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D.L. MICHALK
are committed. However, any foreign proposal which is consistent with these plans might be more favourably received than one which is not included.
In the short time that Hainan has been opened to foreign investment, forty-four contracts representing a total investment of US$ 87 million have been signed with foreign firms, thirty-four of which were operative in 1983. To provide technical counterparts for these projects, more than 4,000 intellectuals, cadres and workers have been transferred to Hainan, while many overseas Chinese have also offered their services. Talks on a number of key projects are under consideration including a petrochemical plant, an express highway, additional power stations (China Daily, 1983), and a tunnel link with the mainland across the Qiongzhou Straits (South China Morning Post, 1984), while the first joint-venture for onshore oil exploration in China was recently arranged for northern Hainan with an Australian consortium (Sydney Morning Herald, May 27, 1985).
Although significant development has taken place over the past five years, naive mishandling and in some instances outright abuse of the autonomy delegated to Hainan officials has hobbled the momentum. Recent reports of corruption and profiteering on Hainan have exposed a sophisticated system where racketeers have spent cherished foreign exchange on imported cars and home appliances made cheaper by the preferential import duty cuts the island enjoys, and resold these on the mainland at huge profits. One source alleged that the racket involved the purchase of more than 89,000 cars, 2.86 million televisions and 252,000 video recorders which cost more than US$ 1.5 billion in foreign exchange (Thompson, 1985). Besides prosecuting officials, the Central Government has reacted by strictly limiting funds for joint-ventures and technology imports, and increasing import duties by as much as 80 percent to price foreign goods out of the local market.
Hainan's agriculture has also undergone development through the adoption of new agricultural policies and the transfer of technology from western nations. In the last five years substantial changes to commune structure and productive practices have occurred with the introduction of the "production responsibility
134
D.L. MICHALK
are committed. However, any foreign proposal which is consistent with these plans might be more favourably received than one which is not included.
In the short time that Hainan has been opened to foreign in- vestment, forty-four contracts representing a total investment of US$ 87 million have been signed with foreign firms, thirty-four of which were operative in 1983. To provide technical counterparts for these projects, more than 4,000 intellectuals, cadres and work- ers have been transferred to Hainan, while many overseas Chinese have also offered their services. Talks on a number of key projects are under consideration including a petrochemical plant, an ex- press highway, additional power stations (China Daily, 1983), and a tunnel link with the mainland across the Qiongzhou Straits (South China Morning Post, 1984), while the first joint-venture for onshore oil exploration in China was recently arranged for northern Hainan with an Australian consortium (Sydney Morning Herald, May 27, 1985).
Although significant development has taken place over the past five years, naive mishandling and in some instances outright abuse of the autonomy delegated to Hainan officials has hobbled the momentum. Recent reports of corruption and profiteering on Hainan have exposed a sophisticated system where racketeers have spent cherished foreign exchange on imported cars and home appliances made cheaper by the preferential import duty cuts the island enjoys, and resold these on the mainland at huge profits. One source alleged that the racket involved the purchase of more than 89,000 cars, 2.86 million televisions and 252,000 video re- corders which cost more than US$ 1.5 billion in foreign exchange (Thompson, 1985). Besides prosecuting officials, the Central Gov- ernment has reacted by strictly limiting funds for joint-ventures and technology imports, and increasing import duties by as much as 80 percent to price foreign goods out of the local market.
Hainan's agriculture has also undergone development through the adoption of new agricultural policies and the transfer of tech- nology from western nations. In the last five years substantial changes to commune structure and productive practices have oc- curred with the introduction of the "production responsibility
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