Page 66 - 2022 Special Report on the State of Business in South China
P. 66
nomic Overview in South China
South China1’s economy The most attractive region for
foreign investment
South China is a leading engine in
China’s economic growth that Despite COVID-19 disruption, Mainland China
includes not only the provinces of Guangdong, and Hong Kong remained the most attractive
Fujian, Guangxi and Hainan, but also the Special destination for investment in 2020, with total foreign
Administrative Regions (SARs) of Hong Kong direct investment (FDI) inflows reached US$149
and Macao. Thanks to the effective prevention billion and US$119 billion2. The four provinces
and control of COVID-19, the economies of of South China, with no surprise, were the most
these regions reached RMB 20.8 trillion in 2020, dominant recipients, absorbing 24% investment of
accounting for around 20.5% of national gross the total mainland FDI inflows3. Shenzhen, Xiamen
domestic product (GDP). and Zhuhai Special Economic Zones (SEZs), at the
same time, accomplished around 37.8% of import
Forerunners in China’s Economic and export trade of foreign invested enterprises,
Reform with the total amount reached US$679.3 billion in
20204, which clearly demonstrates South China’s
The reform and open-door policy of China began irreplaceable role as a springboard for China’s
with the adoption of a new economic development ongoing internationalization.
strategy in late 1978. No region better encapsulates
the success this strategy than South China, which Outlook of South China
was at the forefront of reform and opening-up
initiatives and has been quickly developed as an The region is set to become a major powerhouse
external facing manufacturing hub since the 1980s. that leverages each city’s strengths in a synergistic
In the decades that followed, South China has been manner to drive China's trade and economic
continuously moving up the industrial ladder, growth - e.g., in technology and innovation, finance,
from labor-intensive mass production to higher shipping and trade, advanced manufacturing and
value-added manufacturing. Now it has been hospitality. Meanwhile, regional connectivity and
developed to a more diversified region with various rising demand for an improved quality of life will
advantages from both manufacturing and service also support development of modern services
sectors. Under the 14th Five-Year Plan, South across the region. This could thereby create a more
China is expected to become a new technology and developed and interconnected South China with
innovation hub in the next five years, generate new the Pearl River Delta at its center.
business models/opportunities and further drive
China’s economic growth.
1 South China, includes Guangdong province, 2 World Investment Report, UNCTAD, https://
Fujian province, Guangxi Autonomous Region, Hainan unctad.org/webflyer/world-investment-report-2021
province, Hong Kong and Macao 3 Government site of provinces/regions, EY
analysis
66 4 The ministry of commerce PRC, http://data.
mofcom.gov.cn/lywz/forie.shtml
South China1’s economy The most attractive region for
foreign investment
South China is a leading engine in
China’s economic growth that Despite COVID-19 disruption, Mainland China
includes not only the provinces of Guangdong, and Hong Kong remained the most attractive
Fujian, Guangxi and Hainan, but also the Special destination for investment in 2020, with total foreign
Administrative Regions (SARs) of Hong Kong direct investment (FDI) inflows reached US$149
and Macao. Thanks to the effective prevention billion and US$119 billion2. The four provinces
and control of COVID-19, the economies of of South China, with no surprise, were the most
these regions reached RMB 20.8 trillion in 2020, dominant recipients, absorbing 24% investment of
accounting for around 20.5% of national gross the total mainland FDI inflows3. Shenzhen, Xiamen
domestic product (GDP). and Zhuhai Special Economic Zones (SEZs), at the
same time, accomplished around 37.8% of import
Forerunners in China’s Economic and export trade of foreign invested enterprises,
Reform with the total amount reached US$679.3 billion in
20204, which clearly demonstrates South China’s
The reform and open-door policy of China began irreplaceable role as a springboard for China’s
with the adoption of a new economic development ongoing internationalization.
strategy in late 1978. No region better encapsulates
the success this strategy than South China, which Outlook of South China
was at the forefront of reform and opening-up
initiatives and has been quickly developed as an The region is set to become a major powerhouse
external facing manufacturing hub since the 1980s. that leverages each city’s strengths in a synergistic
In the decades that followed, South China has been manner to drive China's trade and economic
continuously moving up the industrial ladder, growth - e.g., in technology and innovation, finance,
from labor-intensive mass production to higher shipping and trade, advanced manufacturing and
value-added manufacturing. Now it has been hospitality. Meanwhile, regional connectivity and
developed to a more diversified region with various rising demand for an improved quality of life will
advantages from both manufacturing and service also support development of modern services
sectors. Under the 14th Five-Year Plan, South across the region. This could thereby create a more
China is expected to become a new technology and developed and interconnected South China with
innovation hub in the next five years, generate new the Pearl River Delta at its center.
business models/opportunities and further drive
China’s economic growth.
1 South China, includes Guangdong province, 2 World Investment Report, UNCTAD, https://
Fujian province, Guangxi Autonomous Region, Hainan unctad.org/webflyer/world-investment-report-2021
province, Hong Kong and Macao 3 Government site of provinces/regions, EY
analysis
66 4 The ministry of commerce PRC, http://data.
mofcom.gov.cn/lywz/forie.shtml
