History of the Pearl River Delta

Because of Guangdong's geographical location and thanks to its excellent connectivity with other parts of China, the province has always had a thriving trade and commerce industry. In fact, the area was an important stop in the famous Silk Road as far back as the 13th century.

However, it was not until the end of the 1970s that the conditions for the development of this area were laid out. In fact, and much like the rest of China, until the mid 1980s most of what today is the Pearl River Delta Special Economic Zone was mostly a rural area. However, in 1979 the Chinese government began to implement a policy geared to promote the economic liberalisation of the Guangdong province (and later in Fujian). Following this initiative, the local government in these provinces designated three areas as Special Economic Zones. These areas included the cities of Shenzhen (close to Hong Kong), Zuhai (near Macau), Shantou, and Xiamen (in Fujian). The main objective of this political and economic move was to attract foreign investors thanks to a number of special benefits, such as tax breaks, preferential tax rates, and the application of duty free benefits to certain products.

Need car insurance in the UK? Interested in telematics insurance? Visit www.telematicsonline.co.uk to compare cheap quotes.

The appearance of these Special Economic Zones marked the beginning of the formation of the Pearl River Delta. The whole area enjoyed a higher degree of political autonomy, and as a result, foreign trade and entrepreneurship flourished in the area. Nine years after the formation of the Special Economic Zones, the local government in Guangdong was granted additional powers, which allowed the province to make its own decisions in terms of tax, finance, labour and wages, foreign trade and investment, and the allocation of its resources. From 1988 onwards, the province was known as a comprehensive economic reform area. Economic reforms were concentrated mostly in the city of Shenzhen, and particularly in the banking and finance industries.

The proximity of the Pearl River Delta to Hong Kong was also a decisive factor in the transformation of this area. During the British rule, Hong Kong was one of the world's leading manufacturing centres. Following the economic reforms that took place in China during the 1980s, hundreds of Hong Kong-based manufacturing businesses relocated to the Pearl River Delta area, a move that spurred growth. Over the years, the number of Hong Kong companies that have moved their operations to the delta has surpassed the 80,000 mark, and due to this fact Hong Kong is sometimes considered an integral part of the Pearl River Delta.

During the decade that followed, the Pearl River Delta became highly dependent on light industries. It was not until the 1990s that the economic base of the area began to diversify and to move towards heavy industrial manufacturing, while focussing on producing and exporting high technology equipment. This change in focus resulted in a large increase in the local population figures, as more and more workers moved to the area to find employment in the local factories. This in turn has transformed the Pearl River Delta area into one of the world's largest consumer markets, where demand for housing, public services, and transportation continues to increase year after year.

Copyright prdculture.net 2009 All Rights Reserved