Guangzhou has had some favourable press recently with the opening of the new airport and the creation of the pan-Pearl River Delta (PPRD) alliance. Together with the Closer Economic Partnership Arrangement (Cepa) and the outlook towards the 2010 Asian Games, optimism is high among the community. But behind the headlines, the government is, more than ever, facing the challenge of ensuring growth is sustainable. Twenty years after forging an economic miracle and despite recent urgings from the central government, the city's present-day leaders still seem devoted to gross domestic product numbers. Keeping growth at a breakneck pace remains a more urgent priority than looking at the quality of that growth. But this is not something that can be avoided forever. It is understandable why large-scale projects have been fashionable. Aside from involving heavy investment, which beefs up GDP figures, they are visible proof for cadres to show superiors their performance within their set five-year terms. Thus there is the creation of prestige projects such as the Guangzhou Higher Education Mega Centre, the new name for University Town, which combines 10 different colleges on one campus. But some analysts who look beyond the data are not impressed. 'With such fast growth, questions of efficiency, product quality, protection of intellectual property rights and the paucity of branded products are becoming more prominent than ever,' says Tan Zuoping, a retired economist based in Guangzhou. Perhaps the most worrisome individual project from this standpoint is the development of Guangzhou's car industry. Since last year, the city has moved rapidly ahead by getting Toyota to join fellow Japanese giants Honda and Nissan in setting up manufacturing facilities. Demand is certainly booming: about 500 new cars go on the road each day. But since the city's main ring road was finished four years ago, no new roads have been built to accommodate the rising number of cars. Instead, a stop-gap measure was implemented in May whereby motorcycles are being banned from the city centre. In the bigger picture of economic restructuring, Guangzhou has set a goal of weaning itself off light industries by developing high value-added heavy industries. But again, its space for development is limited by geographic constraints. The merger with Huadu and Panyu four years ago brought Guangzhou much-needed space to build a new airport, and car and steel factories. But as a drive south to Panyu will attest, the area's transport network is a mess. There is space to the east and north, which would involve the integration of the townships of Conghua and Zengcheng. But this presents further challenges. 'If the metropolitan area grows too big, it will be difficult to manage,' says Professor Tan. 'Moreover, the rich-poor gap will be accentuated by the inclusion of a huge rural population.' Much has been said about the need for Guangzhou to move up the value-added chain into services. Given its central location in the Pearl River Delta, this is an attractive option that already has strong momentum. But this would no doubt put it at loggerheads with Hong Kong and could undermine the spirit of the Cepa and PPRD accords. The task of moving up the technology ladder is putting pressure on Guangzhou's inadequate labour pool. Despite the swarms of migrant workers descending daily on the city from other parts of China, there is a shortage of as many as a million skilled workers in the province. The gap between the city's hardware and software capabilities is evident at its two most prestigious facilities. The Baiyun International Airport and the Guangzhou International Exhibition Centre may look impressive, but they are exposing the city's lack of experience in modern management methods. The airport's opening was not a disaster on August 5, but it is clear its management cannot match its sleek American-designed exterior and the shiny granite finishing. Banks and money exchange services were not available, signs were inconspicuous or non-existent and visitors littered the terminal because they could not find rubbish bins. 'I cannot see how it can catch up,' says Professor Tan. 'We have a market economy that is managed by people operating in a planned economy.'
