China’s Pearl River Delta Economic Zone

14 Feb

The Pearl River Delta economic zone in eastern China has been paramount to the development of China’s industry and economy since 1979 when China started to undergo political reform and adopt a more open door policy. The area contains some of the key economic areas of China including Guangzhou and Hong Kong. Population growth rates in the area have increased dramatically since the 1980’s with cities like Shenzhen increasing from 880,000 in 1980 to 9.83 million in 2010 (Oizumi, 2011). There is a large contrast between the financial sectors of Hong Kong which is home to Asia’s second largest stock exchange and the manufacturing sector in the rest of the Delta, which together produce a yearly GDP of 2.9 billion yuan(Oizumi, 2011). This therefore proves that the Pearl River Delta is a significant region for the Chinese economy and its massive growth over recent years has been vital for economic growth.

 

The cities in the economic zone have high levels of GDP per capita compared to other regions of China. In 2009 there were 4 cities with a GDP per capita of more than $10,000 which include Shenzhen at $13,600, while Guangzhou was second with $13,000, the other cities are Foshan and Zhuhai. These are far higher than the average for the Guangdong Province which is just $6,027, which is where the Pearl River Delta is located. The average GDP per capita for the whole of China is even less at $3,734 which shows the Guangdong Province is a prosperous region, while the cities such as Guanzhou have a far better GDP per capita than the national average (Oizumi, 2011). This can largely be put down to the fact that there have been large amounts of industrialization as the pearl river delta has expanded, however large areas of China remain rural with families relying on subsistent farming and having little or no income at all, which will make the GDP per capita for China as a whole low.

 

The Pearl River Delta has been able to expand so proficiently due to the levels of direct foreign investment it has been able to attract. Zhongshan, a city in the Guangdong Province grew by 18% in 2003 which was twice the national average while 20 of the fortune 500 companies have manufacturing operations based in the city (http://www.economist.com/node/3403188). Guangzhou can be considered the ‘economic core‘ of the region while other cities such as Zhongshan ‘outer core‘ areas and the rest of the region ‘peripheral’. However there has been a recent shift on the focus of manufacturing in the province with manufacturing in the core falling from 54.4% in 2005 to 50.4% in 2009 while the outer core areas have increased from 34.8% to 37.4% (Oizumi, 2011). This comes to the conclusion that industry is starting to shift away from the core, as manufacturing in the peripheral areas has also increased.

 

References:

K Oizumi (2011), The Emergence of the Pearl River Delta Economic Zone, Pacific Business and Industries, Volume XI, No.41.  

Accessed at http://www.jri.co.jp/MediaLibrary/file/english/periodical/rim/2011/41.pdf

Date accessed 13/2/14

 

 

2004, String of pearls, The Economist, http://www.economist.com/node/3403188

Date Accessed 13/2/14 

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