Guangzhou city officials were warned at a recent municipal meeting that Tianjin could soon take Guangzhou’s title of China’s third city.

“Tianjin may surpass Guangzhou in terms of economic output in two or three years,” Guangzhou party chief Zhu Xiaodan said at a July 30 meeting. “Tianjin’s GDP growth rate reached 16.2 percent year-on-year in the first half of 2009, nearly twice that of Guangzhou. Its investment in H1 also exceeded 45%,” Zhu pointed out.

Zhu’s words captured media focus and sparked an ongoing debate.

Guangzhou, capital of Guangdong province, is known as the third largest city on the Chinese mainland after Beijing and Shanghai. Since it is adjacent to Hong Kong and Macau, it became the foreland of China's reform and opening-to-the-outside-world policy in 1978.

The capital is also the main manufacturing hub of the Pearl River Delta, one of China's leading commercial and manufacturing regions. In 2008, its GDP reached 821.5 billion yuan, ranking third among Chinese mainland cities. But the export-oriented city has been hit hard by the current financial crisis. Its exports slumped by 22.1% compared to the same period of last year.

In contrast, Tianjin is booming. The municipality has become China's third fastest-growing city despite the global economic downturn, thanks to huge investment stimulus.

Tianjin has three major advantages over Guangzhou: policy privileges from the central government, fixed assets investment and its role in regional cooperation, according to Dr. Peng Peng with the Guangzhou Academy of Social Sciences.

Tianjin’s general plan (2005-2020) aiming to be northern China’s economic core, an ecological city and an international harbor city, was approved by the State Council earlier this year.

The municipality’s Binhai New Area was also approved to be a national comprehensive reform experimental area in April, the second one after the Shanghai Pudong New Area.

BNA, including Tianjin Economic-Technological Development Area, Tianjin Port Free Trade Zone and Tianjin Port, is currently one of the fastest growing areas in northern China and plays a key role in boosting Tianjin’s domestic demand.

Tianjin's total investment in fixed assets for the first half of 2009 is equal to 218.108 billion yuan, with a 45.4 percent growth rate year-on-year.

Major projects, such as the Tianjin final assembly line for the Airbus A320 series, have effectively stimulated foreign demand as well as created new industries, Zhang Qiang, deputy director of the Tianjin Statistics Bureau, was quoted as saying.

“I believe Tianjin will surely surpass Guangzhou,” Zang Xueying, professor with the Economic Development Strategy Institute of the Tianjin Party School of the CPC, predicted.

Tianjin now is the new engine for China’s economy while Guangzhou is faced by difficulties brought by the current financial crisis, he added.

Guo Yanhua, Deputy Director of the Economic Studies Institute of the Guangzhou Academy of Social Sciences, holds that Tianjin still cannot compete with Guangzhou in terms of overall economic strength.

“Tianjin lags behind in terms of soft power, urban infrastructure, financial revenues, exports and many other things,” Guo said.

An expert with Nankai Universtiy warned Tianjiners to keep “cool headed” and be aware of the great gap between Tianjin and China’s leading cities.

By Guo Changdong