This paper deals with the geographical conditions and the development ofGuangzhou(GZ) from the angle of regional economic geography.GZ was an important port for foreign trade in ancient China owing to itsbetter physical conditions

favourable location and earlier establishment.Butafter the Opium War(1840-42)

the dominant position of GZ was replaced by Sha-nghai.The causes of this change are as follows:first

inadequate transport linkwith its hinterland

second

lack of mineral resources such as iron and coal

third

lower level of economic development than that of Shanghai.However

GZ isstill the biggest centre of foreign trade and the hub of transportation in SouthChina.Three regional economic factors which would influence on the future devel-opment of GZ are identified.(1)Increasing competition from cities and counties

with similar industrialstructure as GZ

on the PRD(Pearl River Delta) will stimulate improvement inproduction technique and service quality.(2)Exploitation of offshore oil in South China Sea will stimulate thegrowth of oil related industries in GZ.(3)Strengthening of relations between GZ and Hong Kong after the year of1997 when HK’s sovereignty

will be given back to China will inevitably acces-lerate the growth of GZ’s foreign trade.In order to cope with the above changing factors

it is proposed that GZshould be developed into a multifunctional central city

based on technique-int-ensive industries

with active foreign and domestic trade

port transportation

and service industries.