G.F. 326
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Guangdong unless at very high prices so as to share its gains from exporting. On the demand side, apart from the consumption boom, there has also been an upsurge in investment in outward processing plants. A new foreign currency loan quota of US$700 million has been arranged this year to finance such investment (paragraph 19). Reflecting this investment boom, in the first five months of this year the amount of steel reinforcing bars consumed by state-owned enterprises in Guangdong was 61.3% higher than in the same period last year. But during this period, there were signs of some slowing down in the growth of outward processing activities. According to one news report, the number of outward processing contracts signed was about 1,800, involving a total contracted value
(9) of US$110 million
These were 35% and 10%
respectively less than in the first five months of 1987. The amount of processing fees actually received was US$48
(10) million , representing an increase of 15% over the same period last year. If this trend continues, which is quite possible in view of Hong Kong's less buoyant domestic export performance, there is a possibility of over-expansion in outward processing capacity in Guangdong.
23.
The growth of both its industrial output and exports in Shenzhen City (including the Special Economic
(11) Zone)
gathered further momentum in the first half of
(9) But some other news reports suggested that outward processing activities in Baoan County and Shenzhen Special Economic Zone had increased rapidly in the first few months of this year.
(10) Due to time lag between production and payment, some of these fees might be related to work done in 1987.
(11) The Shenzhen Special Economic Zone is part of the
Shenzhen City. The statistics reported here refer to the City as a whole.
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