Pearl River region represents a major industrial economic hub for not only Guangzhou but also the entire Republic of China. However, the rapid urbanization and industrialization has resulted in serious environmental costs. In this paper, a great effort will be made to look at the effects of pollution in the Pearl River Delta, Guangzhou and the greater Chinese economy. In an attempt to address the above, concepts of environmental economics will be utilized. The research shall utilize academic resources on economic significance of PRD to China and the world, the state of pollution in PRD and the impact of pollution among others.

Historical Background

The Pearl River Delta is a pioneer of reform and opening-up of China as a critical economic center of the world populous nation. The Pearl River Delta (PRD) continues to play a remarkable role and a critical strategic position in the overall effort of China to pursue economic and social development. PRD average annual growth rate is 15% of real GDP (Enright, Scott, & Hong Kong, 2003). As a result, PRD region has risen to the forefront of prosperity in China. It is imperative to appreciate that PRD region has the significant foreign direct investment (Asafu-Adjaye, 2005).

Chen Yun, a supporter of Deng early market reforms, argued that China’s economy should operate freely but within the frameworks of socialism. It is argued that Chen’s ideology is responsible for propelling PRD to being the wealthiest and fastest growing region in the mainland. Private enterprise, foreign investment and international trade are more stable and developed in the PRD compared to the rest of China since 1978 (Foster, 2011).

Additionally, an estimated 59,000 Hong Kong companies have their plants in the mainland, 53,000 factories of which are clustered in the Pearl River Delta. The concentration of factories provides employment to millions of Hong Kong citizens and Chinese. Besides the region being a large source of employment, it injects a significant contribution to the economic prosperity of the PRD (Foster, 2011). Current political leadership is pushing towards adding value as opposed to producing on conventional affordable cost and affordable labor (Carley & Christie, 2000).

The PRD enjoys logistical advantage to the inner provinces because of its geographical proximity to key international shipping routes. Consequently, in late 1970s, three Special Economic Zones were established in the provinces of Guangzhou while another one was set up in Fujian (Yu, Luo, Chen, Mai, & Zeng, 2008). Apart from establishing Special Economic Zones within the province, the central government granted the local government of Guangzhou greater independence in designing its economic policy. The separation from the rest of the country allowed more rapid transition to a market economy (Green & Chambers, 2006).

The population of the Pearl River Delta is another reason of its success and the presence of overseas wealthy Chinese who repatriate money to the region. Additionally, PRD enjoys endless supply of cheap labor provided by migrants from inner provinces. PRD is known as a low value-added, labor-intensive manufacturing base; In addition, the industry clusters in PRD include textiles and apparel, plastic products, electronic and electrical goods, and toys among others. The clustering is intended to spur competitiveness among related industries and enhance economic prospects of Guangzhou. Guangzhou is a major industrial region and serves as the provincial capital of southern China; it has risen towards high-tech and heavy industries such as automobiles.

Geography and Sources of Pollution

The Pearl River also referred to as Canton River or the Guangzhou River extends for 2,000 KM in the southern part of China; Xi Jiang River, Bei Jiang and Dong Jiang act as its main tributaries. The Pearl River Basin drains most of south central part. Though the Pearl River has sustained Chinese civilization for years, in recent decades the sustainability of the river is threatened by civilization. The river has become a dumping ground for debris and is flourishing with massive algae blooms among other undesired waste. Aside from industrial pollution and agricultural runoff is the river’s biggest threat to sustainability, which is a threat to China and the world economy as the river is the lifeline of the ‘world’s factory floor’. Thousands of factories that manufacture world’s toys, textiles, mobile phones and more are located along the Pearl River (Harrison, 2004).

Satellite images depict river banks piled with trash including denim scraps adjacent to Xintang’s blue jeans factories. For instance, the manufacture of denim jeans at the Jinxin Dyeing Plant discharges tons of wastewater pools around the Jinxin factory premises (Wolanski, 2007).

