G.F. 326
CONFIDENTIAL **
8.
(b) Foreign investment
Regardless of the reasons for Guangdong's
•
in
success in attracting foreign investment, it is clear that the very rapid growth rates in its gross industrial output and exports in the 1980s are closely related to foreign investment activity. It is estimated that the cumulative
(12) total of realised direct foreign investment Guangdong up to the end of 1987 was US$3.6 billion, slightly more than 40% of the national total. Besides direct foreign investment, it is believed that more than 90% of the outward processing activities in China are located in Guangdong. Hong Kong investors accounted for about 60 to 80% of the direct foreign investment and for nearly all of the outward processing activities found in
Guangdong.
9.
7
While the rapid growth of Guangdong in the 1980s
(13) it has been highly regarded by some Chinese leaders has also come under criticism over whether the economic success of Guangdong represents a net gain to China as a whole or is achieved at the expense of the rest of the country. To the extent that the preferential status enjoyed by Guangdong in terms of policy is one important contributory factor in its success, such criticism probably has some foundation.
10.
(c) Stability
While Guangdong has been successful in achieving rapid economic growth, it has been less successful in maintaining economic stability, particularly since 1985
(12) Including joint ventures (equity and cooperative) and
foreign owned enterprises.
(13) The General Secretary of the Chinese Communist Party, Zhao Ziyang, is said to be a strong supporter of Guangdong's growth and development.
CONFIDENTIAL # 3
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