Special economic zones reading

Special economic zones (SEZ)

Designated geographical areas along the South China coast (established by China in 1979) where different set of economic rules or conditions apply compared to the rest of the country. To attract foreign investment, and serve as a testing ground for China’s open door policy.

Locations. Shenzhen, Zhuhai, Shantou, and Xiamen.

Sez mistake

The failure of the SEZ was due to a fundamental conflict between China’s goal of creating export- oriented high- tech bases and foreign investors’ primary goal of selling to the Chinese domestic market.

Policy shift

The change in China’s national economic strategy that occurred starting in the late 1970s, specifically under Xiaoping. From the Maoist self- reliant policy of economic development to the open door policy and a focus on economic construction.

Open door policy

The shift in economic strategy. The strategy meant to encourage foreign participation in the Chinese economy.

Wai-yin, Nei-lian

The summarising slogan and core conceptual objectives for China’s special economic zones. Meant attracting and drawing in foreign capital and technology from outside China.

Iron rice bowl / eating from the common rice bowl

Chinese economic concept that refers to a system of guaranteed lifetime employment and comprehensive social welfare benefits provided by the state under the Maoist economic system.  

Difference of Sez to the rest of China

SEZ operated as economic outliers by offering liberal administrative rules and tax incentives to foreign investors, while the interior adhered to the tight control of central planning and the “iron rice bowl” system.

State capitalism in China

A system where the central party- state maintains overall political and strategic economic control while allowing market mechanisms and foreign capital to operate. Designed to selectively harness the benefits of capitalism while ensuring they were directed toward national modernisation.