A new ‘Golden Delta’ in China
Guangdong, Hong Kong and Macao now have become a ‘Golden Delta’ in China. Trade and investment between Hong Kong, Macao and Guangdong continues to grow since the Closer Economic Partnership Arrangement (CEPA) between the government of the Hong Kong Special Administrative Region (SAR) and the central government that has been signed on June 29, 2003.
A similar agreement, known as the Mainland and Macao Closer Economic Partnership Arrangement, was signed between the government of Macao SAR and the central government on October 18, 2003.
Both the two agreements took effect on January 1, 2004. Annual supplements to the agreements have also been signed between the central and Hong Kong governments.
With the aim to further open the mainland market to Hong Kong-based businesses, especially the service industry, the fifth supplement to CEPA in Hong Kong was signed on July 30 this year.
Owing to the excellent geographical advantages, Guangdong obtains significant benefits from the CEPA.
Based on recent statistics from a Guangdong industrial and commercial department, there have been more than 432,000 Hong Kong-invested enterprises in the province last February, which accounted for over 60% of its overseas invested companies.
More than a half of the province’s foreign investment capital, which was nearly $200 billion, came from Hong Kong.
Last year, 6,000 new companies from Hong Kong joined in the procession of investing in Guangdong, bringing their investment capital of more than $15 billion, while the number of Guangdong enterprises investing in Hong Kong was also increasing.
According to Hong Kong’s department of foreign trade, it is the destination of 40% of Guangdong’s overseas investment.
Many Guangdong enterprises, including TCL and Huawei, have been more competitive in the global market through the platform Hong Kong provided.
Economic cooperation in the region has lasted for 30 years since China began its reform and opening-up in 1970s. Chen Guanghan, an expert on Hong Kong and Macao at Guangzhou’s Sun Yat-sen University said that Guangdong and the Pearl River Delta seized the right opportunity to develop economic relationships with Hong Kong and Macao and archived a lot in economy.
The delta region has become the second home for many Hong Kong companies, especially those in labour-intensive manufacturing because of its offering low-priced land and labour.
Now the world market usually considers the PRD, Hong Kong and Macao as an ‘Golden Delta’, Chen said, after Hong Kong’s return to motherland and the implementation of CEPA, cooperation entered a new era.
Today Hong Kong and Guangdong are interdependent and indispensable to each other, he added.
An important result of the cooperation is that Hong Kong has become a global trading and logistic centre as Guangdong became a base of manufacturing.
Because of the opening of Guangdong, Hong Kong transferred most of its manufacturing enterprises to the province to focus on the development of service industry.
Even though the range of industries and development in Guangdong has been enlarged, the province will still focus on manufacturing, Chen said.
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