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Special economic zones of China

In justifying opening up and the series of economic reforms that ensued in China, Deng Xiaoping referred to Karl Marx and his theories, which predicted that nations need to undergo urbanization and a stage of capitalism for a natural socialist transition. One of the most renowned reforms under Deng was establishing four "special economic zones" along the Southeastern coast of China, with Shenzhen, Shantou, and Zhuhai located in Guangdong province and Xiamen located in Fujian province. Special economic zones (SEZs) in mainland China are granted more free market-oriented economic policies and flexible governmental measures by the government of China, compared to the planned economy elsewhere.

This allows SEZs to utilize economic management which is more attractive to foreign and domestic businesses. In SEZs, "...foreign and domestic trade and investment are conducted without the authorization of the Chinese central government in Beijing" with "tax and business incentives to attract foreign investment and technology".[1] Trade was originally controlled by China's centralized government. However, these special zones are where market-driven capitalist policies are implemented to entice foreign investments in China. In 1986, China then added 14 additional cities to the list of special economic zones.

History Edit

In the late 1970s, and especially at the 3rd Plenary Session of the 11th Central Committee of the Chinese Communist Party in December 1978, the Chinese government initiated its policy of reform and opening up, as a response to the failure of Maoist economic policy to produce economic growth which would allow China to be competitive against not only industrialized nations of the west but also rising regional powers: Japan, Korea, Singapore, Taiwan, and Hong Kong.[2]

Officials in Guangdong Province led by Provincial Party Secretary Xi Zhongxun seized the initiative, starting with an investment project in Shekou prepared by Yuan Geng on behalf of the Hong Kong-based China Merchants Steam Navigation Company. This project, initially a ship breaking facility, was approved by Li Xiannian on January 31, 1979. In April 1979, Xi Zhongxun and other Guangdong officials presented in Beijing a proposal to give broader flexibility to the coastal provinces of Guangdong and Fujian to attract foreign investment, with additional exemptions in four cities, namely Shenzhen in the Pearl River Delta region, Zhuhai and Shantou in Guangdong and Xiamen[3]: 158  (Amoy) in Fujian Province. For these, Chinese Paramount leader Deng Xiaoping coined the name "special zones"[4][5] and characterized them as experiments in the mold of the pre-1949 Communist base areas.[6]: 65  The proposal was approved on July 15 and the four special zones were officially established on August 26, 1979.[7] Within these SEZs, export-focused businesses had the leeway to respond to quickly respond to demand in foreign markets.[8]: 50  These initial SEZs successfully attracted foreign capital, primarily from ethnic Chinese in Taiwan, Hong Kong, and Southeast Asia.[9]: 90  Foreign businesses in these areas were generally motivated to move production to China's SEZs because of lower labor costs, preferential economic policies, and the general trend of offshoring more simple manufacturing as globalization increased.[9]: 90 

Successes in the initial SEZs led to the establishment of additional SEZs in 14 coastal cities:[8]: 50  Dalian, Qinhuangdao, Tianjin, Yantai, Qingdao, Lianyungang, Nantong, Shanghai, Ningbo, Wenzhou, Fuzhou, Guangzhou, Zhanjiang and Beihai. Since 1988, mainland China's opening to the outside world has been extended to its border areas, areas along the Yangtze River and inland areas. First, the state decided to turn Hainan Island into mainland China's biggest special economic zone (approved by the 1st session of the 7th NPC in 1988) and to enlarge the other four special economic zones.

Shortly afterwards, the State Council expanded the open coastal areas, extending into an open coastal belt the open economic zones of the Yangtze River Delta, Pearl River Delta, Xiamen-Zhangzhou-Quanzhou Triangle in south Fujian, the Shandong Peninsula, the Liaodong Peninsula (in Liaoning Province), Hebei Province and Guangxi autonomous region. In June 1990, the Chinese government opened the Pudong New Area in Shanghai to overseas investment, and additional cities along the Yangtze River valley, with Shanghai's Pudong New Area as its "dragon head."[10]

Since 1992, the State Council has opened a number of border cities and, in addition, all the capital cities of inland provinces and autonomous regions. In addition, 15 free trade zones, 32 state-level economic and technological development zones, and 53 new and high-tech industrial development zones have been established in large and medium-sized cities. As these open areas adopt different preferential policies, they play the dual roles of "windows" in developing the foreign-oriented economy, generating foreign exchanges through exporting products and importing advanced technologies and of "radiators" in accelerating inland economic development.

