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The Pearl River delta (PRD) has been a crucial driver of China's economic growth, a key destination for foreign investment, and a platform for the country's growing integration into the global economy for more than two decades since China's economic reforms.
The PRD's role in China's economy is pivotal. Home to less than 3 percent of China's population, it contributes almost 7 percent of its GDP. The PRD economy, measured in purchasing power parity (PPP) terms, is larger than the national economies of Malaysia, Portugal, and Greece, two-thirds the size of the Philippine economy, and just under half the GDP of Australia.
The PRD's economic importance in China stems from early economic reforms, started experimentally in the Shenzhen and Zhuhai special economic zone (SEZs), that quickly spilled over to adjacent cities and towns. Foreign direct investment (FDI), initially from Hong Kong (which shifted 70 percent of its industrial capacity to the PRD in less than a decade) and then from Taiwan, fueled massive manufacturing growth and exports. Since the mid-1990s, large influxes of FDI have originated from Japan, the United States, and other countries. Most investment, particularly from Hong Kong and Taiwan, has been in low value-added manufacturing, creating jobs for huge pools of low-cost, largely female migrant labor from inland provinces.
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