Page 58 - 2019 Special Report on the State of Business in South China
P. 58
Economic Conditions in South China
Overview to bring in modern service sectors such as exhibitions
and logistics, and high value-added industries such as
South China is a leading engine in China’s pharmaceuticals. With its stated target to become an
economic growth that includes not international tourism destination in the 13th Five Year
only the province of Guangdong, Fujian, Guangxi, and plan, Hainan has also launched offshore duty-free policy
Hainan, but also the Special Administrative Regions of and travel visa waiver to welcome tourists.
Hong Kong and Macao. Together, the economy of these
regions measured at 8.27 trillion yuan in 2017, or around Meanwhile, the economic prospect of the SARs of
20.7% of the national GDP. Much of the economy is Hong Kong and Macao is set to gain from increasing
concentrated at the coastal region especially the Pearl integration with the Mainland. This is particularly since
River Delta. the announcement of the Greater Bay Area in July 2017,
when President Xi Jinping witnessed the signing of
Forerunners in China’s Economic Reform “The development of Guangdong-Hong Kong-Macao
Greater Bay Area”. Being long-standing portal of the
The coastal region of South China is now home Mainland to the rest of the world, the SARs, especially
to the technology and financial centers in China, as it Hong Kong, may tap on 1) the rising connectivity of the
benefits from being at the forefront of China’s economic financial market in the Mainland with the rest of the
reforms. Shenzhen, Shantou and Zhuhai in Guangdong world; 2) the unique positioning as a gateway for Belt
and Xiamen in Fujian were designated the first four and Road Initiative through its connections to overseas,
special economic zones since the opening up policy particularly as a financing and litigation center; and
began in 1978. With the support of significant capital 3) the synergy with Shenzhen in terms of updating
investments from the Chinese diaspora that originated technology research and development, according to
in areas such as Taishan, Macao, Hong Kong, Chaozhou, President Xi’s pledge in May 2018, possibly through its
Xiamen and Fuzhou, the regions established quickly to comparative advantage in academic researches.
become an external facing manufacturing hub since the
1980s. In the decades that followed, the provinces have Outlook
also successfully moved up from production of labor-
intensive light-industry products and processing trade The Greater Bay Area is envisioned by the government
to higher value-added products such as mobile phones not only to become a leading metropolis in itself. Its
and the service industries. development is also expected in the 13th Five Year Plan
to radiate to adjacent regions. As the GBA develops by
The transition opened up opportunities for the inland leveraging the diverse strengths of its constituent cities,
provinces in the region which remain hubs for national in technology and innovation, finance, shipping and
resources and agriculture. The governments of inland trade, advanced manufacturing and hospitality, it is also
provinces have been proactive in attracting new inbound creating a supply chain of idea, resources and talents
investments. Specifically, the Guangxi government has in its vicinity region. Meanwhile, regional connectivity
aligned its comparative advantages in heavy industry and rising demand for improved quality of life will also
and its proximity to ASEAN to welcome new industrial support development of modern services across the
investments in the automobile, petrochemical, and region. It could thereby create a more developed and
machinery manufacturing sectors in recent years. interconnected South China with the Pearl River Delta
Hainan has also invested extensively on infrastructure at its center.
58
Overview to bring in modern service sectors such as exhibitions
and logistics, and high value-added industries such as
South China is a leading engine in China’s pharmaceuticals. With its stated target to become an
economic growth that includes not international tourism destination in the 13th Five Year
only the province of Guangdong, Fujian, Guangxi, and plan, Hainan has also launched offshore duty-free policy
Hainan, but also the Special Administrative Regions of and travel visa waiver to welcome tourists.
Hong Kong and Macao. Together, the economy of these
regions measured at 8.27 trillion yuan in 2017, or around Meanwhile, the economic prospect of the SARs of
20.7% of the national GDP. Much of the economy is Hong Kong and Macao is set to gain from increasing
concentrated at the coastal region especially the Pearl integration with the Mainland. This is particularly since
River Delta. the announcement of the Greater Bay Area in July 2017,
when President Xi Jinping witnessed the signing of
Forerunners in China’s Economic Reform “The development of Guangdong-Hong Kong-Macao
Greater Bay Area”. Being long-standing portal of the
The coastal region of South China is now home Mainland to the rest of the world, the SARs, especially
to the technology and financial centers in China, as it Hong Kong, may tap on 1) the rising connectivity of the
benefits from being at the forefront of China’s economic financial market in the Mainland with the rest of the
reforms. Shenzhen, Shantou and Zhuhai in Guangdong world; 2) the unique positioning as a gateway for Belt
and Xiamen in Fujian were designated the first four and Road Initiative through its connections to overseas,
special economic zones since the opening up policy particularly as a financing and litigation center; and
began in 1978. With the support of significant capital 3) the synergy with Shenzhen in terms of updating
investments from the Chinese diaspora that originated technology research and development, according to
in areas such as Taishan, Macao, Hong Kong, Chaozhou, President Xi’s pledge in May 2018, possibly through its
Xiamen and Fuzhou, the regions established quickly to comparative advantage in academic researches.
become an external facing manufacturing hub since the
1980s. In the decades that followed, the provinces have Outlook
also successfully moved up from production of labor-
intensive light-industry products and processing trade The Greater Bay Area is envisioned by the government
to higher value-added products such as mobile phones not only to become a leading metropolis in itself. Its
and the service industries. development is also expected in the 13th Five Year Plan
to radiate to adjacent regions. As the GBA develops by
The transition opened up opportunities for the inland leveraging the diverse strengths of its constituent cities,
provinces in the region which remain hubs for national in technology and innovation, finance, shipping and
resources and agriculture. The governments of inland trade, advanced manufacturing and hospitality, it is also
provinces have been proactive in attracting new inbound creating a supply chain of idea, resources and talents
investments. Specifically, the Guangxi government has in its vicinity region. Meanwhile, regional connectivity
aligned its comparative advantages in heavy industry and rising demand for improved quality of life will also
and its proximity to ASEAN to welcome new industrial support development of modern services across the
investments in the automobile, petrochemical, and region. It could thereby create a more developed and
machinery manufacturing sectors in recent years. interconnected South China with the Pearl River Delta
Hainan has also invested extensively on infrastructure at its center.
58
