The changing industrial transformation in the Pearl River Delta: issues, challenges and intergovernmental coordination

Abstract

This paper examines the changing pattern of industrial development in the nine PRD cities since the late 1990s. Guangdong province, especially the PRD, has spearheaded economic reform and opening in China and achieved spectacular growth in the past three decades. However, with the rise of Shanghai and the Yangtze River Delta and other regions in China and the transformation of the global economy, the province has been under increasing pressure to upgrade its industrial structure and technological capacity and to go beyond its labor-intensive manufacturing and export-oriented model of development. On the other hand, the granting of the Closer Economic Partnership Arrangements (CEPA) by the central government since 2003 aimed also to foster close economic relations Hong Kong and the PRD. Guangdong has also been able to secure the approval of a major reform document, The “Outline of the Plan for the Reform and Development of the Pearl River Delta, 2008-2020” (Outline Plan), as its blueprint for future development since early 2009 by partnering with Hong Kong and successfully lobbying the central authorities. Hence both the external and policy environments confronting the PRD are undergoing major changes and offer both major challenges and opportunities for the existing path of development. This paper explores the following key questions: What are the key policy measures initiated by the provincial and municipal governments in promoting the economic and industrial transformation of the PRD? What are its special features and limitations? What are the impacts of the global financial tsunami in 2008 on the economic and industrial transformation in the PRD? Has it facilitated or constrained the ongoing industrial upgrading? What are the most critical challenges facing the PRD in promoting industrial development and technological upgrading? The answers to these questions will have important implications on understanding the transformation of China’s city-regions.