Lack of structured laws to address pollution coupled with chaotic attempts to remedy the pollution crisis of the river leaves the onus on respective factories. Factories within PRD admit partially recycling wastewater. There is dismissive attempt to label the pipes leading into the Pearl River; that makes it hard to crystallize which are discharging domestic waste and which are releasing industrial waste into the river (Hanley, Shogren, & White, 2001).

In fact, Greenpeace report titled ‘Poisoning the Pearl’ indicates that several factories may be intentionally dumping wastewater into the river. The Greenpeace organization examined the discharge contents of pipes from five different factories and discovered high amounts of heavy metals, chemicals and organic pollutants. These toxic materials are considered a serious hazard to human health (Sankar, 2001). Experts emphasize that water pollution is the primary challenge that China must tackle or risk experiencing a tremendous threat to its water supply in the future (Smith, 2011).

The World Resource Institute points out that the textile industry in China is one of the largest which consumes a lot of water yet performs dismissively on wastewater management. Environmentalists argue that industrial pollution in the river the size of Pearl could poison the entire ecosystem and expose people depending on it to risk (Fan, Cui, Zhang, Zhang, & Zhao, 2012a).


Impact of Pollution on Livelihoods

It is disturbing to realize that in a fishing village along the river, a villager maneuvers through a murky pond and gets the fish with his bare hands. As a result, a potentially contaminated fish is introduced into the human food chain by unsuspecting players. Therefore, the PRD region makes not only Guangzhou but also China a critical player in environmental matters (Fan, Cui, Zhao, & Zhang, 2012b). The geography of the Pearl River Delta makes it highly vulnerable to sea level rise. Explosive economic and urban development coupled with major changes in land utilization and land cover associated with such development has released large emissions of carbon dioxide; consequently, this has resulted in extreme weather events. In the above context, a deeper look at PRD’s role in economy and risks from climate change will be evaluated.

The Pearl River Delta is undergoing some visible regional climate changes because of the dramatic land use and the region’s increased emissions of greenhouse gases. The average temperature increase in Guangzhou province has been 0.21°C in the last 10 years according to the Guangzhou Meteorological Administration report in 2007 (Yu et al., 2008). The temperature increase has been equated to that of the entire Chinese economy; however, a greater part of the urbanized PRD coastal region showed a higher increase of 0.3°C in the last 10 years. In fact, the cities of Dongguan, Shenzhen, Foshan and Zhongshan register an increase of 0.4°C every decade (Fan et al., 2012b).

The Pearl River suffers from consequences of global warming caused largely by industrial pollution. When meteorological disasters strike especially storms and typhoons, agricultural runoff and debris are washed into the river ecosystem. Furthermore, meteorological disasters damage water and sewerage systems consequently washing or discharging such effluent into the Pearl River ecosystem. The vulnerability of PRD is furthermore a result of its coastal geography and high population density. Therefore, pollution of the river and the pollution effects tend to be cyclic; hence, there is the need to control pollution before it happens.

Lack of a robust environmental management of the Pearl River Delta has led to PRD losing 602 kilometers of land as a result of coastal erosion. Coastal erosion can be prevented by the embankment of river banks and moderate exploitation of land along the coastline. In the absence of such measures, pollution from a cluster of factories in thousands as they are in PRD will significantly push up global warming effects. The rise in sea levels around PRD affects the pollution state of the Pearl River ecosystem as the volume of water washing near the river estuaries increases. The result is amalgamating pollutants between the two water ecosystems. The rise in sea levels threatens the infrastructure along PRD. In the above perspective, pollution of the sea area is indirectly affecting the current state of the Pearl River in a negative manner.

As cities in PRD concentrate infrastructure, population and nonagricultural activities, they remain vulnerable to natural disasters and climate change; as a result, daily life and economic activities are severely impacted. Serious damage and significant economic losses are incurred each time rainstorms and typhoons occur in the region. For the period of 2000-2007, rainstorms and typhoons in Shenzhen led to cumulative direct losses of 524 and 277 million Yuan respectively (Fan et al., 2012b). The losses above account for 63 and 33% of total direct economic losses linked to meteorological hazards in the city (Fan et al., 2012b).

