City Repositioning and Competitiveness Building in Regional Development: New Development Strategies of Guangzhou, China

Competition among cities for mobile capital in the 21st century has intensified. Urban hierarchy of a region is undergoing transformation, where economic fortunes vary markedly among different localities. In China, these global forces and regional restructures have caused a relative economic decline of some historically powerful cities, and have also brought about the emergence of new economic centres. In response to these forces, many Chinese cities have been driven into adopting a series of new competitive strategies, which seek to win back and build up their leading positions and competitiveness. To translate these strategies into concrete actions, local governments have promoted high profile and face-lifting projects and investments. The extensive new urban development in Guangzhou is a particularly interesting case. As the provincial capital of the Guangdong Province, and a historically central city in the Pearl River Delta Region, Guangzhou’s importance has recently declined. This paper attempts to reveal the general strategies and specific projects initiated by Guangzhou as important promotion devices in its revitalization program, and to examine the rationales behind them. The ambitious new strategies could most likely happen under the ‘soft budget constraint’ syndrome in China, and these strategies could be risky. Although how much these strategies actually do stimulate business and lure investment is yet to be seen, the citizens are immediately and directly benefiting from them, and thus, they have gained much popularity and support. However, the competitiveness building in Chinese cities has called into question the legitimacy of local state governance, and the validity of large projects that lack financial disciplines, social objectives, and accountability for unsuccessful investments. * The Centre of Urban Planning and Environmental Management, the University of Hong Kong, Pokfulam Road, Hong Kong. The authors would like to express their gratitude to the anonymous reviewers for their very constructive comments.