SPECIAL ECONOMIC ZONES IN CHINA

Special economic zones are towns in Chinese provinces, which the government of China gives SEZs special (more free market-oriented) economic policies and flexible governmental measures. These policies make it
more attractive for foreign and domestic firms to do business in SEZ, than the rest of mainland China. 

What are the Cities in the Special Economic Zones?

Guangdong 

Nansha - Plastic, chemical, electronic, food processing and shipbuilding are the main industries in the zone.
 
Qianhai - geared towards Hong Kong with a focus on the professional and financial services sector.

Shekou - In 2003, the local government, seeking to capitalize on the foreign flavor of the area, invested in a complete make-over of Sea World, turning it into a western-style entertainment area centered on the grounded Minghua ship, a 14,000 ton, 168 m long vessel built in 1962 as a French ferry vessel purchased by China in 1973.

Shekou Port Ferry Terminal offers regular ferry services to and from Hong Kong, Macau and Zhuhai. The area attracts many tourists and has a sizable community of resident foreigners, and many non-Chinese restaurants exists in the area. There are also 5 International Schools in Shekou.

Zhuhai - The establishment of Zhuhai as an SEZ allowed the Chinese Central Government and economy to have easier access to the Macau and consequently, global market. The implementation of Special Economy Zone intended for the city to become a key port city, science and education city, scenic and tourism city, and as a regional hub for transportation.

The outstanding geographic location, a wide range of supporting infrastructure and a deep-water port serve as a major attraction for foreign capital. Utilized foreign investment reached US$10.344 billion in 2008. Among the top 500 enterprises worldwide, 19 of them have investment projects in Zhuhai such as ExxonMobil, BP, Siemens, Carrefour and Matsushita.

Fujian - the Fujian park aims to develop trade links with Taiwan and in so doing increase exports to and imports from further afield (suitable for logistics and marine transportation).

Xiamen

Xinjiang

Kashgar

What are the Provinces in the Special Economic Zones?

Hainan
Dalian, Liaoning
Qinhuangdao, Hebei
Tianjin
Yantai, Shandong
Qingdao, Shandong
Lianyungang, Jiangsu
Nantong, Jiangsu
Shanghai
Ningbo, Zhejiang
Wenzhou, Zhejiang
Fuzhou, Fujian
Guangzhou, Guangdong
Zhanjiang, Guangdong
Beihai, Guangxi

What are the Economic Policies of Special Economic Zones?

1. Special tax incentives for foreign investments in the SEZs.

2. Greater independence on international trade activities.

3. Economic characteristics are represented as "4 principles":

a. Construction primarily relies on attracting and utilizing foreign capital.

b. Primary economic forms are Sino-foreign joint ventures and partnerships as well as wholly foreign-owned enterprises.

c. Products are primarily export-oriented.

d. Economic activities are primarily driven by market forces.

What are the Benefits of the Special Economic Zones:

1. SEZs successfully tested the market economy and new institutions and became role models for the rest of the country to follow.

2. SEZs have contributed significantly to national GDP, employment, exports, and attraction of foreign investment.

3. The SEZs have also played important roles in bringing new technologies to China and in adopting modern management practices. It is estimated that as of 2007, SEZs (including all types of industrial parks and zones) accounted for about 22% of national GDP, about 46% of FDI, and about 60% of exports and generated in excess of 30 million jobs. 

4. In 2007, the 54 HIDZs hosted about half the national high-tech firms and science and technology incubators. They registered some 50,000 invention patents in total, more than 70 percent of which were registered by domestic firms.  They also hosted 1.2 million R&D personnel (18.5 percent of HIDZ employees) and accounted for 33 percent of the national high-tech output.

5. The key experiences of China’s SEZs and industrial clusters can best be summarized as gradualism with an experimental approach; a strong commitment; and the active, pragmatic facilitation of the state.

6.  Trade laws differ from the rest of the country and companies are offered tax incentives (no tax before the investment becomes profitable) to set up operations, and to attract foreign investors.


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