About 46 percent of the contracts signed have been on industrial projects, with the other half involving tourism, trade and other such businesses. Of the industrial projects, most are in electronics, light and building materials projects. Chiness-foreign joint ventures account for 65 percent of the investments. Chinese and foreign co-operative enterprises make up about 30 percent, while 5 percent are solely foreign-owned enterprises.

What countries and regions do investors come from?

From 1980 to 1983 investors were mainly from Hongkong and Macao. Since 1984, however, they have been joined by businessmen from Southeast Asian countries, Japan, the United States, the Federal Republic of Germany, Canada, Australia, Jordan, Poland and Hungary.

What are your plans for modernizing Xiamen's outward-oriented industry?

We will devote our main efforts to the following two fields: First, we intend to attract additional foreign capital. It is hoped that 60 percent of the direct investment will be used for industrial production. Those in which investment will be concentrated are projects involving the production of precision instruments and meters, electronics, refined chemicals and new-type building materials. Projects which facilitate the technical progress of existing industrial enterprises, and projects which turn out products mainly for export to earn more foreign exchanges and which can provide the necessary accessaries for the imported equipment will also be given investment priority.

Second, we will speed up the technological transformation of the existing enteprises. In the next three to five years, we plan to upgrade the technology of Xiamen's main industrial enterprises by promoting co-operation between domestic enterprises and by importing advanced foreign equipment and technology. At that time, the technical level of all enterprises should be up to advanced domestic levels of the same trades and some of the zone's key enterprises to the 1980s world levels. The present efforts will focus on the technical transformation of electronic, foodstuff, machinery textile and other light industrial enterprises.

In 1990 we plan to double the 1985 industrial and agricultural production output value, as well as Xiamen's GNP.

What does free port entall? And could you describe your office's plan for the implementation of the free-port policies in Xiamen?

Implementing certain free-port policies step by step in the zone involves carrying out a number of policies followed by some of the world's other free ports. These policies include allowing the storage of foreign goods with the exception of narcotics and weapons, processing these goods and exporting them once again by the appointed enterprises. All of this is done under the strict supervision of the customs house. No customs duties, import tax and value-added tax are levied on them.

This decision of the Chinese government will have a far-reaching influence on the future development of the Xiamen SEZ. Xiamen officials are now drawing up concrete measures and creating necessary conditions for the policies' implementation.

As a free port, the zone must first create conditions to facilitate the entry and exit of personnel and the import and export of materials as well as the circulation and exchange of currency. To this end, we have done the following things: Xiamen has attracted a variety of foreign and overseas Chinese banks that are now considering opening branches in Xiamen. The Xiamen International Bank, a joint venture run by the Bank of Industry and Commerce, the Fujian Investment Corp., the Xiamen Construction Development Corp. and a Hongkong Corp., recently opened to business with the approval of the Chinese authorities at the end of 1985. The Singapore United Overseas Bank Group and the Chi-Yu Banking Corp. have also been granted approval to operate branches in Xiamen. Also filing applications with the Chinese authorities for branches or joint ventures in Xiamen are the Hongkong and Shanghai Banking Corp., the Chartered Bank, the World Bank and others.

The Ministry of Foreign Affairs has planned to establish a visas office in the city for the convenience of the people visiting the zone.

We are making preparations for establishing a management line between the special zone and the other areas in order to facilitate business and tourist travel in and out of the zone.

To stimulate the business of the Xiamen International Airport, the State Council has invested the local authorities with the management power of the airport. The Xiamen Airline Co., the first local airline company in China, has also recently gone into operation.

The city has also improved its legislative work.

As one of the mayor's senior aides, what knotty problems have you encountered in building the Xiamen SEZ?

The first problem to confront us was the lack of experience. Another is the shortage of talented people. Though the former problem has been basically solved, the latter still exists. I believe that as long as we persist in the reforms, in the open policy and in learning from our work, we will be better able to improve our special economic zone.