TNAG-1051-FCO40-1301-China-s-economic-relationship-with-Hong-Kong-1982 — Page 97

FCO40 Hong Kong Department Records 聯邦事務部香港部檔案 All

L

G.F. 324

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Current Hong Kong China Economic Developments February 1981

Guangdong Provincial People's Congress

1

The Third Session of the Fifth Provincial People's Congress was convened on 24 February in Guangzhou. The Congress opened with a speech

by Vice-Governor Liu Tianfu on the work of the Guangdong provincial government. Delegates are also expected to elect a new provincial governor (most probably, said Da Gong Bao on 26 February, Liu Tianfu himself) and three vice-governors.

2.

Liu's speech was interesting in that it reinforced, and lent authority

to, the authorities' evident concern to reassure foreign investors that the province would continue to welcome outside participation in the economy despite the policy of economic readjustment dictated by Peking. Liu reminded delegates of the 1979 State Council decision conferring special status to Guangdong in its economic foreign relations; he emphasised that these flexible policies. remained unchanged. He looked forward to an increase in the volume of exports from the province in 1981 and a quicker development of Guangdong's Special

Economic Zones. Liu said that he found the initial successes of the economic

zones encouraging, but that the pace of development should be quickened, with

greater powers delegated to them in the coming year. Such enthusiasm is

surprising given that Da Gong Bao on 17 January had reported Deng Xiaoping's

recent comments on the same subject as follows: "the steps and methods should

be readjusted and the pace can be slowed down a bit".

3.

Liu's concession to national economic readjustment was that there should be cutbacks in the province's spending, particularly on capital

construction projects, and that industries which consumed large amounts of

the province's scarce energy resources or placed heavy demands on the already

stretched transportation network would be closely controlled.

4.

Nevertheless, Liu predicted that there would be more development than retreat in Guangdong. Precisely because energy and transportation were

weak links, these sectors would benefit most from foreign investment. The

other sectors specifically mentioned as suitable for foreign investment

included the renovation of old industries, marine produce, housing and

tourism. In all sectors, though, the key consideration would be the ability

of enterprises to own profits and foreign exchange earnings, with little or

no capital outlay on the part of the Guangdong authorities.

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