their financial management in Hong Kong, where they can enjoy free international capital flow and low taxation. The scale of processing trade is one of the ideal economic indicators to 3

The PRD’s trade data were calculated with the principle of production and marketing.

4

The estimated trading transactions between the PRD region and Hong Kong/Macao, based on the Guangdong

5

It is extremely challenging to estimate intra-regional trade as a result of statistical, economic and institutional factors. The Hong Kong trading figure does not specify trading transactions with the Pearl River Delta region, but Mainland China as a whol e. Th e C hinese statistical bureau adopts the principle of ‘good s o rigin’ to c ompile import data, Hong Kong’s re-export activities, and, particularly, exporting transactions from Hong Kong to the Pearl River Delta region, which are not recorded. On institutional considerations, particularly after the mid-2000’s, in order to speed up and streamline the tax rebate mechanism for exporting goods, many PRD-based processing manufacturers exported goods produced in the Pearl River Delta region to Hong Kong first, then re-imported the same products back to the Pearl River Delta region. To counter this, the Central Government established a bonded warehouse, however, some Pearl River Delta region manufacturers declared to Customs that they export to Hong Kong via these bonded warehouses for the purposes of their financial arrangements, though the goods have never entered Hong Kong, nor have been recorded by Hong Kong Customs. Given the constant changes in trading patterns of processing manufacturers, in response to the Mainland Customs regulations, it is almost impossible to develop a simple formula to estimate processing trade and intra-regional trade figures. Among all trading statistics, the processing trade figure estimated by the Census and Statistics Department of the HKSAR Government may

Section 1

Section 1



18

19

Table 1-3: Merchandise Trade in the Greater Pearl River Delta Region (US$ Billion)

demonstrate Hong Kong’s institutional advantage as a free port serving the region.5

1990

1995

2000

2005

2010

2012

Pearl River Delta 3

41.9

94.3

159.1

411.1

751.3

943.4

Being the cornerstone of intra-regional trade, processing trade has

Hong Kong

167.1

369.9

416.7

592.3

842.1

1,046.4

enabled Hong Kong’s financial portfolio to carry out cross-border trade

3.2

4.0

5.2

7.0

6.5

10.0

Doub le cou nt trade 4

( 32 .3 )

( 26 .5)

( 35 6 . )

(87. 1)

( 15 4. 5)

( 22 1.6 )

settlements. Processing trade also generates huge trade surpluses to


180.0

441.8

545.4

923.3

1,445.4

1,778.2

Mainland China, particularly to the Pearl River Delta region. Meanwhile,


(10th)

(6th)

(6th)

(6th)

(5th)

(4th)

intra-regional trade, largely in the form of processing trade, is not only

US

910.6

1,355.6

2,041.2

2,633.8

3,247.7

3,881.2

China

115.4

280.9

474.3

1,421.9

2,974.0

3,867.1

Germany

776.8

987.3

1,049.0

1,748.0

2,313.7

2,574.3

Japan

522.9

779.0

858.8

1,110.8

1,463.9

1,684.4

financing services as in the past, and, in recent years, to provide Hong Macao

Kong with a huge trading mass to develop renminbi cross-border trade

a key driving force for Greater PRD development, and differentiating the region from other Chinese regions, but the most important vehicle linking the economic players of the region for joint development. In 2011, Hong Kong trade involving outward processing in Mainland China amounted to US$174.7 billion, 98.6 percent of which transactions were with Guangdong Province. Within the province, the Pearl River

Source: WTO database and Guangdong Statistical Yearbook, various years.

Delta cities of Shenzhen and Dongguan accounted for 34 percent and 31 It should be pointed out that a fairly large share of trading activities in

percent of processing trade value, respectively. In addition, the frequent

the Greater Pearl River Delta region are processing trade and intra-

transactions between small and medium-sized enterprises (SMEs) in

regional trade which may give rise to a double counting of trading

the region, arising from processing trade and intra-regional trade, make

transactions. Some academic discussions tend to estimate intra-regional

heavy demands on the cross-border logistic, financial, and professional

trade and delete this from economic analysis. However, this analytical

services that are instrumental for the rapid development of service

approach may overlook the contribution of processing trade to Pearl

sectors in the region.

River Delta development. In reality, processing trade assists exportled manufacturers, cutting short the lengthy process of dealing with Mainland Chinese Customs, and improving cash flow by minimising pre-paid import duties. More importantly, processing trade allows manufacturers to retain their financial management in Hong Kong, where they can enjoy free international capital flow and low taxation. The scale of processing trade is one of the ideal economic indicators to 3

The PRD’s trade data were calculated with the principle of production and marketing.

4

The estimated trading transactions between the PRD region and Hong Kong/Macao, based on the Guangdong Statistical Yearbook; trading transactions between Macao and Hong Kong, based on the Statistics and Census Service of the Macao SAR Government, to be deducted from the aggregated trading volume.

Section 1

5

It is extremely challenging to estimate intra-regional trade as a result of statistical, economic and institutional factors. The Hong Kong trading figure does not specify trading transactions with the Pearl River Delta region, but Mainland China as a whol e. Th e C hinese statistical bureau adopts the principle of ‘good s o rigin’ to c ompile import data, Hong Kong’s re-export activities, and, particularly, exporting transactions from Hong Kong to the Pearl River Delta region, which are not recorded. On institutional considerations, particularly after the mid-2000’s, in order to speed up and streamline the tax rebate mechanism for exporting goods, many PRD-based processing manufacturers exported goods produced in the Pearl River Delta region to Hong Kong first, then re-imported the same products back to the Pearl River Delta region. To counter this, the Central Government established a bonded warehouse, however, some Pearl River Delta region manufacturers declared to Customs that they export to Hong Kong via these bonded warehouses for the purposes of their financial arrangements, though the goods have never entered Hong Kong, nor have been recorded by Hong Kong Customs. Given the constant changes in trading patterns of processing manufacturers, in response to the Mainland Customs regulations, it is almost impossible to develop a simple formula to estimate processing trade and intra-regional trade figures. Among all trading statistics, the processing trade figure estimated by the Census and Statistics Department of the HKSAR Government may be the best indicator of intra-regional trade. The complexity of intra-regional trading figures demonstrates the institutional uniqueness of the region, with Hong Kong as the focal point.

Section 1



20

21

Table 1-4: Hong Kong’s Processing Trade with Mainland China (US$ Billion)

Total processing trade with Mainland China Processing exports to Mainland China Processing imports from Mainland China

1.2.2. Link between Global Economies and Mainland China

1990

1995

2000

2005

2010

2011

The uniqueness of the Pearl River Delta region lies in its global economic

30.4

79.8

109.0

138.9

165.0

174.7

links. Of all key economic indicators, the Pearl River Delta region

11.8

28.1

36.2

50.0

66.8

71.4

18.6

51.7

72.8

89.0

98.1

103.3

6.8

23.5

36.6

39.0

31.3

31.8

performs best in foreign-related indicators. In 2012, the region accounted for a quarter of national exports and a fifth of foreign direct investment, mainly due to the strong support of Hong Kong. Indeed, Hong Kong’s cumulative investment into Guangdong Province (1979-2012) was

Trade surplus of processing trade to Mainland China

Source: Census and Statis tics Depart ment of HKSAR Governm ent, Hong Kong’s Trade Involvin g Outward Processing in the Mainland of China, various issues.

Indeed, simply looking at the export performance of the Pearl River Delta

US$184.7 billion, and accounted for 61.8 percent of the foreign direct investment actually utilised in the period. In fact, the majority of Hong Kong investments went to the Pearl River Delta region. Table 1-6: Indicators of the Pearl River Delta Region, as Percentages of National Performance

region alone, not including the contribution of Hong Kong and Macao, the Pearl River Delta region qualifies classi fication as a prominent world-

D om es ti c-Re lat ed I ndi ca tor s

class exporting region. In 2012, the export volume of the Pearl River Land Area

Delta region stood at US$547.7 billion, on a par with Korea at US$547.9

Permanent Population

billi on, surpa ssing that of Russia (US$529.3 billi on), and behind just six foreign nations (i.e. the US, Germany, Japan, the Netherlands, France, and Korea).

6

2000

2005

2010

Total Retail Sales of Consumer Good

Exports

Imports

Foreign Direct Investment Actually Utilised

35.4%

1990

2.1%

5.4%

5.1%

-

35.8%

36.9%

1995

2.7%

6.7%

7.2%

-

34.5%

32.5%

21.2%

2000

3.4%

8.5%

8.2%

10.4%

34.0%

33.0%

25.5%

2005

3.5%

9.9%

8.8%

10.8%

29.8%

27.8%

18.8%

2010

4.2%

9.4%

8.0%

9.6%

27.4%

22.9%

17.4%

2012

4.2%

9.2%

7.9%

8.9%

26.7%

21.8%

19.3%

0.57%

Table 1-5: Export Performance of the Pearl River Delta Region (US$ Billion) 1995

Gross Domestic Product

Fore ig n-Re lat ed I ndi ca tor s Savings Deposits by Urban and Rural Residents

2012

Pearl River Delta Region

51.3

84.8

227.3

431.8

547.7

China

148.8

249.2

762.0

1,577.8

2,048.7

US

584.7

781.9

901.1

1,278.5

1,545.7

Germany

523.5

551.8

970.9

1,258.9

1,407.1

Hong Kong serves as the most important gateway linking Mainland

Japan

443.1

479.2

594.9

769.8

798.6

China and the Pearl River Delta region to the economies of the world.

Netherlands

203.2

233.1

406.4

574.3

655.7

France

301.2

327.6

463.4

523.8

568.9

Korea, Rep.

125.1

172.3

284.4

466.4

547.9

Russia

81.1

105.6

243.8

400.6

529.3

Source : WTO databa se and Guangdo ng Stat istical Yearbook 2 013.

Source : Based on d ata fro m the China Statist ical Yearbook 2013 and G uangdon g Stat istical Yearbook 2013.

The economic interaction between Hong Kong and the Pearl River Delta is trade and investment driven. In the early 1980s, Hong Kong manufacturers, by establishing labour-intensive processing factories in the Pearl River Delta region, initiated a revolutionary export-led working relationship with Mainland China. The low-cost goods assembled in the Pearl River Delta region were then re-exported to global markets via

Section 1

Section 1



20

21

Table 1-4: Hong Kong’s Processing Trade with Mainland China (US$ Billion)

Total processing trade with Mainland China Processing exports to Mainland China Processing imports from Mainland China

1.2.2. Link between Global Economies and Mainland China

1990

1995

2000

2005

2010

2011

The uniqueness of the Pearl River Delta region lies in its global economic

30.4

79.8

109.0

138.9

165.0

174.7

links. Of all key economic indicators, the Pearl River Delta region

11.8

28.1

36.2

50.0

66.8

71.4

18.6

51.7

72.8

89.0

98.1

103.3

6.8

23.5

36.6

39.0

31.3

31.8

performs best in foreign-related indicators. In 2012, the region accounted for a quarter of national exports and a fifth of foreign direct investment, mainly due to the strong support of Hong Kong. Indeed, Hong Kong’s cumulative investment into Guangdong Province (1979-2012) was

Trade surplus of processing trade to Mainland China

Source: Census and Statis tics Depart ment of HKSAR Governm ent, Hong Kong’s Trade Involvin g Outward Processing in the Mainland of China, various issues.

Indeed, simply looking at the export performance of the Pearl River Delta

US$184.7 billion, and accounted for 61.8 percent of the foreign direct investment actually utilised in the period. In fact, the majority of Hong Kong investments went to the Pearl River Delta region. Table 1-6: Indicators of the Pearl River Delta Region, as Percentages of National Performance

region alone, not including the contribution of Hong Kong and Macao, the Pearl River Delta region qualifies classi fication as a prominent world-

D om es ti c-Re lat ed I ndi ca tor s

Permanent Population



1990

2.1%

5.4%

5.1%

-

1995

2.7%

6.7%

7.2%

-

34.5%

32.5%

21.2%

2000

3.4%

8.5%

8.2%

10.4%

34.0%

33.0%

25.5%

2005

3.5%

9.9%

8.8%

10.8%

29.8%

27.8%

18.8%

2010

4.2%

9.4%

8.0%

9.6%

27.4%

22.9%

17.4%

2012

4.2%

9.2%

7.9%

8.9%

26.7%

21.8%

19.3%

class exporting region. In 2012, the export volume of the Pearl River Land Area

Delta region stood at US$547.7 billion, on a par with Korea at US$547.9 billi on, surpa ssing that of Russia (US$529.3 billi on), and behind just six foreign nations (i.e. the US, Germany, Japan, the Netherlands, France, and Korea).

6

2000

2005

2010

2012

Imports

35.8%

36.9%

35.4%


51.3

84.8

227.3

431.8

547.7

China

148.8

249.2

762.0

1,577.8

2,048.7

US

584.7

781.9

901.1

1,278.5

1,545.7

Germany

523.5

551.8

970.9

1,258.9

1,407.1

Hong Kong serves as the most important gateway linking Mainland

Japan

443.1

479.2

594.9

769.8

798.6

China and the Pearl River Delta region to the economies of the world.

Netherlands

203.2

233.1

406.4

574.3

655.7

France

301.2

327.6

463.4

523.8

568.9

Korea, Rep.

125.1

172.3

284.4

466.4

547.9

Russia

81.1

105.6

243.8

400.6

529.3

Source : WTO databa se and Guangdo ng Stat istical Yearbook 2 013.

6

Exports

Foreign Direct Investment Actually Utilised

0.57%

Table 1-5: Export Performance of the Pearl River Delta Region (US$ Billion) 1995

Fore ig n-Re lat ed I ndi ca tor s Savings Deposits by Urban and Rural Residents

In 201 2, the import volume of Hong Kong was US$553.5 billi on and behind six foreign nation s (the US, Germany,

Source : Based on d ata fro m the China Statist ical Yearbook 2013 and G uangdon g Stat istical Yearbook 2013.

The economic interaction between Hong Kong and the Pearl River Delta is trade and investment driven. In the early 1980s, Hong Kong manufacturers, by establishing labour-intensive processing factories in the Pearl River Delta region, initiated a revolutionary export-led working relationship with Mainland China. The low-cost goods assembled in the Pearl River Delta region were then re-exported to global markets via

Japan, the UK, France and the Netherlands), surpassing that of Korea (US$519.6 billion). Generally, the PRD region performs better in export activities, while Hong Kong does better in import activities, primarily due to its institutional advantage in being a ‘free port’.

Section 1

Section 1



22

Hong Kong’s well-established international trading networks. Attracted

23

Table 1-7: Gross Domestic Product of the Greater Pearl River Delta Region (US$ billion)

by the i ndustria l foundatio n of t he Pearl River Delta region, a s well as the

1990

2000

2005

2010

2012

98.6

276.9

411.6

815.9

1,064.3

Pearl River Delta

18.7

101.7

222.0

558.9

757.5

Hong Kong

76.9

169.1

177.8

228.7

263.3

3.0

6.1

11.8

28.4

43.6

-

-

-

(16th)

(16th)

Korea, Rep.

263.8

533.4

844.9

1,014.9

1,129.6

Indonesia

114.4

165

285.9

709.2

878.0

Turkey

150.7

266.6

483.0

731.1

789.3

Netherlands

294.9

385.1

638.5

772.1

770.6

producer services and financial support that Hong Kong provided, other


international investors subsequently followed Hong Kong’s lead into the Pearl River Delta. At its peak in the 1980s, the region represented more than a third of Mainland China’s total foreign direct investments.

Macao

Following the opening-up of the Yangtze River Delta region, and China’s


accession to the World Trade Organization (WTO) in 2001, the FDI proportion of the Pearl River Delta region stabilised at around 20 percent of the national total. The large scale of foreign investment projects attracted a huge influx of migrant workers into the Pearl River Delta region, and swiftly built up

Source : Guan gdong Statis tical Yearbook 2013 and World Bank databas e (fo r 20 10 & 20 12 data). The GDP figures of the Pearl River Delta are proportionate to the total GDP of Mainland China.

economic and population mass. There were other changes as well: the improvement of domestic household incomes led to a rapid growth of

The Pearl River Delta region is the core force of the economy of

saving deposits in the Pearl River Delta region, which consequently

Guangdong Province, and is a major economic player in the coastal

boosted the expansi on of the domestic market. The increasin g

China region. In fact, its performances in GDP, fixed investment,

consumption power of the Chinese quickly drew in the investment

and retail sales surpass those of most of the Mainland’s key coastal

aspirations of international manufacturers, retailers, and distributors

provinces and municipalities. In 2012, per capita GDP of the Pearl River

keen to capture the China market. In the early 2000s, Japanese

Delta region stood at US$13,363 (RMB84,355). This was 219.6 percent

automobile manufacturers Toyota, Honda, and Nissan, had set up

of the national average, higher than that of Jiangsu and Zhejiang

manufacturing facilities in Guangzhou, serving Mainland consumers

provinces, and on a par with Shanghai. In addition, apart from its

from their Pearl River Delta manufacturing facilities.

outstanding export performance, the Pearl River Delta region also excels in services development. In 2012, the output of the Pearl River

1.2.3. Coastal China’s Economic Powerhouse

Delta’s tertiary industry amounted to US$391 billion (RMB2,471 billion), which was the highest among all coastal provinces and municipalities

An even better indicator of the economic competence of the Greater

including Beijing, Shanghai, Tianjin, Jiangsu, and Zheijing. Not only is

Pearl River Delta region may be Gross Domestic Product (GDP). In 2012,

the Pearl River Delta region blessed with high disposable income, it

the region’s GDP was equivalent to that of the 16th largest economy in

also encompasses wealthy local governments with high government

the world, ahead of Indonesia, Turkey and the Netherlands, and only

budget ary revenue s, which allows the regio n’s aut hori tie s t o c arry out

slightly behind Korea.

ambitious infrastructure investments.

Section 1

Section 1



22

23

Hong Kong’s well-established international trading networks. Attracted

Table 1-7: Gross Domestic Product of the Greater Pearl River Delta Region (US$ billion)

by the i ndustria l foundatio n of t he Pearl River Delta region, a s well as the

1990

2000

2005

2010

2012

98.6

276.9

411.6

815.9

1,064.3

Pearl River Delta

18.7

101.7

222.0

558.9

757.5

Hong Kong

76.9

169.1

177.8

228.7

263.3

3.0

6.1

11.8

28.4

43.6

-

-

-

(16th)

(16th)

Korea, Rep.

263.8

533.4

844.9

1,014.9

1,129.6

Indonesia

114.4

165

285.9

709.2

878.0

Turkey

150.7

266.6

483.0

731.1

789.3

Netherlands

294.9

385.1

638.5

772.1

770.6

producer services and financial support that Hong Kong provided, other


international investors subsequently followed Hong Kong’s lead into the Pearl River Delta. At its peak in the 1980s, the region represented more than a third of Mainland China’s total foreign direct investments.

Macao

Following the opening-up of the Yangtze River Delta region, and China’s


accession to the World Trade Organization (WTO) in 2001, the FDI proportion of the Pearl River Delta region stabilised at around 20 percent of the national total. The large scale of foreign investment projects attracted a huge influx of migrant workers into the Pearl River Delta region, and swiftly built up

Source : Guan gdong Statis tical Yearbook 2013 and World Bank databas e (fo r 20 10 & 20 12 data). The GDP figures of the Pearl River Delta are proportionate to the total GDP of Mainland China.

economic and population mass. There were other changes as well: the improvement of domestic household incomes led to a rapid growth of

The Pearl River Delta region is the core force of the economy of

saving deposits in the Pearl River Delta region, which consequently

Guangdong Province, and is a major economic player in the coastal

boosted the expansi on of the domestic market. The increasin g

China region. In fact, its performances in GDP, fixed investment,

consumption power of the Chinese quickly drew in the investment

and retail sales surpass those of most of the Mainland’s key coastal

aspirations of international manufacturers, retailers, and distributors

provinces and municipalities. In 2012, per capita GDP of the Pearl River

keen to capture the China market. In the early 2000s, Japanese

Delta region stood at US$13,363 (RMB84,355). This was 219.6 percent

automobile manufacturers Toyota, Honda, and Nissan, had set up

of the national average, higher than that of Jiangsu and Zhejiang

manufacturing facilities in Guangzhou, serving Mainland consumers

provinces, and on a par with Shanghai. In addition, apart from its

from their Pearl River Delta manufacturing facilities.

outstanding export performance, the Pearl River Delta region also excels in services development. In 2012, the output of the Pearl River Delta’s tertiary industry amounted to US$391 billion (RMB2,471 billion),

1.2.3. Coastal China’s Economic Powerhouse

which was the highest among all coastal provinces and municipalities An even better indicator of the economic competence of the Greater

including Beijing, Shanghai, Tianjin, Jiangsu, and Zheijing. Not only is

Pearl River Delta region may be Gross Domestic Product (GDP). In 2012,

the Pearl River Delta region blessed with high disposable income, it

the region’s GDP was equivalent to that of the 16th largest economy in

also encompasses wealthy local governments with high government

the world, ahead of Indonesia, Turkey and the Netherlands, and only

budget ary revenue s, which allows the regio n’s aut hori tie s t o c arry out

slightly behind Korea.

ambitious infrastructure investments.

Section 1

Section 1



24

25

Table 1-8: Indicators for Three Coastal China Regions in 2012


Guang-

Yangtze River Delta Region

dong Province

1.2.4. Emerging World-Class Metropolis With 64.66 million residents in 2012, the Greater Pearl River Delta region

Bohai Rim (Jing-Jin-Ji Cluster)

S ha ng ha i

J ia ng su

Z he ji an g

B ei ji ng

T ia nj in

H eb ei

23.8

79.2

54.8

20.7

14.1

72.9

China

populous country in the world, ahead of the UK and Italy.

Permanent Population7 (year end,

is a highly populous area in China that is equivalent to the 22nd most

Table 1-9: Resident Population of Greater Pearl River Delta Region at Year-End 9 56.9

105.9

(million persons)

1,354

million persons) Gross Domestic Product

757

904

320

856

549

283

204

421

8,221

(US$ billion) 8 Primary Industry (US$ billion)

16

45

2

54

26

2

3

51

830

Secondary Industry

3 50

4 39

1 24

430

2 74

64

1 06

2 22

3 ,7 25

391

420

193

373

24 8

217

96

149

3,666

2000

2005

2010

2012


50.05

52.80

63.76

64.66

Pearl River Delta

42.90

45.47

56.16

56.90

Hong Kong

6.71

6.84

7.05

7.18

Macao

0.44

0.49

0.54

0.58

(23rd)

(24th)

(21st)

(22nd)


(US$ billion)

Source: World Bank database and Gu angdong Statist ical Yearbo ok 201 3. Tertiary Industry (US$ billion) Per Capita GDP (US$)

Among all Greater Pearl River Delta member cities, Guangzhou, 13,363

8,570

13,471

10,827

10,022

13,857

14,760

5,795

6,086

populations of 12.84 million, 10.55 million, and 7.18 million, respectively.

Investment in Fixed Assets

221

297

81

489

280

97

126

311

5,936

and Zhaoqing; the ‘east zone’ including Hong Kong, Shenzhen, Dongguan,

Total Retail Sales

Good

262

359

117

290

215

122

62

147

3,332

(US$ billion) Imports (US$ billion)

548

574

207

329

225

60

49

30

2,049

396

410

230

219

88

348

67

21

1,818

65

99

59

93

54

52

28

33

968

Revenue

Given the geographical proximity of Guangzhou and Foshan; and Hong Kong and Shenzhen; and their inter-city economic interactions, industrial compatibility, and domestic market potential, Guangzhou and Foshan together with Hong Kong and Shenzhen are often perceived to

Local Government Budgetary

and Huizhou; and the ‘west zone’ including Macao, Jiangmen, Zhongshan, and Zhuhai.

(US$ billion) Exports

Typically, the Greater Pearl River Delta region is categorised into three zones – the ‘central zone’ including member cities Guangzhou, Foshan,

(US$ billion)

of Consumer

Shenzhen, and Hong Kong are the key populous cities with resident

(US$ billion)

Source : China Statis tical Yearbook 2 013 and Guangdo ng Stat istical Yearbook 20 13.

be major metropoli ses i n the Greater Pe arl River Delta regi on. They have 20.1 million and 17.7 million residents, and population densities of 1,819 and 5,708 persons per square kilometre, respectively.

Section 1

Section 1



24

25

Table 1-8: Indicators for Three Coastal China Regions in 2012


Guang-

1.2.4. Emerging World-Class Metropolis

(Jing-Jin-Ji Cluster)

dong Province

With 64.66 million residents in 2012, the Greater Pearl River Delta region

Bohai Rim

Yangtze River Delta Region

S ha ng ha i

J ia ng su

Z he ji an g

B ei ji ng

T ia nj in

H eb ei

23.8

79.2

54.8

20.7

14.1

72.9

China

is a highly populous area in China that is equivalent to the 22nd most populous country in the world, ahead of the UK and Italy.

Permanent

Table 1-9: Resident Population of Greater Pearl River Delta Region at Year-End 9

Population7

56.9

(year end,

105.9

(million persons)

1,354

million persons) Gross Domestic Product

757

904

320

856

549

283

204

421

8,221

(US$ billion) 8 Primary Industry (US$ billion)

16

45

2

54

26

2

3

51

830

3 50

4 39

1 24

430

2 74

64

1 06

2 22

3 ,7 25

391

420

193

373

24 8

217

96

149

3,666

2000

2005

2010

2012


50.05

52.80

63.76

64.66

Pearl River Delta

42.90

45.47

56.16

56.90

6.71

6.84

7.05

7.18

Hong Kong Macao

Secondary Industry


0.44

0.49

0.54

0.58

(23rd)

(24th)

(21st)

(22nd)

(US$ billion)

Source: World Bank database and Gu angdong Statist ical Yearbo ok 201 3. Tertiary Industry (US$ billion) Per Capita GDP (US$)

Among all Greater Pearl River Delta member cities, Guangzhou, 13,363

8,570

13,471

10,827

10,022

13,857

14,760

5,795

6,086

populations of 12.84 million, 10.55 million, and 7.18 million, respectively.

Investment in Fixed Assets

221

297

81

489

280

97

126

311

5,936

and Zhaoqing; the ‘east zone’ including Hong Kong, Shenzhen, Dongguan,


262

359

117

290

215

122

62

147

3,332

(US$ billion)

548

574

207

329

225

60

49

30

2,049

396

410

230

219

88

348

67

21

1,818

65

99

59

93

54

52

28

33

968

Given the geographical proximity of Guangzhou and Foshan; and Hong Kong and Shenzhen; and their inter-city economic interactions,

Imports (US$ billion)

ment Budgetary Revenue

industrial compatibility, and domestic market potential, Guangzhou and Foshan together with Hong Kong and Shenzhen are often perceived to

Local Govern-

be major metropoli ses i n the Greater Pe arl River Delta regi on. They have 20.1 million and 17.7 million residents, and population densities of 1,819

(US$ billion)

and 5,708 persons per square kilometre, respectively.

Source : China Statis tical Yearbook 2 013 and Guangdo ng Stat istical Yearbook 20 13.

Perman ent population’ refers to the population that has stayed in the surveyed place for more than six months.

8

and Huizhou; and the ‘west zone’ including Macao, Jiangmen, Zhongshan, and Zhuhai.

(US$ billion) Exports

Typically, the Greater Pearl River Delta region is categorised into three zones – the ‘central zone’ including member cities Guangzhou, Foshan,

(US$ billion)

7

Shenzhen, and Hong Kong are the key populous cities with resident

9

Po pulation in the Pearl River Delta region refers to the permanent popu lation that has stayed in the surveyed place for more than six months. The ‘Hong Kong Resident Population’ comprises ‘Usual Residents’ and ‘Mobile Residents’.

US$1 = RMB 6.3125 for 2012

Visitors are not included in the Hong Kong’s population.

Section 1

Section 1



26

27

Together with the other member cities of the Greater Pearl River Delta

Figure 1-2: Three Potential Metropolitan Areas in the Greater Pearl River Delta Region

region, in particular, the cross-jurisdiction cooperation between Macao and Zhuhai, the Greater Pearl River Delta region has emerged as a worldclass polycentric metropolis with three key areas in the centre and east zones: Hong Kong and Shenzhen, Guangzhou and Foshan as well as Macao and Zhuhai. As a result of the last three decades of industrial and Integrated Guangzhou / Foshan Metropolitan Area

urban development in Shenzhen and Dongguan, and Hong Kong being one of the most densely populated places in the world, the east zone of the Greater Pearl River Delta region has the highest population density.

