Wednesday, August 17, 2005

China Exclusive: Glorious SEZ striving hard for further growth

China's vanguard city in reform and opening-up is seeking to continue its decades-long boom, though Shenzhen no longer enjoys preferential treatment from the central government, the city's leader Li Hongzhong said in Shenzhen Wednesday.
"The Shenzhen Special Economic Zone (SEZ) is pursuing healthy, stable development," Li, secretary of the Shenzhen municipal committee of the Chinese Communist Party, told the press on the eve of the 25th anniversary marking the SEZ's establishment.
Shenzhen, the country's first and most successful SEZ, reported a per capita gross domestic product (GDP) of more than 7,100 US dollars in 2004, the highest among all Chinese cities. It's target is 12,000 dollars for 2010.
Even when China as a whole was endeavoring to cool down its roaring economy, Shenzhen's economy grew at a blistering rate of 14-17 percent annually, Li said.
One of Shenzhen's biggest advantages, according to him, lies in the market-oriented mechanism built up over the past two decades and more and local people's foreknowledge on development.
"We are a real immigrant city. The number of registered citizens here is just 1.65 million, but more than 8 million people from elsewhere are working in this city. Most of them are enterprising."
Li said Shenzhen also benefits greatly from its neighborhood with Hong Kong, a world-class financial and trade center. "Close links with Hong Kong give us more advantages than any other places in China."
Large numbers of Hong Kong firms have moved their operations to Shenzhen to take advantage of cheap labor force. By the end of June, 20 Hong Kong banks had opened business outlets in Shenzhen.
As a matter of fact, the territory of Hong Kong and current Shenzhen belonged to a single county, namely Bao'an, before Britain occupied Hong Kong. Bao'an is now the name of one of Shenzhen's six districts.
Late Chinese leader Deng Xiaoping proposed the idea of SEZ to kick off China's sweeping reform and opening-up efforts. A host of SEZs including Shantou, Zhuhai and Hainan were inaugurated on the heels of Shenzhen.
Shenzhen, the bellwether, is facing a dilemma: On the one hand, the central government will not grant any more preferential treatment for it in terms of taxation and project allocation; on the other, all the Chinese are paying attention to its development as an SEZ -- the pressure is there, analysts say.
The Shenzhen Stock Exchange, one of China's two bourses, has not been allowed to accept the issuance of A- and B-shares for years.
"We do not need any kind of special treatment. We should depend on ourselves now," said Li Hongzhong, adding that reform is the "nickname" of Shenzhen. Shenzhen should further shift its development philosophy from processing to high-tech industry, he said. High-tech exports reached 35.1 billion US dollars last year, making up 45 percent of the city's total, figures show.
Li said the financial sector and modern logistics should also be a boon to Shenzhen's economy, which soared an average 28 percent annually since the SEZ was set up in 1980.
The latest challenge for Shenzhen is energy crunch. In the past few days, local drivers are permitted to purchase oil worth no more than 100 yuan (about 12 dollars) at oil stations. "I have joined the queue here for three hours for the oil," a driver surnamed Li told Xinhua.
"The phenomenon gave us a warning and we will attach great importance to it," Mayor Xu Zongheng told Wednesday's press conference.
He acknowledged that energy and resources including land, water and electricity power are posing a threat to the sustained growth of Shenzhen.
He said his government will speed up urbanization to "create" more land for industrial use and usher in more water and electricity from other places.
Meanwhile, Shenzhen will curb the excessive growth of population, Xu said, but adding that "Shenzhen's door is always open to the talented people the city needs."
August 18, 2005
Source: Xinhua


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