Redistribution of Hong Kong manufacturing firms in the Pearl River Delta, China

Abstract

Concurrent with the transformation of the Pearl River Delta (PRD) in China and more recently the global financial crisis, Hong Kong manufacturing firms in the PRD are faced with unprecedented challenges. Upgrading and redistribution are two major responses for Hong Kong manufacturing firms in the PRD. Since the early 2000s, redistribution rather than upgrading is more favorable to Hong Kong manufacturing firms. In comparison with the relocation from Hong Kong to the PRD in the 1980s and 1990s, the ongoing redistribution of Hong Kong manufacturing firms, although spatially resembles the flying geese model, can not simply be associated with the locally economic forces. It argues that the unsuccessful upgrading of Hong Kong manufacturing firms, increasing firm linkages between Hong Kong and domestic manufacturing firms, connections with the PRD, industrial relocation policies of Guangdong provincial government and the fragmentation of environmental regulation in China are jointly shaping a new industrial landscape of 'made in PRD'. The paper concludes that, a trans-local perspective and investigation of the various redistribution mechanisms in different sectors can help to achieve a better understanding of the ongoing redistribution of Hong Kong manufacturing firms and its implications for the regional development of the PRD.