Comparative Advantages of Yangtze River Delta and Pearl River Delta

Published: 12th July 2010
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Following Shanghai's successful bid to host the World Expo, more and more people are drawing comparisons between the Pearl River Delta (PRD) and the Yangtze River Delta (YRD) as rivals. The general opinion is that the YRD's momentum now outstrips that of the PRD. However, an official in Hong Kong points out that people have overlooked certain important aspects in the comparison of the two places and that the PRD still has advantages that are beyond compare, which makes it hard at this stage to say who will emerge as the ultimate winner. GHD Hair

GDP of Greater PRD is 25 percent higher. The official points out that observer have drawn some inappropriate comparisons between the two regions. For example, as defined by the State Statistical Bureau, the YRD only includes Shanghai, southern Jiangsu and northern Zhejiang, but many observers include the whole of Jiangsu and Zhejiang into the region. A comparison between this greater "YRD", which encompasses one municipality and two provinces, and the PRD, which merely covers a small part of Guangdong (excluding Hong Kong and Macau with only eight cities), cannot give a real and even-handed picture of the relative economic strengths of the two places. According to the official, last year the GDP of Greater PRD (the PRD economic zone, Hong Kong and Macau) was 25% higher than that of the YRD. In fact, the total volume of exports of the PRD minus Hong Kong and Macau already exceeded that of the YRD. The two places were going neck and neck in the absorption of foreign investment. The balance will tip further in PRD's favor if Hong Kong and Macau figures are included. PRD+ Hong Kong can outmatch YRD. It is generally held that the YRD has many advantages over the PRD. These advantages cover many aspects, including population and economy, geographical environment, workforce quality, policy support, traditional business spirit, and coordinated development of different cities in the region. The YRD with its vast hinterland of the Yangtze basin is seen as the bellwether for the Chinese economy and the bridgehead for foreign investment into China, while the PRD is regarded as on the fringe. GHD Hair Straightener

However, a more careful analysis shows that the advantages of the YRD are by no means absolute. The lack of well-developed transport along the Yangtze has restricted the market scope of the YRD, whereas the PRD has easy access to the heartland via the two north-south railway arteries, the Beijing-Guangzhou and Beijing-Kowloon lines. Although Guangzhou and Shenzhen are not quite there yet, Hong Kong is unmistakably a first-class international city. Its overall strength and position is beyond Shanghai's compare. In terms of development strategy, the general view is that the PRD lacks integration, with different cities going their own way, while the strong point of the YRD lies in its synergy. However, the flexibility of decentralization should be recognized. The PRD is a forerunner of reform and opening up. In the absence of large-scale state investment, pragmatic leaders and enterprising private-sector businessmen have long emancipated themselves from the trammels of the planned economy. Different cities are encouraged to look for new opportunities to meet market needs. Hong Kong, which lies next to the region, has become its source of investment, technology, information, managerial expertise, and market knowledge. Through Hong Kong, the PRD has done an excellent job merging itself with the international market and established international market-oriented industries that are drawing workers, scientists and engineers from all parts of the country. This makes it the most mercerized region in China. It owes its economic dynamics to the market force and the private sector. By comparison, the YRD owes its development to huge government investment and policy support, but excessive government intervention often turns into a double-bladed sword. Foreign businesses make most money in PRD.

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