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
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.
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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.
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