Hainans Exportwirtschaft, 1978-1987

Abstract This paper, which examines the development of Hainan’s export sector during the period 1978-1987/8 when Hainan still formed part of Guangdong province, is an attempt to interpret some of the relevant Hainan statistics published in China and define factors that may have exerted a significant influence upon the performance of the island’s foreign trade. For this purpose, the period under review is segmented into three cycles — 1978-80, 1981-84, 1985-1987/8 - and comparisons are made between Hainan’s exports and the total provincial exports of Guangdong. The value of Hainan’s exports only formed a fraction of the island’s gross value of industrial and agricultural output; in this and many other respects Hainan lagged behind the rest of Guangdong. The remote Iocation of the island, serious infrastructural problems and a weak industrial basis were in part responsible for this backwardness which affected the investment environment and foreign trade on the whole. Most foreign money came from Hong Kong which also bought up what little Hainan had to offer for export. This high degree of dependency on Hong Kong proved to be of disadvantage during the period when Hong Kong’s future status was still under negotiation and when, as a result, Hong Kong went through a recession and its demand for Hainan and Guangdong products declined. Structural factors and Hainan’s special relation to the China mainland also had adverse affects on the island’s export statistics. In the past, China had exploited Hainan’s tropical resources, hence most of the island’s producers were either orientated towards the local market or the mainland. The well-known car incident of 1984/5 and the ensuing crack down on the island’s foreign trade sector did additional damage, particularly affecting firms operating outside of the so-called waomao xitong (foreign trade system). In 1987 and 1988, when preparations went ahead to turn Hainan into a province of its own and a Special Economic Zone, total exports grew again and the overall situation in the foreign trade sector clearly improved. However, this development was disturbed by the events of June 1989.