JIML
機密
10
technological transfer, the SSEZ is not yet functioning as
originally intended, due to the low technological level of
most of the foreign industrial investment in the zone.
Earner of foreign exchange
19.
Thus,
So far, the SSEZ is unsuccessful as a foreign exchange earner. Still at its initial stage of
development, the manufacturing sector of the SSEZ is
small. Further, a substantial proportion of the
manufacturing output produced in the SSEZ is for
consumption within China rather than for export. the manufacturing sector of SSEZ cannot yet be relied on
as an earner of foreign exchange. Largely a reflection of its small manufacturing capacity and its emerging role as an entrepot between the outside world and the interior of
China through Hong Kong, the SSEZ has been incurring very large (relative to the size of its economy) foreign trade deficits (paragraphs 9 and 10). So with respect to its
visible trade balance, the SSEZ is actually losing, rather than earning, foreign exchange.
20.
Consumption within the SSEZ cannot account for
such large visible trade deficits. Goods imported from outside China are being "re-exported" to other parts of China or purchased by people coming from nearby counties and provinces. The SSEZ has, in fact, become a shopping
centre for people in South China. This partly explains why the SSEZ is capable of sustaining such a large visible
trade deficit.
G.F. 326
CONFIDENTIAL # 2