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Another negative impact of pollution is that meteorological hazards lead to disruptive effects on infrastructure, facilities and transportation. Prolonged periods of high or low temperatures exert pressure on urban power supply infrastructure whereas rainstorms and typhoons impose challenges on urban sewage system and flood control facilities (Yu et al., 2008). From the above discussion, it can be concluded that sustainability around the Pearl River is under threat because of pollution of the river which results in further pollution of the ecosystem.

Policy Tools

Chinese authorities have come up with a number of measures to address pollution; however, the current biggest challenge that China is facing is lack a robust framework to draft laws to protect the environment. Secondly, the laws and measures taken are best described as chaotic. There seems to be no central coordination power for all the environmental protection initiatives (Yu et al., 2008).

The Chinese authority is implementing a series of regulations requiring firms to pass wastewater tests that must be open to random inspections. The authorities are relying on instituting legal suits and deregistering (Foster, 2011). However, the authorities are inadvertently admitting that the sheer volume of factories in PRD makes it difficult to inspect and enforce. Despite the setbacks above, there are several measures being pursued to remedy the pollution effects.

The Guangzhou PRD Urban Environment Project

The project was funded by the WB and was aiming to reduce water pollution in the Pearl River system. Some of the main aims of the project were to address wastewater treatment and sludge disposal, and water quality monitoring; flood safeguard and river embankment improvements, and sediment removal from waterways are other areas being addressed by the project above (Wolanski, 2007).

The fast economic growth in the area has happened at a heavy environmental cost. The heavy pollution of the Pearl River possesses a serious threat to drinking water supply not only in China but also in Hong Kong. Sadly, the pollution of the Pearl River makes the river system unsuitable for aquaculture, irrigation and recreational purposes. Consequently, the Guangzhou provincial administration initiated a master plan to rehabilitate the PRD Rivers in 2002 (Chan et al., 2006). When this project is completed, there will be an expansion of wastewater treatment facilities in the region; in addition, Foshan will have a consolidated sludge treatment, disposal facility and improvements to the river embankment for flood protection. The above project will create water environment management information system. These are plans for water quality monitoring facilities in PRD. Training of staff and monitoring of environment cost for GDP growth will be part of the funded project including “green” economic planning. The project includes technical assistance to improve capacities of the Jiangmen Biyuan Wastewater firm (Chan et al., 2006).

Indeed China’s fast economic growth has resulted in a rise in living standards but with grave environmental pollution. China formed and promoted environmental protection through State Environmental Protection Administration under the Ministry of Environmental Protection. The active government role is critical as it is estimated that at least 80% of China’s coastal water and about 70% of China’s water sources are polluted (Hong Kong Trade Development Council, 2008). The main factors fueling the above are institutional insufficiencies such as limited powers and independence of the Ministry of Environmental Protection (Harrison, 2004).

Promisingly, 11 provinces and administrative regions along PRD collaborated in a bottom-up initiative to form the Pan-Pearl River Delta. Under the PPRD, members declared their willingness to collaborate in water pollution management and sustainable development. The result of the above initiative is yet to be termed successful perhaps due to institutional issues (Foster, 2011).

Guangzhou invested 25.4 billion Yuan in the new treatment plants in 2004 (Fan et al., 2012b). Primary methods of cleaning the Pearl River include improving the pipe network, water treatment, adding clean water, removing silt and stopping pollution. So far, massive investment in treatment is the main clean-up strategy; it has yielded some remarkable improvements, but more needs to be done. The city can treat an extra 635,000 tones of water daily (Fan et al., 2012a). All the above policies fail in addressing reduction of pollutants because they are concerned with addressing pollution when it has reached unacceptable levels. As a result, the public suffers the pollution and ends up paying the cost of handling the mess through taxpayers funding of sanitation plants (Harrison, 2004).

