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Megacity 2020: The Pearl River Delta’s Astonishing Growth
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In the late 1970s, the fertile river delta to the north of Hong Kong’s territory was primarily agricultural land. Shenzhen was an unassuming town of 30,000 people – with only one functioning taxi – and China was still very much a communist, rural country.
As the visualization above, by Time Out Hong Kong, demonstrates, the sleepy Pearl River Delta was on the cusp of an unprecedented growth spurt that would see cities expand and merge to become the largest contiguous urban region in the world.
A trickle becomes a flood
In 1979, the Chinese government – led by Deng Xiaoping – created four Special Economic Zones (SEZ) with the intention of attracting foreign direct investment and encouraging private enterprise.
The designation of Shenzhen and Zhuhai as SEZs was a strategic move to act as an “overflow” for businesses in Hong Kong, and the impact on the Pearl River Delta was profound and immediate.
A number of factors also helped contribute to the meteoric rise of the region: proximity to Hong Kong’s financial sector, a world-class seaport, a huge and inexpensive labor pool, cheap and abundant land, and few regulatory impediments to rapidly growing companies.
In the two decades after Deng Xiaoping’s market reforms, the GDP of the region grow by more than 10x and urbanization – bolstered by large-scale infrastructure projects – began in earnest.
To put the scale of this population clustering into perspective, here are the populations of cities within the Pearl River Delta in 2020 compared with modern-day metropolitan areas in North America and Europe:
Today, this compact region has a GDP equivalent to that of South Korea.
Megalopolis at the Gates
The explosive growth the Pearl River Delta has upended the regional balance of power.
At the close of the 20th century, Hong Kong was the undisputed economic powerhouse of the region. In fact, just prior to the handover from the United Kingdom to China, the city’s economic output was equal to a quarter of China’s entire GDP.
Today, the situation is markedly different. Hong Kong is no longer a separate entity, and its GDP represents a mere 3% of China’s.
This shift in the regional dynamic is causing trepidation in Hong Kong, where over 90% of the millennial population identifies as “Hong Konger” as opposed to “Chinese”. Although the government has agreed in spirit to maintain the city’s autonomy until 2047, recent actions suggest an eagerness to integrate the entire region into a seamless megacity.
The blurring of the lines appears to be well underway, as more than half a million people from the city now reside in Mainland China, up from approximately 150,000 a decade ago.
One physical manifestation of Mainland China’s push for an integrated region is the Hong Kong–Zhuhai–Macau Bridge. This colossal infrastructure project is a 31 mile (50 km) connection that includes bridges, tunnels, and three man-made islands.
In China, where each project is more ambitious than the next, it’s only fitting that the world’s largest urban area will be connected by the world’s largest sea crossing.
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Visualizing China’s $18 Trillion Economy in One Chart
China’s economy reached a GDP of 114 trillion yuan ($18 trillion) in 2021, well above government targets. What sectors drove that growth?
Visualizing China’s $18 Trillion Economy in 2021
China is the world’s second largest economy after the U.S., and it is expected to eventually climb into the number one position in the coming decades.
While China’s economy has had a much rockier start this year due to zero-tolerance COVID-19 lockdowns and supply chain issues, our visualization covers a full year of data for 2021—a year in which most economies recovered after the initial chaos of the pandemic.
In 2021, China’s Gross Domestic Product (GDP) reached ¥114 trillion ($18 trillion in USD), according to the National Bureau of Statistics. The country’s economy outperformed government targets of 6% growth, with the overall economy growing by 8.1%.
Let’s take a look at what powers China’s modern economy.
Breaking Down China’s Economy By Sector
|Sector||2021 Total GDP |
|2021 Total GDP |
|Wholesale and Retail Trades||¥10.5T||$1.7T||9.2%|
|Farming, Forestry, Animal Husbandry, and Fishery||¥8.7T||$1.4T||7.6%|
|Transport, Storage, and Post||¥4.7T||$0.7T||4.1%|
|Information Transmission, Software and IT Services||¥4.4T||$0.7T||3.9%|
|Renting & Leasing Activities and Business Services||¥3.5T||$0.6T||3.1%|
|Accommodation and Restaurants||¥1.8T||$0.3T||1.6%|
Industrial production—activity in the manufacturing, mining, and utilities sectors—is by far the leading driver of China’s economy. In 2021, the sector generated ¥37.3 trillion, or one-third of the country’s total economic activity.
Despite a slowdown in December, wholesale and retail trades also performed strongly in 2021. As the main gauge of consumption, it was affected by lockdown measures and the spread of the COVID-19 Omicron variant towards the end of the year, but still rose by double digits, reaching a total of ¥10.5 trillion*.
