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Pearl River Delta regains lustre for inward investors
The region still draws in Hong Kong cash even as opportunities improve elsewhere

Leu Siew Ying in Guangzhou
8 May 2005
South China Morning Post

Hong Kong entrepreneurs have shown growing interest in business opportunities in the Pearl River Delta region, officials say, despite predictions their investment horizons would continue expanding northwards.

With the Yangtze River Delta luring more Hong Kong investors last year, its southern sister was expecting to lose ground.

But more people from Hong Kong, and other expatriates, are coming to check out business opportunities, according to anecdotal evidence from both the Hong Kong government's representative office in Guangdong and hoteliers.

When director Peter Leung Pak-yan arrived in Guangdong at the end of 2002, Hong Kong's Economic and Trade Office started organising seminars to help familiarise Hong Kong businessmen with how to do business in the province.

"Our seminars attracted only about 10 people and they were quite lost in our big conference hall. More than 500 people attended our seminar in February," said Mr Leung.

Crowds have grown so large that seminars are now held at a nearby hotel. The textile quotas seminar drew so many Hongkongers that they spilled out of the 300-seat ballroom into three smaller rooms.

"The subject was of topical interest but the response reflects the fact people are ready to come when something is of concern to them," said Mr Leung.

"The distance between Hong Kong and Guangzhou is no longer a barrier."

It was not only Hong Kong businessmen coming to Guangzhou. Mainland officials were also willing to head south, said Mr Leung, citing the example of textile officials who visited Hong Kong after the seminar for a follow-up talk.

It has helped that the number of through trains operating between Guangzhou and Hong Kong has almost doubled to 12 each way, from seven when the Hong Kong government representative office opened.

"The train operators were complaining that there were not enough passengers when we asked for more trains, but now the trains are 90 per cent full," Mr Leung said.

Even the Hong Kong student population at Jinan University attests to the city's increasing integration with the Pearl River Delta. From 500 two years ago, numbers have swollen to more than 2,000 as Hong Kong's young people feel more comfortable studying and living in Guangzhou.

Hotels are also seeing remarkable business.

A sales director at a five-star hotel said: "The market has just skyrocketed after June last year. All hotels are reporting very healthy occupancy."

The Tianlun International Hotel, managed by Hong Kong-Canadian David Lam, has enjoyed better-than-expected occupancy levels since opening in late 2003, thanks to the steady stream of businesspeople tapping the expertise of the representative office.

"Fifty per cent of our success is due to our business direction and location and the other 50 per cent is because Guangzhou has taken off," said Mr Lam, who has been working in the mainland since 1986.

The opening of the Pazhou exhibition centre had made the difference, while improving transport links in the delta also helped.

"Since the mid-1990s, Guangzhou's economic development has been lifted to higher levels because of the 'three transformations'," Mr Lam said, referring to an infrastructure programme to change the face of Guangzhou in three years.

"Now we have [foreign] clients who are buyers who come here directly, bypassing Hong Kong."

But the Hongkongers are coming too - to start their own businesses under the Closer Economic Partnership Arrangement.

Aside from the trade pact, the concept of a pan-Pearl River Delta economic area encompassing nine southern provinces had led Hong Kong companies to expand their operations to Shaoguan and Qingyuan in northern Guangdong, which they saw as springboards into the hinterland market, said Mr Leung.
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