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the Chinese leaders, notably Deng Xiao-ping, toned down their expectations and took the view that the SSEZ was only an experiment. More recently, as the SSEZ achieved greater success in respect of industrial development and export activities, the Chinese reformers again emphasized the role of the SSEZ as a testing ground for economic reforms which might subsequently be applied to the country as a whole. The SSEZ is also cited as an example to be followed by other coastal cities. Probably because the Shenzhen officials who received the visiting team were of only lower to middle ranking, they did not mention anything about the central government's expectation of the special economic zones.
30.
Although it has been almost ten years since China announced the setting up of the special economic zone in 1979, it is now still too early to pass final judgement on whether the zone is a success or failure. Although the zone has had some success in terms of industrial development, entrepôt trade between the rest of China and Hong Kong is probably still the mainstay of the SSEZ's economy (paragraph 15). In respect of attracting foreign investment involving high-tech products or production processes, the zone has achieved little. Neither can the zone be taken as the model for economic development in China.
31.
But in terms of more realistic expectations, it would be wrong to consider the zone a failure because the very substantial investment that has been put in is now beginning to bear fruit. The current rapid development in the SSEZ is apparently made possible by the relatively high proportion of foreign exchange earnings retained by both local authorities and enterprises. With the growth of its manufacturing sector gaining in momentum and the development of new sources of foreign exchange earnings (through land and property sales), the general economic
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