Most of China's SEZs are located in former treaty ports and therefore have symbolic significance in demonstrating a "reversal of fortunes" in China's dealings with foreigners since the century of humiliation.[8]: 51  Researcher Zongyuan Zoe Liu writes that "[t]he success of these cities as 'red' treaty ports represented another step in China's overall reform and opening-up plan while legitimizing the leadership of the CPC over the Chinese state and people."[8]: 51 

Primarily geared to exporting processed goods, the five SEZs are foreign trade-oriented areas which integrate science, industry and innovation with trade. Foreign firms benefit from preferential policies, such as lower tax rates, reduced regulations and special managerial systems. In 1999, Shenzhen's new and high-tech industry reached an output value of 81.98 billion yuan, making up 40.5% of the city's total industrial output value.

Since its founding in 1992, the Shanghai Pudong New Area has made progress in both absorbing foreign capital and accelerating the economic development of the Yangtze River valley. The government has extended special preferential policies to the Pudong New Area that are not currently enjoyed by the special economic zones. For instance, in addition to the preferential policies of reducing or eliminating Customs duties and income tax common to the economic and technological development zones, the state also permits the zone to allow foreign business people to open financial institutions and run tertiary industries. In addition, the state has given Shanghai permission to set up a stock exchange, expand its examination and approval authority over investments and allow foreign-funded banks to engage in RMB business. In 1999, the GDP of the Pudong New Area came to 80 billion yuan, and the total industrial output value, 145 billion yuan.

In May 2010, the PRC designated the city of Kashgar in Xinjiang a SEZ. Kashgar's annual growth rate was 17.4 percent in 2009, and Kashgar's designation has since increased tourism and real estate prices in the city. Kashgar is close to China's border with the independent states of former Soviet Central Asia and the SEZ seeks to capitalize on international trade links between China and those states.[11]

In 2015, then-magistrate of Kinmen County (ROC) Chen Fu-hai, along with a non-profit Taiwan organization "with close ties to the CCP",[12] proposed a referendum in which Kinmen would become a special economic zone and obtain free trade and free investment between it and neighboring SEZ Xiamen on the mainland. The plan received controversy due to PRC investment in the ROC being otherwise strictly controlled; it was praised by a Xiamen government official and PRC state media, but the referendum did not[citation needed] receive approval from the government of Taiwan before Chen's term ended in 2018.

List of the SEZs and open coastal cities Edit

As part of its economic reforms and policy of opening to the world, between 1978 and 1984 China established special economic zones (SEZs) in Shantou, Shenzhen, and Zhuhai in Guangdong Province and Xiamen in Fujian Province as well as designating the entire island province of Hainan as a special economic zone.[13]

In 1984, China opened 14 other coastal cities to overseas investment (listed from north to south): Dalian, Qinhuangdao, Tianjin, Yantai, Qingdao, Lianyungang, Nantong, Shanghai, Ningbo, Wenzhou, Fuzhou, Guangzhou, Zhanjiang, and Beihai. These coastal cities have been designated as the "open coastal cities" (simplified Chinese: 沿海开放城市; traditional Chinese: 沿海開放城市; pinyin: yánhǎi kāifàng chéngshì).[14][15]

Then, beginning in 1985, the central government expanded the coastal area by establishing the following open economic zones (listed from north to south): the Liaodong Peninsula, Hebei Province (which surrounds Beijing and Tianjin; see Jing-Jin-Ji), the Shandong Peninsula, Yangtze River Delta, Xiamen-Zhangzhou-Quanzhou Triangle in southern Fujian Province, the Pearl River Delta, and Guangxi Zhuang Autonomous Region.

In 1990, the Chinese government decided to open the Pudong New Area in Shanghai to overseas investment, as well as more cities in the Yang Zi River Valley.

Since 1992, the State Council has opened a number of border cities and all the capital cities of inland provinces and autonomous regions.

