TNAG-2527-FCO40-3696-Hong-Kong-China-Relations-Committee-1992 — Page 115

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in March 1991(7).

projects involving debts owed to both enterprises and the

government which totalled Rmb 38 billion(®), The State

Council has also ordered expenditure on new investment

projects to be controlled strictly, but the actual impact

is likely to be limited, given the

It has examined 10 000 investment

of this measure

continuously loose monetary stance().

6.

/

Total

Largely stimulated by the continuous growth in economic activity and thus workers' payroll(10)

consumption expenditure increased significantly.

value of retail sales amounted to Rmb 685 billion in the

first three quarters of 1991, representing an increase of

12.8% over the same period in 1990. Discounting inflation,

retail sales registered a growth rate of 10% in real

terms. During the same period, sales to institutional

units increased by nearly 20% in money terms. The central

4

(7) This debt-clearing committee has identified three major reasons for the large amount of overdue inter-company debts: insufficient allocation of funds for capital construction and technical innovation and transformation projects, thus requiring supplementary borrowing; heavy losses incurred by the state-owned enterprises; and the piling up of stocks which locked up working capital.

(8)

(9)

In the light of this, the committee approved Rmb 23 billion of bank credits for clearing debts related to these investment projects and ordered the local governments to raise the remaining Rmb 15 billion.

Outstanding bank loans stood at Rmb 1,664 billion at end-September 1991, representing an increase of 20.2% over a year earlier.

(10) In the first three quarters of 1991, workers' payroll amounted to a total of Rmb 224 billion, representing in money terms over the same

an increase

of

period in 1990.

13.6%

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