Special economic zone

A Special Economic Zone is a geographical region that has economic laws different from a country's typical economic laws. Usually the goal is an increase in foreign investment. Special Economic Zones have been established in several countries, including the People's Republic of China, India, and Kazakhstan.

What is special about a Special Economic Zone?

In Mainland China

The word "special" mainly means special economic systems and policies. That is, the central government gives SEZs special policies and flexible measures, allowing SEZs to utilize a special economic management system.

Special tax incentives for foreign investments in the SEZs. Greater independence on international trade activities. Economic characteristics are represented as "4 principles":

Constructions primarily relies on attracting and utilizing foreign capitals
Primary economic forms are sino-foreign joint ventures[?] and partnerships as well as wholly foreign-owned enterprises
Products are primarily export-oriented
Economic activities are primarily driven by market

SEZs are listed separately in the national planning (including financial planning) and have province-level authority on economic administration. SEZs local congress and government have legislation authority.

List of Chinese SEZs

Chinese SEZ's are located in:

Guangdong Province: Shenzhen, Zhuhai[?] and Shantou[?]
Fujian Province: Xiamen
Hainan Province (whole province)

History of Chinese SEZs

Since the late 1970s, and especially since the 3rd Plenary Session of the 11th CPC Central Committee in 1978, the PRC government has decided to reform the national economic setup. The basic state policy has focused on the formulation and implementation of overall reform and opening to the outside world.

During the 1980s, the PRC passed several stages, ranging from the establishment of special economic zones and open coastal cities and areas, and designating open inland and coastal economic and technology development zones.

Since 1980, the PRC has established special economic zones in Shenzhen, Zhuhai[?] and Shantou[?] in Guangdong Province and Xiamen in Fujian Province, and designated the entire province of Hainan a special economic zone.

In August 1980, the National People's Congress (NPC) passed "Regulations for The Special Economy Zone of Guangdong Province" and officially designated a portion of Shenzhen as The Shenzhen Special Economy Zone (SSEZ).

In 1984, the PRC further opened 14 coastal cities to overseas investment: Dalian, Qinhuangdao, Tianjin, Yantai, Qingdao, Lianyungang[?], Nantong[?], Shanghai, Ningbo, Wenzhou[?], Fuzhou, Guangzhou, Zhanjiang[?] and Beihai[?] to overseas investment.

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 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, Shandong Peninsula, Liaodong[?] Peninsula (Liaoning Province), Hebei and Guangxi.

In June 1990 the PRC 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."

Since 1992, the State Council has opened a number of border cities, and in addition, opened 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.

Primarily geared to exporting processed goods, the five special economic zones are foreign-oriented areas which integrate science and industry with trade, and benefit from preferential policies and special managerial systems. In 1999, Shenzhen's new-and high-tech industry became one with best prospects, and the output value of new-and high-tech products reached 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 Zone has made great progress in both absorbing foreign capital and accelerating the economic development of the Yangtze River valley. The state has extended special preferential policies to the Pudong New Zone that are not yet 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 and certain special economic 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 Zone came to 80 billion yuan, and the total industrial output value, 145 billion yuan.

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Original source @ wikipedia.