1
H3 020/6
Mr Walker,
Resaura Defit our Seaten, FED
15/5
2 Mr Magne
Her Heswall Minellick
3. Enter the
Present
Governor
PA
PS/GH
DEM CONEIDENTHAL
PA HONG KONG /CHINA
Page
(85)
64
COASONE
Meeting with Xu Jiatun, Director NCNA
at 3 pm on 7 April
Ms Y.S. Chiu (interpreter)
Mr. Xu Jiatun, Director Mr. Qiao Zhonghuai,
Vice Director
Mr. Chen Guo Ping,
Deputy Divn Chief
The Governor asked how the NPC had gone. Mr. Xu said that on the whole the CPPCC and NPC had gone very well. Delegates considered Li Peng's report had been a good one: and agreed that its analysis of the current situation was correct, that insufficient measures had been taken to resolve existing problems and that these problems were a feature of developing economies everywhere. He added that it was normal for Government policies to attract criticism. Taking Hainan as an example, some people said that the proposed arrangements for foreign (Japanese) interests to participate in the development of Yan Pu Port would amount an act of treason and that the Port, after development, would become a concession. Mr. Xu dismissed the criticism as an over-reaction.
2.
The Governor asked about recent developments in Shenzhen, especially the question of empowering the zone to legislate for itself. On the issue of empowering Shenzhen to legislate, Mr. Xu said that some Hong Kong and Macau delegates held that it was premature to do so as the regional People's Congress of Shenzhen had yet to be established and that a city should come under the authority of a province. Mr. Xu said such comments were with reasons. He added that the idea of empowering Shenzhen was good, but timing needed careful consideration.
3.
The Governor asked about current Chinese policy towards economic development in Guangdong and the coastal provinces. Mr. Xu said that the strategy for coastal provinces remained unchanged, as did the policy for special economic zones. In fact, there would be further but limited development in these areas. Mr. Xu added this was confirmed by the Secretary of the CPC Leading Group for the Economy during a meeting in Shanghai.
4.
The Governor said he had noted the Governor of Guangdong had said that Guangdong should be allowed to develop its own economy. Mr. Xu said that Vice Premier Yao Yilin had reported that there was currently too much capital construction in China. There was a need to tighten control over construction to slow development a little and thus reduce inflation. The Governor of Guangdong wanted his Province to be excluded from this general policy: but exceptions were only possible where construction with foreign investment was involved. Guangdong had up to now had the great advantage that it could retain 100% of the foreign currency it earned: other provinces could retain only 20% paying the rest to the central government. However a new limit of 15% retentions was now to be imposed across the board, including Guangdong.
CONFIDENTIAL
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G.F. 82