Intenational Hong Kong / Shenzhen Metropolitan Area

Table 1-10: Population and Land Area of the Greater Pearl River Delta Region (2012) Population

Land Area

Population Density

(million persons)

(sq.km)

(persons/ sq.km)

Guangzhou

12.84

7,249

1,771

Foshan

7.26

3,798

1,912

Zhaoqing

3.98

14,891

267

Distinctive Macao / Zhuhai Metropolitan Area

Central Zone

Metropolitan Area Bay Area RegionalDevelopmentAxis

So urce : B ased

on

Construction

Department

of

Guangdong

Provincial

Government,

Dev elo pme nt Bure au of the Hon g Kong SAR Gov ern men t, Sec reta riat for Tran spo rt and Public Works of the Macao SAR Government, Planning Study on the Coordinated

East Zone

Dev elo pme nt of the Grea ter Pea rl R iver Del ta Town ship s, 2009 , p .45.

Shenzhen

10.55

1,997

5,282

Dongguan

8.29

2,460

3,371

Huizhou

4.67

11,346

412

Hong Kong

7.18

1,104

6,481

Recognising the strategic importance of the Greater Pearl River Delta region in both a national and worldwide context, the Central Government has positioned the Pearl River Delta Region as one of three ‘National Optimized Development Zones’ under its National Territory Development Plan (released in December 2010). This means that the Pearl River Delta region shares the same developmental status as the

West Zone Jiangmen

4.48

9,505

472

Zhongshan

3.16

1,784

1,769

Zhuhai

1.58

1,724

918

Macao

0.57

29.9

18,997

Source : China Statis tical Yearbook 2 013 and Guangdo ng Stat istical Yearbook 2013.

Yangtze River Delta region and the Bohai Rim. It is the only region in southern China to do s o.

Section 1

Section 1



26

27

Together with the other member cities of the Greater Pearl River Delta

Figure 1-2: Three Potential Metropolitan Areas in the Greater Pearl River Delta Region

region, in particular, the cross-jurisdiction cooperation between Macao and Zhuhai, the Greater Pearl River Delta region has emerged as a worldclass polycentric metropolis with three key areas in the centre and east zones: Hong Kong and Shenzhen, Guangzhou and Foshan as well as Macao and Zhuhai. As a result of the last three decades of industrial and Integrated Guangzhou / Foshan Metropolitan Area

urban development in Shenzhen and Dongguan, and Hong Kong being one of the most densely populated places in the world, the east zone of the Greater Pearl River Delta region has the highest population density.

Intenational Hong Kong / Shenzhen Metropolitan Area

Table 1-10: Population and Land Area of the Greater Pearl River Delta Region (2012) Population

Land Area

Population Density

(million persons)

(sq.km)

(persons/ sq.km)

Guangzhou

12.84

7,249

1,771

Foshan

7.26

3,798

1,912

Zhaoqing

3.98

14,891

267

Distinctive Macao / Zhuhai Metropolitan Area

Central Zone

Metropolitan Area Bay Area RegionalDevelopmentAxis

So urce : B ased

on

Construction

Department

of

Guangdong

Provincial

Government,

Dev elo pme nt Bure au of the Hon g Kong SAR Gov ern men t, Sec reta riat for Tran spo rt and Public Works of the Macao SAR Government, Planning Study on the Coordinated

East Zone

Dev elo pme nt of the Grea ter Pea rl R iver Del ta Town ship s, 2009 , p .45.

Shenzhen

10.55

1,997

5,282

Dongguan

8.29

2,460

3,371

Huizhou

4.67

11,346

412

Hong Kong

7.18

1,104

6,481

Recognising the strategic importance of the Greater Pearl River Delta region in both a national and worldwide context, the Central Government has positioned the Pearl River Delta Region as one of three ‘National Optimized Development Zones’ under its National Territory Development Plan (released in December 2010). This means that the Pearl River Delta region shares the same developmental status as the

West Zone Jiangmen

4.48

9,505

472

Zhongshan

3.16

1,784

1,769

Zhuhai

1.58

1,724

918

Macao

0.57

29.9

18,997

Yangtze River Delta region and the Bohai Rim. It is the only region in southern China to do s o.

Source : China Statis tical Yearbook 2 013 and Guangdo ng Stat istical Yearbook 2013.

Section 1

Section 1


28


29

Figure 1-3: National Optimised Development Zones in Mainland China

Harbin-Changchun Region

The Northern Slope of Tianshan Tianshan Mountains Region

Hohhot-Baotou-Yinchuan Region Bohai Rim Region

Guanzhong Region Chengdu-Chongqing Region

NationalOptimised DevelopmentZone City Clusterwith 100million residents

Central Plains Region

Middle Yangtze Region Southeast Fujian Region

City Clusterwith 30million residents and above City Clusterwith 10million residents and above Railway route

Yangtze YangtzeRiver River Delta DeltaRegion Region

Pearl River Delta Region Beibu Gulf Region

Source : Based on Lan d-Use Pl anning o f Guan gdong (2006-201 0).

The polycentric metropolis is not unique to the Greater Pearl River Delta region, it can also be found in the US and Europe. There are four such metropolises in the US, and one in Europe. The latter is located along a

– specifically, the city cluster Hong Kong-Shenzhen-Dongguan and the city cluster Guangzhou-Foshan – already had a resident population of 46.09 million, surpassing the Greater Tokyo region where about 36 million people reside.

discontinuous corridor of urbanisation in western Europe that stretches from London in the north to Milan in the south. Polycentric metropolises cover the territories of the world’s highest concentrations of people, money, and industry, and are globalised places with economic strength and competence in innovation.

Conclusion The Greater Pearl River Delta region not only excels in

The Pearl River Delta region, Yangtze River Delta region, and Bohai Rim

economic performance, but in its enormous development

are the global economic integration zones in Mainland China. However,

potential strengthened by its growing local consumption mass

the Greater Pearl River Delta is the most globally integrated of them

and global links due to Hong Kong. All of these factors result

all due to Hong Kong and Macao. By 2012, thanks to a huge population

in distinct advantages and market attractiveness for potential

mass driven by the urbanisation and industrial development of the

international investors.

region, the two regional metropolises comprising five member cities

Section 1

Section 1



28

29

Figure 1-3: National Optimised Development Zones in Mainland China

Harbin-Changchun Region

The Northern Slope of Tianshan Tianshan Mountains Region

Hohhot-Baotou-Yinchuan Region Bohai Rim Region

Guanzhong Region Chengdu-Chongqing Region

NationalOptimised DevelopmentZone City Clusterwith 100million residents

Central Plains Region

Yangtze YangtzeRiver River Delta DeltaRegion Region

Middle Yangtze Region Southeast Fujian Region

City Clusterwith 30million residents and above City Clusterwith 10million residents and above

Pearl River Delta Region Beibu Gulf Region

Railway route

– specifically, the city cluster Hong Kong-Shenzhen-Dongguan and the


The polycentric metropolis is not unique to the Greater Pearl River Delta region, it can also be found in the US and Europe. There are four such metropolises in the US, and one in Europe. The latter is located along a

city cluster Guangzhou-Foshan – already had a resident population of 46.09 million, surpassing the Greater Tokyo region where about 36 million people reside.

discontinuous corridor of urbanisation in western Europe that stretches from London in the north to Milan in the south. Polycentric metropolises cover the territories of the world’s highest concentrations of people, money, and industry, and are globalised places with economic strength and competence in innovation.

Conclusion The Greater Pearl River Delta region not only excels in

The Pearl River Delta region, Yangtze River Delta region, and Bohai Rim

economic performance, but in its enormous development

are the global economic integration zones in Mainland China. However,

potential strengthened by its growing local consumption mass

the Greater Pearl River Delta is the most globally integrated of them

and global links due to Hong Kong. All of these factors result

all due to Hong Kong and Macao. By 2012, thanks to a huge population

in distinct advantages and market attractiveness for potential

mass driven by the urbanisation and industrial development of the

international investors.

region, the two regional metropolises comprising five member cities

Section 2

Transformation and Development in the Greater Pearl River Delta Region

Section 2


30

31

Transformation and Development of the Greater Pearl River Delta

Region

of the Guangdong Government, and the public institutions of the region. Between 1978 and 2012, t he Pearl River Delta region experienced tremendous economic growth resulting in a structural change in its economic and industrial make up. Back in 1978, many districts of the Pearl River Delta region were engaged in agricultural activities, with primary industry constituting 29.8 p ercent of regional GDP. Guangzhou and Hong Kong were the prime cities in the region and specialised in manufacturing and service activities. Guangzhou served the Mainland China market, while Hong Kong targeted the international one. To accelerate the pace of industrialisation i n the Pearl River Delta region, the Guangdong and local governments provided various investment incentives to Hong Kong, Taiwan and foreign manufacturing enterprises. These included preferential taxation measures, competitive land provisions, and the establishment of bonded zones, and hi-tech industri al parks. At the turn of the new millennium, the secondary sector became the largest economic sector in the Pearl River Delta region, representing 47.6 percent of regional GDP, while the portion of primary industry decreased to 5.4 percent in 2000. The decline was due to rapid industrialisation and urbanisation in the region.

2.1. Development

What truly distinguishes the Pearl River Delta region

Model Prior to 2000 Since

1979,

when

Mainland

from other developing economies is that the China

introduced its Open Door Policy, the economic development of the Pearl River Delta region has been policy-dr iven, and boosted by continuing macroeconomic reforms and adjustments launched by various levels of Chinese governments, from the Central Government to various levels

region launched its industrialisation strategy at a time when its

Section 2


Section 2


30

31

Transformation and Development of the Greater Pearl River Delta

Region

of the Guangdong Government, and the public institutions of the region. Between 1978 and 2012, t he Pearl River Delta region experienced tremendous economic growth resulting in a structural change in its economic and industrial make up. Back in 1978, many districts of the Pearl River Delta region were engaged in agricultural activities, with primary industry constituting 29.8 p ercent of regional GDP. Guangzhou and Hong Kong were the prime cities in the region and specialised in manufacturing and service activities. Guangzhou served the Mainland China market, while Hong Kong targeted the international one. To accelerate the pace of industrialisation i n the Pearl River Delta region, the Guangdong and local governments provided various investment incentives to Hong Kong, Taiwan and foreign manufacturing enterprises. These included preferential taxation measures, competitive land provisions, and the establishment of bonded zones, and hi-tech industri al parks. At the turn of the new millennium, the secondary sector became the largest economic sector in the Pearl River Delta region, representing 47.6 percent of regional GDP, while the portion of primary industry decreased to 5.4 percent in 2000. The decline was due to rapid industrialisation and urbanisation in the region.

2.1. Development

What truly distinguishes the Pearl River Delta region

Model Prior to 2000 Since

1979,

when

Mainland

from other developing economies is that the region launched its industrialisation

China

strategy at a time when its

introduced its Open Door Policy, the economic development of the Pearl River Delta region has been policy-dr iven, and boosted by continuing macroeconomic reforms and adjustments launched by various levels of Chinese governments, from the Central Government to various levels

Section 2


Section 2


32

33

manufacturing-related activities stood at a moderate level – in other

Industrial Value Added (US$ billion)

words, 41 percent of Guangdong’s GDP in 1978. Rather than adopting a

800

de-industrialisation strategy, the Pearl River Delta region chose to launch

700

an export-led strategy of industrialisation and incorporate Hong Kong

600

as the integral element in this strategy to strengthen its manufacturing

500

sector. The producer’s services – logistic, financial, trading, investment,

400

and management services – that Hong Kong provided were crucial to this upgrading process. By introducing processing trade activities into the Pearl River Delta region, the manufacturers of the region, regardless of their Hong Kong, Taiwan or local investment background, faced keen competition from global sources and were under tremendous pressure

Percentage of GDP 100

Tertiary Industry

90

Tertiary Industry

Secondary Industry

80

Secondary Industry

Primary Industry

Primary Industry

70 60 50 40

300

30 200 20 100 0

10 1978

1990

1995

2000

2005

2010

2012

0

1978

1990

1995

2000

2005

2010

2012

to compete. Through combined efforts, the Pearl River Delta region upgraded its manufacturing capabilities, and Hong Kong benefited from

The increase of tertiary industry in the Pearl River Delta region is also

the enlarged hinterland, and transformed into the regional ser vicing hub

largely to do with Hong Kong. Firstly, Hong Kong service providers have

in terms of financial, logistic, investment and management functions.

extended their producers’ service networks to the Pearl River Delta region, particularly logistic and transportation functions. Well-known

Table 2-1: Gross Domestic Product for the Pearl River Delta Region, 1978-201210 Value (US$ billion )

projects include Hopewell’s highway investment linking Guangzhou and

Composition of GDP

Shenzhen, and Hutchison’s container terminal investment in Shenzhen

Total

Primary Industry

Secondary Industry

Tertiary Industry

Primary Industry

Secondary Industry

Tertiary Industry

11.0

3.3

5.2

2.6

29.8%

46.6%

23.6%

followed in the footsteps of companies such as Jardines, which had

1990

21.1

3.2

9.2

8.6

15.3%

43.9%

40.9%

retail activities in Guangzhou, Hong Kong-based property developers

1995

48.8

4.1

23.8

20.9

8.5%

48.7%

42.8%

with real estate investments, and the many multinational groups with

2000

101.7

5.5

48.4

47.8

5.4%

47.6%

47.0%

five-star hotel investments across the Pearl River Delta region via their Hong Kong branches.

197811

2005

223.2

6.8

1 13.1

103.2

3.1%

50.7%

46.3%

2010

556.5

12.0

270.5

274.0

2.1%

48.6%

49.2%

2012

756.9

15.6

349.9

391.5

2.1%

46.2%

51.7%

Source : Guang dong S tatisti cal Yearbo ok 201 3.

and the region. In no time, Hong Kong consumer services providers

2.2. A Journey of Economic Transformation After 20 years of economic development, the Pearl River Delta region

10

Exchange Rate: 1978: US$1=RMB1.68; 1990: US$1=RMB4.7832; 1995: US$1=RMB8.3510; 2000: US$1=RMB8.278 4; 2005: US$1=RMB8.1917; 2010: US$1=RMB6.7695; 2012: US$1=RMB6.3125. This set of exchange rates (period average) is provided by the China Statistical Yearbook 2013. The GDP figures in this table are slightly different from Table 1-7 due to the different exchange rates and calculation approach adopted to estimate China’s GDP. The differences are generally between 1 to 3 per cent, except for the year 1990 when the RMB exchange rate was volatile, and due to Mainland China adopting a dual-track scheme on exchange rates around that period.

11

This set of GDP values was for Guangdong Province in 1978, instead of the PRD’s regional GDP. In view that PRD cities

had completed its first stage of capital accumulation and possessed a sound industrial foundation. This being so, in 2000 the Guangdong Provincial Government decided to aim for another stage of economic transformation, which has resulted in a shift i n the regional development

Section 2


Section 2


32

33

manufacturing-related activities stood at a moderate level – in other

Industrial Value Added (US$ billion)

words, 41 percent of Guangdong’s GDP in 1978. Rather than adopting a

800

de-industrialisation strategy, the Pearl River Delta region chose to launch

700

an export-led strategy of industrialisation and incorporate Hong Kong

600

as the integral element in this strategy to strengthen its manufacturing

500

sector. The producer’s services – logistic, financial, trading, investment,

400

and management services – that Hong Kong provided were crucial to this upgrading process. By introducing processing trade activities into the Pearl River Delta region, the manufacturers of the region, regardless of their Hong Kong, Taiwan or local investment background, faced keen competition from global sources and were under tremendous pressure

Percentage of GDP 100

Tertiary Industry

90

Tertiary Industry

Secondary Industry

80

Secondary Industry

Primary Industry

Primary Industry

70 60 50 40

300

30 200 20 100 0

10 1978

1990

1995

2000

2005

2010

2012

0

1978

1990

1995

2000

2005

2010

2012

to compete. Through combined efforts, the Pearl River Delta region upgraded its manufacturing capabilities, and Hong Kong benefited from

The increase of tertiary industry in the Pearl River Delta region is also

the enlarged hinterland, and transformed into the regional ser vicing hub

largely to do with Hong Kong. Firstly, Hong Kong service providers have

in terms of financial, logistic, investment and management functions.

extended their producers’ service networks to the Pearl River Delta region, particularly logistic and transportation functions. Well-known

Table 2-1: Gross Domestic Product for the Pearl River Delta Region, 1978-201210 Value (US$ billion )

projects include Hopewell’s highway investment linking Guangzhou and

Composition of GDP

Shenzhen, and Hutchison’s container terminal investment in Shenzhen

Total

Primary Industry

Secondary Industry

Tertiary Industry

Primary Industry

Secondary Industry

Tertiary Industry

197811

11.0

3.3

5.2

2.6

29.8%

46.6%

23.6%

followed in the footsteps of companies such as Jardines, which had

1990

21.1

3.2

9.2

8.6

15.3%

43.9%

40.9%

retail activities in Guangzhou, Hong Kong-based property developers

1995

48.8

4.1

23.8

20.9

8.5%

48.7%

42.8%

with real estate investments, and the many multinational groups with

and the region. In no time, Hong Kong consumer services providers

2000

101.7

5.5

48.4

47.8

5.4%

47.6%

47.0%

five-star hotel investments across the Pearl River Delta region via their

2005

223.2

6.8

1 13.1

103.2

3.1%

50.7%

46.3%

Hong Kong branches.

2010

556.5

12.0

270.5

274.0

2.1%

48.6%

49.2%

2012

756.9

15.6

349.9

391.5

2.1%

46.2%

51.7%


Source : Guang dong S tatisti cal Yearbo ok 201 3.

After 20 years of economic development, the Pearl River Delta region 10

Exchange Rate: 1978: US$1=RMB1.68; 1990: US$1=RMB4.7832; 1995: US$1=RMB8.3510; 2000: US$1=RMB8.278 4; 2005: US$1=RMB8.1917; 2010: US$1=RMB6.7695; 2012: US$1=RMB6.3125. This set of exchange rates (period average) is provided by the China Statistical Yearbook 2013. The GDP figures in this table are slightly different from Table 1-7 due to the different exchange rates and calculation approach adopted to estimate China’s GDP. The differences are generally between 1 to 3 per cent, except for the year 1990 when the RMB exchange rate was volatile, and due to Mainland China adopting a dual-track scheme on exchange rates around that period.

11

This set of GDP values was for Guangdong Province in 1978, instead of the PRD’s regional GDP. In view that PRD cities

had completed its first stage of capital accumulation and possessed a sound industrial foundation. This being so, in 2000 the Guangdong Provincial Government decided to aim for another stage of economic transformation, which has resulted in a shift i n the regional development

were the most important economic players for Guangdong Province in the 1970s, the provincial GDP composition was largely in line with the regional GDP structure.

Section 2


Section 2


34

35

model, with sizeable consequences on the Greater Pearl River Delta region as a whole.

10th Guan gdon g P rovinc e Fiv e-Year Plan (200 1-200 5)

When the Guangdong Provincial Government devised its 10th Provincial

Despite the development of the Pearl River Delta region being largely

Five-Year Plan (2001-2005) in 2000, China was already close to its World

policy driven, the highly marketised degree of the regional economic

Trade Organization accession. Guangdong Province felt immense

structure has led to a strong connection between policy initiatives and

pressure to keep its industries strong, fearing potential competition

market changes, particularly international changes.

from a variety of sources in the post-WTO era. The development of ‘Nine Major Industries’ became the key theme for economic transformation

2.2.1. The 10t h to 12th Guangdong Province Five-Year Plans

in Guangdong Province. The nine industries categories were further divided into three major categories, and Guangdong Province attached

In Mainland China, the Five-Year Plan (FYP) is the most important policy platform for Chinese government at various levels to highlight their development intentions, and to allocate development resources economically, politically, and socially. The Guangdong Provincial Government made substantial shifts in its policy orientation over the three consecutive five-year plans from 2001 to 2015.

Major Potential Industries’. The first category related to electronic and information technologies, while the second involved the automotive and pharmaceuticals industries. Both categories were recognised as high-technology industries under Organisation for Economic CoOperation and Development (OECD) guidelines. Guangdong Province

Table 2-2: Policy Orientations of the Pearl River Delta Region for 2001-2015

Background

strategic importance to the ‘Three Major Emerging Industries’ and ‘Three

also prioritised the initiative of ‘encouraging indigenous innovation’.

10th Five-Year Plan

11th Five-Year Plan

12th Five-Year Plan

The Pearl River Delta region’s governments devoted their full attention

(2001-05)

(2006-10)

(2011-15)

to development within their jurisdiction, and massive infrastructure

China’s WTO accession

China’s huge foreign

Global financial crisis

projects such as container terminals and highways were implemented.

reserves Economic

Upgrading

Transformation

Transformation and

The ‘Pan-Pearl River Delta (Pan-PRD) cooperation’ has been a key

Strategy

Manufacturing-led

Manufacturing-led

Diversification

regional cooperation project that Guangdong Province proposed and

strategy: A move

strategy: Developing

Service-ledstrategy:

from labour intensive

technology and capital

Developingmodern

processing to the ‘ Nine

intensive industries

services sector

Industries’

has driven since its 2003 inception. The Pan-PRD covers nine provinces and two Special Administrative Regions in southern China including: Guangdong, Fujian, Jiangxi, Hunan, Guangxi, Hainan, Sichuan, Guizhou,

Regional

Pearl River Delta

Pan-Pearl River Delta

Integration of the

Strategy

development

Cooperation

Greater Pearl River

Yunnan, Hong Kong, and Macao. In 2012, it constituted 35 percent of

Delta region

the national population, and 33 percent of national GDP. The rationale

Key

Container terminals,

High-speed intercity

Regional and cross-

behind Guangdong Province driving the regional initiative is to foster

Transportation

highways

railways and airports

boundar y railway

economic development in a larger regional area.

Projects

networks and bridges

Section 2


Section 2


34

35

model, with sizeable consequences on the Greater Pearl River Delta region as a whole.


When the Guangdong Provincial Government devised its 10th Provincial

Despite the development of the Pearl River Delta region being largely

Five-Year Plan (2001-2005) in 2000, China was already close to its World

policy driven, the highly marketised degree of the regional economic

Trade Organization accession. Guangdong Province felt immense

structure has led to a strong connection between policy initiatives and

pressure to keep its industries strong, fearing potential competition

market changes, particularly international changes.

from a variety of sources in the post-WTO era. The development of ‘Nine Major Industries’ became the key theme for economic transformation

2.2.1. The 10t h to 12th Guangdong Province Five-Year Plans

in Guangdong Province. The nine industries categories were further divided into three major categories, and Guangdong Province attached

In Mainland China, the Five-Year Plan (FYP) is the most important policy platform for Chinese government at various levels to highlight their development intentions, and to allocate development resources economically, politically, and socially. The Guangdong Provincial Government made substantial shifts in its policy orientation over the three consecutive five-year plans from 2001 to 2015.

Major Potential Industries’. The first category related to electronic and information technologies, while the second involved the automotive and pharmaceuticals industries. Both categories were recognised as high-technology industries under Organisation for Economic CoOperation and Development (OECD) guidelines. Guangdong Province

Table 2-2: Policy Orientations of the Pearl River Delta Region for 2001-2015

Background

strategic importance to the ‘Three Major Emerging Industries’ and ‘Three

also prioritised the initiative of ‘encouraging indigenous innovation’.

10th Five-Year Plan

11th Five-Year Plan

12th Five-Year Plan

The Pearl River Delta region’s governments devoted their full attention

(2001-05)

(2006-10)

(2011-15)

to development within their jurisdiction, and massive infrastructure

China’s WTO accession

China’s huge foreign

Global financial crisis

projects such as container terminals and highways were implemented.

reserves Economic

Upgrading

Transformation

Transformation and

The ‘Pan-Pearl River Delta (Pan-PRD) cooperation’ has been a key

Strategy

Manufacturing-led

Manufacturing-led

Diversification

regional cooperation project that Guangdong Province proposed and

strategy: A move

strategy: Developing

Service-ledstrategy:

from labour intensive

technology and capital

Developingmodern

processing to the ‘ Nine

intensive industries

services sector

Industries’

has driven since its 2003 inception. The Pan-PRD covers nine provinces and two Special Administrative Regions in southern China including: Guangdong, Fujian, Jiangxi, Hunan, Guangxi, Hainan, Sichuan, Guizhou,

Regional

Pearl River Delta

Pan-Pearl River Delta

Integration of the

Strategy

development

Cooperation

Greater Pearl River

Yunnan, Hong Kong, and Macao. In 2012, it constituted 35 percent of

Delta region

the national population, and 33 percent of national GDP. The rationale

Key

Container terminals,

High-speed intercity

Regional and cross-

behind Guangdong Province driving the regional initiative is to foster

Transportation

highways

railways and airports

boundar y railway

economic development in a larger regional area.

networks and bridges

Projects

Section 2


Section 2


36

37

backing to technologi cal-base d industri es with a view to transforming

Figure 2-1: The Pan-Pearl River Delta Region

the Pearl River Delta into a high-technology exporting region within five to 10 years. The most important guiding principles of Guangdong Province’s 11th Five-Year Plan were the development priorities outlined in the National

Sichuan

11th Five-Year Plan. One of its most striking features was to diversify the development thrust from the previous export-driven model towards Hunan

Jiangxi

Guizhou

balanced market development. This was done by incorpo rating the Fujian

development of the domestic market into top policy priority, which was a first si nce the country’s economic reform.

Yunnan Guangxi

Guangdong Hong Kong Macao

Due to heavy domestic currency pressure exerted by the Mainland’s huge foreign reserves (US$818 billion in 2005), processing trade, which contributed the largest trade surplus to Mainland China, was no longer unreservedly favoured by the Central Government. Indeed, as a measure

Hainan

to keep its foreign reserves at a reasonable level, the Central Government decided to tighten its grip on processing trade. First, it reduced or


removed preferential measures to processing trade manufacturers, and then it encouraged them to relocate from the wealthy coastal region to

By 2006, the secondary sector of the Pearl River Delta region had reached

the less-developed inland region, including the Pan-PRD region. Last but

a peak at 51.4 percent. The gross industrial output of the electronics

not least, the Central Government put into force the Labo ur Cont ract L aw ,

and the information technology industry, electrical machinery and

and urged local governments to annually review the minimum wage. By

special-purpose equipment industry, both of which fall under ‘Emerging

exerting cost pressure on processing manufacturers, Mainland Chinese

Industries’, and motor vehicles/motorcycles industry under ‘Potential

authorities aimed to assist and drive low value-added manufacturers

Industries’, rapidly rose from 31.5 percent of the provincial industrial share

towards industrial transformation.

in 2000 to 40.1 percent in 2006. At the same time, much agricultural land was converted into industrial areas, and land resources emerged as a key

The Central Government also prioritised the development of an express

hurdle restraining the Pearl River Delta region from further industrial

railway and intercity network as a key national development project

expansion. When the Guangdong Provincial Government devised its

that is expected to fundamentally change the spatial structure of

11th Provincial Five-Year Plan (2006-2010), the government decided to

national development, and attempt to avoid the potential problems of

deepen its economic transformation. Encouraged by the remarkable

excessive highway development. Of all the express railway projects, the

progress resulting from the industrial upgrading programmes of the

Guangzhou-Shenzhen-Hong Kong Express Rail Link to be completed by

previous Five-Year Plan, the Guangdong Government decided to give full

2015 is iconic to the Greater Pearl River Delta region.

Section 2


Section 2


36

37

backing to technologi cal-base d industri es with a view to transforming

Figure 2-1: The Pan-Pearl River Delta Region

the Pearl River Delta into a high-technology exporting region within five to 10 years. The most important guiding principles of Guangdong Province’s 11th Five-Year Plan were the development priorities outlined in the National

Sichuan

11th Five-Year Plan. One of its most striking features was to diversify the development thrust from the previous export-driven model towards Hunan

Jiangxi

Guizhou

balanced market development. This was done by incorpo rating the Fujian

development of the domestic market into top policy priority, which was a first si nce the country’s economic reform.

