The Pearl River (Zhu Jiang) runs from Guangzhou down to the South China Sea near Hong Kong. The area is one of the most prosperous in China and grown enormously since Deng Xiao Ping ordered the creation of Special Economic Zones in Shenzhen and Zhuhai in 1981. He was concerned that the huge economic imbalance between the the two colonies and the adjoining mainland would cause a stampede of workers.

The policy, which reversed the strict communism of Mao Zedong, the father of modern China, was a huge success. Huge numbers of workers do cross the border in Hong Kong and Macau, but huge numbers travel back again. The special tax and other rules that were designed to attract foreign investment into the mainland were a huge success and have been copied in many other parts of China.

China has sustained a frantic rate of GDP growth right through the Global Financial Crisis and is poised to let the recovery of demand from elsewhere in the world take the place of government stimulus of the local economy. A lot of this domestic stimulus has taken the form of infrastructure investment, not least in the PRD area. This investment improves communication between the cities in the region and will further improve the competitiveness of this highly-competitive region, which makes everything from ceramic tiles to aeroplanes and mobile phones.

Wages are high in this region, as you would expect from a region where high-technology manufacturing is widespread. The emerging Chinese middle classes are very numerous here and are spending and investing in the region that they now regard as home. Low margin businesses are increasingly migrating west, both in search of cheaper labour and attracted by temporary tax incentives in developing cities, like Chongqing. The remaining workforce is educated, ambitious and productive. We believe that China's growth, and that of this region, is set to continue for a very long time, and with it, returns on local investment.