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212 37 A Joint Interview with Japanese Correspondents Based in Shanghai October 21, 1988 ZRJ: My assessment of Shanghai’s current economic situation is an optimistic one. From January to September of this year, the value of industrial production increased 8.3% year on year, and this was higher than the growth rate of the past few years. Shanghai is a city of processing industries. Because of an increase in the price of raw materials, production costs went up, resulting in a decline in local fiscal revenues. However, we are sure that we can still meet our fiscal contract obligation this year of turning over RMB 10.5 billion to the central government. Exports from January to September earned 13.1% more forex than during the same period last year, and we expect to surpass our export target of US$4.3 billion for the full year. The price index rose by 19% in the first nine months of this year, the most in the past several years. Meanwhile wages and bonuses for those nine months increased by 23% over the same period last year, which is greater than the rise in the price index. Of course wage increases are uneven, and the real incomes of a small part of the population actually decreased. The production and supply of non-staple foods this year has been quite good. Vegetables are coming to market at an even pace, so they are available even during the slow season. While vegetable prices have risen somewhat, they are still cheaper than in many other large and medium cities across the country. Shanghai’s ability to produce and supply industrial consumer goods is very strong, so when a buying frenzy appeared in late August as it did in other cities, we supplied large quantities of materials and the markets steadied very quickly. Needless to say, our residents’ biggest complaint is still the excessive rise in the price of goods, but we are confident that we can control prices and ensure supplies. Tsukagoshi Toshihiko, Kyodo News: Will the nationwide economic contraction affect Shanghai’s development? ZRJ: Overall, the nationwide curbing of economic overheating is very good for Shanghai, because the fundamental problem for Shanghai’s economic Zhu_Shanghai Years_1987-1991_hc_9780815731399_i-xii_1-620.indd 212 12/26/17 12:00 PM A Joint Interview with Japanese Correspondents Based in Shanghai 213 development is the shortage of energy and raw materials. The supply of raw materials is becoming increasingly tight and prices are rising. Some cottonproducing areas are giving their own small cotton mills all they want, but their products are substandard and their prices are high. Yet a third of the stateowned cotton mills in Shanghai have been forced to halt production for lack of cotton. This is not good for the country, as 80% of the profits from Shanghai’s state-owned cotton mills are turned over to the state, whereas very few of the profits from township and village enterprises and small factories are turned over. Now that the central government is curbing economic overheating, the growth rates everywhere are slowing somewhat, so there will be some easing in the tight supplies of raw materials for Shanghai. It’s possible that after this adjustment, the gap in growth rates between Shanghai and other provinces and municipalities will narrow. At present, Shanghai’s economic growth rate ranks last in the country, yet its economic results still lead the nation. Through this rectification, Shanghai may well overcome the worst of its difficulties and get its economy to grow. At the same time, we are not underestimating the current difficulties. We must recognize that the situation is quite challenging and there may even be setbacks . But we are sufficiently prepared, both materially and psychologically, to meet our challenges. We are confident we will get past our difficulties and grow Shanghai’s economy. From January to September of this year, Shanghai absorbed US$258 million in foreign direct investment (FDI). This is an increase of 58% over the same period last year and already exceeds the US$240 million total for the whole of that year. We expect to reach US$320 million for the whole of this year. It’s not only that total investment is growing rapidly—there has also been a noticeable change in the composition of investments. Last year, over 60% of foreign investments were in tourism and hotels, whereas over 60% this year are in industrial projects. Sakoda Katsudoshi, Chunichi Shimbun: Shanghai wants to absorb...


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