PRD: your need-to-know guide
Apr 13, 2016
How much do you know about the Pearl River Delta? For many of us the short answer is ‘not enough’, especially for a region that is now a crucial contributor to global growth.
In the latest of its special Focus Issues Week in China looks at how the Pearl River Delta (usually abbreviated as the PRD) has emerged as an economic powerhouse – contributing about a tenth of China’s GDP. We review its key cities and companies, and we outline some of its challenges and opportunities in the years ahead.
So what exactly is the PRD?
It is a term used to describe a geographical zone on China’s southern coast. In it 11 key cities are clustered around the delta of the Pearl River, or Zhu Jiang, which feeds from a series of smaller tributaries before spilling out into the South China Sea.
Nine of those cities sit within Guangdong province. These PRD cities are home to about half of Guangdong’s 106 million population and produce an outsized 85% of its gross domestic product (cities in the far west and east of the province are not usually considered part of the PRD zone).
The remaining two cities are Hong Kong and Macau, which technically form part of the ‘Greater Pearl River Delta’ because unlike the other nine they are not part of mainland China. Instead they enjoy separate political status as special administrative regions.
It is this ‘Greater Pearl River Delta’ that we discuss in this report, because of the historical importance of Macau and particularly Hong Kong to the area as a whole, as well as their increasing interconnections with the rest of the region. Their inclusion adds another eight million people to the PRD.
Both are looking to deepen their commercial and infrastructural links with their neighbours to the north, and their futures depend in large degree on how successfully they are able to do so.
The region is the economic mainstay of Guangdong province, which generated just over $1 trillion in gross domestic product in 2013, or about a tenth of China’s total economic output, according to HSBC.
That’s a bigger economy than Indonesia and not far behind Mexico. Guangdong ranks higher than both on trade flows, generating about a quarter of China’s exports. In fact, only Germany and the United States are larger trading economies.
Another reason to know the region better is that it is changing so quickly. Li Keqiang, the Chinese premier, has described how his country is urbanising at speeds unprecedented in human history. Cityscapes have sprouted in a few years rather than decades, and nowhere has jammed its foot harder on the accelerator than the PRD, which – if viewed collectively as a continuing conurbation – overtook Tokyo as the world’s largest megacity last year, according to a study by the World Bank.
Led by the prefectures of Guangzhou (the capital city of Guangdong province), Shenzhen, Dongguan and Foshan, is a region comprising of 11 sprawling cities.
It remains among the fastest growing too. Last year the key cities of Guangzhou and Shenzhen grew their GDPs by 8.3% and 8.9% respectively. With the recent creation of three new special zones in Hengqin, Nansha and Qianhai (see page 41 for more on these) the PRD looks set to enter a dynamic new growth phase as it moves up the manufacturing value chain and takes advantage of the internationalisation of the Chinese currency, the renminbi.
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