B2B AND P2P INSTEAD OF ARMS BUILDUPS

OBSERVATIONS ON CHINA'S 'PEACEFUL' RISE

Fidel V. Ramos

The Manila Bulletin, October 30, 2011

The Pearl River Delta mega-cluster

We were in South China last week, principally in Zhuhai City, Guangdong Province (one of China’s most productive in terms of total GDP-contribution), as head of a Philippine delegation of some 60 entrepreneurs, professionals, and sportspeople to meet with Chinese partners under the auspices of the China-Philippines Chamber of Commerce (CPCC).

Organized on 25 January 2005, the CPCC was given the mandate by the PRoC’s Ministry of Commerce and Ministry of Civil Affairs to promote Philippines-China bilateral trade and economic cooperation. CPCC serves as a valuable network for addressing trade and investment issues, and is an active link of private and state-owned companies among themselves, as well as with government agencies in the Philippines and China. Chaired by Filipino-Chinese Joseph Lim, CEO of the Solid Electronics Group, CPCC counts among its corporate members various pioneering and successful Filipino companies operating in China, principally: Solid Industrial Co., Premix Inve Nutrition Corporation, Handyware China Co., Liwayway Marketing Co., Atlanta Industries Co., and Richfield Corp.

Zhuhai, a prefecture-level city on the southern coast of Guangdong Province, borders Macau SAR and is considered one of China’s modern “windows” to East Asian countries, particularly because of its Formula One hi-speed motor racetrack and annual Aviation Show. Together with nine other cities of Guangdong and the SARs of Hong Kong and Macau, Zhuhai forms part of the so-called Pearl River Delta (PRD) mega-cluster.

Creating economies of scale

Three decades ago, the People’s Republic of China adopted the strategy of clustering its contiguous industrial centers to create economies of scale as well as enhance efficiency in the production and distribution of goods. This move proved to be a huge success and continues to be highly effective in exhibiting China’s progress to the world.

The interconnected, cross-border combination of Macau and Hong Kong SARs with the megacities of the Pearl River Delta notably Guangzhou, Shenzhen, Zhuhai, Dongguan, and China’s eastern seaboard, have a combined population of 660 million and accounts for a GDP of more than USD300 billion.

According to experts, this PRD mega-cluster can attain a GDP of USD500 billion (roughly the equivalent of the economic performance of the 10th to 12th largest world economies) in 6-8 years. Other high-growth cross-border mega-aggrupations include the Cross-Taiwan Straits Economic Zone and the Pan-Beibu Gulf Economic Cooperation (which is the official gateway at Nanning City to the China-ASEAN Free Trade Area).

This set-up provides the Philippines easy access to China’s huge eastern seaboard and southern markets with excellent opportunities for partnerships in trade, tourism, SMEs, services, education, technology exchange, and other business endeavors which should now be fully tapped and exploited.

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