The Pearl River Delta is one of the most successful cases of economic re-integration after a long period of separation. Hong Kong's traditional policy of non-interventionism and China's open-door policy have induced a rapid increase in cross-border trade, outward processing and outward investment. The paper focuses on the different modes of integration as well as on the driving forces behind. It argues that small- and medium- sized enterprises have played the pivotal role in the Delta's economic development. Their cross-border operations have been mainly facilitated through two channels: through subcontracting networks among manufacturers and through links with trading houses which are frequently small in size. The paper underlines three main keys to the Delta's economic success: a non-interventionist policy favourable for growth, a pronounced outward orientation in business which consequently exploits complementaries in comparative advantages and, last but not least, the so-called Chinese factor the special attitudes adopted by local entrepreneurs, their adaptability and flexibility, their work ethics and their common cultural heritage. In some respects, the Pearl River Delta can serve as a model for developing border regions in Central Europe along the former Iron Curtain. Despite their great potential, these regions are integrating only slowly. The paper suggests that border regions after a long period of political and economic division are predestined to become an economic power-house.