In starting its concept of special economic zones back in the seventies China was thinking inside the country. It was planning the industrialization of China.

Especially since the 3rd Plenary Session of the 11th CPC Central Committee in 1978, the PRC government reformed the national economic setup.

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. It is a process the continues but is undoubtedly a massive success, albeit with attendant problems which are being dealt with in an orderly manner. The success of these zones has not escaped the attention of other countries.

In Peshawar, the administrative center of Pakistan, Provincial Minister for Industries Syed Ahmed Hussain Shah said a ‘national trade corridor’ would be established on N-35, Malakand, in the name of China City to enhance trade with China.

He said the establishment of the proposed ‘Reconstruction Opportunity Zones’ (ROZ) in the border regions of Pakistan and Afghanistanwould improve the provincial economy, generate employment opportunities, and help stem terrorism in the area.

Meanwhile Sindh Minister for Industries and Commerce in Pakistan, Rauf Siddiqui has suggested establishing a 100km long industrial zone on the land lying between Karachi and Hyderabad.

Syed Ahmed Hussain Shah said that to eliminate rising unemployment in the country and strengthening local economy, we had to convince foreign investors including China and other countries to invest in Pakistan.

Dr Junaid Ahmed, Advisor to the Finance Ministry called on the government to establish Pak-China, Pak-Korea, Pak-Iran, Pak-Arab Economic Zones, in which industrialists from these countries could be provided opportunities to invest. When China started special economic zones it started a world revolution.
Sources: The News and Trading Markets.

Sometimes it is difficult to understand all the terms used. This is a brief primer.

Special Economic Zones (SEZs) are, for the moment, always located in mainland China. The government gives SEZs special economic policies and flexible governmental measures. This allows SEZs to utilize an economic management system that is especially conducive to doing business.

All of which seems pretty clear. And it has been going on since 1978 when the government decided to reform the national economic setup. Our illustration shows Shenzen, an early starter.

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 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.

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.

(For the record Hainan Island is China’s biggest special economic zone.)

Shortly afterwards, 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 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.

Now it get a bit complicated because the nomenclature changes along with the developments.

At that time 15 free trade zones, 32 state-level economic and technological development zones, and 53 new- and high-tech industrial development zones were established in large and medium-sized cities. What are the differences between these categroies. They tend to have different preferential policies although the general aim is always the same — building up trade.

The five special economic zones are foreign-oriented areas which are primarily geared to exporting processed goods, integrating science and industry with trade. 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 RMB81.98 billion, making up 40.5% of the city’s total industrial output value.

To sum up the attractions (and they have seriously worked because these zones have been a great success are:

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

a. Construction primarily to rely on attracting and utilizing foreign capital.
b. Primary economic forms to be Sino-foreign joint ventures and partnerships as well as wholly foreign-owned enterprises.
c. Products to be primarily export-oriented.

d. Economic activities primarily driven by market forces.

Anji-TNT Logistics, a provider of logistics services for auto part makers, has leased the entirety of a 234,000-square-foot distribution center at ProLogis Park Jiangning in Nanjing. Anji-TNT will operate the space on behalf of Italian automaker Fiat.

ProLogis Park Jiangning is located in a government-sponsored economic development zone adjacent to the Nanjing Lukou International Airport. When finished, the park will comprise six facilitates totaling more than 1.5 million square feet.

Nanjing has also seen rapid industrial growth in recent years in the auto industry. Late this year, for example, Ford will begin producing Fiesta automobiles in Nanjing at a $510 million plant that will produce 160,000 cars annually.

The Nanjing park is one of five similar developments that ProLogis began last year in China. The other four are in the major cities of Changsha, Chengdu, Chongqing and Wuhan.
Source: Commercial Property News

Man Sang Holdings is opening a pearl and jewelery zone in a 55%-owned investment and development project of the group in Zhuji, ,Zhejiang Province.

The opening of the center and the pearl and jewelery procurement fair were timed to coincide with the Third China — Zhuji Xishi Cultural Festival and Sixth China (International) Pearl Festival in an effort to promote the commercial and cultural aspects of pearl and jewelery trading to the world.