In addition 15 free-trade zones, 32 state-level economic and technological development zones, and 53 new and high-tech industrial development zones have been established in large and medium-sized cities. As a result, a multilevel diversified pattern of opening and integrating coastal areas with river, border, and inland areas has been formed in China.[16]

Economic policies of the SEZs Edit

Economic policies of SEZs included tax exemptions, reduced custom duties, reduced priced land, and increased flexibility to negotiate labor contracts and financial contracts.[17]: 37  SEZs were also authorized to develop their own legislation.[6]: 84  The Shenzhen Special Economic Zone was the most active SEZ for legislative experiments over the period 1979-1990 and these had a significant role in shaping national economic legislation on foreign trade and investment.[6]: 84 

Shenzhen's economic transformation Edit

Out of the special zones, perhaps the most successful was Shenzhen. It transformed from 126 square miles of villages into a business metropolis.[18] As seen by the table below, the ten years of economic reform from 1980 to 1990 increased population in Shenzhen by six-fold, GDP by around sixty-fold, and gross industrial output by two-hundredfold. Before 1980, Shenzhen's GDP was just 0.2 percent of Hong Kong's. In 2018, the city's GDP hit 2.42 trillion yuan (US$372 billion), overtaking Hong Kong.[19] Successes in Shenzhen prompted Chinese central authorities to instruct provincial officials to learn from Shenzhen.[20]: 114 

Year Population (thousands people) GDP (million yuan) Gross industrial output (million yuan)
1980 332.9 270 99
1982 449.5 826 424
1985 881.5 3902 3119
1990 2019.4 17,167 20,912

Overseas SEZs Edit

From 1990 to 2018, Chinese enterprises established eleven SEZs in sub-Saharan Africa and the Middle East including: Nigeria (two), Zambia, Djibouti, Kenya, Mauritius, Mauritania, Egypt, Oman, and Algeria.[21]: 177  Generally, the Chinese government takes a hands-off approach, leaving it to Chinese enterprises to work to establish such zones (although it does provide support in the form of grants, loans, and subsidies, including support via the China Africa Development Fund).[21]: 177  Such zones fall within the Chinese policy to go out and compete globally.[21]: 182  The Forum on China-Africa Cooperation promotes these SEZs heavily.[21]: 177–182 

The first Chinese overseas SEZs facilitated the offshoring of labor-intensive and less competitive industries, for example in textiles.[21]: 177  As Professor Dawn C. Murphy summarizes, these zones now "aim to transfer China's development successes to other countries, increase business opportunities for China manufacturing companies, avoid trade barriers by setting up zones in countries with preferential trade access to important markets, and create a positive business environment for Chinese small and medium-sized enterprises investing in these regions."[21]: 177  Overseas SEZs also foster support for China in the international system and help advocate for developing country causes through South–South cooperation.[21]: 182  They "help China demonstrate it is acting as a responsible great power in these regions."[21]: 182 

Effectiveness and legacy Edit

Deng described China's SEZs as "social and economic laboratories where foreign technologies and managerial skills could be observed", including in the development of manufacturing technology, a private real estate market, and management techniques.[20]: 113 

Many scholars argue that SEZs played a decisive role in the development of China and the success of Communism as implemented in China. Since their inception, SEZs have contributed 22% of China's GDP, 45% of total national foreign direct investment, and 60% of exports. SEZs are estimated to have created over 30 million jobs, increased the income of participating farmers by 30%, and accelerated industrialization, agricultural modernization, and urbanization.[22] One of the primary theoretical foundation of SEZs is its ability to cultivate a form of innovation that is uniquely top-down (supported by government) and bottom-up (characterized by local problem solving), while utilizing resources and research at every level. SEZs reflected a desire for Deng Xiaoping's CCP to be experimental, fluid, and localized when implementing Communist reforms.

However, issues like prioritizing the short-term gains, encompassing a limited number of industries, and lack of entrepreneurial promotion are pointed out by critics of the SEZs. Others, like Gopalakrishnan, point out that "Left out of the picture are inequities in development, arable land loss, real estate speculation and labour violence", as well as significant transparency problems in bureaucracy.[23]

China has benefitted from SEZs through foreign enterprises bringing in expertise, technology, and equipment.[17]: 37  In turn, private firms have benefitted from inexpensive labor, a business-friendly environment, robust infrastructure, and China's large domestic market.[17]: 37–38 

A 2022 study in the American Economic Journal found that SEZs in China led to increased human capital investment with improved educational outcomes.[24]

