Guangdong authorities should make clear note of
2.41 The need to reform the environmental regulatory system has, however, been recognised.
New Planning and Business Freedoms
2.42 The decentralisation of decision-making and the consequent new freedoms in the field of planning have allowed the province to set its own course and to give priorities to private developers. It should, however, be noted that the Central Government's prime policy was for "decentralisation" and not the move towards a free economy that actually came about.
2.43 The onward decentralisation which has since occurred has given municipal and county governments much autonomy and has reduced bureaucracy - or, at least, confined it to the level of Government, which, because it is most likely to reap the benefits from any new investments, has the motives to make it work.
2.44 The province's freedoms in fiscal matters and its easy access to foreign exchange also mean that it can generate the revenues it needs to promote development.
2.45 Business freedoms now include free market pricing for most goods and services, the freedom to retain a large proportion of foreign exchange earnings, access to foreign exchange at prices close to free market levels and a flexible attitude on the part of the authorities to regulations. Private individuals, collectives and other organisations are also free to begin new enterprises, form joint ventures with overseas investors or evento set up their own overseas operations. Import tariffs on materials for outward processing are usually zero.
Brickworks polluting atmosphere
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2.46 The only real controls that remain relate to premises, enterprises' obligations to their workers and obtaining raw materials from overseas (that is for enterprises not exporting their products). In many ways, the "de facto" freedoms (there are many "de jure" restrictions) now enjoyed by Guangdong's businessmen are equal to, and perhaps better than, the freedoms enjoyed by businessmen in more openly capitalist economies. Even state owned enterprises are now free to make business decisions without reference to the central authorities.
The Emerging Property Market
2.47 The emerging property markets, particularly in Shenzhen, Zhuhai and Guangzhou are now allowing businesses the freedom to buy, retain or sell factory and office space and to adjust their holdings in line with their market needs. Similar developments in the housing markets are giving incentives to workers to increase their earnings.
2.48 Much more reform is, however, needed in this sector (see next section).
Political and Institutional Freedoms
2.49 It should be noted that the institutional freedoms which the province presently enjoys are highly dependent on political factors. Present freedoms. involve planning, fiscal accounting, the right to legislate and an attitude of “allowing anything that is not expressly prohibited by the Central Government”. While there are no indications that the present situation is soon likely to alter, changes in China have often been unpredictable. Any presumption that the present situation will continue indefinitely should be treated with caution. Also included in this list of freedoms are the wide range of investment opportunities available to foreign investors (and, when necessary, the flexible interpretation of official rules).
Cheap Labour and Land
2.50 Cheap labour and land will clearly be available for some time. Although seen as neither a strength nor a weakness, some comment on their continuing role in the development process is appropriate.
2.51 There is clearly an enormous pool of cheap Chinese labour ready to move into the province from poorer areas of China when jobs are available. This is likely to ensure that low value-added and assembly type plants continue to be attracted to the province.