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Pearl River Delta

Map of Pearl River Delta

The Pearl River Delta (PRD, 珠江三角洲 Pinyin: Zhū Jiāng Sānjiǎozhōu), China, occupies the low-lying areas alongside the Pearl River estuary where the river flows into the South China Sea. The PRD is one of mainland China's leading economic regions and a massive manufacturing centre.

The PRD is located in Guangdong Province and includes eight municipalities, namely Guangzhou, Shenzhen, Zhuhai, Dongguang (東莞), Zhongshan, Foshan (佛山), Huizhou (惠州) and Jiangmen.

The eastern side of the PRD (Shenzhen, Dongguan, Guangzhou) is the most developed economically. The western areas are open for development. New transport links between Hong Kong, Macau and Zhuhai in the PRD are expected to open up new areas for development and facilitate trade within the region. A major transportation development within the region, the Pearl River Bridge Project, is targeted for completion in 2006. The 29-kilometre Y-shaped bridge will be among the longest in the world.

Until around 1985, the PRD had been mainly dominated by farms and small rural villages, but after the economy was reformed and opened, a flood of investment turned it into the mainland's economic powerhouse. The PRD's startling growth was fuelled by foreign investment coming largely from Hong Kong manufacturers that moved their operations into the PRD. In 2003, Hong Kong companies employ 11 million workers in their PRD operations.

Emergence of the Economic Zone

The Pearl River Delta Economic Zone has been the most economically dynamic region of the Mainland China since the launch of Chinaís reform programme in 1979. The region's Gross Domestic Product (GDP) grew from just over US$8 billion in 1980 to more than US$89 billion in the year 2000. During that period, the average real rate of GDP growth in the Pearl River Delta Economic Zone exceeded 16 percent, well above the Peopleís Republic of China national figure of under 10 percent. In 1991, almost 50% of foreign investment in China was in Guangdong, and 40% in the PRD. By 2001 its GDP rose to just over US$100 billion and it was experiencing an annual growth rate more than three percentage points above the national growth rate. The abundance of employment opportunities created a pool of wealthy, middle-income, professional consumers with an annual per capita income that puts them among China's wealthiest. Since the onset of Chinaís reform programme, the Pearl River Delta Economic Zone has been the fastest growing portion of the fastest growing province in the fastest growing large economy in the world.

According to the 2000 national Census, the Zone had a population of 40.8 million people. Per capita income has been growing substantially in recent years, as have consumer expenditures.

Although the Pearl River Delta Economic Zone encompasses only 0.4 percent of the land area and only 3.2 percent of the 2000 Census population of the Mainland China, it accounted for 8.7 percent of GDP, 32.8 percent of total trade, and 29.2 percent of utilised foreign capital in the Mainland China in 2001. These figures show the remarkable level of economic development that the Pearl River Delta Economic Zone has achieved and the international orientation of the regionís economy. This orientation has attracted numerous investors from all over the world who use the Greater Pearl River Delta region as a platform for serving global and Chinese markets.

Significance of Manufacturing

The Pearl River Delta Economic Zone has become the world's workshop and is a major manufacturing base for products such as electronic products (such as watches and clocks), toys, garments and textiles, plastic products, and a range of other goods. Much of this output are invested by foreign entities and is geared for the export market. The Pearl River Delta Economic Zone accounts for approximately one third of the trade of the Mainland China.

Private-owned enterprises have developed quickly in the Pearl River Delta Economic Zone and are playing an ever-growing role in the regionís economy, particularuly after year 2000 when the development environment for private-owned enterprises has been greatly relaxed.

Nearly five percent of the world's goods were produced in the Greater Peral River Delta in 2001, with a total export value of US$ 289 billion. Over 50,000 Hong Kong companies have plants there, according to a 2002 survey.

Ties with Hong Kong

The Pearl River Delta Economic Zone has benefitted from proximity to Hong Kong. Hong Kong has been the source of over 70 percent of the cumulative foreign direct investment in the region since 1979, or roughly eight times the investment of North America, Japan, and Europe combined. One reason Hong Kong has played such an important role is because it links the region with the rest of the world, handling 70 to 80 percent of its seaborne exports and an even greater percentage of its airborne exports.

Hong Kong serves a distinct role as a place for firms to access the strength of the Greater Pearl River Delta region. Many western firms also use Hong Kong as a base for their Greater Pearl River Delta region activities, with senior managers often residing in Hong Kong. Hong Kong also serves as a principal location for the buying offices for companies doing business with the Greater Pearl River Delta region. Increasingly, savvy companies are developing Hong Kong/Greater Pearl River Delta strategies with their management, finance, communication, and coordination activities based in Hong Kong and their manufacturing activities in one or more of the jurisdictions of the Pearl River Delta Economic Zone.

While occupying an important position in the nation's economy, the PRD has also been a pioneer in reform and openness. Two of the original four Special Economic Zones (Shenzhen and Zhuhai) are located in the PRD, which allowed it to lead the way from a planned economy to a market economy. Having this "first mover advantage" in developing private enterprise, manufacturing capabilities and foreign trade, the PRD has drawn on its proximity with Hong Kong to become the manufacturing powerhouse of China. While the PRD offers a competitive market for companies to source or manufacture goods, Hong Kong provides logistical, financial, legal, design and marketing services that allow companies to export their products to rest of the world.

Other cities include: Taishan

See also: Geography of China

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