See also Edit

Notes Edit

  1. ^ "Special economic zone (SEZ) - Chinese economics". Encyclopedia Britannica.
  2. ^ Worden, Robert L.; Savada, Andrea M.; Dolan, Ronald E. (1987-07-01). "China: A Country Study". Fort Belvoir, VA. doi:10.21236/ada205396. {{cite journal}}: Cite journal requires |journal= (help)
  3. ^ Ang, Yuen Yuen (2016). How China Escaped the Poverty Trap. Cornell University Press. ISBN 978-1-5017-0020-0. JSTOR 10.7591/j.ctt1zgwm1j.
  4. ^ Stoltenberg, Clyde D. (1984). "China's Special Economic Zones: Their Development and Prospects". Asian Survey. 24 (6): 637–654. doi:10.2307/2644396. ISSN 0004-4687. JSTOR 2644396.
  5. ^ Holmes, Frank (21 Apr 2017). "China's New Special Economic Zone Evokes Memories Of Shenzhen". Forbes. Retrieved 22 March 2019.
  6. ^ a b c Heilmann, Sebastian (2018). Red Swan: How Unorthodox Policy-Making Facilitated China’s Rise. The Chinese University of Hong Kong Press. ISBN 978-962-996-827-4.
  7. ^ Vogel, Ezra F. (2011). Deng Xiaoping and the Transformation of China. The Belknap Press of Harvard University Press. p. 398.
  8. ^ a b c d Liu, Zongyuan Zoe (2023). Sovereign Funds: How the Communist Party of China Finances its Global Ambitions. The Belknap Press of Harvard University Press. doi:10.2307/jj.2915805. ISBN 9780674271913. JSTOR jj.2915805.
  9. ^ a b Šebeňa, Martin (2023). "Chinese Economic Miracle". In Kironska, Kristina; Turscanyi, Richard Q. (eds.). Contemporary China: a New Superpower?. Routledge. ISBN 978-1-03-239508-1.
  10. ^ Chen, Yawei (2020-10-06). "Financialising urban redevelopment: Transforming Shanghai's waterfront". Land Use Policy. 112: 105126. doi:10.1016/j.landusepol.2020.105126. ISSN 0264-8377.
  11. ^ Fish, Isaac Stone (2010-09-25). "A New Shenzhen". Newsweek. Retrieved 2011-07-29.
  12. ^ Lee, Yimou; Hung, Faith (October 8, 2015). "China turns firepower to soft power to try to win tiny Taiwan-held island". Reuters. from the original on June 6, 2019. Retrieved June 6, 2019.
  13. ^ "China in Brief - china.org.cn". www.china.org.cn. Retrieved 2020-12-02.
  14. ^ "Special economic zone | Chinese economics". Encyclopedia Britannica. Retrieved 2020-12-02.
  15. ^ Verde, Giacomo (2020-10-26). "Learn All About Special Economic Zones In China". FDI China. Retrieved 2020-12-02.
  16. ^ Desk, Magazine (2020-11-01). "China and the history of its Special Economic Zones". Global Village Space. Retrieved 2020-12-02.
  17. ^ a b c Jin, Keyu (2023). The New China Playbook: Beyond Socialism and Capitalism. New York: Viking. ISBN 978-1-9848-7828-1.
  18. ^ Ding, Xuejie (2001). "Shenzhen Yearbook 2001".
  19. ^ "Why China's tech megacity is at risk of being a high-income trap". South China Morning Post. 2021-03-16. Retrieved 2022-10-04.
  20. ^ a b Simpson, Tim (2023). Betting on Macau: Casino Capitalism and China's Consumer Revolution. Globalization and Community series. Minneapolis: University of Minnesota Press. ISBN 978-1-5179-0031-1.
  21. ^ a b c d e f g h Murphy, Dawn C. (2022). China's Rise in the Global South: the Middle East, Africa, and Beijing's Alternative World Order. Stanford, California: Stanford University Press. ISBN 978-1-5036-3060-4. OCLC 1249712936.
  22. ^ "China's Special Economic Zones" (PDF).
  23. ^ Gopalakrishnan, Shankar (2007). "Negative Aspects of Special Economic Zones in China". Economic and Political Weekly. 42 (17): 1492–1494. ISSN 0012-9976. JSTOR 4419511.
  24. ^ Lu, Fangwen; Sun, Weizeng; Wu, Jianfeng (2022). "Special Economic Zones and Human Capital Investment: 30 Years of Evidence from China". American Economic Journal: Economic Policy. doi:10.1257/pol. ISSN 1945-7731.

References Edit

  • Chee Kian Leong, 2007, A Tale of Two Countries: Openness and Growth in China and India [1] 2011-07-19 at the Wayback Machine, Dynamics, Economic Growth, and International Trade (DEGIT) Conference Paper.
  • Chee Kian Leong, (forthcoming), Special economic zones and growth in China and India: an empirical investigation,[2] International Economics and Economic Policy.

