10.
11. ···
CONFIDENTIAL
only move slowly to the South.
機密
Traditionally the
situation in the South was more liberal than in the
North.
CS expressed concern that major projects essential to China's development, e.g. power stations, needed central authority to proceed and were being suspended whilst projects less strategic were going ahead because such authority was not required. This could result in economic development being hindered and achieved precisely the opposite effect to that desired. He asked whether the slow down in food production and increase in population was proving to be a problem. Govt Econ (Ag) said there was indeed such a problem and it was borne out by the statistics. Industrial productivity had increased by 17% in 1988 whilst grain production had only increased by 3%. A factor which compounded the problem was that with rising affluence, people wanted to eat more and eat better. Traditional rice planting areas were being given over to the production of cash crops, leading to rice shortages.
In answer to CS's query on the question of bilateral trade balance, Govt Econ (Ag) said although there was a trade deficit between China and Hong Kong, Hong Kong had trade surpluses with countries such as the USA and countries in the EEC. The overall trade position was therefore almost balanced.
12.
PA asked whether the frequently quoted fact that China earned 25-30% of her foreign exchange from Hong Kong was valid or not. If it were true, it demonstrated very usefully China's vested interests in Hong Kong. Govt Econ (Ag) said that it was only a crude estimate. Two years ago, 25% was the figure used and now the range had been stretched to 25-35%. CS requested that more work be done to substantiate this point. It was a useful one for briefings.
GF 323
ACTION : Govt Econ (Ag)
機密
CONFIDENTIAL
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