Pearl River Delta, pearl of economic
accord By Janus Lam and Carrie Chan
HONG KONG - The Pan-Pearl River Delta Regional
Co-operation and Development Forum has unfurled grand
plans to facilitate economic cooperation among nine
mainland provinces, Hong Kong and Macao, in the new
Pan-Pear River Delta (PPRD) project. It's supposed to
promote interaction and synergy within China, attract
new Chinese and foreign business and generate vast
revenues. It holds promise and is moving rapidly, but it
has yet to take off.
The odd arrangement
reflects the competition between Hong Kong territory and
Guangdong province for the title of "Big Brother" of the
Pearl River Delta (PRD). The competition has been
underway since the two joined efforts in economic
integration of the delta, comprised of developed cities
like Guangzhou, Dongguan and Shenzhen.
PRD is
one of China's two major economic locomotives besides
the Yangtze River Delta led by the country's largest
city Shanghai. In 2002, the former recorded a gross
domestic product of US$113 billion, with an export value
of $112.5 billion - 9.2% and 34.6% of the national
totals respectively.
According to some analysts,
the competition between Hong Kong and Guangdong is a
major reason for the slow progress in the PRD
integration. Beijing managed to shelve the rivalry when
forging the cooperative structure for the larger PPRD.
Though the new PPRD includes many more actors than its
smaller predecessor, the PRD, it is moving rapidly; the
concept was introduced a year ago.
The PPRD
cooperation, namely the "9 plus 2" scheme, comprises
nine provinces: Guangdong, Guangxi, Fujian, Jiangxi,
Hunan, Guizhou, Yunnan, Hainan and Sichuan; and two
special administrative regions: Hong Kong and Macao. But
initially, Hong Kong and Macao were excluded, until the
central government intervened on their behalf.
The concept of nine-province cooperation was
first raised last July, when Zhang Dejiang, secretary of
the Guangdong Provincial Chinese Communist Party (CCP)
Committee and member of the party's central Politburo,
proposed strategic cooperation and co-development within
what he called the "PPRD".
In April, Zhang led a
business delegation through Guangxi and Hunan in an
effort to enhance inter-province liaison and
collaboration. During the tour, the delegation signed a
series of contracts worth in total 84.4 billion yuan
(US$10.2 billion) with the two provinces.
The
two special administrative regions were finally
recruited to the scheme, after chief executives Tung
Chee-hwa of Hong Kong and Edmund Ho Hau Wah of Macao
pressed for membership in the PPRD in a meeting with
President Hu Jintao and Premier Wen Jiabao during the
March sessions of National People's Congress and Chinese
People's Political Consultative Conference.
In
economic cooperation, Guangdong will become a bellwether
among all the nine provinces. The forum that took place
a month ago also divided the work between Guangdong and
Hong Kong to prevent the two from fighting for the pole
position. Actually the Guangdong/Hong Kong Cooperation
Joint Conference held on August 5, 2003, agreed that
Guangdong would develop into a manufacturing base while
Hong Kong would be a center for logistics, finance and
service industries - in principle, complementary.
Hong Kong - with different features in economic
systems, governmental functions, business operation,
social and cultural background - can hardly take the
lead in the "9 plus 2" cooperation, the Economic Review,
a monthly of Bank of China (Hong Kong), pointed out in
April. But it added that Hong Kong should, besides
sharpening its competitive edge in financial service,
spare no effort to propel Guangdong in its regional
economic integration.
In the past, Guangdong
refused the cooperation mode initiated by Hong Kong -
shop at the front (Hong Kong), factory at the back
(Guangdong), and consequently the bilateral cooperation
bore no fruit. Zhang Dejiang, transferred to Guangdong
in 2002, has been considering how to reposition
Guangdong in cooperation with Hong Kong, and accelerate
the economic integration in the Pan-Pearl River Delta
(PPRD) project. As the former secretary of the CCP
Zhejiang Committee, he witnessed the take-off of the
Shanghai-centered Yangtze River Delta project.
Zhang says that with the booming mainland
economy, the Pearl River Delta co-operation will
spotlight Hong Kong's advantages in financial and
logistics services and tourism.According to him, the
PPRD cooperation is an all-around project covering
economy, transportation, communications, education,
culture, science & technology, tourism, and other
fields.
