1. Guangdong, Hong Kong and Macao form an inseparable “economic ecological zone”.
Since China began to adopt the policy of reform and opening up to the outside world more than 20 years ago, dozens of thousands of investors from Hong Kong and Macao have flooded into Guangdong, especially the Pearl River Delta, to start their business. At present, some 63 thousand Hong Kong-funded enterprises have been established in the mainland, with 53 thousand in the Pearl River Delta, which means directly and indirectly employing 1.5 million people in Hong Kong. At the same time, these enterprises employ 10 million workers in the Pearl River Delta, injecting great vitality to the development of the region and helping Guangdong establish itself as an important global manufacturing base. While Hong Kong, by this way, has successfully shifted from a manufacturing center to an international trade metropolis relying mainly on service industry. The economic region of Guangdong, Hong Kong and Macao has developed into an inseparable “economic ecological zone”. The economic integration and dependability of the three places are on the increase, entering an accelerating stage.

2. CEPA brings about the substantial breakthrough of big Pearl River Delta strategy.
The signature of CEPA helps to shift an integrating and developing big Pearl River Delta to that making substantial breakthrough and progress:

(1). The both parties of Guangdong and Hong Kong, on the basis of the established cooperative joint conference system, the liaison office of cooperative joint conference and 15 special responsibility groups, add research team of Guangdong-Hong Kong development strategies and discussion system of unofficial cooperation to the content. Furthermore, centering on CEPA, both parties are determined to strengthen cooperation in 13 aspects recently. These 13 key projects have now all been put into operation.

(2). The both parties of Guangdong and Macao established the cooperative joint conference system, the liaison office of cooperative joint conference and 11 special responsibility groups dealing with the cooperation of both parties. On the joint conference, both parties agreed to strengthen cooperation in 6 aspects recently.

(3). Under the system of Guangdong-Hong Kong and Guangdong-Macao cooperation, the three parties set down the development goal for the future 10-20 years: Guangdong shall be developed into one of the important manufacturing bases in the world; Hong Kong shall establish itself as an important service center in the world, relying mainly on modern logistics and finance; while Macao shall be built into an attractive gambling and touring center in the world as well as a regional business serving platform. The three places shall endeavor to build the “Big Pearl River Delta” which includes Guangdong, Hong Kong and Macao, into one of the most prosperous and active economic centers in the world.

(4). An all-round cooperation is taking shape. A. The smooth implementation of the touring to Hong Kong and Macao. It brings new business opportunities to the relevant sectors to the two places. B. The establishment of cross-border industry zone. The both parties of Guangdong and Macao held the foundation ceremony of Zhuhai-Macao Cross-border Industry Zone in Macao, a new try at strengthening business and trade communication and cooperation of the two places under the framework of “One country, two systems” and CEPA. C. Successful joint promotion of the Big Pearl River Delta. In October 2003, Guangdong and Hong Kong joint hands in holding “Guangdong, Hong Kong-Japan, Korea Fair of Economy, Technology and Trade Cooperation” in Korea and Japan. In November the same year, the both parties held Fair of Guangdong-Hong Kong-Macao Investment Environment Promotion and Business Talk in Zhuhai.

(5). Investment and trade convenience sees a fast development, which is specifically embodied by the simplification of administrative approval, electronic port check, modern port facilities and dense network of transportation. Guangdong has now enacted specific regulations on the simplification of administrative approval and relevant measures. The construction and renovation of those big ports are in full swing.

(6). Meetings and activities between Guangdong and Hong Kong are on the increase. Guangdong-Hong Kong Economic and Trade Seminar was held in Guangzhou; Together with Hong Kong, Guangdong organized four cities, namely Shaoguan, Heyuan, Zhanjiang and Qingyuan City, to attend exhibition activity of business opportunities for Mid and small-sized enterprises under CEPA sponsored by Hong Kong Trade Development Bureau; the first Hong Kong Professional Service Exhibition Fair is held in Shenzhen. Still, such government departments as customs and industry and commerce administration of Guangdong Province have given public reports for many times in Guangdong and Hong Kong.

(7). Research on various kinds of questions is in full swing. The financial department of Guangdong is working hard on establishing the financial circle of the big Pearl River Delta. Besides, town planning for the big Pearl River Delta is stepping up and a blueprint is taking shape.

3. Future Business Opportunities of the Big Pearl River Delta
Pushing forward by CEPA, the economic ties of Guangdong, Hong Kong and Macao will be further strengthened and a developing pattern of mutual benefit, unification and coordination shall present itself before us. Moreover, the modernization of economy shall step up; hi-tech industry shall undertake fast development; the market competitive ability of the exported products shall be further strengthened; foreign investment in service sector shall see a good performance; the economic flow volume of Guangdong, Hong Kong and Macao shall be further increased; the process the regional economic unification of the big Pearl River Delta shall see a faster progress and the regional competitive ability shall be further elevated.

