Fierce competition has broken out between Beijing, Shenzhen and the Pudong district of Shanghai to operate the mainland's first hi-tech export processing zone. At the same time, the Communist Party leadership has mapped out plans to move relatively low-tech industries in the coastal open cities and economic zones to heartland provinces. A planning source said in Beijing yesterday the leaders of the three cities had lobbied top cadres, including President Jiang Zemin and Premier Zhu Rongji, for funds to start the hi-tech export zone, which will enjoy special policies including low taxes. Leaders, including Mr Zhu, have ruled that to avoid duplication, only one such zone will be allowed in the foreseeable future. The source said Shenzhen pulled off a coup last month when it got Mr Zhu's permission to host a national hi-tech fair every year. The city boasts the highest level of 'hi-tech content' in its industrial products. However, Guangdong economists pointed out that in terms of the concentration of hi-tech personnel, Shenzhen lagged behind Shanghai and Beijing. This is despite an aggressive and expensive, campaign undertaken by Shenzhen authorities to 'import' well-trained talents from existing hi-tech centres. It is understood that because of his long association with Shanghai and Beijing, Mr Jiang favours Pudong and the Zhongguancun district in the capital to run a hi-tech export zone. But Shenzhen's supporters have pointed out that both Pudong and Beijing lack the market-oriented practices and atmosphere taken for granted in Guangdong. They say while there are fears that the development of Hong Kong's Cyber-Port might take away investments from Shenzhen, a symbiotic effect could be developed between the SAR and the special economic zone. Meanwhile, under the leadership of Vice-Premier Wen Jiabao, Beijing has adopted new policies to shift less sophisticated industrial operations from the coast to central provinces such as Guangxi, Hunan, Hubei and Henan. Many Shenzhen factories not classified as hi-tech firms are expected to be moved to Hunan or Guangxi during the 10th Five-Year Plan period of 2001 to 2005. The leadership believes this will spearhead the development of the backwater central provinces.