External links Edit

  • Chung-Tong Wu. China's special economic zones: five years later – Asian Journal of Public Administration
  • Special Economic Zones: Lessons from China by Bhaskar Goswami
  • Coordination of tax legislation of special zones in Mainland China[permanent dead link]
  • Support service to enter development Zones to Mainland China

special, economic, zones, china, justifying, opening, series, economic, reforms, that, ensued, china, deng, xiaoping, referred, karl, marx, theories, which, predicted, that, nations, need, undergo, urbanization, stage, capitalism, natural, socialist, transitio. In justifying opening up and the series of economic reforms that ensued in China Deng Xiaoping referred to Karl Marx and his theories which predicted that nations need to undergo urbanization and a stage of capitalism for a natural socialist transition One of the most renowned reforms under Deng was establishing four special economic zones along the Southeastern coast of China with Shenzhen Shantou and Zhuhai located in Guangdong province and Xiamen located in Fujian province Special economic zones SEZs in mainland China are granted more free market oriented economic policies and flexible governmental measures by the government of China compared to the planned economy elsewhere This allows SEZs to utilize economic management which is more attractive to foreign and domestic businesses In SEZs foreign and domestic trade and investment are conducted without the authorization of the Chinese central government in Beijing with tax and business incentives to attract foreign investment and technology 1 Trade was originally controlled by China s centralized government However these special zones are where market driven capitalist policies are implemented to entice foreign investments in China In 1986 China then added 14 additional cities to the list of special economic zones Contents 1 History 2 List of the SEZs and open coastal cities 3 Economic policies of the SEZs 4 Shenzhen s economic transformation 5 Overseas SEZs 6 Effectiveness and legacy 7 See also 8 Notes 9 References 10 External linksHistory EditIn the late 1970s and especially at the 3rd Plenary Session of the 11th Central Committee of the Chinese Communist Party in December 1978 the Chinese government initiated its policy of reform and opening up as a response to the failure of Maoist economic policy to produce economic growth which would allow China to be competitive against not only industrialized nations of the west but also rising regional powers Japan Korea Singapore Taiwan and Hong Kong 2 Officials in Guangdong Province led by Provincial Party Secretary Xi Zhongxun seized the initiative starting with an investment project in Shekou prepared by Yuan Geng on behalf of the Hong Kong based China Merchants Steam Navigation Company This project initially a ship breaking facility was approved by Li Xiannian on January 31 1979 In April 1979 Xi Zhongxun and other Guangdong officials presented in Beijing a proposal to give broader flexibility to the coastal provinces of Guangdong and Fujian to attract foreign investment with additional exemptions in four cities namely Shenzhen in the Pearl River Delta region Zhuhai and Shantou in Guangdong and Xiamen 3 158 Amoy in Fujian Province For these Chinese Paramount leader Deng Xiaoping coined the name special zones 4 5 and characterized them as experiments in the mold of the pre 1949 Communist base areas 6 65 The proposal was approved on July 15 and the four special zones were officially established on August 26 1979 7 Within these SEZs export focused businesses had the leeway to respond to quickly respond to demand in foreign markets 8 50 These initial SEZs successfully attracted foreign capital primarily from ethnic Chinese in Taiwan Hong Kong and Southeast Asia 9 90 Foreign businesses in these areas were generally motivated to move production to China s SEZs because of lower labor costs preferential economic policies and the general trend of offshoring more simple manufacturing as globalization increased 9 90 Successes in the initial SEZs led to the establishment of additional SEZs in 14 coastal cities 8 50 Dalian Qinhuangdao Tianjin Yantai Qingdao Lianyungang Nantong Shanghai Ningbo Wenzhou Fuzhou Guangzhou Zhanjiang and Beihai Since 1988 mainland China s opening to the outside world has been extended to its border areas areas along the Yangtze River and inland areas First the state decided to turn Hainan Island into mainland China s biggest special economic zone approved by the 1st session of the 7th NPC in 1988 and to enlarge the other four special economic zones Shortly afterwards the State Council expanded the open coastal areas extending into an open coastal belt the open economic zones of the Yangtze River Delta Pearl River Delta Xiamen Zhangzhou Quanzhou Triangle in south Fujian the Shandong Peninsula the Liaodong Peninsula in