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Foshan’s Four Surprises

HONG KONG – Few people outside of China know Foshan, a city of seven million located at the heart of the Pearl River Delta in southern China. But this vibrant and economically progressive city – which Foreign Policy and the McKinsey Global Institute ranked last year as the world’s 13th most dynamic city, based on its projected GDP increase from 2010 to 2025 – embodies China’s quest for a high-value-added, high-income economy.

With this in mind, about 18 months ago, a team of researchers (including us) launched a case study on Foshan. The city stood out, because its experience exemplifies China’s progress over the last 35 years – as well as the structural challenges that the country now faces. One of the first Chinese cities to implement experimental economic reforms, Foshan first built itself up as a low-cost manufacturing center, and is now working to become a knowledge-based, innovation-driven economic powerhouse.

The case study’s success depended on critical partnerships. A team of 24 researchers from the National Development and Reform Commission shared their extensive knowledge of China’s experiences and policies. And local experts facilitated the examination of 14 aspects of Foshan’s growth over the last 35 years: industry, land, transport, electricity, water, finance, employment, governance, planning, public finance, education, housing, health care, and pensions.

This micro-institutional study of macro outcomes produced four surprises.