Global Credit Crisis and industrial restructuring in South China

Abstract

The servicing sector in the Pearl River Delta (PRD) region began to develop concurrently with the upgrading of the manufacturing sector since the turn of the century. In 2006, production in the tertiary sector accounted for 45.9% of GDP in the PRD. Based on firms surveys conducted in 2008, it is observed that Hong Kong manufacturing firms in the PRD have been adopting new spatial strategies as a response to the dynamic business environment in the PRD region. In the lights of these relocation strategies adopted by Hong Kong manufacturing firms, it is anticipated that their industrial space will expand beyond the PRD. This restructuring process is partly induced by the policy measures introduced by the Guangdong provincial government with a view to augment its competitiveness. Furthermore, as the region is known as the 'factory of the world' and one of the key recipients of China's foreign direct investment, the paper will examine the impacts of the global credit crisis towards its long term development from a regional perspective.