}
G.F. 326
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8
part of the Chinese government to boost exports.
Preferential treatment such as easier access to loans and
guaranteed supply of raw materials and electricity, is
given to export enterprises. It is also reported that, in
some places, surplus foreign exchange earned by
enterprises can be sold to the Bank of China at a rate of
one yuan per US dollar higher than the official exchange
rate of 3.7 yuans per US dollar. At the same time, export quotas have been raised and are more strictly enforced.
The sharp devaluation of the Renminbi in July has also
helped to increase Chinese exports.
13.
On invisible trade, a surplus of about US$3
billion was recorded in the first nine months of 1986,
which was sufficient to cover roughly one third of the
visible trade deficit. According to reports, the
remaining two thirds of the trade gap was financed largely by trade credits and borrowings (5), so that China's
foreign exchange reserves shrank only slightly. At the
end of September 1986, China's foreign exchange reserves
stood at US$10.4 billion, compared with US$11.9 billion
and US$10.5 billion at the end of December 1985 and of
June 1986 respectively.
(5)
Outstanding foreign debt of the state amounted to
US$6.9 billion as at end September 1986.
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