(1). The manufacturing sector shall undertake a greater development. The shifting of the main part of Hong Kong’s manufacturing industry to the Pearl River Delta, together with investment from different countries, has developed the economic development pattern of the region into one relying mainly on manufacturing industry. Low labor cost, advantageous investment environment and vast domestic market actively promote the development of manufacturing industry of the region, which has already become the manufacturing base and international purchasing center in the world. The Pearl River Delta region receives 80% of the purchasing orders placed in China from multinational companies. This pattern is obvious complementary to Hong Kong’s economy, which relies mainly on service industry. This will do good to the industry integration of the Big Pearl River Delta and help to avoid malicious competition.

(2). Cooperation in infrastructure construction is stepping up. After years of continuous investment in and development of infrastructure construction, there forms a comprehensive and complete network of railway, airports, ports, highways, water transportation, mail system, telecommunication, electricity, etc. With the approval and implementation of “Planning of Intercity Fast Rail Transportation Network of the Pearl River Delta”, especially the planning and construction of the big Shenzhen-Hong Kong Channel and the big Zhuhai-Macao Channel connecting the Pearl River Delta and Hong Kong and Macao, the economic unification of the region shall see a faster development. The strengthening of the cooperation in infrastructure construction of the three places lays a solid foundation for the integration of the regional economy of the big Pearl River Delta.

(3). In-depth cooperation in service sector shows a bright future. Guangdong Province, whose economy development obviously takes the lead in China, has seen a huge demand market for service. The opening up of service sector, one of the biggest breakthroughs in CEPA, will surely gradually push the regional cooperation of Guangdong, Hong Kong and Macao from main manufacturing industry to service industry. In accordance with the 10th “Five Year Plan” of the government of Guangdong Province, the added value of the service industry of the province shall be increased from RMB 360 billion of the year 2000 to RMB 680 billion by 2005, almost doubled. This will let full play to the obviously advantageous service industry of Hong Kong.

(4). Logistics shall undertake a great development. Owing to the geographical location, the goods supply of Hong Kong’s logistic industry is mainly from the Pearl River Delta. It is predicted that the total volume of logistics of Guangdong Province will see an annual average grow of 11% in the near several years. The vigorously developing manufacturing industry and continuous construction of logistic infrastructure in the Pearl River Delta region provide huge market room for the logistic industry of Hong Kong. The logistic enterprises in Hong Kong are familiar with international practices. They have dense customer network and are adept in applying the latest electronic logistic technology. All these contribute to domestic enterprises in winning the confidence of oversea customers and opening up international market. While the logistic enterprises of Guangdong Province are familiar with the operation of domestic logistic industry, the alignment of them shall be able to provide more comprehensive and efficient service for customers.

(5). The printing industry of the Big Pearl River Delta shall take the lead in China. Statistics show that the printing industry of the Pearl River Delta region sees an annual increase of 15%. With high-speeded digital and individual printing is more and more becoming the mainstay of publication printing, the printing industry of the region takes an advantageous position. The printing and publishing industry ranks first in all trades in Hong Kong in terms of the total output value, making Hong Kong one of the four global printing centers, the other three being the United States, Japan and Germany. Since the main part of Hong Kong’s print industry has integrated into that of the Pearl River Delta, the print industry of the Big Pearl River Delta region as a whole has shown up. To push forward the construction of international print base, Guangdong shall continue to attract domestic and foreign investors to set up print enterprises in a certain period of time. On the basis of optimizing industry structure, the province shall appropriately increase the industry concentration and establish its advantageous position in brand and scale. The province shall gradually improve the industry chain and supporting facilities required in the development of print industry. The relevant departments of Guangdong Province have begun to take measures towards these targets.

(6). The economic and trade cooperation of the “Broader Pearl River Delta” enjoys a bright future. The so-called “Broader Pearl River Delta” refers to Guangdong Province and the other 8 provinces around it, namely Fujian, Jiangxi, Guangxi, Hainan, Hunan, Sichuan, Yunnan, Guizhou). Located in the south part of China, these 9 provinces cover a vast territory and are closely connected with each other. The region has an area of 1.9945 million square kilometers and a population of 0.446 billion, accounting for 20.78% and 34.7% of the country’s total respectively. This region is endowed with abundant and peculiar natural resources, tourism resources and historic resources. With a long history of economic communication and cooperation, economic and trade cooperation in this region is more and more frequent now. At present, an economic zone with various functions, relative close connections and somewhat integrated economy has taken shape. The economic cooperation shows a tendency of favorable development. Pushed forward by the construction of China-ASEAN FTA and the implementation of CEPA, the big Pearl River Delta will become one of the most vigorous and prosperous regions in the world. This brings the “Broader Pearl River Delta” a new development opportunity and the economic cooperation between the 9 Provinces, Hong Kong and Macao sees a bright future.