CONFIDENTIAL # 3
3
will be widened and ten ports along the river will be expanded. The telecommunication network of the Yangtze Region will also be improved (2).
4.
The latest investment figures show that the
growth rate of capital construction (including plant and machinery, and building and construction) slowed down to 9.5% in the first three quarters of 1986, from a rate of 38.6% in the same period last year. In apparent recognition of the undesirable effects of the application
of financial controls across-the-board, China seems to
have adopted a more selective approach in its credit
policy, with less restrictive terms for projects in the
bottleneck areas and for enterprises in the export
sector. Partly reflecting this, investment in energy projects rose by 18.6% in the first half of this year,
while that in transport and telecommunications grew by
10.7%. This represents a significant improvement from the
situation in the early part of this year, where investment in the key bottleneck sectors seemed to be lagging behind.
G.F. 326
(2) China has recently signed contracts with the Cable
and Wireless Co. Ltd. to develop the
telecommunications system there.
CONFIDENTIAL #B