The Greater Pearl River Delta - An Economic Guide

The prospects for favourable economic development in the Greater Pearl River Delta, which includes Guangdong, Hong Kong and Macao, have recently grown even more since the signing of the Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA).

Guangdong Province is located in the southernmost part of the Chinese mainland. It has always been an important window for China's foreign trade as well as the starting point of the world-famous "Silk Road on the Sea."

Since China implemented its policies of reform and openness, Guangdong's economy has seen sustained and rapid development. Guangdong has the largest economic capacity and fastest economic development of any province, and has become the most attractive destination for investment in China. In 2003, Guangdong's GDP, the total volume of retail sales of consumer goods, and the import and export value accounted for 11.5%, 12.2% and 33.3% of the national total respectively. More than 100,000 overseas enterprises have been established in Guangdong, attracting USD140.5 billion of foreign capital, with a trading volume of USD15.578 billion in 2003 (accounting for 29.13% of the national total).

Hong Kong is one of the world¡¯s major recipients of FDI and is the Mainland¡¯s single largest source of overseas direct investment. Hong Kong ranked as the second largest recipient of inward FDI in Asia, following China. In 2003, an amount of US$13.5 billion of foreign investment was attracted to the region.

Guangdong has a well developed economy and great market potential. Its success is built on nine industries: textiles and garments; food and beverages; construction materials; electronics and IT; electrical appliances and machinery; petrochemicals; forestation and papermaking; pharmaceuticals; and the automotive industry.

Guangdong has a sturdy infrastructure, abundant energy sources and advanced telecommunication and transport systems. There are 2,412km of expressways. Guangzhou Baiyun International Airport, which is one of the three air hubs of China, is located in Guangdong. International shipping connects the province with over 1,100 ports in more than 130 countries. The total annual goods handling capacity of its main coastal ports reached 423,91 million tons, including a container handling capacity of 18,386,800 TEU.

While continuously perfecting its infrastructure, Guangdong is also endeavouring to improve its soft investment environment. There are many intermediary organizations throughout the province acting to safeguard the legitimate rights and interests of business people and investors, offering efficient and professional services.

Situated at the southern tip of Guangdong Province, Hong Kong and Guangdong are mutually dependent. With a highly developed information network, unrivalled legal system, state-of-the-art infrastructure, plentiful human resources and low tax rate, Hong Kong is a very positive business environment, helping to make it one of the major commercial and financial centres of the world.

Hong Kong is also the most important entry point for the mainland of China. About 30% of the Mainland's foreign trade is handled via Hong Kong, comprising products sourced from and destined for the Mainland. As reflected in Hong Kong's merchandise trade statistics, in 2003, 60% of re-exports were of China origin and 44% were destined for the Mainland. According to the Mainland's Customs statistics, Hong Kong (the 10th largest trading economy in the world) ranked the third largest trading partner of the Mainland after Japan and the US, accounting for 10.3% of its total trade in 2003.

Since China implemented its new policies of reform 24 years ago, Guangdong and Hong Kong have both benefited - and the partnership is becoming stronger. With the increased importance of China in the world economy, the development of the Greater Pearl River Delta (GPRD) is increasing exponentially. The GPRD is now widely recognised as the fastest growing region of the fastest growing large economy in the world. The signing and implementation of CEPA has further strengthened the GPRD as one of the most prosperous economic centres with the highest growth potential on Earth. As the platform for foreign companies to explore and expand China opportunities, the role of Hong Kong in this economic powerhouse is further strengthened.

Guangdong Province and Hong Kong have always attached great importance to enhancing their economic relationship with Europe. With the joint efforts of their governments and business communities, the economic and trade cooperation between the Greater Pearl River Delta and the EU - and with the UK in particular - have enjoyed enormous growth in recent years. Up to 2003, cumulative UK direct investment in Guangdong was USD3.274 billion, while total UK direct investment in Hong Kong stood at US$7.2 billion in 2002. The trade value between Guangdong and EU in the same year reached USD30.6 billion, up by 30.7% since 2002. EU is also one of the most important trading partners for Hong Kong, with a total trading amount of US$49.1 billion in 2003. Eminent enterprises such as British Petroleum, Shell and HSBC have all invested in Guangdong and Hong Kong received rich returns.

Now, this seminar brings even more opportunities for economic and trade cooperation between Guangdong, Hong Kong and Europe.