Guangdong cities vie for slice of trade pie

PUBLISHED : Friday, 26 June, 2009, 12:00am
UPDATED : Friday, 28 October, 2016, 9:17am

Like eager concubines trying to win their master's favours, cities in southeastern China are fighting for a slice of the pie as Beijing pushes its grand plan to foster greater economic ties across the Taiwan Strait.

The 'Straits West Coast Economic Development Zone', which aims to catapult the Haixi region - the coastal cities of Fujian province facing Taiwan - into an economic powerhouse, is at the centre of an infrastructure building frenzy that seeks to capitalise on direct links with Taiwan.

The Fujian cities of Fuzhou, Quanzhou, Xiamen and Zhangzhou are already ploughing hundreds of billions of yuan into rails, roads, ports, power plants, new business districts and industrial parks.

The race to have these facilities in place by 2012, the mid-term cornerstone for intensified cross-strait trade and financial co-operation, heightened last week when Fujian's neighbour, Guangdong province, revealed plans to develop and integrate its own eastern region with Haixi.

The opportunity could not have come at a better time for Guangdong. Hit by a slump in overseas demand, the export-reliant province wants a share of an expected jump in cross-strait trade.

Provincial party secretary Wang Yang has vowed to accelerate the integration of the sleepy east coast cities of Chaozhou, Jieyang, Shantou and Shanwei with Haixi.

Located far from the financial hub of Shenzhen and busy factories of Dongguan, northeastern Guangdong has lagged the more developed south, so much so that Mr Wang describes culturally rich Chaozhou as 'a sleeping lion'.

But these cities have now been directed to transform themselves. Chaozhou, the home of Li Ka-shing, now aspires to become a regional trade hub, while Shantou will take the lead in economic co-operation with Taiwan and the integration with Haixi.

Jieyang, which has petrochemical and airport projects, will be a centre of heavy machine manufacturing, while Shanwei will aim to attract Pearl River Delta factories seeking to relocate elsewhere.

As ambitious as the development plan sounds, whether eastern Guangdong can effectively integrate into the Haixi region has drawn questions. One big concern is the area's inability to fast-track development. Of the 160 billion yuan (HK$181.73 billion) worth of projects planned for eastern Guangdong under the 11th Five-Year Plan through 2012, only about 18 per cent have been completed and the rest are either under or pending construction.

Academics said the success of Guangdong cities in integrating with Haixi hinged on their ability to offer a business-friendly environment.

'Taiwanese used to park their investments in the Pearl River Delta, then in the Yangtze River Delta and Tianjin, where there are markets, infrastructure, transport and labour,' said Priscilla Lau Pui-king, an associate professor and associate head of business studies at Hong Kong Polytechnic University.

'Fujian has been historically a laggard for political and management reasons. Now the pie is bigger and whether Fujian or Guangdong [is able to bring in Taiwanese investors] depends on whether costs are low, infrastructure and transport are convenient, and what the entry barriers to the market are.'

Professor Lau said any breakthrough in the proposed eastern Guangdong development would require a team of government officials who can dispense with the region's less than salubrious past.

'The notorious image of local officials associated with smuggling and tax irregularities in the 1980s must be washed off,' she said.

But if done properly, 'the strait west development blueprint may be a sensible way for Guangdong's sustainable economic growth in years to come'.

At the centre of Beijing's plan is for the Fujian coastal cities to be pioneers in knitting closer trade and economic ties with Taiwan.

After decades of suspicion and hostility across the strait, the recent thaw in relations has even stoked hopes for eventual reunification with the island.

By 2020, an economic superpower is expected to emerge from the Haixi region, bridging the gap between the Pearl River Delta in the south and the Yangtze River Delta in the north.

The ambitious blueprint, however, does not come with any financial assistance from the central government. In the past few days, Fujian and Guangdong crossed paths in Hong Kong, inviting investors to take part in a bunch of projects.

The Fujian provincial government has 73 infrastructure, services, industrial and agriculture projects requiring capital of 81.2 billion yuan, the largest amount of investment sought at any one time.

A Guangdong mission made up of provincial officials and new Shenzhen mayor Wang Rong looked for closer financial ties in areas such as equity markets and securities.

While the opportunities are up for grabs, the jury is out on who the winners and the losers will be.