What China can learn from the Pearl river delta


LIBERAL ECONOMICS MAY have gone out of fashion, but not before working miracles in some parts of the world. To witness one of them, visit the Luohu immigration-control point on Shenzhen’s border with Hong Kong, where some 80m crossings are made every year. Since Deng Xiaoping designated the mainland Chinese city as a special economic zone in 1980, putting out the welcome mat for foreign investment and encouraging private enterprise, trillions of dollars of trade and investment have flowed across this border.

Forty years ago Shenzhen was a rural backwater. Today it is the most dynamic city of the Pearl river delta (PRD), China’s most innovative region. Rem Koolhaas, a Dutch architect who teaches at Harvard, called it the ultimate “generic city”—a place without legacy that can swiftly adapt and grow with the times. It is still doing that, but is now old enough to have a memory.

Not far from the border crossing is Hubei, one of the city’s original communities. Old buildings in the neighbourhood are being demolished to make way for modern structures. “If we all get involved in this transformation, every family will benefit!” declares a giant banner. The authorities are offering compensation to villagers and local homeowners.

“Many people consider this place a slum,” explains Mary Ann O’Donnell, an American expert on Shenzhen’s urban villages. It is indeed shabby compared with Nanshan, a wealthy high-tech neighbourhood nearby with an average income per person of over $50,000 a year. Yet even this humble place has benefited from globalisation. The homes here have proper walls and roofs, as well as electricity, running water and sewerage. Hubei is not heaven, but any slum-dweller in Caracas or Mumbai would love to live like this.

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