CONFIDENTIAL
SPECIAL ECONOMIC ZONES : ESSENTIAL FACTS
1.
A Special Economic Zone (SEZ) is an area specifically allocated for the development of external economic cooperation and technology transfer and for the promotion of inward
investment from overseas. Within the zones foreign citizens and
overseas Chinese are encouraged to set up factories and other business enterprises either wholly or on a joint venture basis with Chinese partners.
2.
Within SEZs certain preferential business conditions are available eg terms of employment of labour, import duties on
components and raw materials, corporation tax, remittance of profits, entry and exit procedures etc. Furthermore, only in
the SEZS are foreign companies allowed to be set up on a 100%
owned basis.
3.
The SEZS were established in 1979. There are presently four, at Shenzhen, Zhuhai and Shantou in Guangdong Province and at Xiamen in Fujian Province. Shenzhen and Zhuhai are adjacent
to Hong Kong and Macao; Shantou and Xiamen are port cities with long-standing Overseas Chinese connections. The only
substantial development so far has been at Shenzhen, largest of
the four.
4.
Most of the investment in Shenzhen to date has come from
Hong Kong sources. This has financed light industrial
development, hotels and restaurants, residential and office
building, and some agricultural schemes. No single project is
very large.
5.
In September a 20-year plan for the economic and social
development of the zone was published. (The Chinese point to this as evidence that China's current open-door policy is long-term.) The plan laid emphasis on industry while at the same time promoting the development of agriculture, animal
/husbandry
CONFIDENTIAL