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outlook for the SSEZ should be reasonably good in the

years to come. The zone stands a good chance of becoming an important industrial town and should in future further

enhance its present role as an access point for

international trade.

Implications for Hong Kong

32.

In terms of economic activity, the SSEZ is

highly dependent on Hong Kong. While Hong Kong provides

the major impetus to its economic growth and development,

the support that the SSEZ gives Hong Kong in respect of

the more labour-intensive and land-intensive industrial

activities is to the benefit of Hong Kong's manufacturers.

33.

The SSEZ's rapid economic growth and development since 1978 has depended heavily on Hong Kong as regards

the provision of capital, of a market for its products, of technical and other expertise/knowledge, and of managerial

support in general. In the process, the SSEZ has become

very much part of Hong Kong's economic hinterland. This

high degree of dependence could increase further if the

"Coastal Region Economic Development Strategy", advocated

by Party General Secretary Zhao Ziyang, is brought into

effect. Under this policy, it is intended that Guangdong,

together with its special economic zones, should be used

as a bridge between the more inland provinces and Hong Kong, so that the other provinces can share the advantages afforded by Hong Kong in promoting their economic growth and development.

34.

The extent of Shenzhen's dependence on Hong Kong can be illustrated by the following :

(a)

Hong Kong is Shenzhen's principal trading

partner (around 95% of the total, see

paragraph 16), taking into account direct trade

as well as re-export and transhipment trade;

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