The PPRD is supposed to usher in a new
era of regional cooperation. However, many observers and
participants in the inaugural ceremony in June doubted
whether the ideal scheme on paper will work in practice.
The blueprint, however promising, remains in the initial
stage and details of cooperation are skimpy, they
warned. The theme of the project is "prosperity through
partnership" and leaders from all regions, signatories
to an accord, are now undertaking the integration
process.
Zhang Dejiang emphasizes that the pan
delta region is endowed with vast land, abundant labor
and rich natural resources. In addition, it enjoys one
of the best production facilities in Guangdong, now
often called the World's Factory - and ample talents in
the other eight provinces. Besides, the region has an
extensive international network with Macao and Hong
Kong, the latter being Asia's most sophisticated center
of logistics, finance and information.
Zhang
suggested that Hong Kong should position itself as the
financial and logistics hub while Macao specializes in
entertainment and Guangdong, of course, in
manufacturing.
Some observers called the "9 plus
2" concept conducive to a win-win situation, while
noting it was too early to predict actual results.
Albert So, President of the Hong Kong Institute
of Real Estate Administration, said, "The pan delta
concept remains much on paper only. It takes time to see
its actual effects. If it does work, it will be a
positive development for surveyors because a booming
realty market guarantees business opportunities for the
surveying industry."
However, So pointed out
that the 11 parties would definitely face obstacles
before a seamless cooperation could be achieved. The
most conspicuous problem is that the mainland
governments in general imposes too many restraints and
demands on various enterprises. He cited a CEPA (Closer
Economic Partnership Arrangement) clause related to the
surveying industry as an example: Hong Kong surveyors
and the mainland authorities concerned have to achieve
mutual qualification recognition and agree on one
threshold for registered capital. CEPA is generally
considered a policy that Beijing has designed to
stimulate the Hong Kong economy, mainly by granting zero
tariff to some products made in the territory.
For decades, protectionism prevalent throughout
the mainland has led to counterproductive economic
policies among different regions. That's why the notion
of PPRD focuses on lifting the trade barriers among the
11 parties, realizing regional economic integration and
mutual complementarity.
Further, the concept of
delta cooperation demands a more extensive and
sophisticated network. Although the planners invited
officials of the ministries of railways and
communications, how to develop the transport network has
not been decided yet. Since investors traditionally
value the transportation cost, the existing network will
fail to attract massive investments and must be upgraded
and extended.
Economic analysts say tourism is
another major area urgently in need of development in
the Pearl River Delta region. The China National Tourism
Administration (CNTA) has urged formation of a "9 plus
2" tourism cartel to make the industry an example of
regional tourism cooperation. In general, the nine
provinces abound in tourism resources and have developed
considerably. In 2002, they generated $7.68 billion in
foreign exchange from tourism, or 37.7% per cent of the
national total.
Experts have urged the nine
provinces, Hong Kong and Macao to develop distinct
regional tours, services and itineraries and jointly
undertake an advertising campaign to create a Pearl
River Delta image. In recent years the region has become
a magnet for holiday makers, many of them driving their
own cars and creating traffic congestion - a sign of
increasing prosperity and mobility, but also an
annoyance.
According to the Guangdong branch of
China Travel Service, self-driving tours bound for
provinces like Hainan, Guangxi, Jiangxi, Fujian, and
elsewhere accounted for a large part of its business
during the May holiday.
After individual Hong
Kong and Macao tours have been gradually opened to the
mainland, the two are also among the favorite
destinations of mainland travelers, from the neighboring
Guangdong province in particular. It is estimated that
some 400,000 mainland residents visited Hong Kong during
the May vacation, and Guangdong tourists spent
substantial sums.
Since individual tourism - not
the previously mandated group tours - is now available
to the entire Guangdong province, an increasing number
of local residents prefer to travel on their own instead
of joining package tours. As the
expressway-railway-airway traffic network is being
enhanced constantly, the appeal of Pearl River Delta
travel is growing and the "9 plus 2" travel cartel could
create a prodigious tourism culture covering almost half
of the country.
(Copyright 2004 Asia Times
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Jul 3, 2004
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