Guangzhou has an extremely advantageous relative location. At the confluence of the Xi, Bei, and Dong Rivers and connected to the South China Sea through the Pearl River system, Guangzhou has developed into South China's largest port. Land and air transportation links are being constantly improved. From Guangzhou, there are over 100 flights daily to all domestic destinations, as well as daily flights to international destinations including Bangkok, Manila, Singapore, Sydney, Jakarta, and Kuala Lumpur. Guangdong Province has one of the most comprehensive highway networks in China, and the Guangzhou-Sanshui, Guangzhou-Kowloon, and Beijing-Guangzhou railroads help connect Guangzhou to the rest of China. Two new rail lines, the Beijing-Kowloon and Shanghai-Kowloon through trains, opened in May 1997.

Guangzhou has also benefitted enormously from its proximity to Hong Kong and Macau. Daily flights, ships, trains, and hovercraft run between Guangzhou and Hong Kong, and Guangzhou attracts heavy Hong Kong investment. This integration of Guangzhou and the Pearl River Delta with Hong Kong has accelerated since Hong Kong's reversion to Chinese rule in 1997. Because of Guangzhou's long history of contact with the outside, many overseas Chinese have their roots in Guangzhou; thus the city has both a locational and a kinship advantage in attracting foreign investment. Guangzhou is also located close to the Shenzhen and Zhuhai Special Economic Zones, which are capitalistic zones intended to attract foreign investment and manufacturing.

Guangzhou is located on the northern fringe of the Pearl River Delta, a fertile and populous agricultural and manufacturing region with a year-round growing season. The Delta provides Guangzhou with raw materials for light industry as well as food products. Recently, the towns of the Pearl River Delta have taken on a new role in value-added manufacturing and tertiary economic activities.

Guangzhou is a prototypical primate city. With a large population, a long history, and a prime location, it dominates the cultural, political, economic, financial, and transportation life of a vast hinterland, which includes Guangdong, Guangxi, Hunan, Yunnan Guizhou, and Sichuan Provinces.