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132 20 An Interview with Kevin Sinclair of The Standard (Hong Kong) June 29, 1988 KS: Mayor Zhu, could you please talk about the current and future relationship between Hong Kong and Shanghai? You were recently quoted in newspapers as saying that foreign investment in Shanghai has already reached US$2 billion. How much of this do you estimate came from Hong Kong? How high will this reach in the future? ZRJ: Hong Kong has invested US$500 million in 149 projects in Shanghai, which is second only to the United States in foreign investments. I feel there is a great future for cooperation between Shanghai and Hong Kong because of Shanghai’s strengths in technology and Hong Kong’s in finance and information . Both Shanghai and Hong Kong are fairly large cities in Asia and there should be further cooperation between them. Currently, because of geographical proximity, Hong Kong has somewhat more cooperative projects in Guangdong. Geographical proximity is more advantageous for labor-intensive cooperating, but there are also advantages to cooperating with Shanghai, which features technology- and knowledge-­ intensive enterprises. In the past, cooperation between Shanghai and Hong Kong did not develop rapidly. This wasn’t only due to geographical reasons— there were also certain problems with Shanghai’s investment environment. I will very frankly admit that the investment environment in Guangdong is better than that in Shanghai and the awareness of a commodity economy is stronger there than in Shanghai, but we’re already doing solid work to improve the investment environment in Shanghai. Henceforth the pace of technical cooperation between Shanghai and Hong Kong will speed up. I recently noticed that some Hong Kong papers have been reporting more about the negative aspects of Shanghai, such as its declining fiscal revenues, poor morale, backward urban construction, and so on. Although there is some basis for these reports, I feel they should also see the positive elements in Shanghai. Shanghai has a large number of talented people with high cultural and technological standards; it has the most comprehensive array of industries Zhu_Shanghai Years_1987-1991_hc_9780815731399_i-xii_1-620.indd 132 12/26/17 12:00 PM An Interview with Kevin Sinclair of The Standard (Hong Kong) 133 in the country and is very strong in related capacities. In this sense, Shanghai has the best investment environment in the country. Because of the rapid population increase, Shanghai’s infrastructure construction isn’t keeping up, but problems in this area aren’t hard to solve. Take telephones, for instance. At liberation, Shanghai had 72,000 phones, more than Hong Kong. Over the past several decades, Shanghai added only 70,000 or so phones, reaching 142,000 phones by 1978. By contrast, Hong Kong now has over 10 times as many phone lines as Shanghai. In the past few years, we’ve adopted some preferential measures to develop digital telephones, which have nearly doubled in number. For the past seven or eight years, Shanghai has added 20,000 phones annually and will add 70,000 this year. By 1990 we can reach 500,000 to 600,000. At this rate, it won’t be very hard for our telephone facilities to catch up with Hong Kong’s. That’s why Hong Kong should see the positive side of Shanghai. Particularly since Shanghai implemented fiscal contracting this year, it has acquired greater autonomy and greater fiscal resources. Shanghai has the authority to directly utilize foreign investment—at present, it is the only such city in China. During the period of the Seventh Five-Year Plan, we will utilize US$3.2 billion in loans, while at the same time preparing to absorb large quantities of foreign direct investment (FDI). I hope that after you return, you’ll report more on the positive side of Shanghai . The current image of Shanghai in Hong Kong newspapers is a “gray” one. I hope Hong Kong’s confidence in Shanghai will be restored. I’m very optimistic about this: I see the positive side of Shanghai’s people, and they’re gradually acquiring a new dynamism. Recently, a Sino-American symposium on industry, trade, and economic development was held in Beijing. Americans sent 1,000 participants and the Chinese sent delegations from over 20 provinces and cities. The Shanghai delegation attracted the most attention there—it was the most popular participant with the Americans, and it conducted negotiations on the largest number of projects. That’s why someone at the workshop said that Shanghai is now “launching...


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