“Other services”, which includes everything from scientific research and development to education and social services, generated 16% of China’s total economy in 2021, or ¥18.1 trillion.
*Editor’s note: At time of publishing, China’s government seems to have since adjusted this number to ¥11.0 trillion, which is not consistent with the original data set provided, but worth noting.
Where is China’s GDP Headed?
China’s economy recovered noticeably faster than most major economies last year, and as the overall trend below shows, the country has grown consistently in the years prior.
Before the pandemic hit, China’s quarterly GDP growth had been quite stable at just above 5%.
After the initial onset of COVID-19, the country’s economy faltered, mirroring economies around the globe. But after a strong recovery into 2021, resurging cases caused a new series of crackdowns on the private sector, slowing down GDP growth considerably.
With the slowdown continuing into early 2022, China’s economic horizon still looks uncertain. The lockdown in Shanghai is expected to continue all the way to June 1st, and over recent months there have been hundreds of ships stuck outside of Shanghai’s port as a part of ongoing supply chain challenges.
China’s Zero-COVID Policy: Good or Bad for the Economy?
While every country reacted to the COVID-19 pandemic differently, China adopted a zero-COVID policy of strict lockdowns to control cases and outbreaks.
For most of 2021, the policy didn’t deter GDP growth. Despite some major cities fully or partially locked down to control regional outbreaks, the country’s economy still paced well ahead of many other major economies.
But the policy faced a challenge with the emergence of the Omicron variant. Despite lockdowns and an 88% vaccination rate nationally, seven out of China’s 31 provinces and all of the biggest cities have reported Omicron cases.
And China’s zero-COVID policy has not affected all sectors equally. Industrial production rose by more than 10% in the first 11 months of 2021, despite city lockdowns around the country. That’s because many factories in China are in suburban industrial parks outside the cities, and employees often live nearby.
But many sectors like hotels and restaurants have been more severely affected by city lockdowns. Many global economies are starting to transition to living with COVID, with China remaining as one of the last countries to follow a zero-COVID policy. Does that ensure the country’s economy will continue to slow in 2022, or will China manage to recover and maintain one of the world’s fastest growing economies?
Satellite Maps: Shanghai’s Supply Chain Standstill
China’s lockdown of Shanghai is causing massive back-ups at the world’s largest container port. Hundreds of ships are now waiting at sea.
Satellite Maps: Shanghai’s Supply Chain Standstill
China has mandated a strict “zero COVID” policy since the onset of the global pandemic, which has led to tight lockdowns across the country whenever cases have started to spike.
Recently, lockdown restrictions have been enacted in major cities like Shenzhen and Shanghai, as China deals with one of its worst outbreaks since Wuhan in December 2019.
These cautionary measures have had far-reaching impacts on China’s economy, especially on its supply chain and logistics operations. Shanghai’s port system, which handles about one-fifth of China’s export containers, is currently experiencing significant delays as a result of the recent government lockdown.
Shipping volume has dipped drastically since early March this year, right after partial lockdowns began in Shanghai. By the end of March, as restrictions continued to tighten up, shipping activity dipped nearly 30% compared to pre-lockdown levels. And while activity has recently picked up, it’s still far below average shipment volumes prior to the recent lockdown.
While the port is still technically operating, shipping delays will likely cause hiccups in the global supply chain. That’s because the Shanghai port is a major hub for international trade, and one of the largest and busiest container ports in the world.
How Bad is the Back-Up?
Here’s a closer look at satellite imagery that was captured by the Sentinel-1 satellite, which shows the current congestion at Shanghai’s port as of April 14, 2022. In the image, a majority of the white dots are cargo ships, many of which have been stuck in limbo for days.
Traffic has been building up at the Shanghai terminal. As of April 19, 2022, over 470 ships are still waiting to deliver goods to China. If you’d like to check out the Shanghai ports most up-to-date traffic, this live map by MarineTraffice provides real-time updates.
The number of container vessels waiting outside of Chinese ports today is 195% higher than it was in February. – Windward
Much of these delays are due to transport issues—an estimated 90% of trucks that support import and export activities are currently offline, which is causing dwell time for containers at Shanghai marine terminals to increase drastically.
Wait times for at Shanghai marine terminals has increased nearly 75% since the lockdowns began. Delays at the Shanghai terminal have sent ships to neighboring ports in Ningbo and Yangshan, but those ports are beginning to get congested as well.
The global impacts of this current bottleneck are still pending, and depend greatly on the length of Shanghai’s lockdown. According to an article in Freight Waves, this could turn into the biggest supply chain issue since the start of the pandemic if China’s marine shipping congestion isn’t cleared up soon.
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