TNAG-1051-FCO40-1301-China-s-economic-relationship-with-Hong-Kong-1982 — Page 60

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Fang traces China's decision to experiment with SEZS through the historical tradition of Export Processing Zones and the earlier Free Trade Zones. The article attempts to

show the Marxist theoretical basis for the SEZs and refers to the state capitalism practised by Lenin and Stalin. However, Fang argues that the Chinese experiment is distinct, with special safeguards against the pitfalls inherent in opening up to Western capitalism. He listed the special characteristics of China's SEZs as follows:

(a)

(b)

(c)

The administration of the SEZS remains under

the jurisdiction of the Central Government although certain responsibilities are dele- gated to the localities;

the SEZs maintain responsibility for the provision of the economic infrastructure and the supply of public utilities;

although priority is given to the operation of market forces, which in turn generate a form of capitalism, this is a "restricted capitalism" within the context of the over-riding "regulation by the planning

mechanism.". In the same way, argues Fang,

the SEZS can take appropriate measures to prevent other forms of contamination by capitalist ways (e.g. brothels, kidnapping, drugs, smuggling, speculation, etc.). any event, the risk of serious contamination is slight because the SEZs are but a pin-prick compared with China's non-SEZ land area (Shenzhen's 327.5 sq.kms. compared with China's total land area of 9.6 million sq.kms.);

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