Beiji A CHINESE WEEKLY OF NEWS AND VIEWS VoTIT, No.18 May 2-8, 1988 US-Soviet Relations & the World Situation HAINAN PROVINCE- CHINA'S LARGEST SEZ SHENZHEN AT NIGHT Chinese cities are usually quiet at 10 o'clock at night. But in the Shenzhen Special Economic Zone, night life is just starting. The three photos show Shenzhen at around 1 0 pm. by Chen Xiaopo Yan Li (right) is a magazine editor. She usually attends a late evening lecture at the Art Training Institute. The open-air theatre called "Everybody is Happy" attracts many amateurs who have performing talents. The students of the management department at the Shenzhen University attend a lecture. Beijing HIGHLIGHTS OF THE WEEK vol.. 31, NO. IX MAY 1W8 New State Council Set to Tackle Tasks CONTENTS • Honesty in government, tightening discipline and eliminating bureaucracy should be the main principles of the NOTES FROM THE EDITORS 4 new State Council's work style, Chinese Premier Li Peng said Hainan to .Adopt More recently at the council's first plenary meeting. He also outlined Spet-ial Policies the new division of labour among government members (p. 5). EVENTSARENDS 5-0 State (oiincii Duties I)i\idcd Hainan Becomes a Province and the Fifth SEZ China Vahic lies With Circece Japanese F.nvo> VJMtb Beijing • The recent NPC session granted Hainan Island the status of Price Hikes Hit China s Markets province and made it China's fifth and largest special economic China Launches Housing Reform zone (p. 4). A report on Hainan's resources, preferential \Vcekl> Chronicle (April 18-24) policies and development strategy (p. 14). INTERNATIONAL 10-13 Palestinian Struggle; Assassination Enterprise Law—A IVIilestone of Reform Will Not Stop Uprising Japan: Paving ihe Way to • The Enterprise Law, drafted after nine years of preparation Send Troops Abroad and passed by a majority at the recent NPC session, provides a Soviet Union: Letter Sets legal guarantee for the independent management of enterprises. Off New Debate on Reform It is expected to increase their vitality and produce a WorJd Bank-IMF; Uncertainty tremendous impact on China's economy as a whole (p. 20). Lingers After Meetings Laos: Cautiously Taking The Road of Reform Changes in the World Favour Detente Hainan Province—China's • The world economy is entering a new period of Largest SEZ 14 development. The trend towards a multipolar world has been Enterprise Law: A Milestone strengthened. All countries, even the United States and the For Reform 20 Soviet Union, have found it necessary to concentrate on Fang Lizhi's Academic internal affairs, especially economic and technological Acliievements 23 development. These changes will help stabilize the international Otianges in International situation and prolong the current US-Soviet relaxation (p. 24). Relations 24 TOURISM 29 Assassination Will Not Stop Uprising BUSINESS/TRADE 30 CULTURE/SCIENCE 32-34 • Abu Jihad, the deputy commander of the Palestine COVER: A bird"s-eve view of the Haikou Revolutionary Forces, was assassinated in Tunis on April 16. Citv. The atrocity aroused a chorus of condemnation around the Xue Chao globe and new waves of protest by the Palestinians (p. 10). Subscription rates (1 year): USA US$24.00 Published every Monday by General Editorial Office Tel: 8314318 Australia A.$24.00 Canada Can.$23.00 BEIJING REVIEW English Dept Tel; 831.5599 Ext. 546 New Zealand NZ.$33.00 24 Baiwanzhuang Road, Distributed by China International Book UK £13.00 Beijing 100037 Trading Corporation (GUOJI SHUDIAN) The People's Republic of China P.O. Box 399, Beijing, China Hainan to Adopt More Special Policies by Yang Xiaobing The first session of the Seventh materials are sold to the mainland through transfer and lease to National People's Congress, with more than a 20-percent develop and manage the land or which just closed, granted Hainan increase in value after processing, conduct real estate business. The Island the status of province and full customs duties will be levied longest term for the transfer of made it China's largest special on imported raw materials. land-use right is set at 70 years. economic zone. • Foreign-funded enterprises To supplement the policies CPC Central Committee Gen• (Sino-foreign joint ventures, co• adopted by the central govern• eral Secretary Zhao Ziyang once operative and wholly foreign- ment, efforts are now being made suggested that Hainan could owned enterprises) usually begin to draft relevant local regulations. implement more open economic paying over a 15-percent income Xu Shijie, who has been policies than the existing special tax in their third profit-making entrusted by the central govern• economic zones (such as Shen• year. Hight-tech and development ment to take charge of the zhen) and take the lead in projects, or construction projects preparations for establishing experimenting with political struc• for basic facilities other than Hainan Province, expressed the tural reform at the provincial power, will pay inconae tax in their need to boldly use the