DELEGATES to the Guangzhou Trade Fair will be able to look back on a year of spectacular success for the Chinese economy. At the end of the year, China's foreign exchange reserves stood at US$21.7 billion, according to a report by the Hongkong Trade Development Council (HKTDC). The mainland's gross domestic product (GDP) grew by 12.8 per cent to RMB2,394 billion. It is forecast to grow each year by a further eight to nine per cent until the year 2000. This economic growth was due to increased investment in fixed assets, high industrial growth and substantial overseas investment. Industrial growth grew by 21.7 per cent in real turns. Even more remarkably, it has grown by another 20.4 per cent in the first two months of this year. This industrial growth is partly due to the rapid expansion and success of the private sector. By the end of 1992, with encouragement from the central government, there were 15 million individual enterprises and 139,000 private enterprises. Between them, they generated RMB113 billion in 1992, about 4.7 per cent of GDP. This is in sharp contrast to the state-owned sector, which shows little sign of becoming efficient, and where a quarter of the enterprises are operating in the red. China attracted direct foreign investment last year of US$57.5 billion. This is nearly four times the amount contracted in 1991 and more than half the total amount contracted since 1979. Nearly 49,000 foreign-funded enterprises were approved last year, nearly three times as many as in 1991. Hongkong was the leading investor last year. It was responsible for 62 per cent of all foreign investment between 1979 and September, 1992, and for 69 per cent of the 70,030 projects contracted during the same period. Other major investors last year included Taiwan, Japan and the United States, and the major recipients were Guangdong, Jiangsu, Shanghai, Fujian and Shandong. China's total trade was US$165.6 billion, which made it the world's 11th biggest trading nation in 1992. Hongkong contributes about one-third of China's foreign exchange earnings, and is its largest trading partner, responsible for 35 per cent of total trade in 1992, and 44.1 per cent of its exports. Hongkong's trade is clearly a two-way process. During the first nine months of last year, 78 per cent of the territory's domestic exports and 48 per cent of re-exports to China were raw materials for outward processing. Meanwhile, 71 per cent of Hongkong's imports from China were the processed goods returning, often for value to be added before final export worldwide. China's other major trading partners are Japan, the European Community and the US, but China has been expanding its markets, most notably with South Korea.