Liaoning Province Hebei Province and Guangxi autonomous region In June 1990 the Chinese government opened the Pudong New Area in Shanghai to overseas investment and additional cities along the Yangtze River valley with Shanghai s Pudong New Area as its dragon head 10 Since 1992 the State Council has opened a number of border cities and in addition all the capital cities of inland provinces and autonomous regions In addition 15 free trade zones 32 state level economic and technological development zones and 53 new and high tech industrial development zones have been established in large and medium sized cities As these open areas adopt different preferential policies they play the dual roles of windows in developing the foreign oriented economy generating foreign exchanges through exporting products and importing advanced technologies and of radiators in accelerating inland economic development Most of China s SEZs are located in former treaty ports and therefore have symbolic significance in demonstrating a reversal of fortunes in China s dealings with foreigners since the century of humiliation 8 51 Researcher Zongyuan Zoe Liu writes that t he success of these cities as red treaty ports represented another step in China s overall reform and opening up plan while legitimizing the leadership of the CPC over the Chinese state and people 8 51 Primarily geared to exporting processed goods the five SEZs are foreign trade oriented areas which integrate science industry and innovation with trade Foreign firms benefit from preferential policies such as lower tax rates reduced regulations and special managerial systems In 1999 Shenzhen s new and high tech industry reached an output value of 81 98 billion yuan making up 40 5 of the city s total industrial output value Since its founding in 1992 the Shanghai Pudong New Area has made progress in both absorbing foreign capital and accelerating the economic development of the Yangtze River valley The government has extended special preferential policies to the Pudong New Area that are not currently enjoyed by the special economic zones For instance in addition to the preferential policies of reducing or eliminating Customs duties and income tax common to the economic and technological development zones the state also permits the zone to allow foreign business people to open financial institutions and run tertiary industries In addition the state has given Shanghai permission to set up a stock exchange expand its examination and approval authority over investments and allow foreign funded banks to engage in RMB business In 1999 the GDP of the Pudong New Area came to 80 billion yuan and the total industrial output value 145 billion yuan In May 2010 the PRC designated the city of Kashgar in Xinjiang a SEZ Kashgar s annual growth rate was 17 4 percent in 2009 and Kashgar s designation has since increased tourism and real estate prices in the city Kashgar is close to China s border with the independent states of former Soviet Central Asia and the SEZ seeks to capitalize on international trade links between China and those states 11 In 2015 then magistrate of Kinmen County ROC Chen Fu hai along with a non profit Taiwan organization with close ties to the CCP 12 proposed a referendum in which Kinmen would become a special economic zone and obtain free trade and free investment between it and neighboring SEZ Xiamen on the mainland The plan received controversy due to PRC investment in the ROC being otherwise strictly controlled it was praised by a Xiamen government official and PRC state media but the referendum did not citation needed receive approval from the government of Taiwan before Chen s term ended in 2018 List of the SEZs and open coastal cities EditAs part of its economic reforms and policy of opening to the world between 1978 and 1984 China established special economic zones SEZs in Shantou Shenzhen and Zhuhai in Guangdong Province and Xiamen in Fujian Province as well as designating the entire island province of Hainan as a special economic zone 13 In 1984 China opened 14 other coastal cities to overseas investment listed from north to south Dalian Qinhuangdao Tianjin Yantai Qingdao Lianyungang Nantong Shanghai Ningbo Wenzhou Fuzhou Guangzhou Zhanjiang and Beihai These coastal cities have been designated as the open coastal cities simplified Chinese 沿海开放城市 traditional Chinese 沿海開放城市 pinyin yanhǎi kaifang chengshi 14 15 Then beginning in 1985 the central government expanded the coastal area by establishing the following open economic zones listed from north to south the Liaodong Peninsula Hebei Province which surrounds Beijing and Tianjin see Jing Jin Ji the Shandong Peninsula Yangtze River Delta Xiamen Zhangzhou Quanzhou Triangle in southern Fujian Province the Pearl River Delta and Guangxi Zhuang Autonomous Region In 1990 the Chinese government decided to open the Pudong New Area in Shanghai