Yunnan Guangxi

Guangdong Hong Kong Macao

Due to heavy domestic currency pressure exerted by the Mainland’s huge foreign reserves (US$818 billion in 2005), processing trade, which contributed the largest trade surplus to Mainland China, was no longer unreservedly favoured by the Central Government. Indeed, as a measure

Hainan

to keep its foreign reserves at a reasonable level, the Central Government decided to tighten its grip on processing trade. First, it reduced or


removed preferential measures to processing trade manufacturers, and then it encouraged them to relocate from the wealthy coastal region to

By 2006, the secondary sector of the Pearl River Delta region had reached

the less-developed inland region, including the Pan-PRD region. Last but

a peak at 51.4 percent. The gross industrial output of the electronics

not least, the Central Government put into force the Labo ur Cont ract L aw ,

and the information technology industry, electrical machinery and

and urged local governments to annually review the minimum wage. By

special-purpose equipment industry, both of which fall under ‘Emerging

exerting cost pressure on processing manufacturers, Mainland Chinese

Industries’, and motor vehicles/motorcycles industry under ‘Potential

authorities aimed to assist and drive low value-added manufacturers

Industries’, rapidly rose from 31.5 percent of the provincial industrial share

towards industrial transformation.

in 2000 to 40.1 percent in 2006. At the same time, much agricultural land was converted into industrial areas, and land resources emerged as a key

The Central Government also prioritised the development of an express

hurdle restraining the Pearl River Delta region from further industrial

railway and intercity network as a key national development project

expansion. When the Guangdong Provincial Government devised its

that is expected to fundamentally change the spatial structure of

11th Provincial Five-Year Plan (2006-2010), the government decided to

national development, and attempt to avoid the potential problems of

deepen its economic transformation. Encouraged by the remarkable

excessive highway development. Of all the express railway projects, the

progress resulting from the industrial upgrading programmes of the

Guangzhou-Shenzhen-Hong Kong Express Rail Link to be completed by

previous Five-Year Plan, the Guangdong Government decided to give full

2015 is iconic to the Greater Pearl River Delta region.

Section 2


Section 2


38

39

The new policy orientation set by both national and Guangdong

can rest. These aspects further accelerate the building of a world-class

governments in the 11th Five-Year Plan, marked the 2006 to 2010

metropolis in the Greater Pearl River Delta region, re-shaping the entire

period as a turning point in the development of the Greater Pearl River

region in a holistic manner.

Delta region.

2.2.2. Labour Issues in the Pearl River Delta Region 12th Guan gdon g Pr ovince Five-Year Pla n (2 011-2 015)

To the surprise of Mainland Chinese governments and Pearl River

Largely due to the global financial crisis, the Pearl River Delta region

Delta manufacturers, labour shortages hit the Pearl River Delta region’s

didn’t turn out as envisaged in the 11th FYP, with the unfavourable

manufacturing sector hard in 2003, making labour issues a challenge

global business environment and sluggish global exporting markets

for the Greater Pearl River Delta region for the first time since economic

posing a huge challenge to the export-oriented manufacturing sector.

reform. According to various researchers, many migrant workers were

The Guangdong Provincial Government put aside the manufacturing-

reportedly dissatisfied with salary levels, and were less willing to work

led development concept ‘Nine Major Industries’, replacing it with a

in the manufacturing sector. To counter this, the Mainland authorities

services-led ‘Modern Services Sector’, under the initiative of establishing

launched two important labour-related policie s, which greatly impacted

a ‘Modern Industrial System’. In 2012, the tertiary industry accounted for

the country’s labour competitiveness.

more than half of regional GDP, with a growth rate that surpassed that of the industrial sector in the previous two years. By consolidating the economic performances of Hong Kong and Macao with that of the Pearl River Delta region, about 60 to 63 percent of the combined GDP for the Greater Pearl River Delta region has been derived from the service sector in the last five years. Developing the domestic market has been another policy highlight. It is also the extension of the ‘RMB4 trillion stimulus package’ (US$580 billion) that was launched in 2009. The ‘Greater Pearl River Delta integration’ is a key policy initiative of Guangdong Province’s 12th Five-Year Plan. By re-s trengthening the regi onal ties of the three jurisdictions, Hong Kong and Macao are (and will continue into the future) energising regional development and capitalising on the emerging opportunities of new development strategies.

When the Lab our Contr act Law was first implemented in 2008, enterprises in the Pearl River Delta region expressed strong concerns that it would not only lead to higher labour costs but also give rise to employer-employee disputes. Responding to this, in December 20 12 the Standing Committee of China’s National People’s Congress adopted the Deci sion on Revisin g th e L abou r C ontra ct Law of the People’s Republ ic of China to tackle legal loopholes, and seek a better balance between the

interests of contractual parties. After the US adopted ‘quantitative easing’ as a key initiative to tackle its economic downturn and high local unemployment, Mainland China experienced imported inflation which cast heavy shadows on the quality of living of its factory workers. To compensate for their loss of consumption power, the Mainland authorities frequently reviewed

These new movements indicate a new development era for the

the minimum wage level, keeping it on a par with the domestic rate

Greater Pearl River Delta region. The service sector is positioned as the

of inflation. Shenzhen provides a worthwhile example – its minimum

future business sector, while the domestic market has become a new

monthly wage surged from RMB690 (US$87) in 2006 to RMB1,600

economic foundation on which the Greater Pearl River Delta companies

(US$254) in 2013. Given the combined impact of renminbi appreciation

Section 2


Section 2


38

39

The new policy orientation set by both national and Guangdong

can rest. These aspects further accelerate the building of a world-class

governments in the 11th Five-Year Plan, marked the 2006 to 2010

metropolis in the Greater Pearl River Delta region, re-shaping the entire

period as a turning point in the development of the Greater Pearl River

region in a holistic manner.

Delta region.

2.2.2. Labour Issues in the Pearl River Delta Region 12th Guan gdon g Pr ovince Five-Year Pla n (2 011-2 015)

To the surprise of Mainland Chinese governments and Pearl River

Largely due to the global financial crisis, the Pearl River Delta region

Delta manufacturers, labour shortages hit the Pearl River Delta region’s

didn’t turn out as envisaged in the 11th FYP, with the unfavourable

manufacturing sector hard in 2003, making labour issues a challenge

global business environment and sluggish global exporting markets

for the Greater Pearl River Delta region for the first time since economic

posing a huge challenge to the export-oriented manufacturing sector.

reform. According to various researchers, many migrant workers were

The Guangdong Provincial Government put aside the manufacturing-

reportedly dissatisfied with salary levels, and were less willing to work

led development concept ‘Nine Major Industries’, replacing it with a

in the manufacturing sector. To counter this, the Mainland authorities

services-led ‘Modern Services Sector’, under the initiative of establishing

launched two important labour-related policie s, which greatly impacted

a ‘Modern Industrial System’. In 2012, the tertiary industry accounted for

the country’s labour competitiveness.

more than half of regional GDP, with a growth rate that surpassed that of the industrial sector in the previous two years. By consolidating the economic performances of Hong Kong and Macao with that of the Pearl River Delta region, about 60 to 63 percent of the combined GDP for the Greater Pearl River Delta region has been derived from the service sector in the last five years. Developing the domestic market has been another policy highlight. It is also the extension of the ‘RMB4 trillion stimulus package’ (US$580 billion) that was launched in 2009. The ‘Greater Pearl River Delta integration’ is a key policy initiative of Guangdong Province’s 12th Five-Year Plan. By re-s trengthening the regi onal ties of the three jurisdictions, Hong Kong and Macao are (and will continue into the future) energising regional development and capitalising on the emerging opportunities of new development strategies.

When the Lab our Contr act Law was first implemented in 2008, enterprises in the Pearl River Delta region expressed strong concerns that it would not only lead to higher labour costs but also give rise to employer-employee disputes. Responding to this, in December 20 12 the Standing Committee of China’s National People’s Congress adopted the Deci sion on Revisin g th e L abou r C ontra ct Law of the People’s Republ ic of China to tackle legal loopholes, and seek a better balance between the

interests of contractual parties. After the US adopted ‘quantitative easing’ as a key initiative to tackle its economic downturn and high local unemployment, Mainland China experienced imported inflation which cast heavy shadows on the quality of living of its factory workers. To compensate for their loss of consumption power, the Mainland authorities frequently reviewed

These new movements indicate a new development era for the

the minimum wage level, keeping it on a par with the domestic rate

Greater Pearl River Delta region. The service sector is positioned as the

of inflation. Shenzhen provides a worthwhile example – its minimum

future business sector, while the domestic market has become a new

monthly wage surged from RMB690 (US$87) in 2006 to RMB1,600

economic foundation on which the Greater Pearl River Delta companies

(US$254) in 2013. Given the combined impact of renminbi appreciation

Section 2


Section 2


40

and increasing labour costs, the Pearl River Delta region is now no

41

Table 2-3 : S elected Major Infrastructure Projects in the Greater Pearl River Delta Region

longer competitive enough to support labour-intensive manufacturing

Connectivity

projects. However, if enterprises were to look at the same situation

Within the

from a market perspective, higher employee income actually means

Pearl River

higher consumption power, which could result in a market boom in the Mainland’s retail sector.

Infrastructure

High-speed railways to Nanning, Guiyang, Xiamen and Maoming

Delta region and Guangdong

Selected Major Projects under Construction/Planning •

Railways

Province

Intercity railways linking the cities and major towns in

•

the Pearl River Delta region Metros or urban transits in Guangzhou, Shenzhen and

•

Dongguan

The new developments between 2001 and 2010, from both policy Expressways

and market perspectives, converted the strength of the Greater Pearl River Delta region from ‘PRD Manufacturing’ to ‘PRD Services’, and enlarged its market coverage from an ‘export market’ to ‘domestic market’ as well. This signified a new development era in the Greater Pearl River Delta region.

Cross-boundary links in the

Railways

1,110 km of national network and 3,410 km of provincial

•

network in the 12th Five-Year Plan Period Guangzhou-Shenzhen-Hong Kong Express Rail Link

•

Hong Kong-Shenzhen Western Express Line

•

Greater Pearl River Delta region

Expressways

The third, fourth, and fifth runways of Guangzhou

•

Baiyun International Airport and its neighbouring

and external

2.3. Infrastructure and Regional Connectivity

Liantang/Heung Yuen Wai Boundary Control Point

•

International connectivity

Hong Kong-Zhuhai-Macao Bridge

•

Airport development

economic zone The third runway of Hong Kong International Airport

•

The third runway of Shenzhen Bao’an International

•

To achieve their new development objectives, the Guangdong Province

Airport

and the Pearl River Delta regional governments launched a series of Container

regional policies and projects, such as massive construction of regional

terminals

infrastructure to improve regional connectivity. This was to re-define economic space and spatial layout, and further encourage the integration of the Greater Pearl River Delta region.

Phase three of Nansha Port in Guangzhou

•

The container ferry in Yantian Port and phase two of

•

Dachanwan Port in Shenzhen

2.3.1. Railways Due to its unique economic and technical advantages, the Guangdong

The construction of infrastructure projects aims to improve regional

Provincial Government chose railways to be the backbone to facilitate

connectivity on three levels: 1) To improve connectivity within the

integration of the Greater Pearl River Delta region. Compared with other

Pearl River Delta region and other parts of Guangdong Province. 2)

transportation modes, railways can handle a large amount of passengers

To streamline and enhance cross-boundary links in the Greater Pearl

with much less energy consumption and pollutants emissions. In

River Delta region, especially links between the Pearl River Delta

addition, railways occupy less space meaning that scarce land resources

region and Hong Kong and Macao, and 3) To expand the connectivity

can be saved for other more valuable uses. Sustainable development

of the Greater Pearl River Delta region to international economies and

of the region has become policy makers’ major concern. As such, much

other Mainland China regions.

emphasis is being put on the construction of a railway network to increase its share among transport modalities and support the efficient transportation of people which is required in the integration process.

Section 2


Section 2


40

41

and increasing labour costs, the Pearl River Delta region is now no

Table 2-3 : S elected Major Infrastructure Projects in the Greater Pearl River Delta Region

longer competitive enough to support labour-intensive manufacturing

Connectivity

projects. However, if enterprises were to look at the same situation

Within the

from a market perspective, higher employee income actually means

Pearl River

higher consumption power, which could result in a market boom in the Mainland’s retail sector.

Infrastructure

Selected Major Projects under Construction/Planning High-speed railways to Nanning, Guiyang, Xiamen and

•

Maoming

Delta region

Intercity railways linking the cities and major towns in

•

Railways

and Guangdong

the Pearl River Delta region

Province

Metros or urban transits in Guangzhou, Shenzhen and

•

Dongguan

The new developments between 2001 and 2010, from both policy Expressways

and market perspectives, converted the strength of the Greater Pearl River Delta region from ‘PRD Manufacturing’ to ‘PRD Services’, and enlarged its market coverage from an ‘export market’ to ‘domestic market’ as well. This signified a new development era in the Greater Pearl River Delta region.

Cross-boundary

network in the 12th Five-Year Plan Period Guangzhou-Shenzhen-Hong Kong Express Rail Link

•

Railways

links in the

1,110 km of national network and 3,410 km of provincial

•

Hong Kong-Shenzhen Western Express Line

•


Expressways

region

Hong Kong-Zhuhai-Macao Bridge

•

Liantang/Heung Yuen Wai Boundary Control Point

•

The third, fourth, and fifth runways of Guangzhou

International

•

Baiyun International Airport and its neighbouring

and external connectivity

economic zone

Airport

2.3. Infrastructure and Regional Connectivity

development

The third runway of Hong Kong International Airport

•

The third runway of Shenzhen Bao’an International

•

To achieve their new development objectives, the Guangdong Province

Airport

and the Pearl River Delta regional governments launched a series of

Phase three of Nansha Port in Guangzhou

•

Container

regional policies and projects, such as massive construction of regional

The container ferry in Yantian Port and phase two of

•

terminals

Dachanwan Port in Shenzhen

infrastructure to improve regional connectivity. This was to re-define economic space and spatial layout, and further encourage the integration of the Greater Pearl River Delta region.

2.3.1. Railways Due to its unique economic and technical advantages, the Guangdong

The construction of infrastructure projects aims to improve regional

Provincial Government chose railways to be the backbone to facilitate

connectivity on three levels: 1) To improve connectivity within the

integration of the Greater Pearl River Delta region. Compared with other

Pearl River Delta region and other parts of Guangdong Province. 2)

transportation modes, railways can handle a large amount of passengers

To streamline and enhance cross-boundary links in the Greater Pearl

with much less energy consumption and pollutants emissions. In

River Delta region, especially links between the Pearl River Delta

addition, railways occupy less space meaning that scarce land resources

region and Hong Kong and Macao, and 3) To expand the connectivity

can be saved for other more valuable uses. Sustainable development

of the Greater Pearl River Delta region to international economies and

of the region has become policy makers’ major concern. As such, much

other Mainland China regions.

emphasis is being put on the construction of a railway network to increase its share among transport modalities and support the efficient transportation of people which is required in the integration process.

Section 2


Section 2


42

This being so, an intercity railway network with a total length of 1,890

43

Figure 2-2: Greater Pearl River Delta Region Intercity Railway Network

kilometres will be constructed to satisfy the anticipated demand for passenger transportation over the coming decades due to the the provision of frequent train departures, The Plan on the Intercity

Dongguan

Guangzhou-Foshan Metro

eight outbound routes’, connecting the nine municipals in the region

Zhaoqing

Huizhou

Foshan Shanwei

Yunfu

Province. Railway access to the eastern and western wings of be consi dered before 2030, if d eemed nece ssar y.

GuangzhouDongguan-Shenzhen Intercity

Guangzhou

formation of a rapid transit system in the shape of ‘three circular and

Guangdong Province, as well as its northern mountainous areas, will

GuangzhouDongguan-Shenzhen Extension

Guangzhou-Foshan Loop

Railwa y of the Pea rl River Delt a Regi on (2009 amended) envisages the

with Hong Kong and Macao, as well as the other part of Guangdong

Heyuan

Qingyuan

integration of cities in the Greater Pearl River Delta region. Through

Jiangmen

Guangzhou-Zhuhai Intercity

Zhongshan

Shenzhen

Hong Kong

Zhuhai

An average distance of about five to 10 kilometres between stations on

Hong Kong-Shenzhen WEL

Macao

Legend Intercity railway completed / in operation Intercity railway under construction

various routes will make the railway network exceptionally adaptable

New projects to be initiated before the end of 2015

to short- and mid-haul commuting in the densely populated region,

Intercity railway under planning / consideration

while its extensive coverage of major airports and public transport hubs in the region is planned to establish its unique role in facilitating

Source : Based on the Plan on the Develo pment of Integrated Transport ation System of Guangdo ng Province in the Twelfth Five-Year Plan Pe riod.

intermodal transportation. High-speed railways are mainly assigned for the purpose of crossWith Guangzhou as the core, 23 railways with a maximum speed of

province corridors, and also to meet certain intraregional passenger

140 kilometres per hour or 200 kilometres per hour, will transform

traffic needs. In the most recent plan, four state-of-the-art lines with

the region into a one-hour commuting circle. According to The Plan

two different speeds of 200 to 250 kilometres per hour and 300 to 350

on the Development of Integrated Transportation System of Guangdong

kilometres per hour were proposed to radiate from Guangzhou South

Prov inc e in the Twelf th F ive-Year Pl an P eri od , the Guangdong Provincial

Station at Panyu, which is the central position of the integrating cities

Government is striving for the completion of 16 railways with a

of Guangzhou and Foshan. The idea is that two rail lines will stretch

combined length of 1,480 kilometres, by the end of 2020. Meanwhile,

along the eastern and western coasts of the province linked by the new

some 700 kilometres of this is planned to be in operation by 2015. To

Humen-Nansha Bridge at the Pearl River Estuary. In August 2013, the

increase efficiency in the use of resources, special attention is being

Guangdong Provincial Government announced its ambitions to provide

paid to specifications related to the interconnectivity of different

all municipalities under its jurisdiction (21 municipalities) with access to

railway networks as preparation for the future, for example, through

high-speed passenger services by 2020.

operation between the newly built intercity railways and conventional or high-speed lines.

The coverage of railway services will be extended into a network of nodes in the congested urban districts of Guangzhou and Shenzhen via the fast

Section 2


Section 2


42

43

This being so, an intercity railway network with a total length of 1,890

Figure 2-2: Greater Pearl River Delta Region Intercity Railway Network

kilometres will be constructed to satisfy the anticipated demand for passenger transportation over the coming decades due to the the provision of frequent train departures, The Plan on the Intercity

GuangzhouDongguan-Shenzhen Extension

Guangzhou-Foshan Loop

Railwa y of the Pea rl River Delt a Regi on (2009 amended) envisages the

GuangzhouDongguan-Shenzhen Intercity

Guangzhou

formation of a rapid transit system in the shape of ‘three circular and

Dongguan

Guangzhou-Foshan Metro

eight outbound routes’, connecting the nine municipals in the region with Hong Kong and Macao, as well as the other part of Guangdong

Heyuan

Qingyuan

integration of cities in the Greater Pearl River Delta region. Through

Zhaoqing

Huizhou

Foshan Shanwei

Yunfu

Province. Railway access to the eastern and western wings of Jiangmen

Guangdong Province, as well as its northern mountainous areas, will

Guangzhou-Zhuhai Intercity

Zhongshan

be consi dered before 2030, if d eemed nece ssar y.

Shenzhen

Hong Kong

Zhuhai Hong Kong-Shenzhen WEL

An average distance of about five to 10 kilometres between stations on

Macao

Legend Intercity railway completed / in operation Intercity railway under construction

various routes will make the railway network exceptionally adaptable

New projects to be initiated before the end of 2015

to short- and mid-haul commuting in the densely populated region,

Intercity railway under planning / consideration

while its extensive coverage of major airports and public transport hubs in the region is planned to establish its unique role in facilitating

Source : Based on the Plan on the Develo pment of Integrated Transport ation System of Guangdo ng Province in the Twelfth Five-Year Plan Pe riod.

intermodal transportation. High-speed railways are mainly assigned for the purpose of crossWith Guangzhou as the core, 23 railways with a maximum speed of

province corridors, and also to meet certain intraregional passenger

140 kilometres per hour or 200 kilometres per hour, will transform

traffic needs. In the most recent plan, four state-of-the-art lines with

the region into a one-hour commuting circle. According to The Plan

two different speeds of 200 to 250 kilometres per hour and 300 to 350

on the Development of Integrated Transportation System of Guangdong

kilometres per hour were proposed to radiate from Guangzhou South

Prov inc e in the Twelf th F ive-Year Pl an P eri od , the Guangdong Provincial

Station at Panyu, which is the central position of the integrating cities

Government is striving for the completion of 16 railways with a

of Guangzhou and Foshan. The idea is that two rail lines will stretch

combined length of 1,480 kilometres, by the end of 2020. Meanwhile,

along the eastern and western coasts of the province linked by the new

some 700 kilometres of this is planned to be in operation by 2015. To

Humen-Nansha Bridge at the Pearl River Estuary. In August 2013, the

increase efficiency in the use of resources, special attention is being

Guangdong Provincial Government announced its ambitions to provide

paid to specifications related to the interconnectivity of different

all municipalities under its jurisdiction (21 municipalities) with access to

railway networks as preparation for the future, for example, through

high-speed passenger services by 2020.

operation between the newly built intercity railways and conventional The coverage of railway services will be extended into a network of nodes

or high-speed lines.

in the congested urban districts of Guangzhou and Shenzhen via the fast

Section 2


Section 2


44

45

growing metro systems in these two cores of the Greater Pearl River Delta region, and by urban transit to the scattered towns in Dongguan. The Plan on the Development of Integrated Transportation System of Guangdong Province in the Twelfth Five-Year Plan Period shows that a

series of high-speed trunk lines equivalent to 1,087 kilometres in length will be ready for service by 2015. To further strengthen the function of the high-speed network, a connection

between

Guangzhou-Shanwei

Railway

and

Xiamen-

Shenzhen Railway is in the planning stages, and may be completed during the 13th Five-Year Pl an (20 16-2020) . Figure 2-3: Outbound High-Speed Railways of the Greater Pearl River Delta City-Region

Legend Pan-PRD

Beijing

Outer Guangdong Province GPRD Major City

Wuhan

GPRD Origin City

As the capital of Guangdong Province, it is planned that the largest

Chongqing Shanghai South Asia, Middle East

Kunming

Guiyang Guilin

Changsha

enhance the central districts’ transit service and their connections to Shaoguan

Nanning Guigang

in Guangzhou before 2040. The aim of the 20-line metro network is to

Hezhou

Wuzhou South East Asia

Hangzhou Guangdong Province

Yunfu Zhaoqing

expected to be in service to ensure that residents inside the ring road, and those at the sub-centres, will be able to reach the city centre within 30 and Xiamen Shantou Huizhou

Western Guangdong

Macao/ Zhuhai

the periphery districts of Luogang, Panyu, Nansha, and Huadu, as well as to the districts of Conghua and Zengcheng. By 2020, 16 alignments are

GPRD Guangzhou/ Foshan

Hainan

metro network in the Greater Pearl River Delta region be constructed

Hong Kong/ Shenzhen

60 minutes, respectively. Thirteen routes with a combined length of 228.9 kilometres, at a cost of 124.1 billion yuan, have already been approved by the National Development and Reform Commission. Meanwhile, the operating length of the Guangzhou Metro will be expanded to

Source : Based on Constr uctio n Depart ment of Guangdo ng Provinci al Governm ent, Develo pment Bureau of the Hong Kong SAR Governm ent, Secretar iat for Transport and Publi c Works of

520.5 kilometres after completion of the above projects and following

Macao SAR Governm ent, Planning Study on the Co-ordi nated Develo pment of the Greater

the implementation of The Short-Term Planning on the Construction of

Pearl Riv er De lta Town ships, 2 009, p.83

Guangzhou Urban Transit (2012-2018)

Section 2


Section 2


44

45

growing metro systems in these two cores of the Greater Pearl River Delta region, and by urban transit to the scattered towns in Dongguan. The Plan on the Development of Integrated Transportation System of Guangdong Province in the Twelfth Five-Year Plan Period shows that a

series of high-speed trunk lines equivalent to 1,087 kilometres in length will be ready for service by 2015. To further strengthen the function of the high-speed network, a connection

between

Guangzhou-Shanwei

Railway

and

Xiamen-

Shenzhen Railway is in the planning stages, and may be completed during the 13th Five-Year Pl an (20 16-2020) . Figure 2-3: Outbound High-Speed Railways of the Greater Pearl River Delta City-Region

Legend Pan-PRD

Beijing

Outer Guangdong Province GPRD Major City

Wuhan

GPRD Origin City

As the capital of Guangdong Province, it is planned that the largest

Chongqing Shanghai South Asia, Middle East

Guiyang Guilin

Kunming

Changsha

enhance the central districts’ transit service and their connections to Shaoguan

Nanning

Hangzhou Guangdong Province

Yunfu

Guigang

in Guangzhou before 2040. The aim of the 20-line metro network is to

Hezhou

Wuzhou South East Asia

Zhaoqing

expected to be in service to ensure that residents inside the ring road, and those at the sub-centres, will be able to reach the city centre within 30 and Xiamen Shantou Huizhou

Western Guangdong

Macao/ Zhuhai

the periphery districts of Luogang, Panyu, Nansha, and Huadu, as well as to the districts of Conghua and Zengcheng. By 2020, 16 alignments are

GPRD Guangzhou/ Foshan

Hainan

metro network in the Greater Pearl River Delta region be constructed

Hong Kong/ Shenzhen

60 minutes, respectively. Thirteen routes with a combined length of 228.9 kilometres, at a cost of 124.1 billion yuan, have already been approved by the National Development and Reform Commission. Meanwhile, the operating length of the Guangzhou Metro will be expanded to

Source : Based on Constr uctio n Depart ment of Guangdo ng Provinci al Governm ent, Develo pment Bureau of the Hong Kong SAR Governm ent, Secretar iat for Transport and Publi c Works of

520.5 kilometres after completion of the above projects and following

Macao SAR Governm ent, Planning Study on the Co-ordi nated Develo pment of the Greater

the implementation of The Short-Term Planning on the Construction of

Pearl Riv er De lta Town ships, 2 009, p.83

Section 2

Guangzhou Urban Transit (2012-2018).


Section 2


46

47

Table 2-4: Approved Construction Projects of Guangzhou Metro (2012-2018) and Shenzhen Metro (2011-2016) Guangzhou Metro Route No.

Alignment

Length (km)

Period

8

Baiyunhu-Wenhua Gongyuan

15.0

2012-2015

13

Yuzhu-Xiangjingling (First Section)

28.3

2012-2016

14

Jiahe Wanggang-Jiekou (Phase One)

51.2

2013-2017

58.7

2013-2017

11.7

2013-2017

42.4

2014-2018

21

4

11

14

Tianhe Gongyuan-Zengcheng Guangchang Jinzhou-Nansha Keyungang (SouthwardExtension) Guangzhou Station-Guangzhou East Station-Guangzhou Station Xinhe-Zhenlong (Branch Line)

21.6

Subject to the development progress along the alignment

Shenzhen Metro 11

Futian Central-Songgang

51.2

9

Xiangxicun-Shenzhenwan

25.0

To be completed in or

7

Taian-Dongwuyuan

29.8

before 2 016

6

Shenzhen North Station-S onggang

37.2

8

Guomao-Xiaomeisha

26.4

Subject to the progress of the initial work

Source: National Develo pment and Refo rm Co mmissio n.

Intercity railways are integrating with national railways (including the state-dominated joint-venture high-speed railways) and metros in the Greater Pearl River Delta region to form one of the most comprehensive

The scale of the Shenzhen Metro network will be second only to that

multi-layer railway networks in the world. According to The Plan on the

of Guangzhou. Indeed, the Shenzhen government has made known its

Interc ity Railway of the Pearl River Delta Region (2009, amended), the

aspirations to build a 720-kilometre long network consisting of 20 metros

density of railways in the region will significantly increase from the 1.35

in the Railway Planning of Shenzhen City (Amended) . Five projects have

kilometres/100 square kilometres in 2008 to 11.8 kilometres/100 square

already been listed in the Short-Term Planning on Construction of Urban

kilometres, which is comparable to 13.4 kilometres/100 square kilometres

Transit of Shenzhen City (2011-2016) . Their completion, in the final year

in the metropolit an area of Paris, France. The enhanced access to railway

of the plan, implies that the total operation network of the city’s metro

services, and its growing advantages in total travelling time, will redefine

system will be 10 metro lines and an operating length of 348 kilometres.

the economic space of the region.

