The western Pearl River Delta

5 May 2011

better access for Macao and challenges

By Thomas Chan (*)

The western part of the Pearl River Delta (PRD) has long lagged behind the eastern part, led by Shenzhen and Dongguan, despite the Special Economic Zone of Zhuhai and its proximity to Macao, the second Special Administrative Region of China. This is in part because Macao has been no match for Hong Kong, first as an industrial economy and then a service economy, and has been unable to play the same role as a growth engine for the development of the mainland cities bordering it. It is also because Zhuhai has not grown at the same pace or to the same scale as the special economic zone of Shenzhen, although both have shared the same special policies given by the central government. But the primary factor that facilitated the relocation of industries from Hong Kong to Shenzhen and beyond in the PRD has been the presence of the advanced transport and logistics systems of Hong Kong and the easy access to services in Hong Kong. Accessibility to Hong Kong, the transport and logistics services of Hong Kong and industrial relocation to the eastern part of the PRD are three interlocking and mutually reinforcing factors that explain the fast development of Shenzhen and Dongguan. On the other hand, the under-development of transport and logistics services in Macao and inadequate accessibility to Macao may explain the poor economic integration of the western part of the PRD and Macao, resulting in the lack of such mutually reinforcing factors and the lack of economic impact of the international connections of Macao on the area.

Over the past 30 years, besides the Guangzhou-Kowloon Railway in operation since the early 20th century, highways have been built across the boundary between Hong Kong and Shenzhen, extending to Dongguan and beyond. The highway network has added hinterland for the transport and logistics industries in Hong Kong, which has in turn created one of the largest and most modern container terminals in the world, based on the ever-rising demand from this expanding hinterland.

Guangzhou as new leader

But, in the new century, Guangzhou has taken over the leadership of the PRD and changed the geography of the region. It has expanded its boundaries and recently incorporated Foshan, a city which has also been growing rapidly. Together, they form a large metropolis that matches the economic size of Hong Kong; they have a greater dynamism for growth that could easily enable the combined city to surpass Hong Kong in the near future. The Guangdong provincial government and Guangzhou city government have embarked on ambitious investments in high-speed railways for the city and the PRD. Although there is no direct conflict between highways and railways, with the PRD having built an extensive network of highways over the past three decades, the impact on economic, social and cultural factors and, in particular, on a more integrated and equitable regional and local development is very different. Railways are high-speed and can carry large numbers of people and goods at lower prices than highways: they are also more carbon-efficient. As a result, they will serve as the best and most effective mode of transport to integrate the PRD. They will be able to transform the cluster of cities and towns of different sizes in the region into a larger functional urban region bound together by a dense network of mass transit railways. The Tokyo metropolitan region and Greater Paris are good examples of the role of high-speed railways in creating an effective and fast-moving metropolis. The same may happen in the PRD region. The inter-city railway plan of the Guangdong provincial government for the PRD explicitly cited the example of Greater Paris as a target for investments up to 2030 in the region.

Diversifying away from exports

For the Guangzhou city government and Guangdong provincial government, the balanced development of the PRD will enhance the central metropolitan role and functions of Guangzhou and eliminate inter-locality disparities in development. This will mean strengthening transport linkages not just between the more developed cities, towns and areas of the eastern part of the PRD. In addition, the coverage and intensity of the network will include less developed areas, including the western part of the province, such as Zhuhai, Zhongshan and Jiangmen, and extending to areas outside the PRD.

The global financial crisis has shown that excess reliance on export-oriented and foreign investment-dominated economies of the eastern part of the PRD exposes the regional economy too much to the vicissitudes of the world market. To sustain growth and diversify risk, the region needs to balance the importance of the domestic and external markets in its development. In addition, to meet the challenges of increasing competition in the two markets, the region must enhance further the advantages of economies of agglomeration, scale and scope and the capacity for local innovation that can only come from improving social, cultural and human resources. This can only be achieved by integrating economies and communities of the entire PRD into an unbeatable network in terms of scale and diversity. A dense regional network of high-speed railways is the economic and social foundation for such a strategy.

Dense high-speed rail network

In late 2009, the central government approved the inter-city railway plan of the PRD. Of the 23 lines, seven will be in the western part of the region, totaling 711 km by 2030, or 37.6% of the total mileage under construction and planning.

Table 1 is the list of intercity express railways approved; some are already under construction.

Table 1

Seven intercity express railway lines in the western part of the PRD region (2010-2030)

Intercity express lines (completion date) Length in km.

