12 - China's Experience with Special Economic Zones

Summary

I. Introduction

China's policy of opening to the outside world was made in late 1978. However, places are open to various degrees. Therefore there have been four echelons of opening — Special Economic Zones (SEZs), coastal open cities, coastal open economic zones, and inland.

August 1980 saw “Regulations Governing the SEZs in Guangdong Province” authorized at the fifteenth meeting of the Fifth People's Congress Standing Committee. Shortly afterwards came the promulgation establishing four SEZs in Shenzhen, Zhuhai, Shantou, and Xiamen. In April 1984, the Chinese Govern- ment declared the opening of fourteen coastal harbour cities and Hainan Island, after it had gained experience from the four SEZs and the setting up of Economic Zones for Technical Development in open cities with good environment. Some preferential policies concerning the SEZs were to be adopted to attract foreign investment, which aimed to introduce advanced technology and start joint research and production of new technology, products, and industries. January 1985 saw the Chinese Government's decision to open up the Yangtze and Zhujiang River Deltas, and the Southern Fujian Triangle as coastal economic zones. Thus, the SEZs, coastal open cities, economic zones, and inland open China to the outside world, in a sequence which moves from seashore to inland, with different levels and emphases. (Up to the end of 1986, 80 per cent of the operating foreign-invested enterprises were located in the coastal open cities.) Data on the SEZs are given in the Appendices.

It should be pointed out that each of the various levels of opened areas has its own characteristics. SEZs profit much from their grographical position of easy access to the world market. The fourteen coastal cities have advantages mainly in their thriving economy and all kinds of talents. They are places abundant in resources, particularly foundations for industry. The population in these cities is less than 8 per cent of the national total, but the industrial output value accounts for 23 per cent of the national total.