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The Co-operation and Development of Pan Pearl River Delta

The Pearl River Delta in the narrow sense refers to the area surrounding the lower course of the Pearl River and its mouth into the sea in Guangdong, encompassing eight cities and six counties, including Guangzhou, Shenzhen, Zhuhai, Foshan, Jiangmen, Dongguang, Zhongshan, Huizhou urban district, Huiyang county, Huidong county, Boluo county, Zhaoqing urban district, Gaoyao and Sihui.

In a wider sense, the Greater Pearl River Delta refers to the economic region including Guangdong province, Hong Kong and Macao. Ever since the open-door policy and reforms on Mainland China, the economic development of Hong Kong and Macao has been more and more closely related to that of Guangdong. The northward movement of the manufacturing industry and the "shops on the front and factories behind" model in the region have brought about increases in trade volumes and investment amounts. Furthermore, the implementation of CEPA will create more new opportunities for the co-operation and development in the Greater Pearl River Delta region. So the concept of Greater Pearl River Delta region has gained wide acceptance and there are progresses, to different degrees, in the area of high-level co-ordination mechanism, the co-ordination of big infrastructure projects, cross-border industrial zone, tourism, facilitation of customs clearance and co-operation in the service sector.

The Pan Pearl River Delta region, on the other hand, is a concept of economic co-operation of the largest scale ever since the establishment of People's Republic of China. Its area also includes areas neighbouring the Greater Pearl River Delta region or having close economic and trade relations with it. In terms of administrative region, the Pan Pearl River Delta region includes Fujian, Jiangxi, Hunan, Guangdong, Guangxi, Hainan, Sichuan, Guizhou, Yunan Provinces or Autonomous Administrative Regions, and Hong Kong, Macao SARs. It thus can be sometimes referred as "nine plus two". The total area covered is 2 million square kilometers, 20.9 per cent of the nation, of population 0.45 billion, 34.8 per cent of the nation, of GDP 3884.6 billion RMB, one third of the national total.

The term "Pan Pearl River Delta", since it was first officially coined in July 2003, has rapid development in practical realization. In August, the nine provinces/regions' auditing chiefs gathered and participated in the "Meeting for Nine Provinces/Regions' Auditing Chiefs" and reached a consensus to promote the exchange and co-operation with Hong Kong and Macao, to facilitate the mutual development of the Pan Pearl River Delta. Subsequently, in October and November, meetings in the areas of information industry, new technology and transportation development were held between the nine provinces/regions. Moreover, several pacts were signed during these meetings, like "Pan Pearl River Delta Regional Technology Innovation and Co-operation Framework Agreement", "Inter-provinces Road Planning Memorandum" and " Nine Provinces/Regions of Pan Pearl River Delta Economic Region and Chongqing Road Transportation System Co-operation and Development 2003 Agreement". Besides, the investment promotion organizations in the region, including that of nine provinces/regions and two SARs, participated in the first " Conference for Investment Promotion Organisations in Pan Pearl River Delta Cities" and jointly released the "Declaration of the Co-operation between Investment Promotion Organisations in Pan Pearl River Delta".

However, the most prominent event was the first high-level "Pan Pearl River Delta Regional Co-operation and Development Forum" with three sessions held in Hong Kong, Macao and Guangzhou respectively from June 1 to 3. Leaders of the "nine plus two" had the opportunities to exchange opinions and discuss about future co-operation together. The "Pan Pearl River Delta Regional Co-operation Framework Agreement" signed in Guangzhou laid a firm foundation for future co-operation in the area of infrastructure, industries and investment, commerce and trade, tourism, agriculture, labour, education and culture, information system, environmental protection and health and quarantine. Parties of the agreement agreed to establish multi leveled regional co-operation including a system of meetings between the executive heads of various administrative regions.

