Page 334 - 2017 White Paper
P. 334
7 White Paper on the Business Environment in China
3.1 Introduction to South China
The term “South China” immediately brings to sold worldwide, offering both original equipment
mind the Pearl River Delta (PRD) - China’s manufacturing (OEM) and branded goods. The Shenzhen
manufacturing center and beating “economic heart”. Stock Exchange is the national leader for high-tech
Broadly defined as including nine cities in southeast enterprises – China’s leading technology enterprises,
Guangdong province (Guangzhou, Shenzhen, Dongguan, including Huawei, Tencent and ZTE, were all founded in
Foshan, Huizhou, Jiangmen, Zhaoqing, Zhongshan Shenzhen.
and Zhuhai), the PRD’s true centers are to be found in
Guangzhou (the provincial capital) and Shenzhen (China’s Yet the PRD is a region in transition. In recent years,
first and most successful special economic zone). low labor costs (once the major attraction of the region)
have been increasing rapidly. Minimum labor costs
To think of the PRD only in terms of these cities, are one measure of this, with Shenzhen a particularly
however, would be to ignore the instrumental role illuminating example. The city raised its minimum
in economic development played by the special monthly wage by 222 yuan in March 2015 to 2030 yuan,
administrative regions (SARs) of Hong Kong and, to a making it the highest nationwide at the time. Many
lesser extent, Macau, with which the cities of Guangdong other PRD cities raised their minimum wages during the
and Shenzhen have long leveraged their proximity. year as well, as illustrated in the table below.
The Closer Economic Partnership Arrangements (CEPA)
concluded in 2003 between Mainland China and Hong Region 2015 Monthly 2015 Hourly
Kong and Macau, respectively, have phased out tariffs and MinimumWage MinimumWage
trade barriers, liberalized trade in services, and boosted
trade and investment in Guangdong. As such, the term (yuan) (yuan)
“Greater PRD” was coined to refer to the PRD, Hong Kong
and Macau as a group. Shenzhen 2030 18.5
Guangzhou 1895 18.3
The more remote, less developed (and often more Zhuhai* 1510 14.4
mountainous) towns of Guangdong province, along Dongguan 1510 14.4
with the neighboring provinces of Fujian, Hainan and Foshan 1510 14.4
the Guangxi Zhuang Autonomous Region, are the final Zhongshan 1510 14.4
pieces of the South China puzzle. A series of economic Jiangmen 1350 13.3
and infrastructure-focused government policies have Huizhou 1350 13.3
been designed to better connect the Greater PRD and to Zhaoqing 1350 13.3
improve its links to these adjoining regions.
* Zhuhai independently sets minimum wages, with its monthly amount set
The PRDToday at 1650 yuan and its hourly amount set at 15.8 yuan.
The PRD has long been considered the heart of high-
tech China, with Shenzhen, Guangzhou and Dongguan
(as well as Zhuhai and Huizhou) considered centers for
the manufacture of consumer electronics and other
high-tech products. The PRD hosts direct and indirect
production arrangements for a wide variety of goods
334
3.1 Introduction to South China
The term “South China” immediately brings to sold worldwide, offering both original equipment
mind the Pearl River Delta (PRD) - China’s manufacturing (OEM) and branded goods. The Shenzhen
manufacturing center and beating “economic heart”. Stock Exchange is the national leader for high-tech
Broadly defined as including nine cities in southeast enterprises – China’s leading technology enterprises,
Guangdong province (Guangzhou, Shenzhen, Dongguan, including Huawei, Tencent and ZTE, were all founded in
Foshan, Huizhou, Jiangmen, Zhaoqing, Zhongshan Shenzhen.
and Zhuhai), the PRD’s true centers are to be found in
Guangzhou (the provincial capital) and Shenzhen (China’s Yet the PRD is a region in transition. In recent years,
first and most successful special economic zone). low labor costs (once the major attraction of the region)
have been increasing rapidly. Minimum labor costs
To think of the PRD only in terms of these cities, are one measure of this, with Shenzhen a particularly
however, would be to ignore the instrumental role illuminating example. The city raised its minimum
in economic development played by the special monthly wage by 222 yuan in March 2015 to 2030 yuan,
administrative regions (SARs) of Hong Kong and, to a making it the highest nationwide at the time. Many
lesser extent, Macau, with which the cities of Guangdong other PRD cities raised their minimum wages during the
and Shenzhen have long leveraged their proximity. year as well, as illustrated in the table below.
The Closer Economic Partnership Arrangements (CEPA)
concluded in 2003 between Mainland China and Hong Region 2015 Monthly 2015 Hourly
Kong and Macau, respectively, have phased out tariffs and MinimumWage MinimumWage
trade barriers, liberalized trade in services, and boosted
trade and investment in Guangdong. As such, the term (yuan) (yuan)
“Greater PRD” was coined to refer to the PRD, Hong Kong
and Macau as a group. Shenzhen 2030 18.5
Guangzhou 1895 18.3
The more remote, less developed (and often more Zhuhai* 1510 14.4
mountainous) towns of Guangdong province, along Dongguan 1510 14.4
with the neighboring provinces of Fujian, Hainan and Foshan 1510 14.4
the Guangxi Zhuang Autonomous Region, are the final Zhongshan 1510 14.4
pieces of the South China puzzle. A series of economic Jiangmen 1350 13.3
and infrastructure-focused government policies have Huizhou 1350 13.3
been designed to better connect the Greater PRD and to Zhaoqing 1350 13.3
improve its links to these adjoining regions.
* Zhuhai independently sets minimum wages, with its monthly amount set
The PRDToday at 1650 yuan and its hourly amount set at 15.8 yuan.
The PRD has long been considered the heart of high-
tech China, with Shenzhen, Guangzhou and Dongguan
(as well as Zhuhai and Huizhou) considered centers for
the manufacture of consumer electronics and other
high-tech products. The PRD hosts direct and indirect
production arrangements for a wide variety of goods
334
