CONFIDENTIAL
- 6-
15.
Both Qingdao and Dalian are faced with a number of problems in recent years. Their rate of industrial growth was slow compared with cities in South China. Although it still ranked as the fourth largest port among the 14 open coastal cities, Qingdao is facing so strong competition from two other port cities to its north (Yantai 烟台 ) and south (Lianyungang 連雲港 ) (see Annex III) that the volume of cargo handled had slipped, albeit marginally, for two consecutive years in 1989 and 1990:
Ranking Among the 14 Coastal Cities
Year
Cargo Handled
(mn tonnes)
1987
30.70
4th
(after Shanghai,
Qinhuangdao and Dalian)
1988
31.53
4th
1989
31.45
4th
1990
30.43
N.A.
16.
We also know that Dalian is troubled by stockpiling and poor economic
efficiency of its large enterprises. North East China, the oldest industrial area in China, was
dominated by large scale state-owned enterprises, which were notorious for being deeply and
perennially entrenched in 'triangular debts' (). 10% of the nation's large-and-
medium-sized enterprises are located in Liaoning Province. The province is the heaviest
debtor in 'triangular debts', accounting for approximately Rmb25 billion or one-eighth of the
national total of Rmb200 billion. The situation was so critical that Vice Premier Zhu Rongji
( 朱鎔基 ), the former mayor of Shanghai now in charge of China's industries,
had visited the North East a few months ago and issue directives to local officials to settle
the debts. Dalian, with many large-sized state-owned enterprises, was one of the cities visited by Zhu, no doubt because it also had very serious triangular debt problems.
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