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first half of 1987. It is doubtful, however, whether
such high growth rate of China's exports can be
sustained for much longer as domestic inflation is likely to have the effect of shifting resources to the domestic sector from the external sector. other hand, more imports may be allowed to enter
China in order to meet part of the unsatisfied
domestic demand (paragraphs 10 to 13).
On the
(5) Money supply and loans have been growing rapidly in
the first half of 1988, accommodating the rapid growth of the economy and the high rate of inflation (paragraphs 14 to 16). The unofficial exchange rate of Renminbi depreciated sharply over the same period
(paragraph 17).
(6)
(7)
With a growth rate in real terms of 31.1%, Guangdong
was the fastest growing province in terms of gross industrial output in the first half of 1988. But the problem of over-heating has also become more serious
as demand continued to increase despite serious
bottlenecks on the supply side. There is also a danger of over-expansion of outward processing capacity (paragraphs 21 and 22). Shenzhen's economy also grew rapidly as measured by all its major economic indicators (paragraph 23).
Hong Kong's domestic exports and re-exports continued to grow rapidly in the first half of 1988. A large proportion of this growth was related to the strong
growth of domestic consumption in China. Outward
processing activities may have grown more slowly in
1988, given the slow-down in the growth rate of Hong
Kong's domestic exports to its overseas markets
(paragraphs 25 and 26).
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