Page 110 - 2025 Special Report

Economic Overview in South China

The economy of South China 1 innovation have positioned it as a powerhouse of

China’s growth. To develop new quality productive
China is a leading engine in forces, all localities will promote the transformation
South China’s economic growth that and upgrading of traditional industries while
includes not only the provinces of Guangdong, shaping new drivers for growth and forming new
Fujian, Guangxi and Hainan, but also the Special competitive advantages in the region.
Administrative Regions (SARs) of Hong Kong and
Macau. The economies of these regions gained Though property remaining a challenge and
traction and reached RMB25.5 trillion in 2023, the labor market still under pressure as of now,
accounting for around 20.2% of national gross the regional integration injects new catalysts to
domestic product (GDP). local consumption growth in longer-term. Thanks
to the continued improved transportation in the
region, there has been a steady recovery in cross-
Forerunners in China’s economic boundary travel within the Guangdong-Hong
reform Kong-Macao Greater Bay Area (GBA) cities and that
makes Shenzhen joined the “trillion consumption
The reform and open-door policy of China club” in 2023 .
2
began with the adoption of a new economic
development strategy in late 1978. No region
better encapsulates the success of this strategy The most attractive region for
than South China, which was at the forefront foreign investment
of reform and opening up initiatives and has
been quickly developed as an external facing Despite the external headwinds and rising
manufacturing hub since the 1980s. In the decades geopolitical tensions, the Chinese mainland and
that followed, South China has been continuously Hong Kong remained two of the most attractive
moving up the industrial ladder, from labor- destinations for investment in 2023, with total
intensive mass production to higher value-added foreign direct investment (FDI) inflows reached
manufacturing. Now it has been developed to a US$163 billion and US$113 billion respectively.
3
more diversified region with various advantages The four provinces of South China, with no surprise,
from both manufacturing and service sectors. were the most dominant recipients, absorbing
19.5% investment of the total national FDI inflows .
4
H1 2024 data reflected a resilient and dynamic
economy in the region, characterized by strong On 25 December 2023, the National Development
industrial production, steady investment growth and Reform Commission released the Three-year
and a burgeoning service sector. Key drivers Action Plan for the Development of International First-
of growth include advancements in high-tech class Business Environment in the Guangdong-Hong
manufacturing, increased industrial investment Kong-Macao Greater Bay Area (hereinafter “Action
and robust foreign trade performance. Despite Plan”) . In terms of creating an open environment
5
global economic uncertainties, South China’s 2 Shenzhen government online, https://www.sz.gov.cn/
diversified industrial structure and focus on cn/zjsz/fwts_1_3/yxhjjc/content/post_11117933.html

1 South China, includes Guangdong province, Fujian 3 World Investment Report, UNCTAD, https://unctad.
province, Guangxi autonomous region, Hainan prov- org/system/files/official-document/wir2024_en.pdf
ince, Hong Kong Special Administrative Region (SAR) 4 Government sites of provinces/regions, EY analysis
and Macau (SAR) 5 Government site of Guangdong, https://www.gd.gov.
cn/zwgk/zcjd/gnzcsd/content/post_4306516.html
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