Special economic zones of China
경제특구 (중국)
Areas given exceptional tax, land, labour and foreign-exchange rules to attract foreign capital and technology. After Xi Zhongxun of Guangdong asked in 1979 to “take one step ahead” and Deng Xiaoping supplied the name, they were established in 1980 at Shenzhen, Zhuhai, Shantou and Xiamen, with Hainan added in 1988. Shenzhen, which began with processing trade for Hong Kong capital, grew from a fishing town into a metropolis and became the symbol of reform, and the model spread to fourteen coastal cities in 1984 and to Pudong in Shanghai in 1990. The zones were “windows” for testing the market outside the plan; conservatives attacked them as a revival of the foreign concessions.
In depth
The idea grew out of Guangdong’s crisis of mass flight to Hong Kong. Xi Zhongxun, appointed in 1978, traced the flight to the income gap and at the central work conference of April 1979 asked for autonomy in foreign economic activity; Deng Xiaoping supported him — “the Shaan-Gan-Ning border region at Yan’an was a special zone too” — and in July the centre approved “special policies and flexible measures” for Guangdong and Fujian.
Shenzhen was formally launched in August 1980. Its border with Hong Kong, the “three imports and one compensation” processing trade, paid transfer of land-use rights and contract labour were all tested there for the first time in China, and Deng’s first southern tour in 1984 confirmed that “the experience of Shenzhen is correct”. Smuggling scandals and attacks on “ideological pollution” in 1985 did not change the policy.
In 1992 Deng chose Shenzhen as the stage of his second southern tour, restarting reforms that had stalled after 1989. The zones were followed by free-trade pilot zones and the Xiong’an New Area, and many developing countries copied the Chinese model. Labour conditions, land expropriation and discrimination under the household registration system remain the shadow of the zones’ success.