Special Economic Zone

Areas with the approval of the Central Committee of the Communist Party of China and the State Council to implement certain special economic policies, flexible economic measures and special economic management systems. After the Reform and Opening-up, in order to concentrate and effectively use foreign capital and technology in our country for production, trade development and economic prosperity, coastal areas with relatively superior transportation conditions were set up, and opening-up policies and preferential systems were implemented, which was a way to absorb foreign investment and realize the international economic cooperation. In April 1979, Deng Xiaoping proposed to open “Special Export Zones” for the first time. In July 1979, the Central Committee of the Communist Party of China and the State Council agreed to pilot special export zones in Shenzhen, Zhuhai and Shantou in Guangdong Province and Xiamen in Fujian Province. In May 1980, the Central Committee of the Communist Party of China and the State Council decided to rename these four special export zones as special economic zones. In August of the same year, the Fifteenth Meeting of the Standing Committee of the Fifth National People’s Congress approved the “Regulations on Special Economic Zones of Guangdong Province”. These special economic zones were built one after another. Later, our country approved the establishment of many new development and innovation “new zones” of various localities, all of which essentially meant special economic zones.

Most of the initially established special economic zones had the following characteristics: they were generally near the port with convenient transportation to facilitate the flow of goods and reduce costs; open policies were there for foreign economic activities and tariff reduction and exemption to attract foreign investment; convenient and safe investment environment were built for foreign businessmen and preferential regulations and guarantee systems were formulated; the products were mainly export; they were managed centrally but the administrative agency of a special zone had the right to formulate special zone regulations tailored to local conditions; enterprises in the zone enjoyed considerable autonomy. In February 1984, after inspecting the three special economic zones in Shenzhen, Zhuhai and Xiamen, Deng Xiaoping pointed out, “The special zone is a window, a window of technology, a window of management, a window of knowledge and a window of foreign policies. Through the special zone, we can introduce technology, acquire knowledge, learn management, and management is also knowledge. The special zone has become a base for opening up, which not only benefit us in terms of economy and talent cultivation, but also will expand our country’s external influence.” He wrote an inscription to Shenzhen: “Shenzhen’s development and experience prove that our policy to establish a special economic zone is correct.” The inscription to Zhuhai is, “Zhuhai Special Economic Zone is good”. The one to Xiamen is, “Build the special economic zone faster and better.”

Deng Xiaoping also pointed out, “In addition to the current special zones, we can consider opening up a few more port cities, such as Dalian and Qingdao. These places are not special zones, but certain policies of special zones can be implemented there. We also need to develop Hainan Island. If the economy of Hainan Island can develop rapidly, it will be a great victory.” In early 1992, Deng Xiaoping pointed out in the Southern Talks, “From the very beginning, there were different opinions on the building of the special zones. Some people worried about whether it was capitalism. Shenzhen’s construction achievements clearly answered those who were worried. The Special Economic Zones are ‘Socialist’ not ‘Capitalist’. Judging from the situation in Shenzhen, public ownership plays a leading role and foreign investment accounts for only a quarter. We can still gain taxation, labor services and other benefits from foreign investment!”

The practice of building special economic zones was gradually carried out through pilot projects under the direct advocacy and support of Deng Xiaoping and the correct leadership of the CPC Central Committee and the State Council. Practice has proved that it has played the role of opening to the outside world and the experimental role of economic system reform in socialist modernization and has achieved tremendous achievements that have attracted worldwide attention.