Free-Enterprise Zone Leads China toward Market System Guangzhou's Entrepreneurial Spirit Has Withstood Both a National Retrenchment Program and the Crackdown against Democracy in 1989. Provincial Officials Say the Momentum toward Reform Here Is Irreversible. Guangdong Province ON THE FAST TRACK Series: POINTS OF THE COMPASS. First of Three Articles Appearing Today

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FOR a panorama of Guangdong's upstart economy, pull back the white-lace curtains on a northbound ride on the Kowloon-Canton Railway.

Across the border from Hong Kong rise the skyscrapers of Shenzhen, China's liveliest free-enterprise zone. Next appear the rice paddies and humming rural workshops of the country's richest region, the fertile Pearl River Delta. Finally, the blue diesel engine chugs past the abundant markets of the provincial capital, Guangzhou.

Scenes of prosperity on the three-hour journey lend credence to claims by Guangdong leaders that a large chunk of the southern province will achieve the living standards of a middle-income developed nation by the end of the century - 50 years ahead of the rest of China.

They also support a consensus among Guangdong officials that the free-market forces unleashed here since 1979 now constitute an irreversible engine for economic progress.

"The momentum of development in south China ... cannot be controlled by man," said Zhou Baohong, director of foreign investment in Shenzhen.

In recent years, Guangdong's resilience has been proven in the face of two major shocks: a nationwide economic retrenchment launched in 1988 and the reversion to Marxist orthodoxy by hard-line leaders after the June 4, 1989, Beijing massacre.

China's biggest exporting province, Guangdong now also boasts the country's fastest growing industrial sector, chalking up a growth rate of 27 percent from January to May.

Today, some Chinese predict the freewheeling province will also push forward with political liberalization ahead of Beijing.

"You could argue that Guangdong is going the way of (authoritarian regimes like) South Korea and Taiwan," where the emergence of a middle class has spawned demands for political participation, says a Western diplomat based in Guangzhou.

Now that Beijing has lost its grip on the province's economy, "the crucial question is one of political control," says a Chinese resident of Guangzhou.

Beijing's concern over Guangdong's growing autonomy prompted a long-awaited reshuffle of the provincial leadership this spring.

Ye Xuanping, a Guangdong native who emerged as a popular champion of reform during his tenure as governor since 1985, succumbed to pressure from Beijing and accepted a ceremonial post in the capital.

But Mr. Ye's departure is unlikely to cramp Guangdong's maverick style, say Chinese officials in Guangzhou.

Apparently by Ye's demand, the acting Governor Zhu Senlin and other officials recently promoted in the province are all avid reformers who are either native Cantonese or have spent much of their careers here. …


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