China's Special Economic Zone Experiment: An Appraisal

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Abstract
This article attempts to provide a review of the latest development of China's special economic zones, assessing their achievements in terms of the attraction of foreign capital, export growth and foreign exchange earnings and technology transfer. Reforms and innovative measures initiated in the zones that have implications for other parts of China are also discussed. Problems encountered in the course of SEZ development are examined, noting in particular the heavy capital expenditure on infrastructure provision, the development of a trade-based economy (instead of one based on industrial production), the over-ambitious objectives which would be difficult to achieve in a short period of time as well as other economic and social issues. It is observed that the development of the SEZs has been proceeding without careful and coordinated planning and that the designation of economic development zones in the open coastal cities stands to undercut the allures of the SEZs and has made the latter much less “special” than they used to be.

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