Dongguan is also planning to establish a rail transit network consisting

Indeed, the whole region is becoming a one-hour commuting area for

of four routes and a length of about 194 kilometres. Currently, Line R2 is

local residents, while day-return trips for a greater number of travellers

under construction.

are now possible from the major cities of neighbouring provinces. As a

Section 2


Section 2


46

47

Table 2-4: Approved Construction Projects of Guangzhou Metro (2012-2018) and Shenzhen Metro (2011-2016) Guangzhou Metro Route No.

Alignment

Length (km)

Period

8

Baiyunhu-Wenhua Gongyuan

15.0

2012-2015

13

Yuzhu-Xiangjingling (First Section)

28.3

2012-2016

14

Jiahe Wanggang-Jiekou (Phase One)

51.2

2013-2017

58.7

2013-2017

11.7

2013-2017

42.4

2014-2018

21

4

11

14

Tianhe Gongyuan-Zengcheng Guangchang Jinzhou-Nansha Keyungang (SouthwardExtension) Guangzhou Station-Guangzhou East Station-Guangzhou Station Xinhe-Zhenlong (Branch Line)

21.6

Subject to the development progress along the alignment

Shenzhen Metro 11

Futian Central-Songgang

51.2

9

Xiangxicun-Shenzhenwan

25.0

To be completed in or

7

Taian-Dongwuyuan

29.8

before 2 016

6

Shenzhen North Station-S onggang

37.2

8

Guomao-Xiaomeisha

26.4

Subject to the progress of the initial work

Intercity railways are integrating with national railways (including the state-dominated joint-venture high-speed railways) and metros in the

Source: National Develo pment and Refo rm Co mmissio n.

Greater Pearl River Delta region to form one of the most comprehensive The scale of the Shenzhen Metro network will be second only to that

multi-layer railway networks in the world. According to The Plan on the

of Guangzhou. Indeed, the Shenzhen government has made known its

Interc ity Railway of the Pearl River Delta Region (2009, amended), the

aspirations to build a 720-kilometre long network consisting of 20 metros

density of railways in the region will significantly increase from the 1.35

in the Railway Planning of Shenzhen City (Amended) . Five projects have

kilometres/100 square kilometres in 2008 to 11.8 kilometres/100 square

already been listed in the Short-Term Planning on Construction of Urban

kilometres, which is comparable to 13.4 kilometres/100 square kilometres

Transit of Shenzhen City (2011-2016) . Their completion, in the final year

in the metropolit an area of Paris, France. The enhanced access to railway

of the plan, implies that the total operation network of the city’s metro

services, and its growing advantages in total travelling time, will redefine

system will be 10 metro lines and an operating length of 348 kilometres.

the economic space of the region.

Dongguan is also planning to establish a rail transit network consisting

Indeed, the whole region is becoming a one-hour commuting area for

of four routes and a length of about 194 kilometres. Currently, Line R2 is

local residents, while day-return trips for a greater number of travellers

under construction.

are now possible from the major cities of neighbouring provinces. As a

Section 2


Section 2


48

49

result, huge intraregional and interregional flows of passengers pass through the railways each day, concentrating at the nodes which enjoy y a w s s e r p x E n a u g o a h C

excellent environment and comprehensive urban functions.

2.3.2. Expressways The Guangdong Provincial Government is also continuing to construct a large number of expressways. The expansion of the expressway network is not only to enhance internal links within the Greater Pearl River Delta

i y u a w h s g s n e a r u p G x E

n y e h a s w n s s a e u r g p n x e Z E

region, but also to improve connectivity between the Greater Pearl River Delta region and other parts of Guangdong Province. This is with the aim of balanced development purposes. Expressways provide an alternative to daily traffic and play an irreplaceable role in supporting freight services under current development conditions. The Plan on the Dev elo pme nt of Int egr ate d Tran spo rta ti on Sys tem of Gua ngd ong Prov inc e in the Twe lfth Fiv e-Year Pla n Per iod shows that Guangdong

aims to invest 294 billion yuan (US$47 billion) to build 1,661 kilometres of expressways. According to the Framework of Fostering the Construction of Major Infrastructure in the Province (2013-2015) ,

Guangdong wishes to connect all its counties with expressways.

n G o N i I g J I e E R B a o t T l e D r e v i R l r a e P r a t l e e s y D t r e w a a s v i s e R e r l r r p a x G E e P g e n i i n R h t n i t n e m p o l e v e D y a w s s e r p x E : 4 2 e r u g i F

n y e a h w s s g s n e a r p u x G E

U O T N A H S

y n a a w h s s s n e e r h p S x E

N A I T N A Y y a e w s h i s e J r p x E

t t e u u m o o i t b b g a , a n , l i e g t l u n e o v o l r a r g m t n k r i t s 0 u o i 0 x h E 2 4 y u a h w g s n s a e h r p C x E

L A G L N N T O R O I K T O P G A R N N I O R A H E T N I

N E H Z N E H S

N A U g s h e n G G u a n s t a l G C o a w a y N p r e s s O E x D

e g d i r B n e m u H

y u a h z w g h g n i i J H

t s e W y u a w h h z g g i n H a u G

u w g n a u G G N I Q O A H Z

, U I O X H G Z N U A U W o G T

y a w h g i H

s a y s w l t a e s e r p D E x v e r n g l R i r - i r e r P e a t O u i n

y a g n i w s s m e g r n p a u x G E

N A H S O F

g y n a o w h s s z e g n r p a x i J E

N E M G N A I J

y a w s s r e p x E o u l g n a i J

, g e n o i m l t m g k i n 0 l l 4 t e v u a o r b t e a , t e u t n u i o m r 5 d 4 e s t o u o p b o a r P

d a o R g n i t s i x E

n o i t c u r t s n o C / g n i n n a l P r e d n u d a o R

B M Z H

I A H U H Z

N A H S G N O H Z

U O G H Z G N A U G

G N O K G N O H

O A C A M

y u a h w z s g s n e r a p i J x E

y a w s s e r p x E n a h z g n a u G

y a i w a s t s n e i r X p x E

y a w h g i H l a t s a o C n r e t s e W G N A G I J N A N I J A G H N Z A o Y T

r e t t e l s w e N s t c e j o r P g n o K g n o H d e t a l e R d n a e g d i r B o a c a M i a h u h Z g n o K g n o H t , n e m n r e v o G R A S K H f o t n e m t r a p e D y a w h g i H n o d e s a B : e c r u o S

Section 2


Section 2


48

49

result, huge intraregional and interregional flows of passengers pass through the railways each day, concentrating at the nodes which enjoy y a w s s e r p x E

excellent environment and comprehensive urban functions.

n a u g o a h C

2.3.2. Expressways The Guangdong Provincial Government is also continuing to construct a large number of expressways. The expansion of the expressway network is not only to enhance internal links within the Greater Pearl River Delta

i y u a w h s g n s e a r u p G x E

n y e h a w s s n a s e u r g p n x e Z E

region, but also to improve connectivity between the Greater Pearl River Delta region and other parts of Guangdong Province. This is with the aim of balanced development purposes. Expressways provide an alternative to daily traffic and play an irreplaceable role in supporting freight services under current development conditions. The Plan on the Dev elo pme nt of Int egr ate d Tran spo rta ti on Sys tem of Gua ngd ong Prov inc e in the Twe lfth Fiv e-Year Pla n Per iod shows that Guangdong

aims to invest 294 billion yuan (US$47 billion) to build 1,661 kilometres of expressways. According to the Framework of Fostering the Construction of Major Infrastructure in the Province (2013-2015) ,

Guangdong wishes to connect all its counties with expressways.

Section 2


n G o N i I g J I e E R B a o t T l e D r e v i R l r a e P r a t l e e s y D t r e w a a v i s e s R e r l r r p a x G E e P g e n i i n R h t n i t n e m p o l e v e D y a w s s e r p x E : 4 2 e r u g i F

Section 2

n y e a h s w s g s e n r a u p x G E

U O T N A H S

y n a a w h s s s n e e r h p S x E

N A I T N A Y y a e w s h s i J e r p x E

t t e u u m i o o t b b g a , a n , l i e g t l u n e o v o l r a r g m t n k r i t u s 0 o i 0 h x 2 E 4 y u a h w g s n s a e h r p C x E

L A G L N N T O O I R K T O G A P R N N I R A O E H T N I

N E H Z N E H S

N A U g s h e n G G u a n s t a l G C o a w a y N p r e s s O E x D

e g d i r B

u y a h z w g h g n i i J H

n e m u H

t s e W y u a w h h z g g i n a H u G

u w g n a u G G N I Q O A H Z

, U I O X H G Z N U A U W o G T

y a w h g i H

s a y s w l t a e s e r p D E x v e r n g l R i r - i r e r P e a t O u i n

y a g n i w s s m e g r n p a u x G E

N A H S O F

g y n a o w s h s z e g r n p a x i J E

N E M G N A I J

y a w s s r e p x E o u l g n a i J

, g e n o i m l t m g k i n 0 l 4 l t e v u a r o t b e a , t e u t n u i o m r 5 d 4 e t s u o o p b o a r P

d a o R g n i t s i x E

n o i t c u r t s n o C / g n i n n a l P r e d n u d a o R

B M Z H

I A H U H Z

N A H S G N O H Z

U O G H Z G N A U G

G N O K G N O H

r e t t e l s w e N s t c e j o r P g n o K g n o H d e t a l e R d n a e g d i r B o a c a M i a h u h Z g n o K g n o H t , n e m n r e v o G R A S K H f o t n e m t r a p e D y a w h g i H n o d e s a B : e c r u o S

O A C A M

y u a h w z s g s n e a r p i J x E

y a w s s e r p x E n a h z g n a u G

y a i w a s t n s e i X r p x E

y a w h g i H l a t s a o C n r e t s e W G N A G I J N A N I A J G H N Z A o Y T


50

51

2.3.3. Airports Following decades of development and expansion, major airports in the Greater Pearl River Delta region generally show considerable growth in the aviation market – except from Macao International Airport, which suffered from the financial crisis of 2008, the implementation of the ‘Three Direct Links’ in 2009, and fierce regional competition. Hong Kong International Airport (HKIA) has long played the role of strategic hub, providing access for the international network to the Greater Pearl River Delta region. Today, HKIA continues to maintain advantages in terms of internationalisation. Indeed, flights are operated by over 100 airli nes to abo ut 140 foreign de stinatio ns, while t he other t wo largest airports of the region, Guangzhou Baiyun International Airport and Shenzhen Bao’an International Airport, have only 63 and nine international routes operating, respectively.

It should be noted that Hong Kong International Airport is facing both opportunities and challenges from Mainland China. It is also facing

Table 2-5 : Passenger and Cargo Figures of the Five Major Airports

internal challenges in its expansion to deal with the gap between Passengers (million) Year

Hong Kong

Macao

Guangzhou

Shenzhen

Zhuhai

2008

48.59

5.10

33.44

21.40

1.12

2009

46.17

4.25

37.05

24.49

1.39

2010

50.92

4.08

40.98

26.71

1.82

2011

53.90

4.05

45.04

28.25

1.80

2012

56.47

4.49

48.31

29.57

2.09

3.83%

-3.12%

9.64%

8.42%

16.84%

Average Annual Growth (2008-2012)

handling capacity and growing traffic demands. The development of a third runway is being discussed in Hong Kong, despite concerns about its economic feasibility and potential environmental impact. At the same time, the airports of Guangzhou and Shenzhen are fostering expansion projects of their own. Guangzhou Baiyun International Airport plans to develop five runways, with its third runway expected to open in October 2014. Perhaps more importantly, an airport economic zone occupying about six percent area of the city (about 439

Freight (million tonnes)

square kilometres) is to be developed around the Guangzhou airport.

2008

3.63

0.17

0.69

0.60

0.01

2009

3.35

0.05

0.96

0.61

0.01

Multiple projects including: the airport company’s headquarters, the

2010

4.13

0.05

1.14

0.81

0.02

China Southern Airlines base, the river bank commercial area, aviation

2011

3.94

0.04

1.18

0.83

0.02

manufacturing and repair centres, exhibition centres, and bonded

2012

4.03

0.03

1.25

0.85

0.02

areas will be distributed within a 10-kilometres radius from the

2.64%

-36.20%

16.16%

9.34%

9.93%

airport’s core. The aerotropolis is positioned to become a growth pole


in southern China, one of the logistics centres of Asia, and a globally

Section 2


Section 2


50

51

2.3.3. Airports Following decades of development and expansion, major airports in the Greater Pearl River Delta region generally show considerable growth in the aviation market – except from Macao International Airport, which suffered from the financial crisis of 2008, the implementation of the ‘Three Direct Links’ in 2009, and fierce regional competition. Hong Kong International Airport (HKIA) has long played the role of strategic hub, providing access for the international network to the Greater Pearl River Delta region. Today, HKIA continues to maintain advantages in terms of internationalisation. Indeed, flights are operated by over 100 airli nes to abo ut 140 foreign de stinatio ns, while t he other t wo largest airports of the region, Guangzhou Baiyun International Airport and Shenzhen Bao’an International Airport, have only 63 and nine international routes operating, respectively.

It should be noted that Hong Kong International Airport is facing both opportunities and challenges from Mainland China. It is also facing

Table 2-5 : Passenger and Cargo Figures of the Five Major Airports

internal challenges in its expansion to deal with the gap between Passengers (million) Year

Hong Kong

Macao

Guangzhou

Shenzhen

2008

48.59

5.10

33.44

21.40

1.12

2009

46.17

4.25

37.05

24.49

1.39

2010

50.92

4.08

40.98

26.71

1.82

2011

53.90

4.05

45.04

28.25

1.80

2012

56.47

4.49

48.31

29.57

2.09

3.83%

-3.12%

9.64%

8.42%

16.84%


Zhuhai

handling capacity and growing traffic demands. The development of a third runway is being discussed in Hong Kong, despite concerns about its economic feasibility and potential environmental impact. At the same time, the airports of Guangzhou and Shenzhen are fostering expansion projects of their own. Guangzhou Baiyun International Airport plans to develop five runways, with its third runway expected to open in October 2014. Perhaps more importantly, an airport economic zone occupying about six percent area of the city (about 439

Freight (million tonnes)

square kilometres) is to be developed around the Guangzhou airport.

2008

3.63

0.17

0.69

0.60

0.01

2009

3.35

0.05

0.96

0.61

0.01

Multiple projects including: the airport company’s headquarters, the

2010

4.13

0.05

1.14

0.81

0.02

China Southern Airlines base, the river bank commercial area, aviation

2011

3.94

0.04

1.18

0.83

0.02

manufacturing and repair centres, exhibition centres, and bonded

2012

4.03

0.03

1.25

0.85

0.02

areas will be distributed within a 10-kilometres radius from the

2.64%

-36.20%

16.16%

9.34%

9.93%

airport’s core. The aerotropolis is positioned to become a growth pole


in southern China, one of the logistics centres of Asia, and a globally

Sou rce: C ivil Aviatio n Admi nistration of C hina; Ho ng Kong International Airport; Macau International Airport.

Section 2


integrated aviation hub.

Section 2


52

53

The plans for Shenzhen airport are relatively less ambitious than that

the Greater Pearl River Delta region among ports, which will bring about

of Guangzhou. The T3 terminal has just been inaugurated, and the

change in the relative position of container water transport.

plans for the third runway and T4 terminal will, in 2040, theoretically, satisfy demand. The feasibility of building a second airport in eastern Shenzhen is being explored, with an aim to facilitate general rather than

In terms of container handling, Shenzhen rather than Guangzhou is leading the Pearl River Delta region. However, even though Shenzhen port ranked fourth busiest container terminal in the world in 2012, and

civil aviation.

its lag behind Hong Kong port is minimal, Shenzhen is continuing to develop its container ferry in Yantian port in the eastern wing of the city,

Figure 2-5 : Airports in the Greater Pearl River Delta City Region

and phase two of Dachanwan port in its western wing. Meanwhile, Guangzhou will invest more than US$3.17 billion (RMB 20 billio n) on phase three of the development of Nansha port, as well as Guangzhou Baiyun InternationalAirport

the construction of ferries for grains delivery and general navigation to strengthen the city’s logistic functions, and increase its attractiveness for inland sources of goods. Zhuhai seems to have adopted a strategy of differentiation, planning

Shenzhen Bao’an International Airport

to develop its Gaolan port into a regional logistic centre with functions such as a world-class navigation equipment manufacturing base, an

Hong Kong International Airport Macao International Airport Zhuhai Airport

international base for clean energy and a national petrochemical base. Table 2-6: Distribution of Container Terminals in the Greater Pearl River Delta City-Region

Major Airport Subsidiary Airport

Total Volume of Containers Handled (million TEU) 2000

2005

2010

2011

2012

Coastal Ports in Guangdong Province

6.55

23.78

38.68

41.03

42.56

Bureau of Hong Kong SAR Governm ent, S ecretari at for T ransport and Pu blic Work s of Ma cao

Guangzhou Port

1.43

4.68

12.70

14.25

14.55

SAR Governm ent, Planning Study on the Co-ordi nated Devel opment of the Greater Pearl

Shenzhen Port

3.96

16.20

22.51

22.57

22.94

Source : Based on Constr uctio n Depart ment of Guangdo ng Provinci al Governm ent, Develo pment

Item

River D elta Townships, 2009, p.80

Total Volume of Freight Handled (million tonnes)

2.3.4. Ports A new system of major ports, branch ports and feeder ports is emerging in the Greater Pearl River Delta region as a result of recent decades of economic transformation and the organisation of regional production in various cities. Economic integration is leading to fiercer competition in


255.0

592.7

1,053.0

1,144.6

1,212.7

Guangzhou Port

111.3

250.4

425.3

431.5

435.2

Shenzhen Port

42.2

153.5

221.0

223.3

228.1

Source : Guan gdong S tatisti cal Yearbo ok 201 3.

Section 2


Section 2


52

53

The plans for Shenzhen airport are relatively less ambitious than that

the Greater Pearl River Delta region among ports, which will bring about

of Guangzhou. The T3 terminal has just been inaugurated, and the

change in the relative position of container water transport.

plans for the third runway and T4 terminal will, in 2040, theoretically, satisfy demand. The feasibility of building a second airport in eastern Shenzhen is being explored, with an aim to facilitate general rather than

In terms of container handling, Shenzhen rather than Guangzhou is leading the Pearl River Delta region. However, even though Shenzhen port ranked fourth busiest container terminal in the world in 2012, and

civil aviation.

its lag behind Hong Kong port is minimal, Shenzhen is continuing to develop its container ferry in Yantian port in the eastern wing of the city,

Figure 2-5 : Airports in the Greater Pearl River Delta City Region

and phase two of Dachanwan port in its western wing. Meanwhile, Guangzhou will invest more than US$3.17 billion (RMB 20 billio n) on phase three of the development of Nansha port, as well as Guangzhou Baiyun InternationalAirport

the construction of ferries for grains delivery and general navigation to strengthen the city’s logistic functions, and increase its attractiveness for inland sources of goods. Zhuhai seems to have adopted a strategy of differentiation, planning

Shenzhen Bao’an International Airport

to develop its Gaolan port into a regional logistic centre with functions such as a world-class navigation equipment manufacturing base, an

Hong Kong International Airport Macao International Airport

international base for clean energy and a national petrochemical base. Table 2-6: Distribution of Container Terminals in the Greater Pearl River Delta City-Region

Zhuhai Airport

Major Airport Subsidiary Airport

Source : Based on Constr uctio n Depart ment of Guangdo ng Provinci al Governm ent, Develo pment

Total Volume of Containers Handled (million TEU) Item Coastal Ports in Guangdong Province

2000

2005

2010

2011

2012

6.55

23.78

38.68

41.03

42.56

Bureau of Hong Kong SAR Governm ent, S ecretari at for T ransport and Pu blic Work s of Ma cao

Guangzhou Port

1.43

4.68

12.70

14.25

14.55

SAR Governm ent, Planning Study on the Co-ordi nated Devel opment of the Greater Pearl

Shenzhen Port

3.96

16.20

22.51

22.57

22.94

River D elta Townships, 2009, p.80

Total Volume of Freight Handled (million tonnes)

2.3.4. Ports A new system of major ports, branch ports and feeder ports is emerging in the Greater Pearl River Delta region as a result of recent decades of economic transformation and the organisation of regional production in


255.0

592.7

1,053.0

1,144.6

1,212.7

Guangzhou Port

111.3

250.4

425.3

431.5

435.2

Shenzhen Port

42.2

153.5

221.0

223.3

228.1

Source : Guan gdong S tatisti cal Yearbo ok 201 3.

various cities. Economic integration is leading to fiercer competition in

Section 2


Section 2


54

55

the Hong Kong International Airport and Bao’an International Airport in

Figure 2-6: Ports in the Greater Pearl River Delta City Region

Shenzhen. Figure 2-7: Cross-Boundary Transportation Facilities in the Greater Pearl River Delta City Region

r i d g e e n B H u m

Foshan

Dongguan

Zhaoqing

Huizhou Guangzhou Nansha

Zhongshan

Shenzhen West

Huizhou Daya Bay Shenzhen Yantian

J ia n g me n- Z ho n g s h an E x p r e s s w ay

i t a i h s u a n h r -Z T u d o i z h a p g R a n it y u c G t e r I n

G u SHENZHEN W H z h a n g S o n e e n z h s t h e g K E x o u - e p r S h r n n z o n e s e n h e g C s - w o r n a y r i d o r H G

ZHONGSHAN

Jiangmen Hong Kong

T a i ” a o E x p r e s s w a y

Macao Zhuhai

Xiangzhou Port District

ZHUHAI

o u n a g n K g o z h n o g u P - a s S s e h e n n z ge h r e n L - i n e

International Airport

o r i d r r C o n e r t s E a

HONG KONG Hung Hom Station

i d g e a u B r i - M a c Z h u h a K o n g H o n g

Source : Const ructio n Depart ment of Guangdo ng Provinc ial Governm ent, Develo pment Bureau

Macao International Airport

of Hong Kong SAR Government, Secretariat for Transport and Public Works of Macao SAR Government, Planning Study on the Co-ordinated Development of the Greater Pearl River Delta Townships, 2009, p.8 1.

H W o e n g s t e K o r n n E g- x S p h r e e s s n z L h e i Hong Kong n e n -

e w a y B r i d g p i d R a i l C o a s t a l R a

GPRD Port GPRD Inland River Terminal

a y s w r e s x p e E J i - H

Shenzhen International Airport

e i g u a n E x p r e s s w a y

MACAO Hengqin Sanzhao Airport

2.3.5. Cross-Border Infrastructure Development between Hong Kong

Legend Airport

Expressway

Port

Railway

Railway Staion

Intercity Transit

Boundary Control Point

Existing Railway Existing Transit Line

and Pearl River Delta Cities Source : Cons truct ion De partme nt of G uangdon g Provinc ial Gove rnment , Devel opment Bureau o f the

Hong Kong will improve its connection to the Greater Pearl River Delta

Hong Kong SA R G overnme nt, Secreta riat for T ransport and P ublic Works o f th e Mac ao S AR

region by means of a series of new cross-boundary infrastructures. One

Delta Townships, 2009, p.97.

of the most important infrastructures should be the 26-kilometre long Hong Kong section of the Guangzhou-Shenzhen-Hong Kong Express Rail Link. Upon its 2015 inauguration, it will take 48 minutes to travel from Guangzhou to Hong Kong’s West Kowloon Station by this new highspeed link, rather than the current one hour 55 minutes by ordinary rail. This decrease in travelling time will up Hong Kong’s competitiveness as an access point for global business opportunities and an international transit hub, given its superior world city functions and international

Government, Planning Study on the Co-ordinated Development of the Greater Pearl River

The Hong Kong-Zhuhai-Macao Bridge, to be completed one year after the express rail link, is another important land infrastructure that will greatly expand Hong Kong’s connectivity to the western part of the Greater Pearl River Delta region. The ‘bridge head’ is to be located on an artificial island to the northeast of Hong Kong International Airport, while the bridge will cut the travelling time between Zhuhai to Hong Kong International Airport by more than 80 percent – to about 45 minutes. Drivers of vehicles using the bridge to travel to the Kwai Chung Container Port will also save

Section 2


Section 2


54

55

the Hong Kong International Airport and Bao’an International Airport in

Figure 2-6: Ports in the Greater Pearl River Delta City Region

Shenzhen. Figure 2-7: Cross-Boundary Transportation Facilities in the Greater Pearl River Delta City Region e i g u a n E x p r e s s w a y

r i d g e e n B H u m

Foshan

Dongguan

Zhaoqing

Huizhou Guangzhou Nansha Shenzhen West

Zhongshan

Huizhou Daya Bay

J ia n g me n- Z ho n g s h an E x p r e s s w ay

Shenzhen Yantian

i t a i h s u a n h r -Z T u d o i z h a p g y R a n it u r c G t e I n

ZHONGSHAN T a i ” a o E x p r e s s w a y

Macao Zhuhai

o u n a g n K g o z h n o g u P - a s S s e h e n n z ge h r e n L - i n e

H W o e n g s t e K o r n n E g- x S p h r e e s s n z L h e i Hong Kong n e n - International Airport

e w a y B r i d g p i d R a i l C o a s t a l R a

Xiangzhou Port District

GPRD Port

ZHUHAI

GPRD Inland River Terminal

o r i d r r C o r n e s t E a

G u SHENZHEN W H z h a n g S o n e e n z h s t h e g K E x o u - e p r S h r n n z o n e s e n h e g C s w o r n - a y r i d o r H G

Jiangmen Hong Kong

a y s w r e s x p e E J i - H

Shenzhen International Airport

HONG KONG Hung Hom Station

i d g e a u B r i - M a c Z h u h a K o n g H o n g

Source : Const ructio n Depart ment of Guangdo ng Provinc ial Governm ent, Develo pment Bureau

Legend

Macao International Airport

of Hong Kong SAR Government, Secretariat for Transport and Public Works of Macao SAR Government, Planning Study on the Co-ordinated Development of the Greater Pearl River

MACAO Hengqin

Delta Townships, 2009, p.8 1.

Sanzhao Airport

Airport

Expressway

Port

Railway

Railway Staion

Intercity Transit Existing Railway

Boundary Control Point

2.3.5. Cross-Border Infrastructure Development between Hong Kong

Existing Transit Line

and Pearl River Delta Cities Source : Cons truct ion De partme nt of G uangdon g Provinc ial Gove rnment , Devel opment Bureau o f the

Hong Kong will improve its connection to the Greater Pearl River Delta

Hong Kong SA R G overnme nt, Secreta riat for T ransport and P ublic Works o f th e Mac ao S AR

region by means of a series of new cross-boundary infrastructures. One

Delta Townships, 2009, p.97.

of the most important infrastructures should be the 26-kilometre long Hong Kong section of the Guangzhou-Shenzhen-Hong Kong Express Rail Link. Upon its 2015 inauguration, it will take 48 minutes to travel from Guangzhou to Hong Kong’s West Kowloon Station by this new highspeed link, rather than the current one hour 55 minutes by ordinary rail. This decrease in travelling time will up Hong Kong’s competitiveness as an access point for global business opportunities and an international transit hub, given its superior world city functions and international network. In addition, plans are underway for the 42-kilometre long rail link, the Hong Kong-Shenzhen Western Express Line, which will connect

Section 2


Government, Planning Study on the Co-ordinated Development of the Greater Pearl River

The Hong Kong-Zhuhai-Macao Bridge, to be completed one year after the express rail link, is another important land infrastructure that will greatly expand Hong Kong’s connectivity to the western part of the Greater Pearl River Delta region. The ‘bridge head’ is to be located on an artificial island to the northeast of Hong Kong International Airport, while the bridge will cut the travelling time between Zhuhai to Hong Kong International Airport by more than 80 percent – to about 45 minutes. Drivers of vehicles using the bridge to travel to the Kwai Chung Container Port will also save more than 60 percent of their travelling time.

