Special economic zone: The experimental predecessor of Chinese development parks

2019-11-02 0

                                                 Auther Peter Kin

Chinese development zones can be traced back to “Special Economic Zones(SEZ)”. The origin of SEZ is the problem of Canton people’s escape to Hong Kong, during 1950 to 1979, more than 2 million people smuggled from south Canton to Hong Kong. It is obvious that the huge gap of living condition between HK and mainland results in the escape. On 29th Mar 1079, when Deng Xiaoping met with the Govern of Hong Kong MacLehose, he pointed out “Two measures should be taken now, one is reduce the amount of people who is coming into HK and release Hong Kong’s pressure. Another one is that Hong Kong should encourage private funds to invest in Canton, so as to offer more jobs. In the long term, with the development of our economy, this problem will be solved step by step.”

Allow Hong Kong and Macao overseas Chinese build factories in Guangdong, develop the economy and solve employment, and reduce the number of "escape to Hong Kong" is the original intention of establishing a "special economic zone."

The "special economic zone" was launched under the direct promotion of China's top leader Deng Xiaoping. On April 5-28, 1979, the Central Committee of the Communist Party of China held a working meeting in Beijing. Xi Zhongxun proposed that:” Guangdong is close to Hong Kong and Macao and has a large number of overseas Chinese. It should make full use of this favorable condition and actively carry out exchanges of foreign economic and technological. Our provincial party committee has discussed, and I am coming here to the meeting this time, I hope that central government could delegate Guangdong to take a step forward. Let Guangdong have the necessary autonomy in foreign economic activities, and allow export processing zones to be established in Shenzhen, Zhuhai, and Shantou, which is adjacent to Hong Kong and Macao.” Deng Xiaoping interjected: "Guangdong and Fujian have this condition to set special provinces, using overseas Chinese people funds and technology, including setting up factories. As long as they didn’t make big troubles, the economy condition would increase in a few years. If Guangdong conducted this, everyone would earn 1,000 to 2,000 yuan every year. At least, they would not ask the central government for money. Guangdong and Fujian provinces have a population of 80 million people, almost equals to a country, there is no harm in getting rich first. The central government has no money, but we can give you some policies, you can do it yourself. Come!" Deng Xiaoping said, "I run the special economic zone as my initiative, and the central government will set it."

On July 15, 1979, the Central Committee of the Communist Party of China and the State Council approved two reports from the Guangdong Provincial Party Committee and the Fujian Provincial Committee on the implementation of special policies and flexible measures for foreign economic activities, and decided to test the special zones in Shenzhen, Zhuhai, Shantou and Xiamen.

In 1984, Deng Xiaoping said: "The SEZ is a window, a window of technology, a window of management, a window of knowledge, and a window of foreign policy." Deng Xiaoping recalled in April 1987, "At the beginning, Guangdong proposed to engage in special zones. I agreed with their opinions. I said that the name is a special economic zone. It is not good to engage in a political special zone."

Therefore, the “special economic zone” is a border test field far from the core area. The Central Committee of the Communist Party of China wants to find a way of solving Chinese economic difficulties through this test field. But even the experimental field is limited to the "economic" field, not to the "political" field. Deng Xiaoping hoped to achieve progress in economic development while keeping the political system unchanged. This is the basic idea of the concept of "socialism with Chinese characteristics" until today.

The first four special economic zones approved by China from 1980 to 1981 - Shenzhen Special Economic Zone, Zhuhai Special Economic Zone, Xiamen Special Economic Zone, and Shantou Special Economic Zone are obviously corresponding to Hong Kong businessmen, Macao businessmen, Taiwanese businessmen and overseas Chaoshan businessmen. After several decades of closure, the location of the SEZ was in line with the CCP leaders’ perception of the outside world. A few decades later, only the Shenzhen Special Economic Zone in the four special economic zones achieved economic success. Obviously, the funds, technology and information imported through Hong Kong exceed the input of Taiwan, Macao and Chaoshan overseas Chinese.

From the perspective of international relations, the People's Republic of China was an important member of the Soviet socialist camp in East Asia from the very beginning. The "China-Soviet Controversy" in the 1960s and the Jeju Island incident in 1969 marked China's initiative to leave the Soviet camp and ended the decades-long incubation period from the Soviet Union. In 1972, US President Nixon’s visit to China, the 1979 Sino-Vietnamese self-defense counterattack, and the establishment of diplomatic relations between China and the United States in 1979 were a positive effort for China to seek acceptance by the US camp. This effort, under the Cold War pattern, gained a positive response from the Western world led by the United States. China’s departure from the Soviet camp is an important positive news for the United States and the Western world.

At this time, China has set up a "special economic zone" to open up to the outside world. From the perspective of the West, China is moving closer to the West and there may be changes in line with Western values. The "Special Economic Zone" has also won the support of Hong Kong, Macao and Taiwan Chinese businessmen. The opportunity to expand the factory and obtain cheap labor has been obtained,and the opening of the domestic market in the United States has enabled the products of these Chinese businesses to be sold smoothly.

Therefore, the "special economic zone" as a "test field" has neither a clear goal nor direction, nor a pre-established system design framework. It was only an emergency measure at that time. However, the “special economic zone” benefited from the specific global political and economic environment at that time, but it has achieved remarkable economic changes.

In the subsequent evolution of “special economic zones”, the development zones spread all over China.