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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.
The Best and Worst Performing Wealth Markets in the Last 10 Years
This telling chart shows how national wealth markets have changed over the past decade, highlighting the biggest winners and losers.
The Best and Worst Performing Wealth Markets
A lot can change in a decade.
Ten years ago, the collapse of Lehman Brothers sent the world’s financial markets into a tailspin, a catalyst for years of economic uncertainty.
At the same time, China’s robust GDP growth was reaching a fever pitch. The country was turning into a wealth creation machine, creating millions of newly-minted millionaires who would end up having a huge impact on wealth markets around the world.
The Ups and Downs of Wealth Markets (2008-2018)
Today’s graphic, using data from the Global Wealth Migration Review, looks at national wealth markets, and how they’ve changed since 2008.
Each wealth market is calculated from the sum of individual assets within the jurisdiction, accounting for the value of cash, property, equity, and business interests owned by people in the country. Just like other kinds of markets, wealth can grow or shrink over time.
Here are a few countries and regions that stand out in the report:
Developing Asian Economies
In terms of sheer wealth growth, nothing comes close to countries like China and India. The size of these markets, combined with rapid economic growth, have resulted in triple-digit gains over the last 10 years.
For the world’s two most populous countries, it’s a trend that is expected to continue into the next decade, despite the fact that many millionaire residents are migrating to different jurisdictions.
European nations saw very little growth over the past decade, but the Mediterranean region was particularly hard-hit. In fact, eight of the 20 worst performing wealth markets over the last decade are located along the Mediterranean coast:
|Rank (Out of 90)||Country||% Growth (2008-2018)|
European Bright Spots
There were some bright spots in Europe during this same time period. Malta, Ireland, and Monaco all achieved positive wealth growth at rates higher than 30% over the last 10 years.
While it’s expected to see rapidly-growing economies as prolific producers of wealth, it is much more surprising when mature markets perform so strongly. Singapore and New Zealand fall under that category, as does Australia, which was already a large, mature wealth market.
Australia recently surpassed both Canada and France to become the seventh largest wealth market in the world, and last year alone, over 12,000 millionaires migrated there.
The long-term economic slide of Venezuela has been well documented, and it comes as no surprise that the country saw extreme contraction of wealth over the last decade. Since war-torn countries are not included in the report, Venezuela ranked 90th, which is dead-last on a global basis.
Short Term, Long Term
In 2018, global wealth actually slumped by 5%, dropping from $215 trillion to $204 trillion.
All 90 countries tracked by the report experienced negative growth in wealth, as global stock and property markets dipped. Here’s a look at the wealth markets that were the hardest hit over the past year:
|Wealth Market||Wealth growth (2017 -2018)|
The future outlook is rosier. Global wealth is expected to rise by 43% over the next decade, reaching $291 trillion by 2028. If current trends play out as expected, Vietnam could likely top this list a decade from now with a staggering 200% growth rate.
Animation: The Biggest Economies in 2030
By 2030, the complexion of the global economy could look very different. This animation shows how the world’s biggest economies will change over time.
By 2030, the complexion of the global economy could look very different than it does today.
According to recent projections from Standard Chartered, a multinational bank headquartered in London, the next decade will see emerging markets like India and Turkey ascending the global economic ladder to become tomorrow’s powerhouses.
Visualizing the Boom in Emerging Markets
Today’s animation is based on a previous chart of the week we created that shows how economic growth is expected to unfold in the coming years.
View the projected change in rankings for the biggest economies from 2017 to 2030 below:
If the projections used in the above video prove to be accurate, the largest economy in 2030 will be China with $64.2 trillion in GDP after adjusting for purchasing power parity (PPP).
That’s nearly $20 trillion more than India, which will be the second largest by that time.
From Good to Great
While the sheer size of the Chinese economy is certainly an exclamation point, perhaps the more interesting story here is the ascent of developing markets in general.
By 2030, it’s projected that seven of the world’s 10 biggest economies will fall into that category:
|Rank||Country||Proj. GDP (2030, PPP)||GDP (2017, PPP)||% change|
|#1||China||$64.2 trillion||$23.2 trillion||+177%|
|#2||India||$46.3 trillion||$9.5 trillion||+387%|
|#3||United States||$31.0 trillion||$19.4 trillion||+60%|
|#4||Indonesia||$10.1 trillion||$3.2 trillion||+216%|
|#5||Turkey||$9.1 trillion||$2.2 trillion||+314%|
|#6||Brazil||$8.6 trillion||$3.2 trillion||+169%|
|#7||Egypt||$8.2 trillion||$1.2 trillion||+583%|
|#8||Russia||$7.9 trillion||$4.0 trillion||+98%|
|#9||Japan||$7.2 trillion||$5.4 trillion||+33%|
|#10||Germany||$6.9 trillion||$4.2 trillion||+64%|
Over this timeframe, countries like Egypt, China, India, Indonesia, Turkey, and Brazil will all see their economies expand with triple-digit growth in PPP terms.
In particular, India’s economy will be buoyed by rapid population growth in its cities, which are some of the fastest-growing urban areas on the planet. At the same time, Egypt’s economy is expected to grow from $1.2 trillion to $8.2 trillion according to the bank – although we would add that this seems quite optimistic.
Finally, developed economies like the United States, Germany, and Japan will keep growing – but just not at the blistering pace of developing countries. If these projections turn out, the Japanese and German economies will round out the list with the #9 and #10 spots, respectively.
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