Section 2


56

57

The Liantang/Heung Yuen Wai Boundary Control Point will be

The position of Hong Kong as an important entrepot in the world is

constructed to establish a new traffic corridor linking the eastern parts

currently maintained by frequent ship departures, and advantages

of both Hong Kong and Shenzhen.

as a free port with zero tariffs. Although in recent years there have not

Upon completion of the above cross-boundary projects, the travelling time between Hong Kong and other Pearl River Delta cities will be significantly reduced.

been any majo r expans ion projec ts, Hong Kong co ntinue s to act as the Greater Pearl River Delta region’s efficient gateway for shippi ng goods to western countries. In terms of container and aviation handling, Hong Kong is not only

Table 2-7: Travelling Time between Hong Kong and Other Pearl River Delta Cities Current

maintaining its leading position in the Greater Pearl River region,

2016

but also global ly. Despite Guangzho u and Shenzhen swift ly closin g their development gap behind Hong Kong, Hong Kong still excels in

Via Train

Via Express and Intercity Railway

G ua ng zho u

1 ho ur 5 5 m inute s

4 8 m inute s

S hen zhen

4 5 m inute s

14 m inute s (F ut ia n) ; 2 3 m inute s ( Lo ng hu a)

Dongguan

1 hour 1 0 minutes

33 minutes

the link between global economies and Mainland China, as well as an

Huizhou

-

1 hour

international transportation hub in the Greater Pearl River Delta region.

Foshan

2 hours 55 minutes

1 hour 10 minutes

Zhaoqing

4 hours

-

Via Road

Via Hong Kong-Zhuhai-Macao Bridge

Guangzhou

3 hours

-

Shenzhen

1 hour

-

Dongguan

2 hours

-

Huizho u

2 hours 30 minutes

-

Foshan

3 hours 30 minutes

-

Zhaoq ing

4 hours 30 minutes

-

Zhongshan

3 hours

1 hour 45 minutes

J ia ng me n

3 h ou rs 3 0 m in ut es


Zhuhai

4 hours

45 minutes

M ac ao

4 h our s 3 0 m inu te s

4 5 m inu te s

many operating parameters, demonstrating a profound function as

Table 2-8: Global Ranking in 2012: Top-20 Busiest Container Terminals and Airports Container Terminal

1

1 hour

-

Shenzhen Airport

40 minutes

-

Dongguan

1 hour 10 minutes

-

Guangzhou East

1 hour 45 minute s

-

Zhuhai

1 hour 10 minutes

-

Jiangmen

2 hours 30 minute s

-

Zhongshan

1 hour 30 minutes

-

Zhao qing

3 hours 4 5 minutes

-

Shanghai, China

Aviation

Airport

Passengers (million)

Airport

Throughput (million tonnes)

32.53

Atlanta, US

95.5

Hong Kong, China

4.06

81.9

Memph is , US

40 . 2

2

Singapore

31.65

Beijing Capital, China

3

Hong Kong, China

23.10

London Heathrow, UK

70.0

Shanghai Pudong, China

2.94

4

S he nzhe n, Chi na

2 2.9 4

Tokyo Haneda, Japan

66.8

Incheon, South Korea

2.46

5

Busan, Korea, Rep.

17.04

Chicago, US

66.6

Anchorage, US

2.45

6

Ningbo-Zhoushan, China

16.83

L os Angele s, US

63.7

Dubai, UAE

2 .2 7

7

G ua ng zh ou , C hi na

14 .74

P ar is , F ra nc e

6 1. 6

L ou i sv il le , U S

2 .1 7

14.50

Dallas/Fort Worth, US

5 8.6

P ar is , Fr an ce

2 .15

57.8

Frankfurt, Germany

2.07

57.7

Tokyo Narita, Japan

2.01

Via Ferry Shenzhen

Port

Throughput (million TEU)

Rank

8

Qingdao, China

9

Dubai, UAE

13.30

Jakarta, Indonesia

10

Tianjin, China

12.30

Dubai, UAE

Section 2


Section 2


56

57

The Liantang/Heung Yuen Wai Boundary Control Point will be

The position of Hong Kong as an important entrepot in the world is

constructed to establish a new traffic corridor linking the eastern parts

currently maintained by frequent ship departures, and advantages

of both Hong Kong and Shenzhen.

as a free port with zero tariffs. Although in recent years there have not

Upon completion of the above cross-boundary projects, the travelling time between Hong Kong and other Pearl River Delta cities will be significantly reduced.

been any majo r expans ion projec ts, Hong Kong co ntinue s to act as the Greater Pearl River Delta region’s efficient gateway for shippi ng goods to western countries. In terms of container and aviation handling, Hong Kong is not only

Table 2-7: Travelling Time between Hong Kong and Other Pearl River Delta Cities

maintaining its leading position in the Greater Pearl River region,

Current

2016

but also global ly. Despite Guangzho u and Shenzhen swift ly closin g

Via Train

Via Express and Intercity Railway

their development gap behind Hong Kong, Hong Kong still excels in

G ua ng zho u

1 ho ur 5 5 m inute s

4 8 m inute s

S hen zhen

4 5 m inute s

14 m inute s (F ut ia n) ; 2 3 m inute s ( Lo ng hu a)

Dongguan

1 hour 1 0 minutes

33 minutes

the link between global economies and Mainland China, as well as an

Huizhou

-

1 hour

international transportation hub in the Greater Pearl River Delta region.

Foshan

2 hours 55 minutes

1 hour 10 minutes

Zhaoqing

4 hours

-

Via Road

Via Hong Kong-Zhuhai-Macao Bridge

Guangzhou

3 hours

-

Shenzhen

1 hour

-

Dongguan

2 hours

-

Huizho u

2 hours 30 minutes

-

many operating parameters, demonstrating a profound function as

Table 2-8: Global Ranking in 2012: Top-20 Busiest Container Terminals and Airports Container Terminal

1

Foshan

3 hours 30 minutes

-

Zhaoq ing

4 hours 30 minutes

-

Zhongshan

3 hours

1 hour 45 minutes

J ia ng me n



Zhuhai

4 hours

45 minutes

M ac ao

4 h our s 3 0 m inu te s

4 5 m inu te s

Port

Airport


Airport


Shanghai, China

32.53

Atlanta, US

95.5

Hong Kong, China

4.06

81.9

Memph is , US

40 . 2

2

Singapore

31.65


3

Hong Kong, China

23.10

London Heathrow, UK

70.0

Shanghai Pudong, China

2.94

4

S he nzhe n, Chi na

2 2.9 4

Tokyo Haneda, Japan

66.8

Incheon, South Korea

2.46

5

Busan, Korea, Rep.

17.04

Chicago, US

66.6

Anchorage, US

2.45

6

Ningbo-Zhoushan, China

16.83

L os Angele s, US

63.7

Dubai, UAE

2 .2 7

7

G ua ng zh ou , C hi na

14 .74

P ar is , F ra nc e

6 1. 6

L ou i sv il le , U S

2 .1 7

14.50

Dallas/Fort Worth, US

5 8.6

P ar is , Fr an ce

2 .15

57.8

Frankfurt, Germany

2.07

57.7

Tokyo Narita, Japan

2.01

Via Ferry Shenzhen

1 hour

-

Shenzhen Airport

40 minutes

-

Dongguan

1 hour 10 minutes

-

Guangzhou East

1 hour 45 minute s

-

Zhuhai

1 hour 10 minutes

-

Jiangmen

2 hours 30 minute s

-

Zhongshan

1 hour 30 minutes

-

Zhao qing

3 hours 4 5 minutes

-

Macao

55 minutes

-

Section 2

8


Aviation


Rank

Qingdao, China

9

Dubai, UAE

13.30

Jakarta, Indonesia

10

Tianjin, China

12.30

Dubai, UAE

Section 2


58

59

Container Terminal

Port


11

Rotterdam, Netherlands

Commission. By engaging planning institutions at Central Government

Aviation

Airport


level in devising policy, the Guangdong Provincial Government aimed to

57.5

Miami, US

1.93

of the Pearl River Delta region to the level of national strategy. Guangdong-

10.00

Hong Kong, China

56.1

Singapore

1.84

Kaohsiung, Taiwan, China

9.78

Denver, US

53.2


1.79

14

Hamburg, Germany

8.86

Bangkok, Thailand

53.0

Los Angeles, US

1.77

15

Antwerp, Belgium

8.64

Singapore, Singapore

51.2

Taipei, Taiwan, China

1.58

51.0

London Heathrow, UK

1.56

Rank

Airport


11.87

Frankfurt, Germany

12

Port Kelang, Malaysia

13

secure support from the Central Government to elevate the development Hong Kong-Macao cooperation was an important part of the Outline, and provided the Greater Pearl River Delta region with a new development turn. The Outline sets out a number of economic targets, such as the target for GDP per capita of the Pearl River Delta region to reach RMB135,000

16

L os A ngel es , US

80 . 8

Amsterdam, Netherlands

17

Dalian, China

8.06

New York, US

49.3

Chicago, US

1.51

18

Keihin ports, Japan

7.85

Guangzhou, China

48.5

Amsterdam, The Netherlands

1.51

19

Tanjung Pelepas, Malaysia

7.70

Madrid, Spain

45.2

Bangkok, Thailand

1.35

20

Xiamen, C hina

7.20

I stan bu l, Turkey

4 5.1

New York, US

1.28

(US$21,400), and its services sectors to account for 60 percent of regional GDP by 2020. The Outline marks the first time that the Pearl River Delta region has officially aimed to become a service-oriented economy. Referring to the cooperation between the Pearl River

Source : World S hippi ng Cou ncil, the Air port Council Internat ional.

Delta region, Hong Kong, and Macao, a number of programmes were launched on industrial transformation, services cooperation, and institutional setups between the Pearl River Delta region and the two Special Administrative Regions in the form of ‘Guangdong Early and Pilot Implementation’ under the Closer Economic Partnership Arrangement (CEPA). The uniqueness of the Outline is that it also covers

2.4. Urban G overnance and Regional Integration Since 2008 and the introduction of various policy initiatives to the Pearl River Delta region, regional integration has been a hot topic in the Greater Pearl River Delta region, encouraging participation from Hong Kong and Macao.

major infrastructure projects between the three places, calls for the co buil ding of a qual ity resi denti al area in the Greate r Pearl River Delt a region, and encourages collaboration in public service sectors such as education, healthcare, social security, transport, environmental protection and emergency management. Many initiatives stipulated in the Outline are reiterated in the 12th

2.4.1. Economic Integration

National Five-Year Plan (2011-2015), and escalate the development of the Greater Pearl River Delta region as part of national strategy.

The Outline of the Plan for the Reform and Development of the Pearl River Delta (200 8 – 2020)

Guiding Opinions on Expediting Economic Integration in the Pearl River

In the first quarter of 2009, the State Council approved The Outline of

Delta Region

the Plan for the Reform and Development of the Pearl River Delta (2008 to

The Guiding Opinions on Expediting the Economic Integration in the

2020) (the Outline) formulated by the National Development and Reform

Pearl River Delta Region (the Guidi ng Opinio ns) was announced in

Section 2


Section 2


58

59

Container Terminal

Commission. By engaging planning institutions at Central Government

Aviation

Port


Airport


Airport


level in devising policy, the Guangdong Provincial Government aimed to

11

Rotterdam, Netherlands

11.87

Frankfurt, Germany

57.5

Miami, US

1.93

12

Port Kelang, Malaysia

of the Pearl River Delta region to the level of national strategy. Guangdong-

10.00

Hong Kong, China

56.1

Singapore

1.84

13

Kaohsiung, Taiwan, China

9.78

Denver, US

53.2


1.79

14

Hamburg, Germany

8.86

Bangkok, Thailand

53.0

Los Angeles, US

1.77

15

Antwerp, Belgium

8.64

Singapore, Singapore

51.2

Taipei, Taiwan, China

1.58

16

L os A ngel es , US

80 . 8

Amsterdam, Netherlands

51.0

London Heathrow, UK

1.56

17

Dalian, China

8.06

New York, US

49.3

Chicago, US

1.51

18

Keihin ports, Japan

7.85

Guangzhou, China

48.5

Amsterdam, The Netherlands

1.51

19

Tanjung Pelepas, Malaysia

7.70

Madrid, Spain

45.2

Bangkok, Thailand

1.35

20

Xiamen, C hina

7.20

I stan bu l, Turkey

4 5.1

New York, US

1.28

Rank

secure support from the Central Government to elevate the development Hong Kong-Macao cooperation was an important part of the Outline, and provided the Greater Pearl River Delta region with a new development turn. The Outline sets out a number of economic targets, such as the target for GDP per capita of the Pearl River Delta region to reach RMB135,000 (US$21,400), and its services sectors to account for 60 percent of regional GDP by 2020. The Outline marks the first time that the Pearl River Delta region has officially aimed to become a service-oriented economy. Referring to the cooperation between the Pearl River

Source : World S hippi ng Cou ncil, the Air port Council Internat ional.

Delta region, Hong Kong, and Macao, a number of programmes were launched on industrial transformation, services cooperation, and institutional setups between the Pearl River Delta region and the two Special Administrative Regions in the form of ‘Guangdong Early and Pilot Implementation’ under the Closer Economic Partnership Arrangement (CEPA). The uniqueness of the Outline is that it also covers

2.4. Urban G overnance and Regional Integration

major infrastructure projects between the three places, calls for the co-

Since 2008 and the introduction of various policy initiatives to the Pearl River Delta region, regional integration has been a hot topic in the Greater Pearl River Delta region, encouraging participation from Hong Kong and Macao.

buil ding of a qual ity resi denti al area in the Greate r Pearl River Delt a region, and encourages collaboration in public service sectors such as education, healthcare, social security, transport, environmental protection and emergency management. Many initiatives stipulated in the Outline are reiterated in the 12th National Five-Year Plan (2011-2015), and escalate the development of

2.4.1. Economic Integration

the Greater Pearl River Delta region as part of national strategy. The Outline of the Plan for the Reform and Development of the Pearl River Delta (200 8 – 2020)

Guiding Opinions on Expediting Economic Integration in the Pearl River

In the first quarter of 2009, the State Council approved The Outline of

Delta Region

the Plan for the Reform and Development of the Pearl River Delta (2008 to

The Guiding Opinions on Expediting the Economic Integration in the

2020) (the Outline) formulated by the National Development and Reform

Pearl River Delta Region (the Guidi ng Opinio ns) was announced in

Section 2


Section 2


60

61

2009, subsequent to the Outline. They were more focused than their

Table 2-9: Indicators of Three Economic Zones in the Pearl River

predecessor on integration within the Pearl River Delta region. In

Delta Region (2012)

addition, the concept of ‘Three Economic Zones’ was proposed, which

( US$ billion)

replaced the earlier independent development of ‘Nine Cities’.


Investment in Fixed

Guangzhou-Foshan-Zhaoqing,

Shenzhen-Dongguan-Huizhou,

and

Tot al

P rim ar y

S eco nd ar y

Ter ti ar y

Assets

TotalRetail Sales of Consumer Goods

International Trade E xp or t

I mp or t

Foreign Capital Actually Utilised

Zhuhai-Zhongshan-Jiangmen were categorised into three major

Guangzhou-Foshan-Zhaoqing Economic Zone

economic zones, with the aim of promoting economic integration, joint

Guangzhou

214.65

3.33

74.77

136.55

59.53

94.69

58.9

58.3

4.57

planning, public service sharing, and a harmonised intercity public

Foshan

104.71

2.06

65.11

37.54

33.71

31.99

40.1

20.9

2.35

transport system. Despite its many challenges, the ‘three major economic

Zhaoqing

zones’ concept is the foundation of the urban integration of Guangzhou

23.13

3.80

10.61

8.71

13.51

6.87

3.8

2.6

1.15

342.50

9.19

150.50

182.81

106.76

133.55

102.8

81.8

8.07

and Foshan, and one that greatly strengthens Guangzhou’s status as the

Shenzhen-Dongguan-Huizhou Economic Zone

regional hub of the Pearl River Delta region.

Shenzhen

205.15

0.16

90.93

114.22

36.66

63.51

271.4

195.4

5.23

Dongguan

79.37

0.32

37.70

41.50

18.69

21.46

85.1

59.5

3.37

Huizhou

37.54

1.90

21.86

13.78

19.15

11.95

29.2

20.3

1.73

322.06

2.38

150.50

169.50

74.50

96.91

385.7

275.2

10.33

Figure 2-8: Three Economic Zones for PRD Regional Integration To Southeast Coastal China

To South Central China

Zhuhai-Jiangmen-Zhongshan Economic Zone Zhuhai

23.76

0.63

12.36

10.93

12.48

10.06

21.6

24

1.45

Jiangmen

29.78

2.38

15.21

12.20

13.4 7

12.79

13

5.8

0.87

Zhongshan To Southwest China

Guangzhou-Foshan-Zhaoqing Economic Zone Guangzhou

38.65

0.95

21.39

16.32

14.15

12.82

24.6

8.9

0.80

92.20

3.96

48.95

39.45

40.10

35.67

59.2

38.7

3.12

Source : Based on Gu angdong Statist ical Yearbo ok 201 3.

Huizhou

Zhaoqing Dongguan Foshan

Jiangmen Zhuhai-Zhongshan-Jiangmen Economic Zone

2.4.2. Spatial Coordination


To Southeast Coastal China

Shenzhen

Coordinated Development of the Greater Pearl River Delta Region

Zhongshan Hong Kong Zhuhai Legend

Macao To Southwest China

Development Axis EconomicZone

To Overseas Markets

City Green Belt

Source : Based on Pla nning fo r Urban-Ru ral Inte gration of the Pearl Riv er Del ta

To realise the full economic potential of the Greater Pearl River Delta region, the three jurisdictions (the Pearl River Delta, Hong Kong, and Macao) decided to step up spatial coordination by conducting joint studies on regional planning and cross-boundary infrastructure links. The Planning Study on the Coordinated Development of the Greater Pearl River Delta Township was the first planning exercise commissioned by

the governments of the three jurisdictions.

Section 2


Section 2


60

61

2009, subsequent to the Outline. They were more focused than their

Table 2-9: Indicators of Three Economic Zones in the Pearl River

predecessor on integration within the Pearl River Delta region. In

Delta Region (2012)

addition, the concept of ‘Three Economic Zones’ was proposed, which

( US$ billion)

replaced the earlier independent development of ‘Nine Cities’.


Investment in Fixed

Guangzhou-Foshan-Zhaoqing,

Shenzhen-Dongguan-Huizhou,

and

Tot al

P rim ar y

S eco nd ar y

Ter ti ar y

Assets

TotalRetail Sales of Consumer Goods

International Trade E xp or t

I mp or t

Foreign Capital Actually Utilised

Zhuhai-Zhongshan-Jiangmen were categorised into three major

Guangzhou-Foshan-Zhaoqing Economic Zone

economic zones, with the aim of promoting economic integration, joint

Guangzhou

214.65

3.33

74.77

136.55

59.53

94.69

58.9

58.3

4.57

planning, public service sharing, and a harmonised intercity public

Foshan

104.71

2.06

65.11

37.54

33.71

31.99

40.1

20.9

2.35

transport system. Despite its many challenges, the ‘three major economic

Zhaoqing

zones’ concept is the foundation of the urban integration of Guangzhou

23.13

3.80

10.61

8.71

13.51

6.87

3.8

2.6

1.15

342.50

9.19

150.50

182.81

106.76

133.55

102.8

81.8

8.07

and Foshan, and one that greatly strengthens Guangzhou’s status as the


regional hub of the Pearl River Delta region.

Shenzhen

205.15

0.16

90.93

114.22

36.66

63.51

271.4

195.4

5.23

Dongguan

79.37

0.32

37.70

41.50

18.69

21.46

85.1

59.5

3.37

Huizhou

37.54

1.90

21.86

13.78

19.15

11.95

29.2

20.3

1.73

322.06

2.38

150.50

169.50

74.50

96.91

385.7

275.2

10.33

Figure 2-8: Three Economic Zones for PRD Regional Integration To Southeast Coastal China

To South Central China

Zhuhai-Jiangmen-Zhongshan Economic Zone Zhuhai

23.76

0.63

12.36

10.93

12.48

10.06

21.6

24

1.45

Jiangmen

29.78

2.38

15.21

12.20

13.4 7

12.79

13

5.8

0.87

Zhongshan To Southwest China

Guangzhou-Foshan-Zhaoqing Economic Zone Guangzhou

38.65

0.95

21.39

16.32

14.15

12.82

24.6

8.9

0.80

92.20

3.96

48.95

39.45

40.10

35.67

59.2

38.7

3.12

Source : Based on Gu angdong Statist ical Yearbo ok 201 3.

Huizhou

Zhaoqing Dongguan Foshan

2.4.2. Spatial Coordination


To Southeast Coastal China

Shenzhen

Jiangmen

Coordinated Development of the Greater Pearl River Delta Region

Zhongshan Hong Kong

Zhuhai-Zhongshan-Jiangmen Economic Zone

Zhuhai Legend

Macao

Development Axis EconomicZone

To Southwest China

To Overseas Markets

City Green Belt

To realise the full economic potential of the Greater Pearl River Delta region, the three jurisdictions (the Pearl River Delta, Hong Kong, and Macao) decided to step up spatial coordination by conducting joint studies on regional planning and cross-boundary infrastructure links. The Planning Study on the Coordinated Development of the Greater Pearl

Source : Based on Pla nning fo r Urban-Ru ral Inte gration of the Pearl Riv er Del ta

River Delta Township was the first planning exercise commissioned by

the governments of the three jurisdictions.

Section 2


Section 2


62

63

The key findings of the Study were released in October 2009, and

Figure 2-10: A ‘One-Hour Intercity Commuting Circle’

addressed the policy objectives set out in The Outline of the Plan for the Reform and Development of the Pearl River Delta (2008 – 2020) . Its

findings can be read as a high-level strategic outline of recommendations on key planning issues for the region, and a blueprint for key cross boundary infrastru cture links. In t he Outline, the spatial structure of the Greater Pearl River Delta region was proposed in forms such as: ‘Cityregion’; the intra-regional ‘One-Hour Intercity Commuting Circle’; and ‘Multi-Tier Development Space’ linking the Greater Pearl River Delta to its

Huizhou Zhaoqing

Guangzhou

Guangzhou/FoshanMetropolitanArea

Dongguan

Foshan

external regions. Most recommendations indicated have already been

Zhongshan

implemented by the respective governments. Zhuhai

Shenzhen Hong Kong/Shenzhen MetropolitanArea

Hong Kong

Jiangmen

Figure 2-9: Spatial Structure of the Greater Pearl River Delta City-Region

Macao/ZhuhaiMetropolitanArea

R D n P P a

Macao

D P R m c u C i r

Legend Bay Area

Central Sub-region

One-hour Commuting Circle withinMetropolitanArea

One-hour Commuting Circle within Bay Area

Source : Based on Constru ction Depart ment of Guangdo ng Provinc ial Governm ent, Develo pment

Eastern Sub-region

Dongguan

Bureau o f the Hong Kong S AR Gov ernment , Secret ariat fo r Transpo rt and P ublic Works of t he Macao SAR Governm ent, Planning Stud y on the Co-ordi nated Develo pment of the Greater Pearl Rive r Delt a Townshi ps, 2009, p.53 .

Shenzhen Jiangmen

One-hour Commuting Circle withinSub-region

Huizhou

Guangzhou

Zhaoqing

Guangzhou / Foshan Foshan Metropolitan Area

City Node

Zhongshan

Hong Kong / Shenzhen Metropolitan Area WesternSub-region

Zhuhai

Hong Kong

Macao / Zhuhai MetropolitanArea

Co-Building ‘A Quality Living Area’ Pan-PRD and Major Domestic and InternationalMarkets Circum-PRD

Macao

The Regional Cooperation Plan on Building a Quality Living Area was the

second joint study commissioned by Guangdong Province, Hong Kong,

Outer-PRD

and Macao, in response to the proposals of The Outline of the Plan for

The Bay Area

the Reform and Development of the Pearl River Delta (2008 – 2020). It

was the first time that the three jurisdictions had applied the concept of

Legend Three Major Metropolitan Areas

Bay Area

IntegratedCentre

sustainable development on regional development, and strived to find

RegionalDevelopmentAxis

DevelopmentTier

Specialized Centre

a balance between economic, social development, and environmental

Source : Based on Constr uctio n Depart ment of Guangdo ng Provinci al Governm ent, Develo pment Bureau o f the H ong Kong S AR Gove rnment , Sec retariat for Transp ort and Publi c Works of the

protection to transform the Greater Pearl River Delta region into a lowcarbon, high-technology, and low-pollution city cluster for quality living.

Section 2


Section 2


62

63

The key findings of the Study were released in October 2009, and

Figure 2-10: A ‘One-Hour Intercity Commuting Circle’

addressed the policy objectives set out in The Outline of the Plan for the Reform and Development of the Pearl River Delta (2008 – 2020) . Its

findings can be read as a high-level strategic outline of recommendations on key planning issues for the region, and a blueprint for key cross boundary infrastru cture links. In t he Outline, the spatial structure of the

Huizhou

Greater Pearl River Delta region was proposed in forms such as: ‘City-

Zhaoqing

Guangzhou

Guangzhou/FoshanMetropolitanArea

region’; the intra-regional ‘One-Hour Intercity Commuting Circle’; and

Dongguan

Foshan

‘Multi-Tier Development Space’ linking the Greater Pearl River Delta to its external regions. Most recommendations indicated have already been

Zhongshan

implemented by the respective governments. Zhuhai

Shenzhen Hong Kong/Shenzhen MetropolitanArea

Hong Kong

Jiangmen

Figure 2-9: Spatial Structure of the Greater Pearl River Delta City-Region

Macao/ZhuhaiMetropolitanArea

R D n P P a

Macao

D P R m c u r i C

Legend Bay Area

Central Sub-region

One-hour Commuting Circle withinMetropolitanArea

One-hour Commuting Circle within Bay Area

Source : Based on Constru ction Depart ment of Guangdo ng Provinc ial Governm ent, Develo pment

Eastern Sub-region

Dongguan

Bureau o f the Hong Kong S AR Gov ernment , Secret ariat fo r Transpo rt and P ublic Works of t he Macao SAR Governm ent, Planning Stud y on the Co-ordi nated Develo pment of the Greater Pearl Rive r Delt a Townshi ps, 2009, p.53 .

Shenzhen Jiangmen

One-hour Commuting Circle withinSub-region

Huizhou

Guangzhou

Zhaoqing

Guangzhou / Foshan Foshan Metropolitan Area

City Node

Zhongshan

Hong Kong / Shenzhen Metropolitan Area WesternSub-region

Zhuhai

Hong Kong

Macao / Zhuhai MetropolitanArea

Co-Building ‘A Quality Living Area’ Pan-PRD and Major Domestic and InternationalMarkets Circum-PRD

Macao

The Regional Cooperation Plan on Building a Quality Living Area was the

second joint study commissioned by Guangdong Province, Hong Kong,

Outer-PRD

and Macao, in response to the proposals of The Outline of the Plan for

The Bay Area

the Reform and Development of the Pearl River Delta (2008 – 2020). It

was the first time that the three jurisdictions had applied the concept of

Legend Three Major Metropolitan Areas

Bay Area

IntegratedCentre

sustainable development on regional development, and strived to find

RegionalDevelopmentAxis

DevelopmentTier

Specialized Centre

a balance between economic, social development, and environmental

Source : Based on Constr uctio n Depart ment of Guangdo ng Provinci al Governm ent, Develo pment Bureau o f the H ong Kong S AR Gove rnment , Sec retariat for Transp ort and Publi c Works of the

protection to transform the Greater Pearl River Delta region into a lowcarbon, high-technology, and low-pollution city cluster for quality living.

Macao SAR Governm ent, Planning Study on the Co-ordi nated Develo pment of the Greater Pearl Riv er De lta Town ships, 2 009, p.44 .

