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property and an, as yet, mainly undeveloped housing market; and
political uncertainty regarding the continuation of the reform process.
2.56 The heavy emphasis on low cost outward processing production is perhaps also a weakness. Many of the foreign firms which have set up factories in Guangdong may move yet again to even lower cost areas, such as Vietnam and Bangladesh. technology industries have not yet been attracted to the province in sufficiently large numbers to ensure more certain and lasting prosperity.
High
2.57 It is also likely that the uneven development between sectors that has characterised the early years of reform (as seen in the speculative property market, the high growth in the wages of some, but the relatively slow growth in average wages and poor inter-sectoral links) will remain. The main cause of this uneven development is, once again, lack of coherent control over the economy.
Lack of Natural Resources
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2.58 The lack of economically exploitable natural resources is a serious problem - but not one that is insurmountable -it does, however, mean that the province is not particularly suited to heavy industry. In order to overcome the problem much reliance has to be placed on trade growth in the economy is, consequently, highly dependent on external factors. Good transport links with the rest of China for raw materials supplies, and to the outside world for imports and exports, are required. It may be noted that Japan, too, has few natural resources but has, nonetheless, been economically very successful,
2.59 The Province's heavy industry is, however, dominated by the State sector. The lack of natural resources and this sector's present difficulties in adjusting to new market conditions suggest a rapid decline in the importance of these industries in the province. Adjustments may, however, be difficult to obtain without serious social upheavals.
2.60 Off-shore oil is known to exist but, to date, test drilling results appear to have been disappointing.
Ineffective Master Planning and the Province's Inability to Provide Infrastructure in line with the Pace of Economic Development
2.61 The present planning weaknesses do not form
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Much engineering is of low standard - vehicle slowing down as it negotiates ramp at end of bridge
the hindrance on development that they might - this is because, the plans are often superficial, are very often over-ambitious (all possible new development can usually be construed as being within the plan) and, it is reported, judicious payments to officials can usually overcome any difficulties.
2.62 The main problem lies in the inefficiencies that arise because each local authority has its own development plans, most of which pay scant attention to the plans of other areas. The proliferation of small, inefficient, oil fired power stations catering for local demands is a clear example of this lack of coordination.
2.63 The difficulties in providing sufficient infrastructure to keep up with the pace of development is a problem that is common to most "over-heating" economies. In Guangdong, the problem is particularly acute, not because of the slow pace of infrastructure provision (by world standards, the rate of provision is high), but because of the enormous pace of developments.
2.64 Another, perhaps bigger, problem is the lack of coordination in infrastructure provision - the devolution of responsibilities, which has done so much to stimulate growth, has been the main cause of this lack of coordination, and the wasteful duplication of some infrastructure (for example, port facilities) at the same time as the under or inefficient provision of others (for example, water and power supplies and effluent disposal).
2.65 The quality of the engineering of much. infrastructure is also in doubt. There is a danger that much will have to be replaced.
2.66 The existing urban hierarchies, which are a mixture of urban and village land uses, will also make redevelopment difficult.
2.67 The solutions to much of these problems are generally bound up with the solution to the problem