An agreement was signed by Hong Kong Macau, one region and eight provinces in early June to form what appears to be the beginning of a regional economic bloc inside China which could provide some balance to the ever-growing dominance of Shanghai and also a boost to the status of Hong Kong as the rightful economic heart of southern China.
The Pan-Pearl River Delta Regional Cooperation and Development Forum includes the provinces of Fujian, Guangdong, Guizhou, Hainan, Hunan, Jiangxi, Sichuan and Yunnan in addition to the Guangxi region along with Hong Kong and Macao.
"Closer co-operation in the pan-delta region has become a common goal of the 11 regions amid the economic globalization and accelerated regional cooperation," said a communique,' adding that the arrangement would speed up implementation of the CEPA pact, giving Hong Kong firms greater access of the Mainland market.
It will also help to break down internal trade barriers in a territory occupying 20% of China's total land area (see map) and containing about a third of the country's population. The region also accounts for twofifths of national GDP, with the Pearl River Delta region in Guangdong driving growth and attracting the most investment.
The official rationale behind the forum is to create a counterweight to Shanghai and the booming Yangtze River Delta region which in recent years has diverted much attention and investment from its southern neighbors.
As for Hong Kong itself, given the political issues that exist in the Hong Kong-Mainland relationship, Mainland officials are clearly keen to emphasise that Hong Kong's development and prosperity are inextricably linked to that of the Mainland.
The Forum indicated that its top priorities will initially be in fields including transportation, energy, tourism, environmental protection, agriculture, industry, sanitation, IT, labor and education.
The Forum's member regions are hugely different in their levels of development. From prosperous coastal Hong Kong and Guangdong to isolated and poor Guizhou and Yunnan, the area is a stir-fry of geography, ethnicities and languages, which will be a challenge in terms of making the Forum practically useful.
But if it works to any extent, it could energize the inland provinces, help to boost Hong Kong's economy, bolster China- ASEAN trade and give other regions in China similar ideas.
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