Economy Comparisons between Yangtze River Delta and Pearl River Delta

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Economy Comparisons between Yangtze River Delta and Pearl River Delta经济比较,长江三角洲和珠江三角洲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. It is generally thought 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 spirits, and coordinated development of different cities in the region. However, an official in Hong Kong pints 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.Area definition of YRD and PRDThe official points out observers have drawn some inappropriate comparisons between the two regions. For example, as defined by the State Statistical Bureau (SSB), the YRD only includes Shanghai, southern Jiangsu and northern Zhejiang (16 cities for YRD as defined by the SSB), but many observers include the entire Jiangsu and Zhejiang into the region (total 25 cities). 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 night cities), cannot represent a real and evenhanded picture of the relative economic strengths of the two regions.GDP and Annual Income Per Capita, Export VolumeA research report about the development comparison between PRD and YRD, released by the State Statistical Bureau on 2006/10/26 showed that GDP of the YRD is higher than that of the PRD. While as to the annual income per capita, which is more significant when we raise comparison of development, the report exposed that annual income per capita of PRD was RMB 41,990, which exceeded 3.4% of the RMB 40,612 of YRD. Moreover, the economic growth rate of PRD was 2.3% higher than that of the YRD. All these data revealed an actuality that the economy benefit of PRD is fore better. In fact, according to the Hong Kong official, the total volume of exports of the PRD minus Hong Kong and Macau already exceeded that of the YRD.Geographical AdvantagesThe YRD with its vast hinterland of Yangtze basin is seen as the bellwether for the Chinese economy as well as the bridgehead for foreign investment into China, while the PRD is regarded as on the fringe.However, a more careful analysis shows that the advantages of the YRD are by no manner of 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 international metropolitans yet, Hong Kong is no doubt a first-class international city. Its overall strength and position is beyond Shanghai’s compare.Development StrategyIn 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 cooperated synergy and unitary planning. However, the flexibility of decentralization should be recognized. The PRD is the 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 ate encouraged to look for newopportunities 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 into 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 marketized region in China. It owns its economic dynamics because of 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 two-edged sword.Absorption of foreign investmentThe two places are 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. Foreign businesses make the most money in PRD. The official points out that there are indications that the PRD has by far the highest percentage of profit-making foreign investment. The strategic position of the PRD plus Hong Kong is beyond compare, because Hong Kong has a leading edge over Shanghai both as a financial center and management center. Moreover, according to the latest statistic, Hong Kong has 10 times more Asian or Asia-Pacific regional headquarters of multinational corporations than Shanghai. The PRD also benefits from its clusters of producers of finished products, components, materials and equipment, which makes it possible for industries and factories with difficulty in finding complementary partners to team up for development.Regional CompetitionRegional competition boosts Guangdong –Hong Kong integration. The further opening of China following its WTO entry may benefit the YRD as the gateway to the mainland market, but the official notes that increased contacts with the international market will also bring more opportunities for the export-oriented industries in the PRD. Foreign service companies may venture into the YRD, but the PRD stands to benefit from the “spillover”of Hong Kong’s service industry. When government intervention in the economy drops and corporate decisions become more market-oriented and commercialized, both the PRD and YRD will benefit. Whoever develops theprivate-sector economy faster will obtain greater benefits.ConclusionIn conclusion, development in one region will boost rather than hinder the development of another. As the Hong Kong official said that economy growth in one region will not necessarily jeopardize another one. Competition is indeed present, but it will give impetus for Hong Kong and the PRD to look for opportunities for dropping their differences and seeking ways of cooperation and joint development. YRD and PRD's competition likes a nip and tuck contest. Compared with the driving development tendency of YRD whose momentum seems to carry everything before it at this stage, there're still many indisputable superiorities of the PRD+HK region that YRD cannot surpass now and in the long run. PRD + Hong Kong can outmatch YRD.。