TNAG-1621-FCO40-2235-Relations-between-Hong-Kong-and-China-1987 — Page 94

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to have developed in the way desired by those who planned them. Rather than developing into an export-oriented manufacturing zone with a high level of technology, the Shenzhen Special Economic Zone has become largely a trading centre running a large trade deficit with the outside world. Its manufacturing industries have been relatively slow to develop. Another area with some degree

of success in the two SEZs is tourism. But that was not the original objective of setting up the SEZS.

67.

With its more recent concentration on the Open Cities and the Economic and Technical Development Districts, China seems to have shifted its emphasis from creating growth nodes from scratch on greenfield sites to furthering development on the basis of existing

infrastructure and existing pools of skilled labour. Thus the new focal points for growth in Guangdong are likely to be in the established cities and towns like Guangzhou,

Foshan and Huangpu, although, given the investment already made in it, it is unlikely that the Shenzhen SEZ will be

entirely ignored.

68.

A plausible development scenario is that the

Pearl River Delta region will concentrate on agricultural and industrial development while Hong Kong will specialize in services. Although the territorial frontier will

remain and the labour markets will continue to be

segregated, the boundaries between the two economies are likely to become increasingly porous. A greater degree of economic interaction and integration is to be expected. Within the limits imposed by quotas and the origin rules, specialisation on the basis of comparative advantage would tend to bring about complementary developments which would

be beneficial to both economies in overall terms.

G.F. 326

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