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Today in Guangdong

SIgning ceremony with Guangdong People's Publishing House, BEA, New York, June 2015

I’ll be spending the day with our partners in Guangzhou, the Guangdong People’s Publishing Group, and found this article from the Berkshire Encyclopedia of China an excellent overview of the region. If you don’t know Guangdong, or that Guangzhou is the current name for the city formerly called Canton, this will get you up to speed.

Guǎng dōng 广东 Province is one of China’s most important economic and cultural areas. About the size of Syria, it is China’s most populous and wealthiest province with a gross domestic product (GDP) of 3.07 trillion yuan (US$422 billion). Its location on the southeastern coast of China gives it direct access to the South China Sea, Hong Kong, Macao and Southeast Asia.

The role of Guangdong Province in China is paradoxical. Guangdong has always been a somewhat different and marginal place. Yet this marginal position has been why the province has often played a central role in Chinese history. In recent years Guangdong’s connections with foreign countries and neighboring economies have generated huge economic growth for the province, which became a locomotive for China. Despite these achievements its development remains uneven because the province is culturally diverse and faces tough challenges.

Geographical and Cultural Diversity

The core of Guangdong is formed by the Pearl River Delta, with the capital city Guangzhou at the center. Foshan, Shenzhen, Zhuhai, Zhongshan, Dongguan, and Jiangmen are the other main cities. The delta, populated mostly by Cantonese people, was transformed during the late twentieth and early twenty-first centuries from an agricultural region—producing such commodities as sugarcane, silk, tropical fruits, and fish—into an industrial powerhouse. By comparison, northern and western Guangdong are hilly or mountainous and remain relatively poor. The Chaozhou area, near the Fujian border, is densely populated and fertile, and incorporates the two major urban centers of Chaozhou and Shantou. In addition to Cantonese and Chaozhou people, Guangdong also hosts a large minority of Hakka and a sizable population of fishermen with different traditions and languages and, at times, conflicting relationships with the Cantonese.

“The Mountains Are High and the Emperor is Far Away”

Because of its distance from Beijing, Guangdong was able to develop relatively independent and unorthodox policies and behaviors, a fact echoed by the Chinese proverbial expression “The mountains are high and the emperor is far away.” Since the Han dynasty (206 bce–220 ce), Guangzhou has been a trading center frequented by Indian and, later, Arabic merchants. During the sixteenth century, the Portuguese settled in Macao on Guangdong’s southern coast, followed two centuries later by the Americans, British, and other Europeans, who began trading in Guangzhou. Nevertheless, in the sixteenth century, economic growth, not international trade, led to the increased demand for grains and land reclamation. Moreover, at the end of the century, the ban on overseas trade had no effect on Guangdong.

By the eighteenth century, Guangdong’s economy benefited significantly from the confinement of China’s foreign trade to Guangzhou, under the cohong, or licensed Guangzhou merchants guild system. Again, its distance from Beijing played a role in the imperial decision to restrict foreign trade to Guangzhou.

During the first Opium War (1839–1842), Guangdong was again at the heart of Chinese history. The decision of Lin Zexu (1785–1850), the imperial commissioner in Guangdong, to ban opium and seize stocks held by foreigners was motivated by moral, as well as economic, reasons, as the outflow of silver brought about an economic crisis in China. The Treaty of Nanking (1842), which ended the hostilities, greatly affected Guangdong and the rest of China with the cession of the island of Hong Kong to the British. Guangdong gradually lost its economic preeminence to Shanghai but remained a ground for new ideas and experiments. The Taiping Rebellion (1851–1864), which originated in Guangxi, did not spare Guangdong. Most important, the province is the birthplace of the Chinese Revolution and of Sun Yat-sen (1866–1924), the “Father of the Revolution.” In 1938 the Japanese occupation of Guangzhou interrupted the economic progress initiated by the warlord Chen Jitang (1890–1954).

From the Maoist Period to the Open Door Policy

Guangdong’s difficulties continued during the Maoist era. With its proximity to Hong Kong and Macao, and its strong links with foreign countries because of an old wave of migration that accelerated during the nineteenth century, Guangdong was perceived by Beijing as unreliable. Most of its international trade was cut off for much of this period. National policies emphasizing the development of heavy industry were detrimental to Guangdong, which lacks natural and energy resources. Consequently, it concentrated on rice production while neglecting traditional commercial cultures.