Section 2


Section 2


64

65

Issues of: enhancing environmental quality and ecology, promoting low-

However, technological cooperation has not been limited to regional

carbon development, cross-boundary cultural exchange, education,

level but has also taken place at municipal level with the aim of tapping

social welfare, food safety, and green transportation are stipulated in the

the technical strength of each member city. In May 2007, Hong Kong

regional plan.

cooperated with Shenzhen to launch the ‘Shenzhen-Hong Kong Innovation Circle’. This scheme aims to consolidate the technological

2.4.3. Knowledge Collaboration between Hong Kong and the Pearl River Delta Region The reunification of Hong Kong and Macao to China has enabled the Greater Pearl River Delta region to develop new cooperation modes with respect to technology and education. Research and tertiary institutions, technological enterprises, professionals, and experts are highly encouraged to participate in the so-called ‘knowledge collaboration’, which has received funding from the governments of all

resources of both jurisdictions, and build on their complementary strengths. Under the arrangement, four Hong Kong universities established ‘innovation centres’ in the Shenzhen Innovation Circle. In addition, many Shenzhen technological enterprises set up research centres in the Hong Kong Science Park to tap into Hong Kong’s advantages of attracting i nternational talent, its sound legal system and intellectual property rights, and to promote international technological collaboration and international sales.

three jurisdictions. Educ ation Technology

A ‘technology cooperation’ between Guangdong Province and Hong Kong was first initiated in 2003 when the respective governments

The Pearl River Delta regional governments are proactively seeking ‘education cooperation’ with Hong Kong institutes, and have received the enthusiastic support of Hong Kong’s public tertiary institutions.

established the ‘Guangdong-Hong Kong Expert Group on Cooperation

In 2005, a first tertiary education institution founded by a Mainland

in Innovation and Technology’. Since then, both jurisdictions have

and Hong Kong university – the Beijing Normal University-Hong Kong

launched various projects to promote technological cooperation and

Baptist University United International College (UIC) – was founded in

the commercialisation of technology achievements, to enhance the

Zhuhai. In 2007, The Hong Kong University of Science and Technology

productivity and competitiveness of enterprises in the Greater Pearl

(HKUST) set up the HKUST Fok Ying Tung Graduate School in Nansha,

River Delta region.

Guangzhou, to promote technology innovation and advancement

The ‘Guangdong-Hong Kong Technology Cooperation Funding Scheme’ was launched in 2004 to encourage collaboration in applied research and development projects between research institutions and enterprises in Guangdong Province and Hong Kong. In 2006, following the

in the Pearl River Delta region through research and postgraduate education, as well as knowledge transfer and industry collaboration. Meanwhile, the Shenzhen campus of The Chinese University of Hong Kong will open in 2014.

establishment of five publically funded research and development

However, the cooperation between the Pearl River Delta region and

centres in Hong Kong, the Hong Kong Government organised

Hong Kong tertiary institutions goes beyond education. The University

roadshows to the Pearl River Delta region cities, and sought cooperation

of Hong Kong (HKU) has collaborated with the Shenzhen Municipal

Section 2


Section 2


64

65

Issues of: enhancing environmental quality and ecology, promoting low-

However, technological cooperation has not been limited to regional

carbon development, cross-boundary cultural exchange, education,

level but has also taken place at municipal level with the aim of tapping

social welfare, food safety, and green transportation are stipulated in the

the technical strength of each member city. In May 2007, Hong Kong

regional plan.

cooperated with Shenzhen to launch the ‘Shenzhen-Hong Kong Innovation Circle’. This scheme aims to consolidate the technological

2.4.3. Knowledge Collaboration between Hong Kong and the Pearl River Delta Region The reunification of Hong Kong and Macao to China has enabled the Greater Pearl River Delta region to develop new cooperation modes with respect to technology and education. Research and tertiary institutions, technological enterprises, professionals, and experts are highly encouraged to participate in the so-called ‘knowledge collaboration’, which has received funding from the governments of all

resources of both jurisdictions, and build on their complementary strengths. Under the arrangement, four Hong Kong universities established ‘innovation centres’ in the Shenzhen Innovation Circle. In addition, many Shenzhen technological enterprises set up research centres in the Hong Kong Science Park to tap into Hong Kong’s advantages of attracting i nternational talent, its sound legal system and intellectual property rights, and to promote international technological collaboration and international sales.

three jurisdictions. Educ ation Technology

A ‘technology cooperation’ between Guangdong Province and Hong Kong was first initiated in 2003 when the respective governments

The Pearl River Delta regional governments are proactively seeking ‘education cooperation’ with Hong Kong institutes, and have received the enthusiastic support of Hong Kong’s public tertiary institutions.

established the ‘Guangdong-Hong Kong Expert Group on Cooperation

In 2005, a first tertiary education institution founded by a Mainland

in Innovation and Technology’. Since then, both jurisdictions have

and Hong Kong university – the Beijing Normal University-Hong Kong

launched various projects to promote technological cooperation and

Baptist University United International College (UIC) – was founded in

the commercialisation of technology achievements, to enhance the

Zhuhai. In 2007, The Hong Kong University of Science and Technology

productivity and competitiveness of enterprises in the Greater Pearl

(HKUST) set up the HKUST Fok Ying Tung Graduate School in Nansha,

River Delta region.

Guangzhou, to promote technology innovation and advancement

The ‘Guangdong-Hong Kong Technology Cooperation Funding Scheme’ was launched in 2004 to encourage collaboration in applied research and development projects between research institutions and enterprises in Guangdong Province and Hong Kong. In 2006, following the

in the Pearl River Delta region through research and postgraduate education, as well as knowledge transfer and industry collaboration. Meanwhile, the Shenzhen campus of The Chinese University of Hong Kong will open in 2014.

establishment of five publically funded research and development

However, the cooperation between the Pearl River Delta region and

centres in Hong Kong, the Hong Kong Government organised

Hong Kong tertiary institutions goes beyond education. The University

roadshows to the Pearl River Delta region cities, and sought cooperation

of Hong Kong (HKU) has collaborated with the Shenzhen Municipal

opportunities with Pearl River Delta region partners.

Section 2


Section 2


66

67

Government to set up a comprehensive public hospital – The University of Hong Kong – Shenzhen Hospital (Shenzhen Binhai Hospital). With a

Through example and by way of demonstration, it is the

total investment of RMB3.5 billion by the Shenzhen Government, and

Greater Pearl River Delta’s role to lead G uangdong Province and

HKU responsible for medical expertise and overseeing the hospital’s

the Mainland to overcome the middle income trap through:

daily operation, the hospital opened on a trial basis in July 2012. It is

industrial upgrading, development of services, innovation

designed to undertake medical services, research, and teaching, as well

on the basis of an open society, institutional diversity, great

as to provide 2,000 patient beds and have the capacity to receive 6,000

external and internal connectivity, and accessibility through an

to 10,000 outpatients every day.

extensive and dense railway network of high-speed, intercity, and underground railways and related infrastructure. It is the Greater Pearl River Delta’s role to lead the province and nation from industry-led through infrastructure-led to institutionled growth and, possibly, to balanced comprehensive societal development. This is mostly to take place through urban polycentricity, with institutional diversity already embedded

Conclusion

and safeguarded in the special economic zones and the ‘One Country, Two Systems’ policy.

The latest developments in the Greater Pearl River Delta region

In this regard, by proactively participating in regional cooperation,

see the region transcending its earlier economic cooperation

Hong Kong continues to enjoy its advantages. Through the

for harmonisation of urban governance, talent exchange, and

construction of state-of-the-art transportation projects and joint

joint competence building. These aspect s showcase the new

planning, Hong Kong ensures its geographical connectivity

development phase that is taking form in the Greater Pearl River

to emerging business opportunities, while through fostering

Delta region.

knowledge collaboration with the Pearl River Delta, Hong Kong

According to a World Bank research report, the ‘Middle Income Trap’ may cast shadows on Mainland China’s economic development. The trap occurs when a country reaches a growth plateau, and eventually stagnates aer reaching middle income levels. The threshold is per capita GDP of US$12,000, and the economic capability to join the Organisation for Economic Co-Operation and Development. The Greater Pearl River Delta metropolis passe s this threshold, while the Pearl River Delta region is the first region to enter high income status in Mainland China.

maintains a firm foothold in the emerging ‘knowledge economy’ that is new to the region in the new millennium.

Section 2


Section 2


66

67

Government to set up a comprehensive public hospital – The University of Hong Kong – Shenzhen Hospital (Shenzhen Binhai Hospital). With a

Through example and by way of demonstration, it is the

total investment of RMB3.5 billion by the Shenzhen Government, and

Greater Pearl River Delta’s role to lead G uangdong Province and

HKU responsible for medical expertise and overseeing the hospital’s

the Mainland to overcome the middle income trap through:

daily operation, the hospital opened on a trial basis in July 2012. It is

industrial upgrading, development of services, innovation

designed to undertake medical services, research, and teaching, as well

on the basis of an open society, institutional diversity, great

as to provide 2,000 patient beds and have the capacity to receive 6,000

external and internal connectivity, and accessibility through an

to 10,000 outpatients every day.

extensive and dense railway network of high-speed, intercity, and underground railways and related infrastructure. It is the Greater Pearl River Delta’s role to lead the province and nation from industry-led through infrastructure-led to institutionled growth and, possibly, to balanced comprehensive societal development. This is mostly to take place through urban polycentricity, with institutional diversity already embedded

Conclusion

and safeguarded in the special economic zones and the ‘One Country, Two Systems’ policy.

The latest developments in the Greater Pearl River Delta region

In this regard, by proactively participating in regional cooperation,

see the region transcending its earlier economic cooperation

Hong Kong continues to enjoy its advantages. Through the

for harmonisation of urban governance, talent exchange, and

construction of state-of-the-art transportation projects and joint

joint competence building. These aspect s showcase the new

planning, Hong Kong ensures its geographical connectivity

development phase that is taking form in the Greater Pearl River

to emerging business opportunities, while through fostering

Delta region.

knowledge collaboration with the Pearl River Delta, Hong Kong

According to a World Bank research report, the ‘Middle Income Trap’ may cast shadows on Mainland China’s economic development.

maintains a firm foothold in the emerging ‘knowledge economy’ that is new to the region in the new millennium.

The trap occurs when a country reaches a growth plateau, and eventually stagnates aer reaching middle income levels. The threshold is per capita GDP of US$12,000, and the economic capability to join the Organisation for Economic Co-Operation and Development. The Greater Pearl River Delta metropolis passe s this threshold, while the Pearl River Delta region is the first region to enter high income status in Mainland China.

Section 3

Economic Trends in the Pearl River Delta Region

Section 3


68

69

E conomic Trends

The first two developments are largely confined within the Pearl River Delta region with the Chinese authorities as driving forces. The rapid growth of market potential has been induced by regional economic development and the improvement in residents’ income and, since

in the


2009, has been accelerated by the effectiveness of the ‘consumption stimulus’ policy. Both Hong Kong and Macao are also instrumental in the region due to their increasing investments, complementing themselves to Pearl River Delta development strategies and, gradually, changing policy orientation to respond to new opportunities and address new challenges.

3.1 From Manufacturing to Technology In the last 10 years, the most distinctive feature of Guangdong Province manufacturing strategies has been the drive in the Pearl River Delta from processing trade-oriented manufacturing clusters into a hightechnology-oriented exporting region, which calls for supportive industrial and technological policies.

3.1.1. The Development of High-Technology Industries The

economic

development of the

Greater

Pearl

River Delta region since 2000 can be seen from three perspectives: 1) the technologydriven upgrade of the export sector; 2) the shift in economic orientation from the manufacturing sector to the service sector, driven by the Guangdong Provincial Government, and 3) the emergence of the Greater Pearl River Delta market, driven by the growing consumption power of the region’s residents

As early as the late 1980s, the Guangdong Provincial Government had recognised the importance of hightechnology industries. Among all the Pearl River Delta cities, Shenzhen stood out as the first to apply itself to the development of high-technology industries, and gave the highest priority to technological development in the early 1990s. Shenzhen launched numerous measures to encourage

Section 3

Section 3



68

69

E conomic Trends

The first two developments are largely confined within the Pearl River Delta region with the Chinese authorities as driving forces. The rapid growth of market potential has been induced by regional economic development and the improvement in residents’ income and, since

in the

2009, has been accelerated by the effectiveness of the ‘consumption


stimulus’ policy. Both Hong Kong and Macao are also instrumental in the region due to their increasing investments, complementing themselves to Pearl River Delta development strategies and, gradually, changing policy orientation to respond to new opportunities and address new challenges.

3.1 From Manufacturing to Technology In the last 10 years, the most distinctive feature of Guangdong Province manufacturing strategies has been the drive in the Pearl River Delta from processing trade-oriented manufacturing clusters into a hightechnology-oriented exporting region, which calls for supportive industrial and technological policies.

3.1.1. The Development of High-Technology Industries The

As early as the late 1980s, the Guangdong Provincial

economic

Government had recognised the importance of high-

development of the

Greater

technology industries. Among all the Pearl River Delta

Pearl

cities, Shenzhen stood out as the first to apply itself

River Delta region since

to the development of high-technology industries,

2000 can be seen from three

and gave the highest priority to technological

perspectives: 1) the technology-

development in the early 1990s. Shenzhen

driven upgrade of the export sector;

launched numerous measures

2) the shift in economic orientation from

to encourage

the manufacturing sector to the service sector, driven by the Guangdong Provincial Government, and 3) the emergence of the Greater Pearl River Delta market, driven by the growing consumption power of the region’s residents.

Section 3

Section 3



70

71

technological development including: providing tax concessions, increasing research and development expenditure, introducing a government reward system, attracting talent, and allowing flexible

Figure 3-1: Outputs and Exports of High-Technology Products in Guangdong Province (2000-2011)

Percentage

45 40

capital arrangements in relation to ‘know-how’ contribution. From

35

1992 to 1999, the output of Shenzhen’s high-technology industries grew

30

at an annual rate of 55 percent and amounted to 41 percent of total

25

35.6

35.3

35.4

30.5

30.4

Witnessing the tremendous

10

achievement of Shenzhen,

0

development

set

30.9

28.7

23.4 19.4 21.6

23.5

30.0

31.2

37.6

24.8

Proportion of High-tech Products Export in Provincial Industrial Manufactured Exports (%)

19.1

Government

39.2

34.4 27.0

17.2

15

the Guangdong Provincial

39.4

32.3

20

industrial output.

37.7

35.8

Proportion of High-tech Products Output in Provincial Total Industrial Output(%)

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

Source : Guan gdong Provinci al Dep artment of Sc ience and Techn ology. Available at: htt p://www.sts .gd.cn/show.asp?Ar ticleI D=762.

the

objective

Guangdong Province’s success was not only limited to within the

in its 10th Provinc ial Five-

Pearl River Delta region. It induced a spillover effect to Hong Kong via

Year Plan (2001 to 2005) of

processing trade. The total value of high-technology products increased

becoming one of Mainland

from US$113 billion (HK$884 billion) in 2002 to US$442 billion (HK$3,430

China’s most important new,

billio n) in 2012, while its share in total merchandise trade surged from

high-technology industrial

27.8 percent in 2002 to 46.7 percent in 2012. 12

research, production and export bases; and strived to establish a vibrant, open, innovative market-oriented system based

Figure 3-2 : Imports and Exports of High-Technology Products in Total Value of Overall Merchandise Trade in Hong Kong

US $billion

43.4

on the technological contribution of private enterprises, universities and scientific research institutions. Of all research and development players, Guangdong Province particularly valued the efforts of private

39.0

400 32.8 300

27.8

34.8

44.6

44.9

39.8 40

30.4 195.3

a decade, in terms of provincial industrial totals, the output of high-

129.9

200

143.3

137.0

20

109.9

100

52.4

65.1

60.9

73.4

92.9

2002

2003

2004

109.1

2005

128.5

147.8

155.8

151.8

2006

2007

2008

2009

192.7

214.2

232.9

0

10

0

Value of Total Exports of High-Technology Products

34.4 percent in 2011. Meanwhile, the export sector was also better

Value of Imports of High-Technology Products

percent in 2000 to 37.6 percent in 2011.

30

95.6

technology products had increased from 17.2 percent in 2000 to performing, with export sales of high-technology products up from 19.4

209.4

174.5

80.9

Guangdong’s technological initiatives gained it huge success. Within

46.7

36.6

enterprises and often offered tax concessions and subsidies to hightechnologycompanies.

Percentage 50

500

2010

2011

2012

Percentage of Value of Imports and Exports of HighTechnology Products in the Total Value of Overall Merchandise Trade

Source : Censu s and Statist ics D epartme nt o f HKSA R Gove rnment , Hong Kong as a Knowledge -based Econom y – A Statis tical Perspec tive, 2013, p .59.

Section 3

Section 3



70

71

technological development including: providing tax concessions, increasing research and development expenditure, introducing a government reward system, attracting talent, and allowing flexible

Figure 3-1: Outputs and Exports of High-Technology Products in Guangdong Province (2000-2011)

Percentage

45 40

capital arrangements in relation to ‘know-how’ contribution. From

35

1992 to 1999, the output of Shenzhen’s high-technology industries grew

30

37.7

35.8

35.6

35.3

35.4

30.5

30.4

25

industrial output.

20

27.0

10

achievement of Shenzhen,

0

development

30.9

28.7

23.4 19.4 23.5

21.6

31.2

24.8

Proportion of High-tech Products Export in Provincial Industrial Manufactured Exports (%)

17.2

15

Witnessing the tremendous

set

30.0

37.6

32.3

19.1

Government

39.2

34.4

at an annual rate of 55 percent and amounted to 41 percent of total

the Guangdong Provincial

39.4

Proportion of High-tech Products Output in Provincial Total Industrial Output(%)

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

Source : Guan gdong Provinci al Dep artment of Sc ience and Techn ology. Available at: htt p://www.sts .gd.cn/show.asp?Ar ticleI D=762.

the

objective

Guangdong Province’s success was not only limited to within the

in its 10th Provinc ial Five-

Pearl River Delta region. It induced a spillover effect to Hong Kong via

Year Plan (2001 to 2005) of

processing trade. The total value of high-technology products increased

becoming one of Mainland

from US$113 billion (HK$884 billion) in 2002 to US$442 billion (HK$3,430

China’s most important new,

billio n) in 2012, while its share in total merchandise trade surged from

high-technology industrial

27.8 percent in 2002 to 46.7 percent in 2012. 12

research, production and export bases; and strived to establish a vibrant, open, innovative market-oriented system based

Figure 3-2 : Imports and Exports of High-Technology Products in Total Value of Overall Merchandise Trade in Hong Kong

US $billion

Percentage 50

500 43.4

on the technological contribution of private enterprises, universities

39.0

400

and scientific research institutions. Of all research and development players, Guangdong Province particularly valued the efforts of private

300

39.8 40

36.6

34.8

32.8

46.7

44.9

44.6

30.4

27.8

209.4

195.3

30

174.5

enterprises and often offered tax concessions and subsidies to high129.9

200

technologycompanies.

143.3

137.0

20

109.9 95.6 80.9 100

Guangdong’s technological initiatives gained it huge success. Within a decade, in terms of provincial industrial totals, the output of high-

60.9

73.4

92.9

2002

2003

2004

109.1

2005

128.5

147.8

155.8

151.8

2006

2007

2008

2009

232.9

214.2

192.7

10

0

technology products had increased from 17.2 percent in 2000 to

0

Value of Total Exports of High-Technology Products

34.4 percent in 2011. Meanwhile, the export sector was also better performing, with export sales of high-technology products up from 19.4

65.1

52.4

2010

2011

2012

Percentage of Value of Imports and Exports of HighTechnology Products in the Total Value of Overall Merchandise Trade

Value of Imports of High-Technology Products

Source : Censu s and Statist ics D epartme nt o f HKSA R Gove rnment , Hong Kong as a Knowledge -based Econom y – A Statis tical Perspec tive, 2013, p .59.

percent in 2000 to 37.6 percent in 2011. 12

Some imported high-technology products, manufactured in Mainland China and developed countries, are retained in Hong Kong for domestic consumption, or for retail selling to the Mainland visitors (such as electronic devices). The growth of export sales is a better indicator to demonstrate the spillover effect of the technological upgrading of the PRD manufacturing sector to the Hong Kong trading sector.

Section 3

Section 3



72

73

3.1.2. Research and Development in the Pearl River Delta Region and Guangdong Province ) $ n o S i l U i ( l b

The development of high-technology industries accelerated R&D activities in the Pearl River Delta region and Guangdong Province. Research and development expenditure as a percentage of provincial GDP increased from one percent in 2000 to 1.96 percent in 2011, while personnel engaged in R&D per 10,000 persons (full-time equivalent) increased from 9.5 in 2000 to 3 9.1 in 2011. Comparing Guangdong’s 2011 R&D performance with that of other Mainland coastal provinces the same year, Guangdong delivered an exceptional performance in enterprise-related R&D indicators. Meanwhile, the province topped the expenditure on R&D project, export revenue of new products, total personnel in R&D institutions, and patents-in-force, and came second in R&D expenditure on new product development and sales.

1 1 0 2 n i s n o i g e R a n i h C l a t s a o C d e t c e l e S r o f e z i S d e t a n g i s e D e v o b a s e s i r p r e t n E l a i r t s u d n I f o s r o t a c i d n I D & R : 1 3 e l b a T

s t c u d o r P w e N

t r o p x E

1 . 0 . 0 . 3 . 0 . 6 . 0 . 5 3 . 8 9 0 1 1 8 6 3 8 1 6 3 1 1 3

% % % % % % % 1 . 1 . 5 . 2 . 7 . 1 . . 7 1 8 5 2 2 1 3 3 1 2

3 . 7 5 5 , 1

6 . 9 . 4 . . 3 5 3 9 9 5 1 5 5 2

% % % % % % % 3 . 7 . 5 . 0 . 8 . 8 . 9 . 4 1 7 4 1 0 1 3 3 1

t ) e n r s e n u w t o t i c i l . 5 l 0 e u m . 3 d N p i . 9 . 3 . 3 . 9 . . 3 d l o b 6 n 1 6 8 1 9 3 2 2 0 6 e n o $ 1 r e p o P S v x e U E D (

% % % % % % % 6 . 5 . 8 . 7 . 3 . 1 . 2 . 5 1 8 3 2 2 1 6 7

e u s n t e c v w u e e d R N o s f r o P e l a S

) d n a s u o h t ( t n e t a P

6 . 2 2 2

3 . 0 2 1

8 . 9 2 2

e c r o F n I

1 . 5 . 5 . 1 . 3 1 . 7 . 6 . . 2 2 6 8 7 0 6 5 2 2 6 1 2 1

% % % % % % % 0 . 2 . 0 . 3 . 6 . 7 . 3 . 3 6 3 1 9 3 2 1 3

n o i t a c i l p p A

1 . . 4 . 0 . 2 . 8 . 9 6 5 . 8 . 9 2 2 3 1 8 2 5 3 7 1 7 5 1 1

% % % % % % % 8 . 0 . 5 . 4 . 5 . 1 . 8 . 8 1 3 3 1 1 3 1 5 8

e c n d a ) n r n a e m r 0 t o s s r o 0 r f t 0 e o a ’ r ( c M e p o P D l l a r s l e n e v n D o O l a n & i t t u o R t o s i T r i t e n s P n I

e $ r S ) u t U i D ( n & d R t i o c l l n e i e n j p o o b r x P E

9 . 1 . 9 . 8 . 7 . 0 . 5 . 0 . 8 1 2 6 2 1 4 5 1 4 1 2 2 5 2

% % % % % % % 7 . . 9 . 5 . . 8 . 8 . 2 6 6 0 6 5 1 2 2 5 1

5 . 6 . 5 . 9 . 1 . 3 . 6 . . 2 6 7 1 9 9 1 1 5 5 3 0 8 6 4 2 5 3 4 , 3 2 1

% % % 1 % % % % 6 . 8 . 3 . 9 . . 9 . 3 . 5 7 1 3 3 1 1 2 1 2

2 . 5 . 5 . . . 0 . 1 . 5 . 0 8 2 2 0 7 1 4 1 7 2 2 2

% % % % % % % 0 . 9 . 8 . 5 . 2 . . 3 . 7 6 1 8 2 3 2 1 5 5

l a t o T l a n o i t a N

e c n i v o r P g n o d g n a u G

i a h g n a h S

u s g n a i J

g n a i j e h Z

e z t a g r t e l n i a v e Y R D

g n i j i e B

n i j n a i T

i a h m o i B R

i e b e H

e r a h S l a n o i t a N f O


i a h g n a h S

u s g n a i J

g n a i j e h Z

e z t a g r t e l n i a v e Y R D

g n i j i e B

n i j n a i T

i a h m o i B R

i e b e H

. 2 1 0 2 y g o l o n h c e T d n a e c n e i c S n o k o o b r a e Y l a c i t s i t a t S a n i h C : e c r u o S

Section 3

Section 3



72

73

3.1.2. Research and Development in the Pearl River Delta Region and Guangdong Province ) $ n o S i U l l i ( b

The development of high-technology industries accelerated R&D activities in the Pearl River Delta region and Guangdong Province. Research and development expenditure as a percentage of provincial GDP increased from one percent in 2000 to 1.96 percent in 2011, while personnel engaged in R&D per 10,000 persons (full-time equivalent) increased from 9.5 in 2000 to 3 9.1 in 2011. Comparing Guangdong’s 2011 R&D performance with that of other Mainland coastal provinces the same year, Guangdong delivered an exceptional performance in enterprise-related R&D indicators. Meanwhile, the province topped the expenditure on R&D project, export revenue of new products, total personnel in R&D institutions, and patents-in-force, and came second in R&D expenditure on new product development and sales.

Section 3

1 1 0 2 n i s n o i g e R a n i h C l a t s a o C d e t c e l e S r o f e z i S d e t a n g i s e D e v o b a s e s i r p r e t n E l a i r t s u d n I f o s r o t a c i d n I D & R : 1 3 e l b a T

s t c u d o r P w e N

t r o p x E

1 . . 0 . 3 . 0 . 6 . 0 . 5 3 0 . 8 6 8 9 0 1 1 3 8 1 6 3 1 1 3

% % % % % % % 1 . 1 7 . 5 . 2 . 1 . . 7 8 . 1 2 3 3 1 2 5 2 1

3 . 7 5 5 , 1

6 . 3 . 6 . 8 . 9 . 4 . . 3 2 0 9 5 3 9 9 2 2 2 5 2 1 2 1 5 5 2

% % % % % % % 3 . 7 . 5 . 0 . 8 . 8 . 9 . 4 7 4 1 1 0 1 3 3 1

t ) e n r s e n u w t o t i c i l . 5 l 0 e u m . 3 d N p i . 9 . 3 . 3 . 9 . . 3 d l o b 6 n 1 6 8 1 9 3 2 2 0 6 e n o $ e S 1 r v p o P x e U E D (

% % % % % % % 6 . 5 . 8 . 7 . 3 . 1 . 2 . 5 1 8 3 2 2 1 6 7

e u s n e w t c v u e e d R N o s f r o P e l a S

) d n a s u o h t ( t n e t a P

e c r o F n I

1 . 5 . 5 . 1 . 3 1 . 7 . 6 . . 2 2 6 8 7 0 6 5 2 2 6 1 2 1

% % % % % % % 0 . 2 . . 3 . 6 . 7 . 3 . 3 6 3 0 9 3 2 1 1 3

n o i t a c i l p p A

1 . . 4 . 0 . 2 . 8 . 9 6 5 . 8 . 9 2 2 3 1 8 2 5 3 7 1 7 5 1 1

% % % % % % % 8 . 0 . 5 . 4 . 5 . 1 . 8 . 8 1 3 3 1 1 3 1 5 8

9 . 1 . 9 . 8 . 7 . 0 . 5 . 0 . 8 1 2 6 2 1 4 5 1 4 1 2 2 5 2

% % % % % % % 0 2 7 . . 9 y . 5 . . 8 . 8 . 2 6 6 g 1 6 5 1 2 l 2 5 0 o

5 . 6 . 9 . . 6 6 1 9 9 1 1 4 8 , 3 6 2 1

% % % 1 % % % % 6 . 8 . 3 . 9 . . 9 . 3 . 5 7 1 3 3 1 1 2 1 2 e

e c n d a ) n n a r m e r 0 r t 0 o s o o s f r t a 0 r ’ e M e ( p c o P D l l a r s l e n e v n D o O l a n & i t t u R o o t s i T r n t s e i P n I

e $ r S ) u t U i D ( n t i d & o c l n R e i e n j l p o o b r x P E

. 2 1

o n h c e T d n a

1 . 5 . 3 . . 2 7 5 5 3 0 2 5 3 4

% % % % % % % 0 . 9 . 8 . 5 . 2 . . 3 . 7 6 1 8 2 3 2 1 5 5

2 . 5 . 5 0 . . . 1 . 5 . 0 8 2 . 2 0 7 1 4 1 7 2 2 2


l a t o T l a n o i t a N

i a h g n a h S

u s g n a i J

e z t a g r t n e v l e a i Y R D

Section 3


g n a i j e h Z

g n i j i e B

n i j n a i T

i e b e H

i a h m o i B R


e r a h S l a n o i t a N f O

i a h g n a h S

u s g n a i J

g n a i j e h Z

e z t a g r t n e v l e a i Y R D

g n i j i e B

n i j n a i T

i e b e H

i a h m o i B R


74

75

Figure 3-3: R&D Personnel in Coastal China Regions (2011)

Table 3-2 : High-Technology Industry and Patents Granted in Guangdong Province and Pearl River Delta Region

Full-time Equivalent of R&D Personnel ( ‘000 Man-Year) 450

Value Added of High-Tech Industry

411

Patents Granted (2011)

(2012)

400

Region 343

350 300

Amount

Percentage of

(US$ billion)

Provincial Total

Percentage of

Case

Provincial Total

Provincial Total

86.79

100.0%

128,413

100.0%

Pearl River Delta

82.56

95.1%

116,233

90.5%

Shenzhen

46.72

53.8%

39,363

30.7%

Dongguan

9.75

11.2%

19,352

15.1%

Guangzhou

8.15

9.4%

18,346

14.3%

254 250

217

200

149

150 100

74

73

Huizhou

7.14

8.2%

2,917

2.3%

Foshan

3.45

4.0%

16,340

12.7%

Zhongshan

2.84

3.3%

10,027

7.8%

Zhuhai

2.74

3.2%

3,690

2.9%

50 0

Guangdong

Shanghai

Jiangsu

Zhejiang

Beijing

Tianjin

Hebei

Source : China Statis tical Yearbook o n Scie nce and Technolo gy 201 2.

