As early as 200 AD, Indians and Romans came to the city also known as Canton, to trade, making Guangzhou China’s oldest trading port. In the 18th and 19th centuries, China was already an important global manufacturing hub (Roy and Ong, 2011). Today, Guangzhou and its surrounding industrial areas are a major manufacturing and export hub and a global supplier of goods.

However, it also ranks just behind Miami and much ahead of Shanghai, Mumbai, Tokyo, Hong Kong and Bangkok in a recent global index of port cities’ exposure of population to flooding (Nicholls et al., 2008). Moreover, it comes second in terms of assets exposed to flood risks projected for 2070 (Ibid.). In May 2010, extreme rains killed at least 86 people in Guangzhou and disrupted the lives of 8 million. The most damaging storm in 30 years, which cost Guangzhou US$85 million, challenged the city’s flood-control drainage systems and damaged 256,800 acres of farmland (Bloomberg, 2012).

Yet, despite these apparent risks, investors and their advisors do not rank them on par with other investment considerations such as corporate tax breaks, labour laws and costs and other direct business costs. Recent risk analyses of Guangzhou and Guangdong provinces do not refer to disaster risk other than the possibility that companies could be held responsible by government or communities for environmental impacts or disasters.

Instead, there are broad incentives for increased investment in flood-prone areas. The government offers 100 percent corporate tax relief for the first three years of an investment earning returns. As a result, in 2005, assets worth US$84 billion and almost 3 million people were at risk; and these figures are estimated to increase to US$3.4 trillion of assets and more than 10 million inhabitants by 2070 (Bloomberg, 2012).