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Current Hong Kong China Economic Developments: Monthly notes:
Guangdong trade and foreign investment
April 1981
1. According to China Economic News (27 April) the value of Guangdong's exports (to all destinations, including Hong Kong) in 1980 was US$1,650 million. By the end of last year, the province had signed 6,380 contracts with foreign firms, agreeing to process and assemble orders worth US$990 million, using imported equipment valued at US$67 million. The article said that Guangdong had earned US$86 million from processing fees levied on the firms (after allowing for deductions against the cost of plant and equipment). The number of compensation trade projects within the province was put at 93, involving some US$44 million of imported capital and equipment. Overseas firms had also invested some US$470 million in 345 cooperative production projects (including housing). Foreign investment in construction projects related to tourism amounted to US$310 million.
2. A feature article on Guangdong in April's China Trader included the assertion that the province is currently allowed to retain 30% of foreign exchange earnings from trade. In addition, 70% of all remittances to Guangdong from abroad are available for use in investment programmes. The article said that these two sources had together provided the province (over an unspecified period) with US$800 million in capital for modernisation. This compared with US$200 million earned by Fujian Province.
Guangdong's development plans.
3. Longer-range economic development plans for Guangdong appear to include the following initiatives: a further expansion of foreign trade, use of foreign capital to import technology and equipment, development of the existing industrial bases in Guangzhou and other cities, upgrading (renovation) of existing enterprises, and increases in the production of both traditional and new commodities for export. Emphasis is put on the use of foreign capital and technology mainly to develop agriculture, livestock breeding and light and textile industries, as well as the weak links in Guangdong's economy energy, transport, building materials, posts and telecommunications, and mining. In an effort to improve overall management and the access of foreign firms to Guangdong, the provincial authorities will seek to merge various industries and enterprises in order to establish combines responsible for the direct handling of import and
export activities.
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