Island of opportunity

For many years, Guangzhou had been jealous of Pudong – Shanghai's business district whose creation has transformed a tired old city into a modern metropolis. Now Guangzhou could have something to rival Pudong – Nansha, a 319 sq km island south of the city at the mouth of the Pearl River Delta. Nansha is half empty today, with scattered plots of industrial land and holiday homes for overseas Chinese. Guangzhou, however, has plans to build a deep-water container port here that could take business from Hong Kong and Shenzhen, as well as dozens of modern plants that will greatly boost the city's industrial prowess.

Nansha is located at the centre of China's fastest-growing area, the Pearl River Delta. Within a 60km radius of Nansha are five airports and 14 major cities, including the 'golden triangle' of Guangzhou, Hong Kong and Macau. It is one-and-a-half hours by car from Guangzhou and about one hour by boat from Hong Kong.

"We will turn Nansha into the second Guangzhou," said Lin Shusen, mayor of Guangzhou, earlier this year. The local media are also excited about future prospects. "Nansha has so many business opportunities that, when you come to think about it, your heart will beat faster," enthused the Guangzhou-based newspaper Southern Weekend.

Investors such as Hong Kong tycoon Henry Fok spotted the potential of Nansha a decade ago, when it was designated as one of China's 32 economic and industrial development zones. Back in 1993, it was a much smaller area of 54 sq km and under the jurisdiction of Panyu, then a city independent of Guangzhou.

Panyu was Fok's hometown and he had a dream of building a modern city of 22 sq km in eastern Nansha. So far, he has invested US$320m and has committed to spend another US$167m. His biggest investment is the US$45m, 243-hectare Nansha Information Technology Park, to help high-tech startups in the delta region. It is a joint venture between his Fok Ying Tung Foundation, the Guangzhou government and the Hong Kong University of Science and Technology.

Fok's other investments include a ferry terminal, a 36-hole golf course, a conference centre, a shopping mall, a children's science museum and a beer garden. Observers say Fok is investing in his hometown for sentimental rather than business reasons. That is why his plan to turn Nansha into 'a gateway to Hong Kong' has been slow and unprofitable, they say.

Things changed in 2000 when Panyu and Nansha came under Guangzhou's administration. "Guangzhou was looking for ways to expand physically but it made no sense to spend money on infrastructure in a neighbouring city like Panyu, which would get immediate benefits like tax revenue without spending one yuan on it," says Professor Zheng Tianxiang of Zhongshan University in Guangzhou.

Guangdong spent years to bring Panyu, itself a booming tourist and industrial city, under its wing, so that it could secure Nansha, a strategic location that gives it an outlet to the sea. Once Nansha became its own territory, the Guangzhou government expanded the administrative boundary of the island, incorporating other neighbouring islands and sea into the new town.

At the end of 2001, Guangzhou announced a blueprint to turn Nansha into a centre of heavy industry, high-tech companies and transportation businesses. In southern Nansha, the government plans to attract iron and steel, shipbuilding and petrochemical plants. Baoshan Iron and Steel has already promised to build a huge plant with an output capacity of 3m tonnes annually. In the east, there will be non-polluting industries, such as the manufacturing of automobiles and machine tools.

Nansha's most important project is the development of a deep-water port on its southern island of Longxue. With its 30km of coastline, the island will be able to handle ocean-going vessels. Four berths are being built, but the plan is to have 50 eventually.

In April this year, the Guangzhou government invited by open tender international firms to submit plans for the overall design of Nansha's development. In July 2001, it started work on a six-lane expressway that will link Nansha to Guangzhou by 2005. The 65km project will cost Yn7bn to build and will halve the journey time to the city centre to thirty minutes. The third metro line of Guangzhou's subway is also being built to pass through Nansha.

The city government plans to spend Yn10bn annually over the next three years on Nansha. Two state banks, the China Construction Bank and the State Development Bank, have committed to lend a total of Yn62bn to Nansha. Officials hope that foreign and domestic private investors will also be attracted by Nansha's prospects and supply the rest of the capital and technology required to turn this quiet town into an economic powerhouse in southern China.