to overseas investment as well as more cities in the Yang Zi River Valley Since 1992 the State Council has opened a number of border cities and all the capital cities of inland provinces and autonomous regions In addition 15 free trade zones 32 state level economic and technological development zones and 53 new and high tech industrial development zones have been established in large and medium sized cities As a result a multilevel diversified pattern of opening and integrating coastal areas with river border and inland areas has been formed in China 16 Type City ProvinceSpecial economic zone Province HainanSpecial economic zone City Xiamen FujianShantou GuangdongShenzhenZhuhaiKashgar XinjiangOpen coastal city ShanghaiTianjinFuzhou FujianGuangzhou GuangdongZhanjiangBeihai GuangxiQinhuangdao HebeiLianyungang JiangsuNantongDalian LiaoningQingdao ShandongYantaiNingbo ZhejiangWenzhouEconomic policies of the SEZs EditEconomic policies of SEZs included tax exemptions reduced custom duties reduced priced land and increased flexibility to negotiate labor contracts and financial contracts 17 37 SEZs were also authorized to develop their own legislation 6 84 The Shenzhen Special Economic Zone was the most active SEZ for legislative experiments over the period 1979 1990 and these had a significant role in shaping national economic legislation on foreign trade and investment 6 84 Shenzhen s economic transformation EditOut of the special zones perhaps the most successful was Shenzhen It transformed from 126 square miles of villages into a business metropolis 18 As seen by the table below the ten years of economic reform from 1980 to 1990 increased population in Shenzhen by six fold GDP by around sixty fold and gross industrial output by two hundredfold Before 1980 Shenzhen s GDP was just 0 2 percent of Hong Kong s In 2018 the city s GDP hit 2 42 trillion yuan US 372 billion overtaking Hong Kong 19 Successes in Shenzhen prompted Chinese central authorities to instruct provincial officials to learn from Shenzhen 20 114 Year Population thousands people GDP million yuan Gross industrial output million yuan 1980 332 9 270 991982 449 5 826 4241985 881 5 3902 31191990 2019 4 17 167 20 912Overseas SEZs EditFrom 1990 to 2018 Chinese enterprises established eleven SEZs in sub Saharan Africa and the Middle East including Nigeria two Zambia Djibouti Kenya Mauritius Mauritania Egypt Oman and Algeria 21 177 Generally the Chinese government takes a hands off approach leaving it to Chinese enterprises to work to establish such zones although it does provide support in the form of grants loans and subsidies including support via the China Africa Development Fund 21 177 Such zones fall within the Chinese policy to go out and compete globally 21 182 The Forum on China Africa Cooperation promotes these SEZs heavily 21 177 182 The first Chinese overseas SEZs facilitated the offshoring of labor intensive and less competitive industries for example in textiles 21 177 As Professor Dawn C Murphy summarizes these zones now aim to transfer China s development successes to other countries increase business opportunities for China manufacturing companies avoid trade barriers by setting up zones in countries with preferential trade access to important markets and create a positive business environment for Chinese small and medium sized enterprises investing in these regions 21 177 Overseas SEZs also foster support for China in the international system and help advocate for developing country causes through South South cooperation 21 182 They help China demonstrate it is acting as a responsible great power in these regions 21 182 Effectiveness and legacy EditDeng described China s SEZs as social and economic laboratories where foreign technologies and managerial skills could be observed including in the development of manufacturing technology a private real estate market and management techniques 20 113 Many scholars argue that SEZs played a decisive role in the development of China and the success of Communism as implemented in China Since their inception SEZs have contributed 22 of China s GDP 45 of total national foreign direct investment and 60 of exports SEZs are estimated to have created over 30 million jobs increased the income of participating farmers by 30 and accelerated industrialization agricultural modernization and urbanization 22 One of the primary theoretical foundation of SEZs is its ability to cultivate a form of innovation that is uniquely top down supported by government and bottom up characterized by local problem solving while utilizing resources and research at every level SEZs reflected a desire for Deng Xiaoping s CCP to be experimental fluid and localized when implementing Communist reforms However issues like prioritizing the short term gains encompassing a limited number of industries and lack of entrepreneurial promotion are pointed out by critics