Guangzhou will open more than 3,500 square kilometres to easier development under a rezoning plan that would nearly double the city's urban area and increase government income.
Guangdong's provincial capital would expand its urban boundaries by making two rural counties under its jurisdiction, Conghua and Zengcheng, full-fledged districts, according the Nanfang Daily, the government's official mouthpiece.
Meanwhile, Luogang district would be absorbed into Huangpu district, leaving the city with 11 districts in all.
The plan would not change the city's population, which stood at 15 million in 2011, but it would expand available urban land to 7,434 square kilometres from 3,843 square kilometres currently. Rural land is collectively owned and much harder to develop.
As urban residents, people living in Conghua and Zengcheng would enjoy increased minimum income subsidies and other benefits, but Guanzghou would assume control over development decisions.
"The rezoning will make co-ordination of transport and infrastructure planning, such as subways, more effective," said Peng Peng, of the Guangzhou Academy of Social Sciences.
"Now that Conghua and Zengcheng are directly part of Guangzhou, more Guangzhou residents will also be more willing to buy property there, which is good for reducing population density in downtown Guangzhou," he said.
Zengcheng, which is anticipating 390 million rural residents moving to urban areas by 2030.
Development resulting from Guangzhou's rezoning could boost the local economy and provide the government with more revenue as it sells off land. The move may also help the city avoid losing more ground to fast-developing first-tier cities, like Beijing and Shanghai.
"In terms of developed city areas, Guangzhou is still way behind Shanghai, as much of Conghua and Zengcheng are still rural areas," Peng said.
Shanghai had a population 24 million living in about 6,400 square kilometers as of 2012.
Ding Li, a planning expert at the Guangdong Academy of Social Sciences, said it would take more than rezoning to make the city more economically competitive.
"Guangzhou's development relies mostly on property development and is weak in terms of industrial foundation," Ding said. "It's big in size, but it's not as strong as Shanghai. It's just a matter of time before other cities, such as Tianjin, overtake Guangzhou."
Ding said more reforms were needed because Guangzhou was embarrassingly underdeveloped and could no longer rely on the economic model of the past three decades of increasing exports and foreign investment.
"Due to officials' vested interests, there has been not much progress streamlining governmental functions and reducing the proportion of state-owned enterprises," he said.