CONFIDENTIAL #2
3
As a consequence of this visible trade deficit, China's
foreign exchange. reserve position deteriorated sharply
(for a more detailed account of the sharp deterioration of
China's foreign exchange reserve position and China's reaction to this development, please refer to the special paper on this topic (CRC INF 2/85)).
5.
As regards the Shenzhen Special Economic Zone
(SSEZ), it appeared that the economy of the SSEZ continued to grow rapidly in the first half of 1985. Its Industrial
Development Committee reported that during this period the
construction of 66 new factories was completed (but the
extent to which these had been taken up by industrialists
is not known). The value of the SSEZ's industrial output
reached Rmbl.3 billion in the first half of 1985, 92%
higher than in the same period in 1984. Within total
industrial production, production by joint ventures and by enterprises with sole foreign capital grew 2.1 times and
reached Rmb730 million. The new capital involved was
US$134 million, 75% higher than in the first half of
1984. The SSEZ exported goods valued at a total of US$176
million in the first five months of 1985, 3.1 times the
amount exported in the same period in 1984. The value of
capital construction works completed in the first half of 1985, at Rmb1.05 billion, was double that a year ago.
Retail sales, at Rmbl.05 billion, were 25.5% higher than
in the first half of 1984.
Visible trade between Hong Kong and China
6.
China has long been Hong Kong's second largest
trading partner. However, due to the substantial growth
in visible trade between Hong Kong and China in the first
half of 1985, China overtook the USA to become Hong Kong's
largest trading partner.
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