China’s State Post Bureau has released memorial stamps for the 19th Party Congress. The stamps feature Beijing, Shanghai, Shenzhen and Hangzhou. That has stoked debate on whether Hangzhou will overtake Guangzhou as one of the country’s top four metropolises.
Guangzhou has more than 1,000 years of history as a regional business hub. It was already China’s biggest trading port in Sui dynasty in the sixth century.
However, in recent years, Guangzhou has been losing some of its luster. For example, the iconic Canton Fair, an annual trade fair started in 1957, is still the nation’s biggest trade fair. Yet, it is losing attraction largely due to the proliferation of e-commerce. The exhibition has recorded trading value of US$30 billion in this year’s spring fair, down nearly 20 percent from the peak of US$36.86 in 2011.
Meanwhile, Hangzhou has risen rapidly in recent years and built itself as a symbol of the new economy thanks to internet giant Alibaba which is based in the city.
Hangzhou has also attracted a cluster of startups and lots of young talent from other parts of the country.
Guangzhou still leads Hangzhou, with its GDP and per capita GDP reaching 1.96 trillion yuan and 145,000 yuan, respectively, last year, compared with 1.11 trillion yuan and 120,000 yuan for Hangzhou.
However, Hangzhou has stronger economic growth momentum. Its GDP growth rate hit 10.2 percent and 10 percent in past two years, compared with about 8 percent for Guangzhou.
A comparison between Guangzhou and its neighbor Shenzhen also highlights how the absence of a strong tech industry has put the former at a disadvantage.
Shenzhen used to be a barren land. It became the nation’s first special economic zone in 1980 thanks to its proximity to Hong Kong.
Starting out as a production base for contract manufacturers such as Foxconn, Shenzhen has shown notable advances over the past decade and has a portfolio of homegrown tech giants to boast of, including Tencent, Huawei, ZTE Corp, BYD, DJI etc.
Also contributing to Shenzhen’s rapid growth is its finance sector. The city is home to one of the nation’s two largest stock exchanges, and is also where headquarters of big financial firms like Ping An Insurance are located.
Shenzhen built a new district in Qianhai to deepen financial reform under the leadership of the central government.
That said, Guangzhou’s growth may still stand a chance to speed up again. It has a strong foundation as an industry powerhouse apart from trading hub.
A large number of domestic and foreign companies have set up factories in the city. If it can tap into smart manufacturing, IoT and other new technology. Guangzhou may not necessarily lose out.
This article appeared in the Hong Kong Economic Journal on Oct. 25
Translation by Julie Zhu
[Chinese version 中文版]
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