TNAG-1051-FCO40-1301-China-s-economic-relationship-with-Hong-Kong-1982 — Page 24

CONFIDENTIAL

8.

- 4 -

Units of administration. Rather, there is a tendency

towards the proliferation of administrative units. On 11 November, Wen Wei Po reported that a new Bao'an County had recently been brought into existence. Bao'an County had existed before March 1979 as a local administrative unit sub-

ordinate to Huiyang Prefective. In 1979 the county was

redesignated Shenzhen Municipality, directly under the provincial authority, with Shenzhen Special Economic Zone in the southern part of the municipality. It seems that that part of Shenzhen Municipality which lies to the north of the SEZ will now revert to the name of Bao'an County. According to Wen Wei Po, headquarters for the People's Government of the new county will be built at Luo Bu Keng to the north of Nantou. 1st Secretary of the new County CCP Committee will be Fang Bao, who is concurrently also a Secretary of the Shenzhen Municipal

Party Committee.

9.

This administrative reorganisation may well generate more confusion than it resolves. Although Bao'an County will not enjoy Shenzhen's status as a SEZ, and therefore will not be able to offer the same favourable terms to foreign investors, the County is already seeking direct investment or processing contracts (especially in the agricultural sphere) from Hong Kong businessmen. According to press reports, the County has already established its own Foreign Economic Liaison Office (thus duplicating an agency by the same name in Shenzhen).

10.

Demarcation of the boundaries of Shenzhen SEZ. A great deal of importance has been attached to the clear demarcation of the SEZ's boundaries. The reasoning behind such a move is to enable the SEZs to become more or less "free-flow zones" with easier access for both imported goods and the movement of people (see above paragraph 4 (a) and (e)) anticipated in the 10-point programme announced in August. There has been no clear indication where Shenzhen's northern boundary will actually run.

CONFIDENTIAL

/Nevertheless