of the SEZs Others like Gopalakrishnan point out that Left out of the picture are inequities in development arable land loss real estate speculation and labour violence as well as significant transparency problems in bureaucracy 23 China has benefitted from SEZs through foreign enterprises bringing in expertise technology and equipment 17 37 In turn private firms have benefitted from inexpensive labor a business friendly environment robust infrastructure and China s large domestic market 17 37 38 A 2022 study in the American Economic Journal found that SEZs in China led to increased human capital investment with improved educational outcomes 24 See also EditEconomy of China Megalopolises in China New areas Special administrative regions of China Northeast Area Revitalization PlanNotes Edit Special economic zone SEZ Chinese economics Encyclopedia Britannica Worden Robert L Savada Andrea M Dolan Ronald E 1987 07 01 China A Country Study Fort Belvoir VA doi 10 21236 ada205396 a href Template Cite journal html title Template Cite journal cite journal a Cite journal requires journal help Ang Yuen Yuen 2016 How China Escaped the Poverty Trap Cornell University Press ISBN 978 1 5017 0020 0 JSTOR 10 7591 j ctt1zgwm1j Stoltenberg Clyde D 1984 China s Special Economic Zones Their Development and Prospects Asian Survey 24 6 637 654 doi 10 2307 2644396 ISSN 0004 4687 JSTOR 2644396 Holmes Frank 21 Apr 2017 China s New Special Economic Zone Evokes Memories Of Shenzhen Forbes Retrieved 22 March 2019 a b c Heilmann Sebastian 2018 Red Swan How Unorthodox Policy Making Facilitated China s Rise The Chinese University of Hong Kong Press ISBN 978 962 996 827 4 Vogel Ezra F 2011 Deng Xiaoping and the Transformation of China The Belknap Press of Harvard University Press p 398 a b c d Liu Zongyuan Zoe 2023 Sovereign Funds How the Communist Party of China Finances its Global Ambitions The Belknap Press of Harvard University Press doi 10 2307 jj 2915805 ISBN 9780674271913 JSTOR jj 2915805 a b Sebena Martin 2023 Chinese Economic Miracle In Kironska Kristina Turscanyi Richard Q eds Contemporary China a New Superpower Routledge ISBN 978 1 03 239508 1 Chen Yawei 2020 10 06 Financialising urban redevelopment Transforming Shanghai s waterfront Land Use Policy 112 105126 doi 10 1016 j landusepol 2020 105126 ISSN 0264 8377 Fish Isaac Stone 2010 09 25 A New Shenzhen Newsweek Retrieved 2011 07 29 Lee Yimou Hung Faith October 8 2015 China turns firepower to soft power to try to win tiny Taiwan held island Reuters Archived from the original on June 6 2019 Retrieved June 6 2019 China in Brief china org cn www china org cn Retrieved 2020 12 02 Special economic zone Chinese economics Encyclopedia Britannica Retrieved 2020 12 02 Verde Giacomo 2020 10 26 Learn All About Special Economic Zones In China FDI China Retrieved 2020 12 02 Desk Magazine 2020 11 01 China and the history of its Special Economic Zones Global Village Space Retrieved 2020 12 02 a b c Jin Keyu 2023 The New China Playbook Beyond Socialism and Capitalism New York Viking ISBN 978 1 9848 7828 1 Ding Xuejie 2001 Shenzhen Yearbook 2001 Why China s tech megacity is at risk of being a high income trap South China Morning Post 2021 03 16 Retrieved 2022 10 04 a b Simpson Tim 2023 Betting on Macau Casino Capitalism and China s Consumer Revolution Globalization and Community series Minneapolis University of Minnesota Press ISBN 978 1 5179 0031 1 a b c d e f g h Murphy Dawn C 2022 China s Rise in the Global South the Middle East Africa and Beijing s Alternative World Order Stanford California Stanford University Press ISBN 978 1 5036 3060 4 OCLC 1249712936 China s Special Economic Zones PDF Gopalakrishnan Shankar 2007 Negative Aspects of Special Economic Zones in China Economic and Political Weekly 42 17 1492 1494 ISSN 0012 9976 JSTOR 4419511 Lu Fangwen Sun Weizeng Wu Jianfeng 2022 Special Economic Zones and Human Capital Investment 30 Years of Evidence from China American Economic Journal Economic Policy doi 10 1257 pol ISSN 1945 7731 References EditChee Kian Leong 2007 A Tale of Two Countries Openness and Growth in China and India 1 Archived 2011 07 19 at the Wayback Machine Dynamics Economic Growth and International Trade DEGIT Conference Paper Chee Kian Leong forthcoming Special economic zones and growth in China and India an empirical investigation 2 International Economics and Economic Policy External links EditChung Tong Wu China s special economic zones five years later Asian Journal of Public Administration Special Economic Zones Lessons from China by Bhaskar Goswami Coordination of tax legislation of special zones in Mainland China permanent dead link Support service to enter development Zones to Mainland China Retrieved from https en wikipedia org w index php title Special economic zones of China amp oldid 1179981130, wikipedia, wiki, book, books, library,

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