Compared with the European Union, which currently has 25 members, and its history from a custom union to a common market to a monetary union, the union of Pan Pearl River Delta is a regional co-operation structure under one sovereign country, with relatively unified currencies and languages. What is lacking is co-ordinated policy making and infrastructure development, and unimpeded flow of raw materials, energy, commodities, service, labour, technology and capital.

In this region, there are not only abundant resources, both natural and human, but also competitive industrial centres and famed trading and service centre, and with obvious geographical advantages.

There are plentiful mineral resources in Jiangxi, Hunan, Yunnan and Sichuan. There are precious species of plants and animals in Yunan, Sichuan and Guangxi. Fujian is one of the biggst four forest zones in China and in Jiangxi, the forest coverage is 63.1 per cent.

In terms of natural resources, Guangxi's output of steel accounts for one third of the world and it has the potential to be the largest base for cement production in Southern China. Guizhou has the biggest electro-aluminum factory, phosphate fertiliser base, and iron alloy factory. It is also the biggest abrasives and artificial diamond production and export base in China.

In terms of agriculture, Sichuan's husbandry is very developed. Also Sichuan's outputs of tung oil and crude lacquer are the largest in the nation. Fujian is one of the important fisheries in China, with great amounts of aquatic products. Guangxi is rich in tropical fruits, vegetables, canes and hemps, one of the ten largest sugar production bases in the world. Guangxi has the biggest output of turpentine oils and rosin. Hunan is one of the major production base for crops, known as "abundant land of fishes and rice".

In terms of energy, Guizhou is rich in energy resources, both hydro energy and coal generated energy. It is one of the provinces designated in the Western China to transfer electricity power to Eastern provinces. Guangxi and Yunan are also rich in hydro energy.

In terms of human resource and supply of labour, provinces in the central and west like Guizhou and Sichuan have abundant supply of cheap labour whereas Hunan has greater capability for scientific research, with over 1.3 million technical professionals.

In terms of geographical location, Hunan is situated in the central, connecting the southern China coastal area and Yangzi River basin area, conjoining the southern China coastal area with the inland central west area. Guizhou's location is very strategic. Yunnan is the door and window to South East Asia and South Asia, one of the provinces having long borders and neighbouring to many countries. Guangxi is the joining point of east, central and west China, a place where southern China economic area, west southern China economic area and ASEAN area meet.

The Pan Pearl River Delta region has its industrial base in Guangdong. Guangdong is the province with highest GDP in China for 15 consecutive years, with its value accounting for one ninth of national total. It utilizes largest amount of foreign investment and has the largest volume of external trade in China. Guangdong's infrastructure has been improved continuously, with easy accessibility by sea, air and on land and advanced telecommunication system. Moreover, its industrial structure is relatively comprehensive, with nine competitive industries formed, telecommunication, electrical machineries, petroleum chemical industry, food and beverage, garment and textile, construction materials, forestry industry and paper, medicines and vehicles. In particular, the Pearl River Delta in Guangdong is the most dynamic region in terms of foreign investment in China and one of important bases for manufacturing in the world. The output for computer components in Pearl River Delta exceeds one tenth of the world total.

With its sophisticated infrastructure and telecommunication network, Hong Kong is the trading and service centre in Pan Pearl River Delta. Hong Kong is the tenth largest trading regime — one of the important regions of exporting garments, clocks, toys, computer game products. Hong Kong is the tenth garment exporting region, second only to Japan in Asia. It is the world's seventh largest exchange market, tenth largest banking, fourth largest gold market, tenth largest stock market.

If barriers for co-operation can be eliminated in Pan Pearl River Delta Region and advantages in different areas can complement one another's, the potential for growth is great. For Macao, it is important to stay firm in its positioning —While gaming and tourism industry being the chief growth engine, other related service sectors are to have healthy and co-ordinated development. It is also imperative to make use of the advantages and new network brought about by the Pan Pearl River Delta regional co-operation to strengthen its role as well as enhance its functions as regional service platforms.

This article was prepared by IPIM’s Research and Information Division.