Known as CP&J City — it stands for China Pearls and Jewelery City — it has strong support from the provincial and municipal governments. CP&J City has also signed a strategic partnership cooperative memorandum of agreement with the Gemological Institute of America.

Over a thousand jewellery traders, purchasers, and representatives from business associations attended the opening as well as the usual push of government officials and representatives from other countries.

CP&J City is expected to become a center for pearl and jewelery trading.

The market centre in Phase 1 of the CP&J City has a construction area of 160,000 sq. m. accommodating about 2,380 shops and booths.

When the whole CP&J City project is completed, it will have an estimated over 5,000 shops and booths and become the world’s largest of its kind.

In total CP&J City will have a site area of 1.2 million sq. m. which will be developed in phases.
Source: CentreDaily

China has embraced a new airport cities concept by setting a five-year plan in motion to develop all types of commercial space inside and outside the airport’s fences. The buildings are an offshoot of its annual growth in passenger and cargo traffic.

China is leading the world in the development of airport cities, with 15 in various stages of planning as support for an aeronautical pipeline calling for 95 additional airports by 2020 for the existing base of 149 facilities

Ping Wang, co-founder and EVP of Washington, DC-based Garfinkle & Wang Associates, and the general manager of GCW in Beijin gaid seven of the country’s existing airports, which include shared facilities with the military, are supporting 70% of the country’s annual passenger and cargo traffic.

The country is caught in an infrastructure race to build roads and high-speed rail to support office, retail, logistics, manufacturing and residential development, all airport-anchored and related. Ping Wang said, ‘The airport city program fits the People’s Republic of China’s airports extremely well.
Souce: Globest

Thirty years ago this week, then-Chinese leader Deng Xiaoping pushed for the development of science and technology. Since then, China’s science and technology industry has found itself on a brand-new path.

Two decades ago, the first national, high-tech district, Beijing Zhongguancun Science Park, was established.

It was a response to the central government’s strategy to develop its high-tech industry. Since then, the park has developed into an advanced industrial area, leading the software, integrated circuit and computer industries in China. Over the past twenty years, Zhongguancun Science Park has maintained a more than 25% annual growth rate. And it accounts for 18% of Beijing’s GDP.

So far, China has set up 54 high-tech districts, concentrating the country’s high-tech talent. These districts have become efficient technology transfer areas and the most prolific contributors to Chinese science and technology.

Jing Gang, Working Committee Secretary of Chengdu High-Tech Industrial Development Zone said ‘We have stressed providing standardized, efficient and high-quality services to companies. We have also been sticking to the concept that industry development, especially that of the high-tech industry, is our lifeline. All our work is subject to the industry’s development.’

After decades of development, the national high-tech districts have formed into a newly-emerged industrial core with their own characteristics. They play a critical role in the regional economy and in the transformation of cities’ economic structure and development.
Source: CCTV International

Guangdong, the wealthiest mainland China province, under the guidance of newly appointed provincial Communist Party chief Wang Yang, is considering, only considering mark you, whether to integrate with Hong Kong and Macau to form a special cooperative zone. This would be similar to a free trade area (FTA), with the ultimate aim of turning it into a ‘world-class metropolitan belt’.

Guangdong needs something like this as it loses its competitiveness through rapid increases in labor and land costs.

Wang Yang urged Guangdong officials to ‘further emancipate their minds’ and think of new ways to let Guangdong continue to lead other regions in opening up to the outside world.

That ‘To emancipate the mind’ is not a new phrase. It was used by Deng Xiaoping in the late 1970s to urge officials to break ideological shackles of and so pave the way for the launch of capitalist-style economic reforms.

In part because of its proximity to Hong Kong and Macau, Guangdong took the lead in the country’s reforms of the period, becoming the first province to benefit from Deng’s ‘opening-up’ policy.

Of the four special economic zones Beijing approved in 1980 to pilot market-oriented economic reforms, three — Shenzhen, Zhuhai and Shantou — are in Guangdong. The only other one is Xiamen, in Fujian province, facing Taiwan.

As China has gradually opened other provinces, particularly after its entry into the World Trade Organization, Guangdong is increasingly facing challenges from other regions, in particular from the Yangtze River Delta led by Shanghai.