Valuing the Costs of Environment Protection

PRD covers one-fifth of China’s area and constitutes one-third of China’s population. The subject region produces 40% of China’s GDP. Apart from the river pollution, air pollution from the ship emissions is significant (Hong Kong Trade Development Council, 2008). While pollution fronts on the PRD are from all angles, the government of China has implemented few measures to mitigate its effects.  A two-pronged approach is needed by the government to address the threat of emissions; therefore, Chinese lawmakers must draft and enforce national legislation that caps emissions restrictions on ships during and around ports of PRD. Emission from ships is significant considering the PRD region houses most export zones and is among the busiest ports in the world. Secondly, China should seek help of International Maritime Organization to declare PRD a Micro-Emissions Control Area hence remarkably capping the sulfur content of fuel permitted within the area (Hong Kong Trade Development Council, 2008).

Factories, power plants and associated transportation systems are releasing significant quantities of harmful emissions. In comparison, fine particulate matter in PRD has been found to be almost double the U.S. National Ambient Air Quality Standard (Foster, 2011). Consequently, the area experiences reduced visibility. Ships that ferry manufactured goods in and out of the region are said to emit 10-40% of all harmful greenhouse gases (Chan et al, 2006). It is imperative to acknowledge that pollution from ships emissions has been factored in pollution sources recently as far as pollution in PRD is concerned. Ships are the choice and most affordable transport between nations. However, due to the low quality of fuel used within the shipping industry, ships generate 30% of the world’s smog-forming nitrogen oxide emissions (Wolanski, 2007). Inhabitants of PRD regions are highly vulnerable to the harmful effects of ship emissions.

In the above perspective, PRD region derives attractiveness to FDI for being accessible by ships and for being a low-cost production zone in the world. It seems, placing environmental demands on shipping lines and factories within FDI may lead to rise in production costs; at the same time, the increase in production costs in making PRD sustainable seems a concept the political class in China would rather approach cautiously. Health experts including World Bank have linked high incidences of pulmonary disorders and bronchitis in large Chinese cities to the sulfur oxide that is largely emitted by ships within PRD region (Yu et al., 2008).

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By addressing pollution in PRD alone, China will greatly reduce effects of global warming as a result of pollution. Guangzhou province, for example, is registering the steady increase of temperature over the decades; rapid industrialization and urbanization have resulted in significant enormous energy demand from the transportation, manufacturing industries and residential consumers. Consequently, emissions of carbon dioxide continue to rise among other greenhouse gases resulting in global climate change. One counterbalance question for China perhaps is if it shutdowns some industries along its economic belt, the negative economic results are devastating. At the same time, if something extreme is not done, the PRD could become wasted away by pollution effects or become uninhabitable in the long run. There is, therefore, need for China to strike a compromise between its economic ambitions and environmental sustainability, more so, the PRD region (Fan et al., 2012a).


The Pearl River Delta region does not only act as Chinese economic backbone, but also for other the world’s major factories. The subject region provinces enjoy rapid industrialization and urbanization that is higher than the country itself. PRD contributes 40% of national GDP (Fan et al., 2012a). However, the rapid economic prospects of the PRD region have come at greater environmental costs. In fact, the environmental degradation of the Pearl River Delta seems to be happening at par with the economic growth rate of the Pearl River Delta. Continued overlooking of pollution in PRD will finally bring factories in PRD to their knees and may weaken greatly China’s economic capability. For instance, transport forms an important artery of urbanization and industrialization, and when pollution leads to climate change via global warming, typhoons and storms occur; the result is disruption of transport and transport infrastructure. The disruption above temporarily grinds manufacturing and transport industry; Thus, huge economic losses are incurred.

Apart from other discussed effects of pollution, China has attempted to address pollution especially within PRD. However, the country lacks a central authority to coordinate activities that are seeking to address pollution. The result has been multiple projects that overlap and yield dismissible success. China needs to draft well-structured laws that address pollution in the PRD region along with capacity training and resources to enforce such laws. The Chinese government must coalesce existing initiatives to protect environment and restructure them to be managed centrally. The government must strike a balance between its economic ambitions and environmental sustainability of the Pearl River Delta.


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