TNAG-1464-FCO40-1991-Visits-by-Chinese-officials-to-the-UK--including-visit-by-Hu-1986 — Page 75

the internal economy.

a)

The most striking aspects have been:

joint ventures between Chinese and foreign

enterprises;

b) the establishment of Special Economic Zones on the coast offering especially favourable conditions for foreign investors.

c)

decentralisation of foreign trade management and the use of foreign exchange. Enterprises are to have more direct links with foreign concerns, rather than having to work through State foreign trade bureaus. Progress on this aspect was seriously reversed by the need to counter the 1985 import surge.

Other notable features are:

5.

a)

b)

c)

d)

e)

f)

g)

the development of a body of economic law;

emphasis on expertise rather than, ideology;

development of banking and commerce;

renewed attention to statistical work, auditing and accounting;

willingness to accept foreign loans and participate in international economic financial organisations;

increasing the priority of agriculture and light industry at the expense of heavy industry; and

development of small towns as rural industrial centres to relieve pressure on large industrial cities.

CONFIDENTIAL

J20ABR 31

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