Shenzhen’s first-mover advantage, and its persistence in developing hightechnology industries, has won it the undisputed lead in Guangdong Province and Mainland China. In 2012, the city represented 53.8 percent of the value-added provincial high-technology industry, and 30.7 percent of the total provincial patent granted. Dongguan came second, due to its

Zhaoqing

1.09

1.3%

889

0.7%

Jiangmen

0.69

0.8%

5,309

4.1%

Source : Guan gdong Provinci al Depart ment of Scienc e and Technolo gy, and Guangdo ng Statist ical Yearbook 2013.

Figure 3-4 : High-Technology Industry and Patents Granted in Guangdong Province and Pearl River Delta Region

processing trade development, and it being a home to Hong Kong, Taiwan,

Hunan

and foreign manufacturers. Meanwhile, Guangzhou ranked third, thanks to its position as the provincial capital and housing various prestigious universities

and

Fujian

Shaoguan

Guangxi Qingyuan

research

Meizhou Heyuan

institutions. The Pearl River

Chaozhou

Delta region constituted 95.1

Zhaoqing Guangzhou

percent and 90.1 percent of the Guangdong

provincial

Jieyang Shantou

Foshan

Dongguan

Huizhou

Shanwei

Yunfu

value

Shenzhen Zhongshan

added of the high-technology

Jiangmen

industry and patents granted.

Maoming

Zhanjiang

Yangjiang

Zhuhai

Value Added of High-Tech Industry (2012, US$ billion)

46.7 9.8 8.2 7.1 3.4 2.8 2.7 1.1

Patents Granted (2011,Case)

Shenzhen Dongguan Guangzhou Huizhou Foshan Zhongshan Zhuhai Zhaoqing

39,363 19,352 18,346 2,917 16,340 10,027 3,690 889

c n e i c S n o k o o b r a e Y l a c i t s i t a t S a n i h C : e c r u o S

Section 3

Section 3



74

75

Figure 3-3: R&D Personnel in Coastal China Regions (2011)

Table 3-2 : High-Technology Industry and Patents Granted in Guangdong Province and Pearl River Delta Region

Full-time Equivalent of R&D Personnel ( ‘000 Man-Year) 450

Value Added of High-Tech Industry

411

Patents Granted (2011)

(2012)

400

Region 343

350 300

Amount

Percentage of

(US$ billion)

Provincial Total

Percentage of

Case

Provincial Total

Provincial Total

86.79

100.0%

128,413

100.0%

Pearl River Delta

82.56

95.1%

116,233

90.5%

Shenzhen

46.72

53.8%

39,363

30.7%

Dongguan

9.75

11.2%

19,352

15.1%

Guangzhou

8.15

9.4%

18,346

14.3%

254 250

217

200

149

150 100

74

73

Huizhou

7.14

8.2%

2,917

2.3%

Foshan

3.45

4.0%

16,340

12.7%

Zhongshan

2.84

3.3%

10,027

7.8%

Zhuhai

2.74

3.2%

3,690

2.9%

50 0

Guangdong

Shanghai

Jiangsu

Zhejiang

Beijing

Tianjin

Hebei

Source : China Statis tical Yearbook o n Scie nce and Technolo gy 201 2.

Shenzhen’s first-mover advantage, and its persistence in developing hightechnology industries, has won it the undisputed lead in Guangdong Province and Mainland China. In 2012, the city represented 53.8 percent of the value-added provincial high-technology industry, and 30.7 percent of the total provincial patent granted. Dongguan came second, due to its

Zhaoqing

1.09

1.3%

889

0.7%

Jiangmen

0.69

0.8%

5,309

4.1%


Figure 3-4 : High-Technology Industry and Patents Granted in Guangdong Province and Pearl River Delta Region

processing trade development, and it being a home to Hong Kong, Taiwan,

Hunan

and foreign manufacturers. Meanwhile, Guangzhou ranked third, thanks to its position as the provincial capital and housing various prestigious universities

and

Fujian

Shaoguan

Guangxi Qingyuan

research

Meizhou Heyuan

institutions. The Pearl River

Chaozhou

Delta region constituted 95.1

Zhaoqing

Guangdong

provincial

Jieyang Shantou

Guangzhou

percent and 90.1 percent of the

Foshan

Dongguan

Huizhou

Shanwei

Yunfu

value

Shenzhen Zhongshan

added of the high-technology

Jiangmen

industry and patents granted.

Maoming

Yangjiang

Zhuhai

Value Added of High-Tech Industry (2012, US$ billion)

46.7 9.8 8.2 7.1 3.4 2.8 2.7 1.1 0.7

Zhanjiang

Patents Granted (2011,Case)

Shenzhen Dongguan Guangzhou Huizhou Foshan Zhongshan Zhuhai Zhaoqing Jiangmen

39,363 19,352 18,346 2,917 16,340 10,027 3,690 889 5,309


Section 3

Section 3



76

77

Due to its push for R&D and manufacturing-based development, the

The new national trade policy on managing a reasonable trade surplus,

intensity of R&D activities in Guangdong Province surpassed that of

as decreed by the Central Government in the 11th National Five-Year

Hong Kong in the same period. To keep pace with Guangdong Province,

Plan, exerted huge pressure on the export-led manufacturing clusters.

the Hong Kong Government revised its technology policy in 2000,

Reacting to the shift in national strategy, the Pearl River Delta regional

and has since increased R&D in the territory. Through joint efforts, the

governments enforced the new policies of the Central Government but

Greater Pearl River Delta region has progressively transformed from

also devised a series of industrial upgrading programmes to strengthen

a labour-intensive manufacturing region into an innovation-driven

traditional industries, including: offering tax benefits to procure

manufacturing region.

modern equipment, providing training courses to the workforce, and enhancing R&D competencies to preserve the diversity of the industrial

Table 3-3: R&D Activities in Guangdong Province and Hong Kong, 2000-2011

R&D Expenditure as Percentage of GDP

Guangdong

Hong Kong

2000

1.00%

2005

1.12%

2010

1.76%

2011

1.96%

configuration of the Pearl River Delta region.

Personnel Engaged in R&D per 10,000 Persons (full-time equivalent) Guangdong

Hong Kong

0.46%

9.5

13.8

0.77%

15.5

25.1

0.75%

33.0

31.6

0.72%

39.1

33.4

Source : Guang dong Provinc ial Departm ent of Scien ce and Technolo gy, Census and Statis tics Depart ment of HKSA R Gove rnment .

3.2. From Manufacturing to Services 3.2.1. Transformation and Upgrading The Guangdong governments selected certain specialised towns as Spec ialise d Towns and E xport- Led T raditi onal Indu strie s

After 20 years of rapid development, numerous industrial clusters in the form of ‘specialised towns’ have emerged in the Pearl River Delta region. These towns provide scale advantages, network benefits, and synergy effects to t he Pearl River Delta region, which have transformed the region into a leading exporting region, and earned a huge amount of trade surplus for Mainland China. However, many of these specialised towns are engaging in labour-intensive manufacturing activities, and

pilot and demonstration zones for industrial upgrading, and gave them fiscal resources to promote their innovation activities. Meanwhile, the governments encouraged export-oriented manufacturers to enter the domestic market by rewarding their brand-building activities. They also attempted to control pollution either through transferring the offending manufacturers into specially-designed industrial buildings or parks with centralised treatment facilities, or ensuring that they complied to stringent environmental standards.

Section 3

Section 3



76

77

Due to its push for R&D and manufacturing-based development, the

The new national trade policy on managing a reasonable trade surplus,

intensity of R&D activities in Guangdong Province surpassed that of

as decreed by the Central Government in the 11th National Five-Year

Hong Kong in the same period. To keep pace with Guangdong Province,

Plan, exerted huge pressure on the export-led manufacturing clusters.

the Hong Kong Government revised its technology policy in 2000,

Reacting to the shift in national strategy, the Pearl River Delta regional

and has since increased R&D in the territory. Through joint efforts, the

governments enforced the new policies of the Central Government but

Greater Pearl River Delta region has progressively transformed from

also devised a series of industrial upgrading programmes to strengthen

a labour-intensive manufacturing region into an innovation-driven

traditional industries, including: offering tax benefits to procure

manufacturing region.

modern equipment, providing training courses to the workforce, and enhancing R&D competencies to preserve the diversity of the industrial

Table 3-3: R&D Activities in Guangdong Province and Hong Kong, 2000-2011

configuration of the Pearl River Delta region.

Personnel Engaged in R&D per 10,000

R&D Expenditure as Percentage of GDP

Persons (full-time equivalent)

Guangdong

Hong Kong

Guangdong

Hong Kong

1.00%

0.46%

9.5

13.8

2005

1.12%

0.77%

15.5

25.1

2010

1.76%

0.75%

33.0

31.6

2011

1.96%

0.72%

39.1

33.4

2000

Source : Guang dong Provinc ial Departm ent of Scien ce and Technolo gy, Census and Statis tics Depart ment of HKSA R Gove rnment .

3.2. From Manufacturing to Services 3.2.1. Transformation and Upgrading The Guangdong governments selected certain specialised towns as Spec ialise d Towns and E xport- Led T raditi onal Indu strie s

pilot and demonstration zones for industrial upgrading, and gave them

After 20 years of rapid development, numerous industrial clusters in the form of ‘specialised towns’ have emerged in the Pearl River Delta region. These towns provide scale advantages, network benefits, and synergy effects to t he Pearl River Delta region, which have transformed the region into a leading exporting region, and earned a huge amount of trade surplus for Mainland China. However, many of these specialised towns are engaging in labour-intensive manufacturing activities, and

fiscal resources to promote their innovation activities. Meanwhile, the governments encouraged export-oriented manufacturers to enter the domestic market by rewarding their brand-building activities. They also attempted to control pollution either through transferring the offending manufacturers into specially-designed industrial buildings or parks with centralised treatment facilities, or ensuring that they complied to stringent environmental standards.

some are polluted.

Section 3

Section 3



78

79

By implementing the above measures, the Pearl River Delta regional

During the period of the 11th Five-Year Plan (2006 – 2010), the Guangdong

governments aim to improve the value-added performance of traditional

Provincial Government promoted industrial relocation under the

industries, empower manufacturers to face the challenges of increasing

slogan of “Emptying the Cage for New Birds”. The most notable policy

labour costs, and eventually upgrade and transform the manufacturing

initiative was the ‘Dual transfer’ of industries and labour force from

configuration of the region.

the Pearl River Delta region to other parts of Guangdong Province. In May 2008, the Guangdong Government put into force the Deci sion on

Figure 3-5: Pilot Zone of Industrial Clusters for Upgrading in Gu angdong Province

and Labour Force , known as the

Shilong - Electronics

Hunan Huadu-Automobile

Guangxi

Dalang - Knitted wear (wool)

Leatherproducts

Rongcheng-Shoes

Humen - Garment

Chancheng - Ceramics

Shaoguan

Shunde - Electrical Appliances

Chaozhou Ceramics

Dalingshan- Furniture

Meizhou

Xiqiao - Textiles

Qingyuan

Guangzhou

Zhaoqing

Stainless Steel

Foshan

Yunfu Jiangmen

Dongguan

Electrical Appliances

Huizhou Shanwei

Yangjiang

Xiaolan - Metal Products

Huidong - Shoes Jewellery

Motorcycle Kaiping - Sanitary Ware Xinhui - Metal Enping - Audio Equipment

regions of Guangdong Province, while

advanced

manufacturing

River Delta. To facilitate this, the

ToyandSouvenir Arts Cra and KnittedWear (wool)

Guzhen - Lights

Zhanjiang

energy-consumption industries were

industries were retained in the Pearl

Haifeng - Garment

Hong Kong

Macao Maoming

Shantou

Shenzhen

Zhongshan Zhuhai

strategy, labour-intensive and high encouraged to relocate to other

Chaozhou

Jieyang

Shishan - Electrical Appliances

Yangdong Metal and Cutlery

Chaoan - Food

Heyuan

Danzao - Metal

Stone

‘Double Relocation’ strategy. In the Fujian

Changan - Metal

Dali - Aluminum Materials

Promot ing Relocati on of Indu strie s

Guangdong Provincial Government allocated about US$8 billion (RMB50 billio n) bet ween 2008 and 201 2.

Nantou - Electrical Appliances Shaxi - Garment Huangpu - Food Torch - Food and Medicines

Pilot Zone of Industrial Clusters for Upgrading

Dongfeng - Electrical Appliances


Doub le Rel ocati on

However, despite this, the massive out-transfer went unnoticed due to the outbreak of the global financial crisis — though the ‘Double Relocation’ did assist nearby regions with buil ding

After 20 years of development, a majority of Pearl River Delta land resources had been used for industrial development, and much were occupied by Hong Kong and Taiwan-invested manufacturers engaging in labour-intensive, yet low value-added processing trade. As a result, industrial relocation surfaced on Guangdong Province’s policy agenda, with an emphasis on the outward relocation of traditional industries, and inward high-technology manufacturers.

indus tri al

compe tence ,

readying them for take-off in the longer term. In essence, the policy initiative was a most important vehicle for the Pearl River Delta region, enlarging its economic hinterland beyond its administrative boundary, and representi ng a new mode of inter-regional cooperation.

Section 3

Section 3



78

79

By implementing the above measures, the Pearl River Delta regional

During the period of the 11th Five-Year Plan (2006 – 2010), the Guangdong

governments aim to improve the value-added performance of traditional

Provincial Government promoted industrial relocation under the

industries, empower manufacturers to face the challenges of increasing

slogan of “Emptying the Cage for New Birds”. The most notable policy

labour costs, and eventually upgrade and transform the manufacturing

initiative was the ‘Dual transfer’ of industries and labour force from

configuration of the region.

the Pearl River Delta region to other parts of Guangdong Province. In May 2008, the Guangdong Government put into force the Deci sion on

Figure 3-5: Pilot Zone of Industrial Clusters for Upgrading in Gu angdong Province

and Labour Force , known as the

Shilong - Electronics

Hunan Huadu-Automobile

Guangxi

Dalang - Knitted wear (wool)

Leatherproducts

Rongcheng-Shoes

Humen - Garment

Shaoguan

Chaozhou Ceramics

Dalingshan- Furniture

Shunde - Electrical Appliances

Meizhou

Xiqiao - Textiles

Qingyuan

Guangzhou

Stainless Steel

Foshan

Yunfu Jiangmen

Dongguan

Electrical Appliances

Huizhou Shanwei

Macao Maoming

Yangjiang

Huidong - Shoes

Arts Cra and KnittedWear (wool)

Jewellery

Xiaolan - Metal Products

Motorcycle

manufacturing

Guangdong Provincial Government allocated about US$8 billion (RMB50 billio n) bet ween 2008 and 201 2.

Nantou - Electrical Appliances

Kaiping - Sanitary Ware

advanced

River Delta. To facilitate this, the

ToyandSouvenir

Guzhen - Lights

Zhanjiang

regions of Guangdong Province, industries were retained in the Pearl

Haifeng - Garment

Hong Kong

energy-consumption industries were

while

Shantou

Shenzhen

Zhongshan Zhuhai

strategy, labour-intensive and high encouraged to relocate to other

Chaozhou

Jieyang Zhaoqing

Yangdong Metal and Cutlery

Chaoan - Food

Heyuan

Danzao - Metal Shishan - Electrical Appliances Stone

‘Double Relocation’ strategy. In the Fujian

Changan - Metal

Chancheng - Ceramics

Dali - Aluminum Materials

Promot ing Relocati on of Indu strie s

Shaxi - Garment

Xinhui - Metal

Huangpu - Food

Enping - Audio Equipment

Pilot Zone of Industrial Clusters for Upgrading

Torch - Food and Medicines Dongfeng - Electrical Appliances

However, despite this, the massive out-transfer went unnoticed due to the outbreak of the global financial


crisis — though the ‘Double Relocation’ did assist nearby regions with

Doub le Rel ocati on

buil ding After 20 years of development, a majority of Pearl River Delta land resources had been used for industrial development, and much were occupied by Hong Kong and Taiwan-invested manufacturers engaging in labour-intensive, yet low value-added processing trade. As a result, industrial relocation surfaced on Guangdong Province’s policy agenda, with an emphasis on the outward relocation of traditional industries,

indus tri al

compe tence ,

readying them for take-off in the longer term. In essence, the policy initiative was a most important vehicle for the Pearl River Delta region, enlarging its economic hinterland beyond its administrative boundary, and representi ng a new mode of inter-regional cooperation.

and inward high-technology manufacturers.

Section 3

Section 3



80

81

Figure 3-6: Industrial Relocation from PRD Region to Other Parts of Guangdong Province Hunan

Table 3-4: Value Added by Tertiary Industry in Guangdong Province(US$ billion)

Lechang

Annual Growth

2005

2010

2012

273.04

679.71

904.05

14.3%

Tertiary Industry

117.17

305.96

420.12

15.6%

Wholesale and Retail Trade

27.13

68.66

100.34

16.1%

Real Estate

17.77

41.57

57.73

14.0%

Finance

8.23

39.28

50.25

24.8%

12.10

26.96

37.50

13.3%

9.44

23.09

33.77

15.6%

8.40

20.27

25.63

13.0%

7.72

20.15

25.92

14.6%

6.43

15.69

21.91

14.8%

6.36

15.88

20.72

14.1%

4.21

10.77

14.19

14.6%

3.56

9.45

13.53

16.6%

2.55

7.15

9.47

16.2%

1.81

4.18

5.23

12.1%

1.48

2.87

3.93

10.8%

Shixing

(2005-12) #

Fujian

Zhenjiang


Guangxi

Xingning Heyuan/Heping

Qingyuan

Meizhou

Chaozhou

Huaiji Deqing

Haifeng

Guangzhou Dongguan Foshan

Yunfu / Yucheng

Huidong

Shenzhen

Transport, Storage

Lianjiang

and Postal Services

Zhongshan

Xinyi

Leasing and Business Services

Dianbai

Wuchuan

Yangjiang / Yangxi / Yangdong / Yangchun

Information Transmission, Computer Services and Software Industrial Relocation Park

Public Administration and

OriginalLocationof Industries

Social Organisations

Longmen

Education Source : Based on Fung B usiness I ntellige nce Cent re (formerl y known a s Li and Fu ng Research Ce ntre), “China’s industry relocation and upgrading trends: implications for sourcing business”, China

Accommodation and

Distri butio n and T rading - Issue 56, De cember 2008.

Catering Services Services to Households and Other Services

3.2.2 The Development of Modern Serv ice Sectors

Healthcare, Social Security and Social Welfare

Develo pment al In itiativ es

Scientific Research, Technical

Since 2006, Guangdong Province has been keen to develop tertiary

Services and Geological Prospecting

industries. In its 12th Provincial Five-Year Plan (2011-2015), it elaborated

Culture, Sports and Recreation

on the concept of the ‘Modern Services Sector’. The province has Management of Water Conservancy,

categorised the sector into financial, logistic, information, exhibition, cultural and creative, and healthcare services. In the last five years, the growth rate of Guangdong Province’s tertiary industry has surpassed overall GDP growth, with finance, healthcare, and wholesale and retail trade services as the outperformers.

Environment and Public Facilities #

Growth rates are based on the nominal renminbi values of tertiary outputs.

Source : Guan gdong Statist ical Yearb ook 20 06, 201 0, 2013 .

Section 3

Section 3



80

81

Figure 3-6: Industrial Relocation from PRD Region to Other Parts of Guangdong Province Hunan

Table 3-4: Value Added by Tertiary Industry in Guangdong Province(US$ billion)

Lechang

Annual Growth

2005

2010

2012

273.04

679.71

904.05

14.3%

Tertiary Industry

117.17

305.96

420.12

15.6%

Wholesale and Retail Trade

27.13

68.66

100.34

16.1%

Real Estate

17.77

41.57

57.73

14.0%

Finance

8.23

39.28

50.25

24.8%

12.10

26.96

37.50

13.3%

9.44

23.09

33.77

15.6%

8.40

20.27

25.63

13.0%

7.72

20.15

25.92

14.6%

6.43

15.69

21.91

14.8%

6.36

15.88

20.72

14.1%

4.21

10.77

14.19

14.6%

3.56

9.45

13.53

16.6%

2.55

7.15

9.47

16.2%

1.81

4.18

5.23

12.1%

1.48

2.87

3.93

10.8%

Shixing

(2005-12) #

Fujian

Zhenjiang


Guangxi

Xingning Heyuan/Heping

Qingyuan

Meizhou

Chaozhou

Huaiji Deqing

Haifeng

Guangzhou Dongguan

Huidong

Foshan Yunfu / Yucheng

Shenzhen

Transport, Storage

Lianjiang

and Postal Services

Zhongshan

Xinyi

Leasing and Business Services

Dianbai

Wuchuan

Yangjiang / Yangxi / Yangdong / Yangchun

Information Transmission, Computer Services and Software Industrial Relocation Park

Public Administration and

OriginalLocationof Industries

Social Organisations

Longmen

Education Source : Based on Fung B usiness I ntellige nce Cent re (formerl y known a s Li and Fu ng Research Ce ntre), “China’s industry relocation and upgrading trends: implications for sourcing business”, China

Accommodation and

Distri butio n and T rading - Issue 56, De cember 2008.

Catering Services Services to Households and Other Services

3.2.2 The Development of Modern Serv ice Sectors

Healthcare, Social Security and Social Welfare

Develo pment al In itiativ es

Scientific Research, Technical

Since 2006, Guangdong Province has been keen to develop tertiary

Services and Geological Prospecting

industries. In its 12th Provincial Five-Year Plan (2011-2015), it elaborated

Culture, Sports and Recreation

on the concept of the ‘Modern Services Sector’. The province has Management of Water Conservancy,

categorised the sector into financial, logistic, information, exhibition, cultural and creative, and healthcare services.

Environment and Public Facilities #

In the last five years, the growth rate of Guangdong Province’s tertiary


Source : Guan gdong Statist ical Yearb ook 20 06, 201 0, 2013 .

industry has surpassed overall GDP growth, with finance, healthcare, and wholesale and retail trade services as the outperformers.

Section 3

Section 3



82

83

Table 3-5: Value-added by Tertiary Industry in the Pearl River Delta Region (US$ billion)

#

Average Annual

Development Aims 1. Qianhai New District, Shenzhen: To develop Qianhai into an

2000

2005

2010

2012

Pearl River Delta

47.71

103.28

274.02

391.45

16.5%

important production service centre in Asia Pacific by 2020,

Guangzhou

16.67

36.38

96.91

136.55

16.5%

and a Hong Kong/Guangdong Province ‘Modern service industry

Shenzhen

13.17

28.08

74.60

114.22

17.1%

innovation and cooperation’ exemplary zone.

Growth (2000-12) #

Dongguan

4.11

11.35

30.58

41.50

13.9%

Foshan

5.32

10.74

29.54

37.54

15.2%

Zhongshan

1.69

3.91

10.78

16.32

17.8%

Huizhou

1.45

3.30

9.01

13.78

18.4%

Jiangmen

2.42

3.66

8.57

12.20

18.0%

Zhaoqing

1.21

2.44

6.50

8.71

11.9%

Zhuhai

1.81

3.30

7.53

10.93

14.9%


Source : Guang dong S tatist ical Yearbo ok 200 6, 2010, 2013.

2. Nansha New District, Guangzhou: To develop Nansha into a busi ness ser vice centr e, an innovat ion and techn ology centre , and an education training centre serving the Mainland and linked with Hong Kong and Macao; and to build a ‘Port-related industries support services cooperation’ zone. 3. Hengqin New District, Zhuhai: To progressively develop the area into an exemplary zone for a new mode of cooperation bet ween Gua ngdo ng Prov ince , Hong Kong and Macao , a pil ot

Guangzhou and Shenzhen are the two major service providers contributing

zone for deepening reform and technology innovation, and a

60 to 65 percent of regional tertiary outputs. As such, the Guangdong

new platform for upgrading industries in the western region of

Provincal Government and the Municipal governments of Guangzhou and

the Pearl River estuary.

Shenzhen attach strategic importance to the tertiary sectors, and allocate financial and land resources to drive their development.

Massive infrastructural projects have been carried out in three districts, with most of the key projects kick-started in Qianhai. The ‘hardware’ of

Three Special Zones

Qianhai’s development, such as the reclamation of the development zone, railway networks, and the first phase of commercial premises are

Among the seven major cooperation projects across Guangdong

expected to be completed around 2015. Meanwhile, on the soft-skill

Province, Hong Kong and Macao as listed in the 12th National Five-

side Qianhai is conducting a number of pilot reforms on investment

Year Plan, the development districts of Qianhai (Shenzhen), Nansha

regulation, corporate governance, international dispute settlement, and

(Guangzhou), and Hengqin (Zhuhai) have been li fted to national project-

attracting talent.

level. It is Guangdong Provincial Government’s utmost aim to build these districts into development platforms for modern service sectors. Hong

Improve ments to th e Inve stment Enviro nment

Kong and Macao consider these districts to be gateways for further market access, particularly to facilitate service cooperation between

As of 2012, the Guangdong Provincial Government was the first Mainland

themselves and Guangdong Province. The governments of the three

province to launch a pilot reform to simplify business registration

jurisdi ctions jointly seek suppor t from the Central Government to

procedures, with the aim of encouraging local investment and generally improving the Pearl River Delta region’s business environment.

Section 3

Section 3



82

83

Table 3-5: Value-added by Tertiary Industry in the Pearl River Delta Region (US$ billion)

#

Average Annual

Development Aims 1. Qianhai New District, Shenzhen: To develop Qianhai into an

2000

2005

2010

2012

Pearl River Delta

47.71

103.28

274.02

391.45

16.5%

important production service centre in Asia Pacific by 2020,

Guangzhou

16.67

36.38

96.91

136.55

16.5%

and a Hong Kong/Guangdong Province ‘Modern service industry

Shenzhen

13.17

28.08

74.60

114.22

17.1%

innovation and cooperation’ exemplary zone.

Growth (2000-12) #

Dongguan

4.11

11.35

30.58

41.50

13.9%

Foshan

5.32

10.74

29.54

37.54

15.2%

Zhongshan

1.69

3.91

10.78

16.32

17.8%

Huizhou

1.45

3.30

9.01

13.78

18.4%

Jiangmen

2.42

3.66

8.57

12.20

18.0%

Zhaoqing

1.21

2.44

6.50

8.71

11.9%

Zhuhai

1.81

3.30

7.53

10.93

14.9%


Source : Guang dong S tatist ical Yearbo ok 200 6, 2010, 2013.