Guangzhou – Zhuhai Intercity (2010) 142
Zhongshan – Nansha – Humen Intercity (before 2020) 54
Guangzhou – Foshan – Jiangmen – Zhuhai Intercity (before 2020) 172
Zhuhai-Doushan Intercity 116
Jiangmen – Kaiping – Enping (Taishan) Intercity (before 2020) 152
Shenzhen – Zhuhai Intercity 40
Zhuhai City-centre – Zhuhai Airport (before 2020) 35
Tanzhou of the Guangzhou – Foshan – Zhuhai Intercity Extension – – Wanzai of the Guangzhou – Zhuhai Intercity Extension 11
Meihuayuan of Guangzhou – Foshan – Zhuhai Intercity –
– Jianshan of the Nanwan Link 5
Jiangli Road of the Jiangmen – Enping Intercity –
Lidong of the Guangzhou – Foshan Intercity 6

According to the current plan, the first intercity express railway in the western PRD will be the Guangzhou-Zhuhai line; four more will be completed before 2020, two of them starting in Zhuhai. The focus on Zhuhai confirms the spatial development strategy of the railway network plan, which takes Zhuhai as the main city in the western part of the PRD, on the same level as Shenzhen for the eastern part. Given the progress of construction and planning, it is likely that the four lines will be put into operation around 2015. By that time, Zhuhai and Zhongshan will be fully integrated with the greater metropolitan region of Guangzhou/Foshan, and through Jiangmen, the two cities will extend their hinterland westward along the coast.

High-speed trains like a metro

At the same time, Macao is building a light rail, which it is expected to be completed by 2014. By 2010, when the Guangzhou–Zhuhai Intercity express will be in operation, Macao will be linked to the Guangzhou/Foshan metropolis through the terminal at its northern border with Zhuhai and travelers will be able to reach Guangzhou within one hour. The intercity railway will run like a metro with great frequency. Macao and Zhuhai will then come within the orbit of Guangzhou/Foshan, sharing its services and public facilities and taking part in the rapid growth of business and consumption of the joint metropolis. Macao will thus end its centuries-old marginalisation from the central urban area of the PRD. As the Zhuhai terminal of the inter-city express railway will be at the border of Macao and Macao is not big, it will be very convenient for people to travel to Guangzhou/Foshan and back via the terminal. The route will start in 2010, just several months from now.

The Guangzhou – Zhuhai Intercity express train will run at a lower speed (below 200 km/hr) than the Guangzhou – Shenzhen – Hong Kong high-speed train (350 km/hr in the mainland section and 200 km/hr in the Hong Kong section). For the latter, however, the Guangzhou – Shenzhen section is expected to come into operation in 2012, while the Hong Kong section will come even later in 2016. The distance from the Hong Kong border to the Futian station in Shenzhen is considerable and not convenient, linked only by metro. It will take more than 15 minutes from either Lowu or Lok Ma Chau to Futian, and even longer from within Hong Kong; from Central or southern Kowloon, it will take one hour. In other words, in 2010, Macao and Zhuhai will have a better access to Guangzhou/Foshan than Hong Kong. Even in 2012, the advantage in access over Hong Kong will still be maintained by Macao.

Macao gets closer to Guangzhou

This advantage of accessibility, to and from Guangzhou/Foshan, should give Macao a better chance to pursue its programme of industrial diversification, which is in fact the upgrading of its service industries, in cooperation with the larger and more dynamic economy of the metropolis. It will be able to attract both demand for its consumption – probably for services other than gambling – and talent to improve its retail trade and business services. However, the increased accessibility will also mean more intensive competition for the city’s services because of the ease in travelling. The Macao government and industries will be under pressure to upgrade and improve the competitiveness of local services to attract demand and talents. Given the strong fiscal position of the government and its traditional advantage of internationalism, in particular connections with Europe and the Portuguese-speaking world, it should be able to develop its niche in services – in European dining and wines, fashionable goods from Europe and as a gateway for mainland Chinese businesses to approach European and Portuguese-speaking countries. There is no direct competition between Macao and Zhuhai; the latter is committed to aero industry and resort-style tourism and holiday housing, unlike Shenzhen, which is competing with Hong Kong in a full range of production and consumer services. As Macao is small and the success of its gaming industry has generated too much wealth and incoming tourists, it will be difficult to control costs. It may continue to use Zhuhai as its suburb, probably as Monaco uses the land and labour of neighbouring areas in Italy and France. It needs to steadily move to higher value-added services to maintain its external competitiveness vis-a-vis Guangzhou/Foshan, even in niche areas of services.

This increased accessibility over the next few years will both help it to upgrade and also put pressure on it. But, while Hong Kong will achieve better accessibility through the Guangzhou – Shenzhen – Hong Kong high-speed railway in 2016 that will link it to the high-speed rail network of China, the cooperation/competition between Hong Kong and Guangzhou/Foshan will have a detrimental impact on Macao, if it is only partially successful in upgrading its services.

(*) Professor Thomas Chan is the Head of China Business Centre from The Hong Kong Polytechnic University

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