Located on the southern coast of China, Guangdong is the country’s most populous and
rich province. It has 95.4 million inhabitants and provides one-eighth of the national
GDP. A key development feature of Guangdong has been “processing trade”, which has
allowed companies to profit from importing materials, assembling goods and exporting
them via Hong Kong, China.
The recent economic crisis has had a strong impact on the province, although Guangdong
also faces in-depth structural problems. Growing labour costs and strain on land availability
have increasingly challenged the province’s traditional model of development, as have
new competitors in China and abroad. Meanwhile, regional disparities within the province
have increased, with a high concentration of economic activities and foreign direct
investment in the Pearl River Delta area, an agglomeration of nine prefectures of
47.7 million inhabitants that represents 79.4% of the province’s total GDP.
This review assesses Guangdong’s current approach to economic development. The province
is focusing on industrial policies primarily aimed at heavy manufacturing industries
(e.g. automobile, shipbuilding, petrochemicals) and supported by investment in hard
infrastructure transport projects and energy supply, along with the implementation
of the “Double Relocation” policies intended to move lower value-added factories to
lagging regions through incentive mechanisms like industrial parks.
The review discusses how some principles of the OECD regional paradigm could help
Guangdong. It also addresses the huge environmental challenges that the province is
facing and explores the opportunity for developing a green growth strategy. Strategies
to improve Guangdong’s governance are analysed as well, with particular attention
paid to co-ordination issues within the Pearl River Delta.
The Territorial Review of Guangdong is integrated into a series of thematic reviews
on regions undertaken by the OECD Territorial Development Policy Committee. The overall
aim of these case studies is to draw and disseminate horizontal policy recommendations
for regional and national governments.