2. Nansha New District, Guangzhou: To develop Nansha into a busi ness ser vice centr e, an innovat ion and techn ology centre , and an education training centre serving the Mainland and linked with Hong Kong and Macao; and to build a ‘Port-related industries support services cooperation’ zone. 3. Hengqin New District, Zhuhai: To progressively develop the area into an exemplary zone for a new mode of cooperation bet ween Gua ngdo ng Prov ince , Hong Kong and Macao , a pil ot

Guangzhou and Shenzhen are the two major service providers contributing

zone for deepening reform and technology innovation, and a

60 to 65 percent of regional tertiary outputs. As such, the Guangdong

new platform for upgrading industries in the western region of

Provincal Government and the Municipal governments of Guangzhou and

the Pearl River estuary.

Shenzhen attach strategic importance to the tertiary sectors, and allocate financial and land resources to drive their development.

Massive infrastructural projects have been carried out in three districts, with most of the key projects kick-started in Qianhai. The ‘hardware’ of

Three Special Zones

Qianhai’s development, such as the reclamation of the development zone, railway networks, and the first phase of commercial premises are

Among the seven major cooperation projects across Guangdong

expected to be completed around 2015. Meanwhile, on the soft-skill

Province, Hong Kong and Macao as listed in the 12th National Five-

side Qianhai is conducting a number of pilot reforms on investment

Year Plan, the development districts of Qianhai (Shenzhen), Nansha

regulation, corporate governance, international dispute settlement, and

(Guangzhou), and Hengqin (Zhuhai) have been li fted to national project-

attracting talent.

level. It is Guangdong Provincial Government’s utmost aim to build these districts into development platforms for modern service sectors. Hong

Improve ments to th e Inve stment Enviro nment

Kong and Macao consider these districts to be gateways for further market access, particularly to facilitate service cooperation between

As of 2012, the Guangdong Provincial Government was the first Mainland

themselves and Guangdong Province. The governments of the three

province to launch a pilot reform to simplify business registration

jurisdi ctions jointly seek suppor t from the Central Government to

procedures, with the aim of encouraging local investment and generally

launch pilot reforms, provide preferential measures to encourage local

improving the Pearl River Delta region’s business environment.

investment and attract foreign investment.

Section 3

Section 3



84

85

Since 1 March 2013, registration procedures and requirements for

very high per capita consumption expenditure of urban households

commercial entities i n both Shenzhen and Zhuhai have been simplified

(183 percent of the national average). In 2012, the total retail sales of

substantially. Under this pilot scheme, investors may decide, at their

consumer goods of Guangzhou and Shenzhen stood at US$94.7 billion

sole discretion, to register a ‘capital amount’ with the local offices of the

(RMB598 billion) and US$63.5 billion (RMB401 billion), respectively –

State Administration for Industry and Commerce. A Capital Contribution

even greater than Hong Kong’s total retail sales which stood at US$57.4

Verification Report is no longer required, exempting the company

bill ion (HK$4 54 b ill ion) .

from injecting capital before obtaining its business license, and the requirements on domicile and business locations have also been relaxed.

Table 3-6: Retail Sales, Residential Income, and Expenditure in 2012 13

This reform provides flexibility, cost efficiency, and procedural reduction to investors. In addition, a company is able to obtain its business license


Resident Disposable

Consumption

Net

Living

Income

Expenditure

Income

Expenditure

3,331.6

-

3,891

2,641

1,254

936

330.2

-

Guangzhou

94.7

70.9

6,028

4,830

2,659

1,737

Shenzhen

63.5

68.1

6,454

4,234

Foshan

32.0

38.7

5,478

4,145

2,485

1,815

Dongguan

21.4

53.7

6,803

4,969

3,952

2,565

Zhongshan

12.8

14.8

4,931

3,531

3,065

1,793

Jiangmen

12.8

15.1

4,280

2,922

1,797

1,324

Huizhou

11.9

17.5

4,747

3,529

1,967

1,313

Zhuhai

10.1

7.7

5,224

3,815

2,123

1,600

Zhaoqing

6.8

9.6

3,446

2,492

1,642

1,019

Hong Kong

57.4

Macao

6.6

Total GPRD

south China market.

Residents (US$)

Consumer

Income

National

environment will be additionally uplifted and liberalised to serve the

Per Capita of Rural

Households (US$)

(US$ billion)

Nansha district to conduct the pilot reform as of 1 September 2013.

two years. Upon completion of the reform, Guangdong’s business

Per Capita of Urban

and Rural

Goods

former system. The Guangzhou Municipal Government designated the

scheme to other Pearl River Delta cities and the entire province within

Total Urban

Sales of

(US$ billion)

within several working days rather than the weeks of waiting under the

The Guangdong Provincial Government intends to extend the new

Total Retail

Greater Pearl River Delta Region 3.3.1. A Rapidly Developing Market

Source : China Stati stical Yearbook 2 013, G uangdo ng Stat istical Yearbook 2 013.

Thanks to its profound economic performance, residents of the Pearl River Delta region enjoy higher income and expenditure levels than the

The higher retail sales of Guangzhou and Shenzhen are partially to do

national average, which guarantees robust retail sales in the region. In

with their large population sizes and automobile-related consumption,

2012, the Pearl River Delta region represented 7.9 percent of total retail

but, more important ly p erhaps, the residents of their nearby cities who

sales in the Mainland.

are making use of their improved connectivity to do their weekend shopping in Guangzhou and Shenzhen. This is clear from Guangzhou’s

Among nine Pearl River Delta cities, Guangzhou tops retail sales. This

total retail sales of consumer goods, which is larger by US$23.8 billion

is due to its huge resident population (12.84 million persons), and

(representing 33.6 percent of Guangzhou’s total resident income) than

Section 3

Section 3



84

85

Since 1 March 2013, registration procedures and requirements for

very high per capita consumption expenditure of urban households

commercial entities i n both Shenzhen and Zhuhai have been simplified

(183 percent of the national average). In 2012, the total retail sales of

substantially. Under this pilot scheme, investors may decide, at their

consumer goods of Guangzhou and Shenzhen stood at US$94.7 billion

sole discretion, to register a ‘capital amount’ with the local offices of the

(RMB598 billion) and US$63.5 billion (RMB401 billion), respectively –

State Administration for Industry and Commerce. A Capital Contribution

even greater than Hong Kong’s total retail sales which stood at US$57.4

Verification Report is no longer required, exempting the company

bill ion (HK$4 54 b ill ion) .

from injecting capital before obtaining its business license, and the requirements on domicile and business locations have also been relaxed.

Table 3-6: Retail Sales, Residential Income, and Expenditure in 2012 13

This reform provides flexibility, cost efficiency, and procedural reduction to investors. In addition, a company is able to obtain its business license


Resident Disposable

Consumption

Net

Living

Income

Expenditure

Income

Expenditure

3,331.6

-

3,891

2,641

1,254

936

330.2

-

Guangzhou

94.7

70.9

6,028

4,830

2,659

1,737

Shenzhen

63.5

68.1

6,454

4,234

Foshan

32.0

38.7

5,478

4,145

2,485

1,815

Dongguan

21.4

53.7

6,803

4,969

3,952

2,565

Zhongshan

12.8

14.8

4,931

3,531

3,065

1,793

Jiangmen

12.8

15.1

4,280

2,922

1,797

1,324

Huizhou

11.9

17.5

4,747

3,529

1,967

1,313

Zhuhai

10.1

7.7

5,224

3,815

2,123

1,600

Zhaoqing

6.8

9.6

3,446

2,492

1,642

1,019

Hong Kong

57.4

Macao

6.6

Total GPRD

south China market.

Residents (US$)

Consumer

Income

National

environment will be additionally uplifted and liberalised to serve the

Per Capita of Rural

Households (US$)

(US$ billion)

Nansha district to conduct the pilot reform as of 1 September 2013.

two years. Upon completion of the reform, Guangdong’s business

Per Capita of Urban

and Rural

Goods

former system. The Guangzhou Municipal Government designated the

scheme to other Pearl River Delta cities and the entire province within

Total Urban

Sales of

(US$ billion)

within several working days rather than the weeks of waiting under the

The Guangdong Provincial Government intends to extend the new

Total Retail

Greater Pearl River Delta Region 3.3.1. A Rapidly Developing Market

Source : China Stati stical Yearbook 2 013, G uangdo ng Stat istical Yearbook 2 013.

Thanks to its profound economic performance, residents of the Pearl River Delta region enjoy higher income and expenditure levels than the

The higher retail sales of Guangzhou and Shenzhen are partially to do

national average, which guarantees robust retail sales in the region. In

with their large population sizes and automobile-related consumption,

2012, the Pearl River Delta region represented 7.9 percent of total retail

but, more important ly p erhaps, the residents of their nearby cities who

sales in the Mainland.

are making use of their improved connectivity to do their weekend shopping in Guangzhou and Shenzhen. This is clear from Guangzhou’s

Among nine Pearl River Delta cities, Guangzhou tops retail sales. This

total retail sales of consumer goods, which is larger by US$23.8 billion

is due to its huge resident population (12.84 million persons), and

(representing 33.6 percent of Guangzhou’s total resident income) than 13

Section 3

Exchange rate (for 2012): US$1 = RMB 6.3125; HK$7.756; MOP7.9899.

Section 3



86

87

its total resident income. Meanwhile, Guangzhou’s rich neighbouring

Guangdong Province’s e-commerce is closely related to its development

cities, Donguan and Foshan, have retail sales of just 22.6 percent and 33.8

of mobile telecommunication and postal services. In 2012, the number

percent of that of Guangzhou, despite their total resident income being

of Guangdong mobile telephone users and internet subscribers stood at

75.7 percent and 54.6 percent of Guangzhou’s total. It is anticipated that

125 million and 20 million respectively, with an annual growth rate for

with an expanded intercity railway network operating within five to 10

the past 12 years of 20 percent. The duration of internet use grew at 62.6

years, Guangzhou’s retail sector will undergo the fastest development of

percent during the same period, and reached three trillion minutes in

the region.

2012. E-shoppers can retrieve product information and place e-orders easily, and in Mainland China, the merchandise delivery of online orders is often done via door-to-door express mail services. Largely because of

3.3.2. E-Retailing in Guangdong Province In recent years, Guangdong Province has seen a boom in e-commerce and online shopping. In 2012, the province recorded the highest number of online shoppers, 12.2 percent of the national total – followed by Jiangsu,

online shopping, express mail services jumped from 591 million pieces to 1.33 billion pieces within two years, giving an unprecedented thrust to the development of logistic services.

Shangdong, and Zhejiang provinces. The development of Guangdong

Table 3-7: The Development of Telecommunication and Postal Services in Guangdong

Province’s e-commerce activities is not only driven by the increasing income

Province

of Guangdong residents, but also by the increasing quantity of Guangdong

Annual

Province enterprises and individuals active in the e-supply chain. The

2000

2005

2010

2011

2012

Growth (2000-2012)

diversity of manufacturing clusters in the Pearl River Delta region, coupled with a far-reaching logistic network and experienced service providers,

Number of Subscribers of

greatly helps Guangdong Province to top China’s e-commerce sector, and

subscribers)

assist the economic entities of the province which are capitalising on

Number of Mobile Telephone

Mainland China’s fastest growing consumer market segment.

Subscribers (million

Local Telephones (million

14

34

32

32

31

6.9%

14

64

97

108

125

20.3%

2

10

15

17

20

20.2%

9

319

1,987

2,510

3,084

62.6%

13

33

591

864

1,338

46.9%

China

6.7

30.3

64.4

73.6

82.5

Guangdong

17.6

69.7

93.1

102.7

117.7

subscribers) Figure 3-7: Geographic Distribution of Online Shoppers in China (2012)

Number of Internet

Percentage


14%

subscribers) 12.2%

Duration of Internet Use by

12%

Subscribers (billion minutes) 10%

Pieces of Express Mail 8%

6%

7.3%

6.7%

Services (million pcs)

6.2% 5.1%

Popularisation

5.0% 4.2%

4%

4.2%

4.1%

4.0%

Rate of Mobile Telephones (subscribers/

2%

0%

100 persons)

Section 3

Section 3



86

87

its total resident income. Meanwhile, Guangzhou’s rich neighbouring

Guangdong Province’s e-commerce is closely related to its development

cities, Donguan and Foshan, have retail sales of just 22.6 percent and 33.8

of mobile telecommunication and postal services. In 2012, the number

percent of that of Guangzhou, despite their total resident income being

of Guangdong mobile telephone users and internet subscribers stood at

75.7 percent and 54.6 percent of Guangzhou’s total. It is anticipated that

125 million and 20 million respectively, with an annual growth rate for

with an expanded intercity railway network operating within five to 10

the past 12 years of 20 percent. The duration of internet use grew at 62.6

years, Guangzhou’s retail sector will undergo the fastest development of

percent during the same period, and reached three trillion minutes in

the region.

2012. E-shoppers can retrieve product information and place e-orders easily, and in Mainland China, the merchandise delivery of online orders is often done via door-to-door express mail services. Largely because of

3.3.2. E-Retailing in Guangdong Province In recent years, Guangdong Province has seen a boom in e-commerce and online shopping. In 2012, the province recorded the highest number of online shoppers, 12.2 percent of the national total – followed by Jiangsu,

online shopping, express mail services jumped from 591 million pieces to 1.33 billion pieces within two years, giving an unprecedented thrust to the development of logistic services.

Shangdong, and Zhejiang provinces. The development of Guangdong

Table 3-7: The Development of Telecommunication and Postal Services in Guangdong

Province’s e-commerce activities is not only driven by the increasing income

Province

of Guangdong residents, but also by the increasing quantity of Guangdong

Annual

Province enterprises and individuals active in the e-supply chain. The

2000

2005

2010

2011

2012

Growth (2000-2012)

diversity of manufacturing clusters in the Pearl River Delta region, coupled with a far-reaching logistic network and experienced service providers,

Number of Subscribers of

greatly helps Guangdong Province to top China’s e-commerce sector, and

subscribers)

assist the economic entities of the province which are capitalising on

Number of Mobile Telephone

Mainland China’s fastest growing consumer market segment.


Local Telephones (million

14

34

32

32

31

6.9%

14

64

97

108

125

20.3%

2

10

15

17

20

20.2%

9

319

1,987

2,510

3,084

62.6%

13

33

591

864

1,338

46.9%

China

6.7

30.3

64.4

73.6

82.5

Guangdong

17.6

69.7

93.1

102.7

117.7

subscribers) Figure 3-7: Geographic Distribution of Online Shoppers in China (2012)

Number of Internet

Percentage


14%

subscribers) 12.2%

Duration of Internet Use by

12%

Subscribers (billion minutes) 10%

Pieces of Express Mail 8%

7.3%

6.7%

Services (million pcs)

6.2%

6%

5.1%

Popularisation

5.0% 4.2%

4.2%

4.1%

Rate of Mobile

4.0%

4%

Telephones (subscribers/

2%

100 persons)

0%

Guangdong

Jiangsu

Shangdong

Zhejiang

Hebei

Henan

Fujian

Sichuan

Hubei

Liaoning

Source: China S tatist ical Yearbo ok 201 3 and G uangdon g Stat istical Yearbook 2013.

Source : Fung Business Intelli gence Centre, Online Retailing in China, June 2013. Re-quot ed from iResearch.

Section 3

Section 3



88

The rapid growth of ‘e-retailing’ has the potential to create a ‘leapfrog’

89

Table 3-8: Shopping Expenditure of Mainland China Visitors in Hong Kong

effect in Chinese retail, transforming it into a more digitalised and

Overnight Visitors from

Same-day In-town

China

Visitors from China 14

efficient industry even faster than traditional chain stores. Such a scenario could have profound effects on China’s consumption,

Shopping

productivity, logistics, and even urban development. By providing a

Expenditure (US$ billion)

Annual Growth

Shopping Expenditure (US$ billion)

Share of Shopping Expenditure of Mainland Visitors in

Annual

Hong Kong’s Total

Growth

Retail Sales

powerful launch pad for entrepreneurs and merchants of all sizes to sell directly to consumers, e-retailing is also fast becoming an area in which Mainland China could lead the world in innovation rather than relying

2005

3.1

3.6%

0.6

20.5%

14.0%

2006

3.4

12.0%

0.9

45.8%

15.3%

2007

4.4

27.9%

1.3

53.3%

18.1%

2008

4.9

11.0%

1.9

38.7%

19.2%

2009

6.3

28.3%

2.3

23.7%

24.3%

2010

8.2

31.2%

3.1

34.1%

27.1%

services (P2P, B2C, B2B, social media and financial services) – and

2011

10.1

23.1%

4.1

33.8%

27.3%

e-shopping via mobile phone is expected to be the next shopping hit in

2012

11.8

16.3%

5.9

41.8%

30.7%

on its labour cost advantage. In addition, the emerging integration of all networks (TV and broadcasting, computer/internet and telecommunication) creates a seamless global platform for the digital transformation of all producer and consumer

China. Global Chinese firms based in Shenzhen such as Huawei, ZTE, and

Source : Based on data from Cen sus and S tatist ics Dep artment of HKSA R Govern ment an d Hong Kong

Tencent (Wechat), as well as many firms which are innovating in mobile

Tourism Board, Statistical Review of Hong Kong Tourism, various years.

services, applications, and local brands, parts, and components in the Pearl River Delta, are readying themselves for the smart phone-driven ‘digital revolution’. It is anticipated that Guangdong Province will be able to ride on this consumption wave, given the extreme popularity of the mobile telephone there – 117.7 subscribers per 100 persons.

Pearl River Delta region visitors represent about 70 percent of total Mainland visitor arrivals. Given the proximity of the Pearl River Delta region to Hong Kong, a vast majority of same-day in-town Mainland visitors are from the PRD region, visiting Hong Kong for leisure and shopping purposes. One striking feature when comparing the spending pattern of same-day in-town visitors from Mainland China with other


short-haul markets (excluding Mainland China) is that seven percent of

Since July 2003, the residents of 49 major Chinese cities have been

the expenditure of Chinese visitors concerns daily items (for personal

permitted to visit Hong Kong under the Individual Visit Scheme.

care, including shampoo and diapers) rather than the 0.7 percent

Between 2003 and 2013, 101 million Mainland China visitor arrivals out

expenditure of other short haul markets. This demonstrates a very

of a total of 181 million came to the territory on the scheme. It is estimated

important trend: that an integrated Greater Pearl River Delta market is

that the shopping expenditure of Mainland visitors accounted for 30.7

underway via improved resident mobility and transport connectivity.

percent of Hong Kong’s total retail sales in 2012, up from 14 percent in 2005. 14

The shopping expenditures of same-day in-town Mainland China visitor of the year of 2005 and 2006 are

Section 3

Section 3



88

89

The rapid growth of ‘e-retailing’ has the potential to create a ‘leapfrog’

Table 3-8: Shopping Expenditure of Mainland China Visitors in Hong Kong

effect in Chinese retail, transforming it into a more digitalised and

Overnight Visitors from

Same-day In-town

China

Visitors from China 14

efficient industry even faster than traditional chain stores. Such a scenario could have profound effects on China’s consumption,

Shopping

productivity, logistics, and even urban development. By providing a

Expenditure (US$ billion)

Annual Growth

Shopping Expenditure (US$ billion)

Share of Shopping Expenditure of Mainland Visitors in

Annual

Hong Kong’s Total

Growth

Retail Sales

powerful launch pad for entrepreneurs and merchants of all sizes to sell 2005

3.1

3.6%

0.6

20.5%

14.0%

Mainland China could lead the world in innovation rather than relying

2006

3.4

12.0%

0.9

45.8%

15.3%

on its labour cost advantage.

2007

4.4

27.9%

1.3

53.3%

18.1%

2008

4.9

11.0%

1.9

38.7%

19.2%

2009

6.3

28.3%

2.3

23.7%

24.3%

2010

8.2

31.2%

3.1

34.1%

27.1%

services (P2P, B2C, B2B, social media and financial services) – and

2011

10.1

23.1%

4.1

33.8%

27.3%

e-shopping via mobile phone is expected to be the next shopping hit in

2012

11.8

16.3%

5.9

41.8%

30.7%

directly to consumers, e-retailing is also fast becoming an area in which

In addition, the emerging integration of all networks (TV and broadcasting, computer/internet and telecommunication) creates a seamless global platform for the digital transformation of all producer and consumer

China. Global Chinese firms based in Shenzhen such as Huawei, ZTE, and

Source : Based on data from Cen sus and S tatist ics Dep artment of HKSA R Govern ment an d Hong Kong

Tencent (Wechat), as well as many firms which are innovating in mobile

Tourism Board, Statistical Review of Hong Kong Tourism, various years.

services, applications, and local brands, parts, and components in the Pearl River Delta, are readying themselves for the smart phone-driven ‘digital revolution’. It is anticipated that Guangdong Province will be able to ride on this consumption wave, given the extreme popularity of the mobile telephone there – 117.7 subscribers per 100 persons.

Pearl River Delta region visitors represent about 70 percent of total Mainland visitor arrivals. Given the proximity of the Pearl River Delta region to Hong Kong, a vast majority of same-day in-town Mainland visitors are from the PRD region, visiting Hong Kong for leisure and shopping purposes. One striking feature when comparing the spending pattern of same-day in-town visitors from Mainland China with other


short-haul markets (excluding Mainland China) is that seven percent of

Since July 2003, the residents of 49 major Chinese cities have been

the expenditure of Chinese visitors concerns daily items (for personal

permitted to visit Hong Kong under the Individual Visit Scheme.

care, including shampoo and diapers) rather than the 0.7 percent

Between 2003 and 2013, 101 million Mainland China visitor arrivals out

expenditure of other short haul markets. This demonstrates a very

of a total of 181 million came to the territory on the scheme. It is estimated

important trend: that an integrated Greater Pearl River Delta market is

that the shopping expenditure of Mainland visitors accounted for 30.7

underway via improved resident mobility and transport connectivity.

percent of Hong Kong’s total retail sales in 2012, up from 14 percent in 2005. 14

The shopping expenditures of same-day in-town Mainland China visitor of the year of 2005 and 2006 are estimated figures.

Section 3

Section 3



90

91

Table 3-9: Same-Day In-Town Visitor Spending by Main Shopping Category (2012)

Mainland China Main Shopping Items Spending (US$ million) Cosmetics and Skin Care/Perfume Electrical / Photographic Goods Food, Alcohol, and Tobacco Garments/Fabrics Jewellery and Watches Leather/Synthetic Goods Personal Care (Shampoo, diapers, etc) Other Items

Total:

Share

Short Haul Markets (excluding Mainland China) Spending (US$ million)

Share

887

15.2%

21.4

9.3%

855

14.6%

23.1

10.0%

1,039

17.8%

46.4

20.1%

754

12.9%

67.4

29.2%

1,016

17.4%

13.5

5.9%

489

8.4%

30.2

13.1%

412

7.0%

1.5

0.7%

399

6.8%

27.6

11.9%

5,851

100.0%

231.2

100.0%

Source: B ased on data f rom Hong Kong Tourism Bo ard, Statisti cal Review o f Hong Kong Tourism 20 12.

In the context of an integrated Greater Pearl River Delta market, it is observed that many Pearl River Delta residents, especially those from middle to high income groups, often prefer to purchase luxury and top quality items from Hong Kong, mid-range and durable items from Guangzhou and Shenzhen, and daily items from residing city and neighbourhood outlets.

Conclusion The transformation in economic development models and the emergence of consumption in the Pearl River Delta region provide Hong Kong with various advantages. The Pearl River Delta may

These consumption trends allow Hong Kong to capitalise on the emerging

no longer be competitive as a source of cheap labour, but the

market potential of the Greater Pearl River Delta region and, more

evolution of its consumer market presents new opportunities for

importantly, the high-end and high value-added luxury markets that are

international investors. At a time when the world is suffering from

the expert domain of prestigious international brand names and lifestyle

excess production capacities, it is of great importance for every

innovators. By establishing a retail outlet in Hong Kong, the international

enterprise in the world to realise that new customer bases are

investor is able to reach more than 40 million Mainland visitor arrivals

being developed . Ex plorin g t he Ma inlan d C hina market via Hong

annually, and, more excitingly, these visitors belong to the middle to high

Kong is a viable marketing option for international investors.

Section 3

Section 3



90

91

Table 3-9: Same-Day In-Town Visitor Spending by Main Shopping Category (2012)

Mainland China

Short Haul Markets (excluding Mainland China)

Main Shopping Items Spending (US$ million) Cosmetics and Skin Care/Perfume Electrical / Photographic Goods Food, Alcohol, and Tobacco Garments/Fabrics Jewellery and Watches Leather/Synthetic Goods Personal Care (Shampoo, diapers, etc) Other Items

Total:

Share

Spending

Share

(US$ million)

887

15.2%

21.4

9.3%

855

14.6%

23.1

10.0%

1,039

17.8%

46.4

20.1%

754

12.9%

67.4

29.2%

1,016

17.4%

13.5

5.9%

489

8.4%

30.2

13.1%

412

7.0%

1.5

0.7%

399

6.8%

27.6

11.9%

5,851

100.0%

231.2

100.0%

Source: B ased on data f rom Hong Kong Tourism Bo ard, Statisti cal Review o f Hong Kong Tourism 20 12.

In the context of an integrated Greater Pearl River Delta market, it is observed that many Pearl River Delta residents, especially those from middle to high income groups, often prefer to purchase luxury and top quality items from Hong Kong, mid-range and durable items from Guangzhou and Shenzhen, and daily items from residing city and neighbourhood outlets.

Conclusion The transformation in economic development models and the emergence of consumption in the Pearl River Delta region provide Hong Kong with various advantages. The Pearl River Delta may

These consumption trends allow Hong Kong to capitalise on the emerging

no longer be competitive as a source of cheap labour, but the

market potential of the Greater Pearl River Delta region and, more

evolution of its consumer market presents new opportunities for

importantly, the high-end and high value-added luxury markets that are

international investors. At a time when the world is suffering from

the expert domain of prestigious international brand names and lifestyle

excess production capacities, it is of great importance for every

innovators. By establishing a retail outlet in Hong Kong, the international

enterprise in the world to realise that new customer bases are

investor is able to reach more than 40 million Mainland visitor arrivals

being developed . Ex plorin g t he Ma inlan d C hina market via Hong

annually, and, more excitingly, these visitors belong to the middle to high

Kong is a viable marketing option for international investors.

income classes, including young enthusiasts of western lifestyles.

Section 4

Hong Kong’s Contribution to the Development of the Pearl River Delta Region

Section 4

Hong Kong’s Contribution to the D evelopment of the Pearl River Delta Region

92

93

H ong Kong’s C ontribution

requiring soft skills, the Pearl River Delta contributed on the hardware side, providing manufacturing premises, infrastructural support, cheap labour supply and land. For the past two decades, both parties worked

to the

Development of the Pearl River Delta Region

closely via the unilateral investment ties extended from Hong Kong to the Pearl River Delta region. They jointly created the miracle of economic development in the Greater Pearl River Delta region. Figure 4-1: ‘Front Shop and Back Factory’ Cooperation between Hong Kong and the Pearl River Delta Region

Front Shop Hong Kong

R&D, Design

Marketing

Financial Management

Logistic Coordination

Procurement

Management and Services

Componentsfrom InternationalSuppliers

Headquarters in Hong Kong

Re-exportto InternationalMarket

Investmentand CapitalFlow

Partsand Equipment

Assembled Products

ProducerServicesbyHongKong

Boundary

Limited DomesticSales

Factory in the PRD Region

DirectExportto InternationalMarket

Manufacturing and Assembling

Prior

to

accession

China’s to

the

World Trade Organization (WTO) in 2001, the ‘Front Shop and Back Factory’ mode had been the major type of cooperation between Hong Kong and the Pearl River Delta region, with Hong Kong acting as the headquarters and the Pearl River Delta region as the manufacturing base. While Hong Kong offered producer services such as marketing support, financial measures, logistic handling, professional services, and services

Labour

Process Management

Local Procurement

InfrastructureSupport bythePRD Region Transportation &Warehouse

Back Factory Pearl River Delta

GPRD-Book Eng Apr2014

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