(Yicai Global) Aug. 11 -- The city of Zhuhai in China’s southern Guangdong province is making 3 million square meters of land available for industrial use to entice companies from the neighboring economic powerhouse of Shenzhen.

At a promotional event for the new industrial complex yesterday, many companies in Shenzhen expressed interest, while other firms, high-tech projects, and venture capital funds signed agreements with the Zhuhai government.

Industrial parks in the Zhuhai Hi-Tech Zone offer low rents, excellent infrastructure and ancillary facilities, vast acreage for construction, and high-quality operational management, Yicai Global learned. Monthly rent of no more than CNY20 (USD3) per sqm is enough to encourage firms to relocate.

The move aims to adjust the long-term imbalance in economic development of regions in the Pearl River Estuary area. Shenzhen and its neighboring cities on the east bank logged had a combined CNY4.65 trillion (USD691.6 billion) in gross domestic product last year, versus CNY1.1 trillion for Zhuhai and its neighboring cities on the west bank.

Zhuhai is becoming one of the best destinations for businesses from Shenzhen to relieve costs, and at the same time, companies from Shenzhen moving to Zhuhai can boost the latter’s economic development, Li Kongyue, a professor at the School of Business of Zhongshan University, told Yicai Global. The economic integration of Shenzhen and Zhuhai will become a win-win situation, he said.

“Shenzhen and Zhuhai will be interconnected in industrial, supply, and talent chains to achieve a better development,” Li added, noting that Zhuhai not only must strive to improve its basic infrastructure to attract investors, it also should be able to offer high-quality and convenient living conditions to attract talent from Shenzhen, such as solving the issues of housing and schools.

Shenzhen is a leading driver of economic development in the Greater Bay Area that links up Guangdong, Hong Kong, and Macau, as well as a regional innovation and financial center. But land rents, labor costs, and house prices in the region are increasing as the local economy develops, Li said.

Editors: Tang Shihua, Futura Costaglione