With the reforms of the late 1970s, Guangdong revived its traditional role of experimenter and innovator. Rural reforms stimulated commercial agricultural production and rural industries. The Open Door policy, aimed at attracting foreign direct investment (FDI), revived the traditional links between the province, especially in the Pearl River Delta, and Hong Kong, Macao, and overseas Chinese. Also significant was the creation in 1980 of special economic zones. The zones—Shenzhen, Zhuhai, and Shantou—are in Guangdong. The only exception is Xiamen, in Fujian Province. In 1988 Hainan Island was detached from Guangdong to form another special economic zone. As land prices and wages in Hong Kong soared, thousands of small and medium-sized enterprises in Hong Kong moved across the border, thereby spurring the development of subcontractor industries in Shenzhen, Dongguan, Foshan, and other areas. The Pearl River Delta became the prime region of China for FDI.

The social consequences of this economic reorganization, however, were enormous. For the first time in thirty years, local populations were in contact with the lifestyles of their counterparts in Hong Kong and elsewhere. Many switched from an agricultural way of life to an industrial one. The high demand for unskilled workers stimulated migration from China’s less developed areas, such as Hunan and Jiangxi, which mixed populations with different cultures and dialects. The number of migrants in Guangdong has been difficult to assess. Official statistics indicated 13 million people in 2006, which may be a severe underestimation. As a result, Guangdong is China’s richest province, with the highest gross domestic product in the country—3.07 trillion yuan (US$422 billion), the sixth highest per capita gross domestic product 32,713 yuan, and the top exporter ($241 billion) of any province in the country in 2005.

Future Challenges

Despite these achievements Guangdong faces major challenges. Production factor costs (e.g., the labor force) have greatly increased over the last thirty years, making technological upgrading necessary despite undeniable progress in that field over the past ten years. The decentralization of the 1980s led to competition between local governments not only for access to technologies or FDI but also for infrastructure. Resources have been wasted in duplicated infrastructure projects, such as airports, and local cooperation remains difficult.

The relationship between Hong Kong and the Pearl River Delta needs to be better defined. Since 1997, the two economies have become more integrated while new projects like the Hong Kong–Zhuhai–Macao Bridge continue. High-level political discussions are constantly held. Political channels of discussions between the Guangdong governments and that of the Hong Kong Special Administrative Region have been established to facilitate the relationship between these two entities. Nevertheless, the question remains as to whether Hong Kong should remain a window into China while the delta keeps its industrial function, or if the delta should assume a more leading position. In relation to this point, the exact role of each of the two metropolises of Hong Kong and Guangzhou will have to be clarified.

After thirty years of double-digit economic growth in China, the last twenty of which have been the most accelerated, it is clear that Guangdong has become proportionally less important for China in comparison to other areas, such as the Yangzi Delta, which has attracted considerable foreign and state investment in recent years. But this evolution questions the future economic situation of the province within the context of national interests and globalization. To address this matter, local leaders are trying to stimulate local demand and investment in order to wean Guangdong off FDI and exports. While this solution has been successfully implemented by newly industrialized economies, the long-term effects for Guangdong are unclear. Its aging population (about 10 million people are over 60 years old) may jeopardize this strategy and lower the province’s dynamism, not to mention the usual challenges associated with an aging population. A further challenge, and one that may trump the others, is how to curb the high level of pollution created by the explosive economic growth of the last twenty years.


Further Reading

Augustin-Jean, L. (2005). Urban planning in Hong Kong and integration with the Pearl River Delta: An historical account of the local development. GeoJournal, 62(1–2), 1–13.

Bui, Tung X., Yang, David C., Jones, W. D., & Li, Joanna Z. (Eds.). (2003). China’s economic powerhouse. Reform in Guangdong province. Houndmills, Basingstoke, U.K.: Palgrave MacMillan.

Cheng, Joseph Y. S. (Ed.). (2000). Guangdong in the twenty-first century: Stagnation or second take-off. Hong Kong: City University Press.

Faure, D. (1996). History and culture. In B. Hook (Ed.), Guangdong: China’s promised land (pp. 31–70). Hong Kong: Oxford University Press.

Hook, B. (Ed.). (1996). Guangdong: China’s promised land. Hong Kong: Oxford University Press.

Johnson, G. E. (2003). Guangdong: From past to present. In J. Cheng (Ed.), Guangdong: Preparing for the WTO challenge (pp. 327–352). Hong Kong: The Chinese University Press.

Lin, George C. S. (2006). Peri-urbanism in globalizing China: A study of new urbanism in Dongguan. Eurasian Geography and Economics, 47(1), 28–53.

Vogel, E. (1989). One step ahead of China: Guangdong under reforms. Cambridge, MA: Harvard University Press.

Yeung, Yue Man, & Chu, David K. Y. (Eds.). (1998). Guangdong: Survey of a province undergoing rapid change. Hong Kong: Chinese University Press.

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