6.
7.
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CS also asked whether other provinces, jealous of
The
Guangdong's success, had been permitted to put up prices for raw materials. Govt Econ replied that the degree of balkanisation in China was becoming more evident. Provinces could protect themselves from products being moved into their province from others, could hold on to their raw materials or put up their prices. disparities in prices could only be explained by provincial control. When asked by Ag PA whether this trend was increasing, Govt Econ said that it was question of this problem becoming more overt in price differences. There had always been protectionism between provinces but it had been better hidden under the Command economy.
Report on Economic Developments in Guangdong and their implications for Hong Kong (Paper CRC 14/88)
Govt Econ said that the paper had been produced at the request of the PA. It highlighted the important role Guangdong played in HK's economy. Guangdong's GDP was half that of HK but it had ten times the population. other words, its GDP in per capita terms was very low. In China it was the third most important province in terms of contribution to the national income.
In
8.
Guangdong's favourable treatment by the Central Authorities, for example, better access to foreign investment, meant that it could take full advantage of its geographical proximity to Hong Kong. Fuijan had had the same privileges but had done less well. 40% of foreign investment in China was made in Guangdong with 75-80% of it coming from Hong Kong. STI wondered what exactly this statistic, which was often quoted, meant. Govt Econ said that it was difficult in fact to explain
the figure. It could mean that the investment came through Hong Kong rather than from Hong Kong. It could
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