It is under such circumstances that Wang proposed closer ties with Hong Kong and Macau to form a special cooperative zone.

Ambitious and inspiring as the idea may be, the greatest challenge to its implementation would be how to find some way, or ways, to narrow the great differences between the political, economic and social systems in the three places. Under ‘one country two systems’, Hong Kong and Macau continue the systems they inherited from British and Portugal colonial rule.

But perhaps it is possible and 23 provincial authorities and think-tanks in Guangdong are now jointly conducting feasibility studies on forming the Guangdong-Hong Kong-Macau special cooperative zone.
Source: Asia Times Online

As reported here on February 25 China’s central government has given the nod of approval to China’s first international and regional economic cooperation zone in Guangxi. The construction of the Beibu Gulf Economic Zone began in 2006. Now, with this approval, the Beibu Gulf Economic Zone will be formally incorporated into national development strategies.

The Beibu Gulf Economic Zone covers six coastal cities along the Beibu Gulf. It integrates the cities of Nanning, the region’s capital, Beihai, Qinzhou, Fangchenggang, Chongzuo and Yulin.

Qinglin Jia, China’s top political advisor said in a statement, ‘The state will adopt policies and measures to support mechanism innovation, rational industry layout and infrastructure construction in the Beibu Gulf Economic Zone.’

Perhaps more importantly the Guangxi municipality has pledged RMB100 billion yuan ($14 billion) investment over the next five years for building and repairing 2,500 kilometers of railways to form a network hub in the area.

Officials say that the Beibu Gulf Zone will serve as the logistics base, business base, processing and manufacturing base and information exchange center for China-ASEAN cooperation.

Zhenghui Peng, professor of Peking University, Beijing, said in a statement, ‘Beibu Gulf Zone may turn out to be a new economic lead in driving China’s coastal economy because Guangxi boasts so many advantages.

‘For one thing, as the only land and sea link between China and ASEAN, Beibu Zone will benefit from the rapid economic development of both and the heating-up of China-ASEAN relationship.

‘For another, Guangxi connects China’s east, centraland west. China’s sustainable economic development entails “industries complementing each other” and “traffic connectivity”, which will bring tremendous opportunities to Guangxi.’
Source: Emerging China

The China-Singapore Suzhou Industrial Park has made great progress in the past 13 years due to policies encouraging innovation and investment.

The park covers about 4% of Suzhou’s land yet produces 15% of the city’s GDP, 25% of its foreign investment and 30% of foreign trade.

It was built in May 1994 in the east end of Suzhou in Jiangsu province and operates under the principle of ’selective investment’.

It mainly targets capital-intensive, technology-intensive and flagship projects.

A joint project between the Chinese and Singaporean governments, the industrial park has set up a comprehensive network to attract investors and guarantee the park secures multibillion-dollar projects.
The park has recently put more emphasis on projects that highlight science, technology and service.

It has approved over 3,000 foreign-backed companies with total actual foreign direct investment of $13.4 billion. The park’s trade volume has increased to $56.7 billion from a mere several million when it first opened.

It has created more than ten policies to improve innovation and encourage investors to set up research and development centers. It’s also launched plans to encourage intellectual property right protection and lure skilled professionals. It may be a model for industrial parks.
Source: China Daily

Originally, as reported by Xinhua, the plan was that Nokia’s China new headquarters in Beijing would be completed and in use at the end of last year. Missed by a month or so but now it is open and the six-story building has a total floor area even larger that of its world headquarters in Finland.

Shen Jian, communications manager of Nokia China, said the new headquarters will house 2,000 research and development (R&D) and management staff.

The headquarters, R&D center inside and manufacturing base located in the Beijing Economic-Technological Development Area in Yizhuang, southeastern Beijing, will form the Nokia China Campus.

The headquarters building started construction in May 2006 with an investment of RMB450 million ($60 million).

The Nokia China Campus and the Xingwang Industrial Park, which is home to almost 20 other electronic companies led by Nokia, will form the most integrated mobile phone production chain in the world.

China has become the largest market of Nokia, the world’s largest mobile phone maker, whose sales and export volume in China exceeded $13 billion in 2006.
Source: China View