Although maintaining the development momentum, this is likely to be a force keeping wage levels relatively low- and may not be to the full advantage of the indigenous population (a similar dilemma to that noted earlier for Hong Kong occurs - viz, when one speaks of economic benefits, is one referring to a desire to increase economic activity within the area being considered or to the well being of the inhabitants of that area? - the Chinese Central and Provincial Governments are likely to see things rather differently).
2.52 In most areas, the price of land is likely to continue to remain low. If high land prices detract foreign investors then the new market forces should ensure these prices begin to fall. In the peripheral areas of the delta there is, in any case, very little chance that there will be substantial rises in the price of land.
2.53 Vietnam is, however, a likely future competitor in the field of cheap land and labour - when the US embargo on investments in and trade with Vietnam are lifted, some of the Province's presently perceived advantages may diminish. Shanghai and other parts of China may soon also become competitors in this market (for more details see Section 2.5).
2.54 Despite the large external pool of cheap labour, the province is already moving higher up the technology ladder - though perhaps not as fast as its government would wish. In some areas (particularly the Special Economic Zones) wage differentials between Hong Kong are beginning (albeit slowly) to
narrow.
2.4 Provincial Weaknesses
of the Province are listed on Table 2.2. They are mainly concerned with:
(a)
(b)
(c)
(d)
lack of natural resources;
ineffective master planning and the Province's inability to provide infrastructure in line with the pace of economic development - the lack of coordination in infrastructure provision is also a problem;
corruption;
-
inappropriate regulations (many existing regulations are left-overs from the days of a planned economy new ones, more in line with a market economy and which can control the excesses of the free-market and reform the financial markets, are badly needed);
(e)
weak local planning controls;
(f)
poor environmental control and a general unawareness of environmental matters at a non-official level;
(g)
poor levels of training;
(h)
(i)
the problems associated with rural industrialisation (and the governance problems that this may soon generate);
institutional problems these include the practical difficulties that Central Government is facing in trying to implement a coherent macro-economic policy;
2.55 The Consultants' assessments ofthe weaknesses
()
lack of a systematic legal framework for holding
મા
Shenzhen Airport
- 20 -
A
1