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Free-Trade Zone Gives Delegates Something to Talk About

After three years of "separation," the three delegations from the province of Guangdong and the special administrative regions of Hong Kong and Macao have been “reunited” at the Beijing Hotel this year during the fifth sessions of the Ninth National People’s Congress and Ninth National Committee of Chinese People’s Political Consultative Conference.

A staff member of the election liaison committee of the People’s Congress from Guangdong Province said: "For some reason, the Guangdong delegation was shifted from the Five Continent Hotel to Beijing Hotel."

Before their return, Hong Kong and Macao both had been part of the delegation group of Guangdong Province for accent and customs reasons more than geographic reason. At that earlier time, the three delegations "ate together, lived together, worked together" and went out together after a day’s meeting at the Congress.

And now? How will the three delegations get along with each other? Close together at the Beijing Hotel, one thing they can talk about is the free-trade zone topic.

At the urgings of local industrial and business groups who are in a down period, Hong Kong SAR administration is making every effort to promote integrated economic corporation with the mainland. Many Hong Kong business men in the latter half of last year began to advocate a free-trade zone with the mainland. So Guangdong Province got caught up in the pace after Hong Kong’s report to the central government, hoping the zone might first be implemented in the Pearl River delta.

Questions that will be the focus of concern among the three delegations: Whether the zone should be setup between Hong Kong and mainland or between Hong Kong, Macao and Guangdong Province and how to get the permission from the central government. The topic is very sensitive for it relates to the unbalanced development already existing among inland regions.

Facing China’s entry into the World Trade Organization, the three regions are more eager than ever corporate with each other. But the rising competition not only between nations but also between inland regions makes the situation more complex. Under the policy of "taking the overall situation in the country into account," they have more troubles to deal with.

For instance, Governor of Guangdong Province Lu Ruihua recently emphasized the flow of goods and materials at a local people’s congress session. Data shows that 68 percent of foreign trade container processing in Hong Kong comes from the Pearl River delta, which indicates the significance of Hong Kong for the development of inland areas in this field. About 100 Hong Kong logistic investors had invested in mainland by early this year, most in Guangdong and Shanghai. The current problem confronting the sector is not how much money should be invested, but where to invest.

In the financial sector, the policy research department of Shenzhen and the Shenzhen branch of the People’s bank of China recently issued a new strategy to cope with challenges from China’s entry into WTO. A significant policy involved attracting small and medium-sized Hong Kong banks to develop in Shenzheng, which is not a good news for Hong Kong. Hong Kong Monetary Authority now is seeking a win-win solution.

Confronted by national interests and regional interests, the three regions face no easy way to solve these problems. Being an export-oriented economy and plagued by recession in western markets, Hong Kong is urgently in need of support from Guangdong Province which is at its heyday. The free-trade zoo is a way out. On the part of Guangdong, such a free-trade zone can "add flowers to the brocade."

(GD--HK Information Daily 03/04/2002, translated by Li Liangdu for china.org.cn)

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