policies level. Since then, Hainan Island fifth profit-making year. The adopted by the central govern• has become the focus of attention Hainan government has the power ment, but not abuse them. The of many overseas investors. to approve tax exemptions or "motorcar incident" of three years According to a reliable source, reductions for enterprises facing ago, in which the right to import the special preferential policies for difficulties. It will be possible for motor vehicles on the island was Hainan Island approved by the foreign investors to remit profits made use of to sell them on the central government will soon be abroad directly from the enter• mainland for profits, is sdll fresh made public. The major contents prises' foreign exchange accounts in people's memories. of the policies will include: tax free. A 10-percent tax will be The central government has • Hainan will have the right to collected on outward remittances followed two principles in grant• raise funds abroad, and accept of profits from loan interests, ing more open policies to unlimited foreign loans under the equipment rental and royalties. Hainan — the island must not sell principle that the island bears all imported goods on the mainland responsibility for their repayment. • Foreign exchange can be for high profits, and the other • Foreigners will be allowed to freely bought and sold by Hainan places must not take advantage of contract management of state- enterprises and enterprises in Hainan's preferential policies to owned and collectively owned other special economic zones. indulge in tax avasion and the enterprises in Hainan. • Foreign banks can set up illegal procurement of foreign • No quotas will be set for branch organizations in Hainan to exchange. export products from Hainan. handle foreign exchange deposits Products rnanufactured using raw and loans, bonds and stocks. To cater to the establishment of materials or semi-finished pro• • Foreigners holding passports a large special economic zone, ducts from the mainland with can enter Hainan with visas issued Hainan has now started reforms more than 20 percent added value by fronfier stations. Compatriots to its political structure, with the will be treated as products from from Hong Kong and Macao can aim of introducing a system of Hainan. do the same using their ID cards. "small government and greater • Hainan will be able to import For Taiwan compatriots, only society." "Small government" means of production as well as 24 travel certificates and visas issued involves streamlining government controlled import goods, such as by frontier stations are needed. organizations and more import• household electrical appliances, Foreigners travelling to Hainan antly limiting government func• with customs duties exempted or on business can apply for tions to planning, co-ordination, reduced. Customs duties will be temporary residential certificates supervision and examination. levied on imported cigarettes and and stay for longer periods of "Big society" implies using socio• liquor. The use of imports will be time. economic units to replace govern• limited to the island. If products • Foreign enterprises and indiv• ment organizations in charge of made using imported raw iduals can acquire land-use rights | real estate, transport and com- 4 BEIJING REVIEW, MAY 2-H, 1988 EVENTS/TRENDS State Council Duties Divided hinese Premier Li Peng out• premier is responsible for the State C lined the new division of Council, assisted by the vice- labour among government mem• premiers and state councillors. bers at the first plenary meeting of State Council merhbers are to the State Council held on April 18 carry out the principles and in Beijing. policies of the Communist Party As decided at the first State of China in their work. The Council Standing Committee National People's Congress and meeting on April 14, Li Peng has its Standing Committee supervise overall responsibility for the the council's work. munications, commerce, agricul• activities of the State Council, The State Council must see that ture and forestry. These socio• with Vice-Premier Yao Yilin in departments and local govern• economic units will be run like charge of daily and economic ments at all levels play a full role. enterprises and operate in line affairs. Vice-Premier Tian Jiyun is Council members must maintain with the laws of the economy. responsible for agriculture, com• close ties with the people, listen Compared with China's other merce and trade, while Vice- attentively to their views and carry special economic zones, Hainan Premier Wu Xueqian will handle forward the fine tradition of Island is much better off in terms foreign affairs. serving the people. The regul• of resources. It has rich oil, natural Among the state councillors, Li ations also call for high work gas, iron and titanium reserves, Tieying will be in charge of efficiency and reducing bureauc• abundant tropical fauna such as cultural and educational affairs; racy in government work.