TNAG-1051-FCO40-1301-China-s-economic-relationship-with-Hong-Kong-1982 — Page 63

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Processing/assembling arrangements.

Although

the Chinese side provides land, labour, factory buildings and equipment, the foreign partner retains full ownership of the materials and products which are processed or assembled for foreign markets. The Chinese side earns

revenue through wages, rents and utility charges

Such arrange- paid by the foreign businessman. ments are generally concluded by rural collective enterprises run by the communes and production brigades. The number of such projects in Shenzhen by the end of 1980 were numerically quite large (356 projects) but represented only 2.1% of total investment (i.e. HK$33.6 million);

Ventures in which the foreign businessman is the sole investor (wai shang duzi jingying). Under such an arrangement, the Chinese side makes land available to rent and the necessary labour. Revenue is earned through land rents and taxes. These are mostly in commerce and service trades. There were six such projects in Shenzhen by the end of 1980, accounting for 5% of the total investment i.e. HK$80 million or an average of HK$13.3 million in each project. Interest in the SEZS (in particular, the forerunners Shenzhen and Zhuhai) is clearly being maintained by the Chinese authorities. The Hong Kong monthly "Economic Reporter" (published

publishers also of "China · by Economic Information and Agency

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Economic News") carried a special feature on the SEZS in its August edition. Although it covered some new ground, it generally echoes the content of Fang Zhuofen's article.

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