and state departments from outside the SSEZ. Dr Chan emphasizes that no money has come from the central government's budgetary allocation as the Chinese leaders had repeatedly proclaimed that the SEZS could not expect to get any financial support from the central government. In Dr Chan's view this was a peculiar characteristic which distinguished the SSEZ from other successful examples of economic development like the famous Daqing Oilfield in
China.
15.
Although there is no explicit budgetary allocation by the central government to finance developments in the SSEZ, the degree of government involvement, at least indirectly, is nevertheless very significant. Practically all the enterprises and banks in China are government owned. Investment made by the Guangdong provincial government and state departments clearly involve government funds. The granting to the SSEZ by the central government of relatively freer foreign trade privileges has made possible the local accumulation of funds (mostly generated by wholesale and retail trading activities going on in the SSEZ). So it is misleading to conclude that the SSEZ provides an unique example of economic success in China which does not rely on central government's budgetary provision. In reality, the development of the SSEZ is still reliant on government support, though the funds are provided in a somewhat different manner and with somewhat lower level of bureaucracy.
16.
Besides the amount of money involved, the technological level of the foreign investment in the SSEZ is also significant, as an important objective of setting
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CONFIDENTIAL #B
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