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The Pearl River Delta showcases the Chinese Dream

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Message Pepe Escobar
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Reprinted from RT

Guangzhou Cityscape

As President Putin, post-Brexit, rushed to discuss all matters pertaining to Eurasia integration with President Xi Jinping in Beijing, I embarked on a connected, parallel southern China journey.

From my base in Hong Kong, I set out on a Pearl River Delta loop, hitting Shenzhen and Dongguan and then Guangzhou, Zhuhai and Macau.

Why? Because this unprecedented, inter-connected story of breakneck urbanization, technological innovation and post-modern megacity sprawl showcases no less than the future dreamed up by the collective leadership in Beijing. And it doesn't hurt that southern China is the starting point of the Maritime Silk Road.

I was very privileged to visit Shenzhen and Guangzhou only a few days after the Little Helmsman Deng Xiaoping, then 88, embarked on his legendary six-week "southern tour" in January-February 1992. His target at the time was to turbo-charge the "get rich is glorious" Chinese manufacturing miracle, still in its infancy.

In the early 1990s, agriculture, mining and fishing were responsible for 27 percent of the Chinese economy, while manufacturing and construction accounted for 40 percent, and services for 30 percent, according to Hong Kong banking sources. At the start of the 2010s, agriculture was already down to only 10 percent, with manufacturing at 46 percent and services at 44 percent. A generation of business leaders often referred to as the "Gang of 92" -- when many of them started -- were imprinting their mark on a new China.

Now the Pearl River Delta -- China's number one hub of labor-intensive manufacturing -- is in the process of replacing workers with robots on a large scale, a further sign that China is about to take off technologically, big time. And that's all part of a "Made in China 2025" strategy announced only two months ago by Beijing, centered on relentless innovation -- and commercialization. The China 2.0 new industrial revolution is a go -- with a bang.

China today, on the ground, looks and feels like a confederation of mega-cities fiercely competing with each other for everything; investment (internal and foreign), industries, tech talent, global visibility. Beijing does support provinces and regions -- much as the Song dynasty did -- but up to a point. China, de facto, is already federalized. It's up to each province to determine its own economic strategy.

The megacity confederation

That's a long and winding road since the 1960s -- when China was under the yoke of the Cultural Revolution (to seize the seismic shift, check out The Cultural Revolution: A People's History 1962-1976, by University of Hong Kong professor Frank Dikotter, based on previously classified party documents). It's also enlightening to compare it with the fact that the UN, during the 1960s, was starting to promote the concept of the Special Economic Zone (SEZ) as an infrastructure and growth template.

Now there are more than 4,000 SEZs scattered all across the world -- living and breathing experiments of strategic investment bound to absorb working masses and turbo-charge modernity. And Shenzhen, of course, is the mother of all SEZs.

In 1979 Deng designated Shenzhen, then a mere sleepy fishing village north of Hong Kong, as China's first SEZ. Now it's home to up to 18 million people -- and counting. Shenzhen started as a somewhat unregulated hub for low-cost labor, very handy for a China that badly needed foreign investment to create jobs, train a massive workforce, and import skills and technology. It turned out as a major win-win. What took the West 200 years to accomplish China did in only 20.

Between them, Greater Shanghai and Guangdong province -- home of the Pearl River Delta -- account for 80 percent of China's exports. Now China's new "urbanization drive" strategy reaches beyond Shenzhen, aiming to decentralize into new mega-cities or even brand new cities, all self-sustaining. The emphasis is to create a vicious circle; up and up in the value chain; more productivity; more consumption; higher wages. Both Hong Kong and Singapore -- key models for Beijing -- neatly graduated from a vicious trade circle to first-class global cities. Now it's up to places inside China, from Shenzhen to the Suzhou Industrial Park near Shanghai, to show the way.

It's this urbanization drive that is at the heart of the Chinese Dream. And the lab where the idea was conceived is the Pearl River Delta -- with its confluence of capital, technology and knowledge industries.

Knowledge is power

Guangzhou, less than two hours north of Hong Kong, is the capital of the Pearl River Delta manufacturing miracle. Way beyond the free trade zone set up in 1992, the Guangzhou Nansha Export Processing Zone (automotive assembly, biotech, heavy machinery) seamlessly connects in only a few minutes to the airport as well as Shenzhen's ultra-modern port.

Being close to Hong Kong was always a Guangzhou plus -- even before the 1997 handover. As much as Hong Kong was the seminal source for all foreign direct investment (FDI) in China, the Delta export machine progressively harnessed all this investment to build ultra-modern infrastructure in competition with Hong Kong. Shenzhen for all practical purposes may now be overtaking Hong Kong in many aspects -- but officially it's all about the emergence of a world-class Hong Kong-Shenzhen megalopolis.

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Pepe Escobar is an independent geopolitical analyst. He writes for RT, Sputnik and TomDispatch, and is a frequent contributor to websites and radio and TV shows ranging from the US to East Asia. He is the former roving correspondent for Asia (more...)

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