The Industrial Development in the Pearl River Delta

Content IntroductionP.3 Hong KongP.4 The PRDP.5 Relationship between HK and the PRD P.6 – P.7 Changes of locational factorP.8 Future of the PRD and HKP.9

Introduction The Pearl River Delta Region is located in southern China dominates the low-lying areas alongside the mouth of Pearl River where the water flow into the South China Sea. The Pearl River Delta Region covers nine city of the Guangdong Province namely Guangzhou, Shenzhen, Zhuhai, Dongguan, Zhongshan, Foshan, Huizhou, Jiangmen and Zhaoqing and the SARs of Hong Kong and Macau. After the economy was reformed and opened, many foreign investors, including Hong Kong’s, invested in the Pearl River Delta Region. Those investment turned the region from farmlands and small villages to a industrial centre of China. Hong Kong manufacturers are the biggest investors of the Pearl River Delta Region. In this project, I will analyze the relationship between Hong Kong and the Guangdong Province, see how the changes of the PRD affect the industrial development of both Hong Kong and the PRD.

Hong Kong Hong Kong manufacturers has long been the biggest investors in the Pearl River Delta Region, roughly eight times of the foreign investors such as North America, Japan and Europe. They dominates the industrial development of the PRD. When the economy of China had reformed and opened, the role of Hong Kong was confirmed to be a administration centre of those factories. Hong Kong manufacturers would set the head office in Hong Kong and their factories in the PRD. The head office would provide services such as marketing, markets, after sales services and logistic arrangements. In addition, Hong Kong has many ports for export, products will be exported through Hong Kong.

The Pearl River Delta Region It is one of the production centre in China, many transnational corporations also set the factories in the PRD. As the region is near Hong Kong, many products would export through Hong Kong. There are large area of land, leading to the low land price. It is favorable for building factories. There are also many cheap labour for production, that lower the cost of production. That’s why many large foreign company, even transnational corporations, would choose the PRD as their production centre.

Relationship between Hong Kong and the PRD The roles of them are different, as transport between Hong Kong is very convenience and is a famous in re-export, most of the factories would export their products through Hong Kong. As I mentioned before, many corporations would set their production centre in the PRD but administration centre in Hong Kong. Reasons for that are, first, Hong Kong has a lot of high educated talents but the PRD can provide a lot of cheap labour. Second, the economy of Hong Kong had developed, many services such as insurance, banking system and law are sufficient to assist doing business while the PRD do not has them.

The Relationship between Hong Kong and the PRD Factories set in the PRD Head office set in Hong Kong

Changes of locational factor In these ten to fifteen years, the PRD has changed a lot including the education level of the labour. There are still a lot of cheap labour provided in the PRD, in addition, there are a lot of supply of highly educated talents. The role of Hong Kong is not important as before. Administration and production can be done in the PRD in stead of finish them in two places. As Hong Kong labour’s salaries become higher and higher, the quality of workers in Hong Kong are not higher than those in the PRD, owners would rather choose the cheaper to work for them.

Future of the PRD and Hong Kong The PRD is still developing vigorously in different aspects. In manufacturing aspect, most of the factories are using machine intensive production method instead of labour intensive, the speed of production become very fast. As in administration aspect, more and more highly educated talents are in supply to the PRD, the quality of them are not worse than those in Hong Kong, that would be a trend to hire them to work as administrators. Moreover, there are many new ports constructed in the PRD, manufacturers can export products directly through those port instead of Hong Kong’s. As Hong Kong looses many advantage, Hong Kong should develop other techniques to fight against those competitors such as technique of information technology.

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