Description
This is a presentation includes covers SEZ in China.
SPECIAL ECONOMIC ZONES IN CHINA
AGENDA
• • • • • • • • SEz- Meaning and Origin Political facets Economic rationale Developments and benefits Critique Indian experience with SEZs A comparative study References
SEZ- MEANING & ORIGIN
• Designated areas in countries that possess special economic regulations • These regulations tend to contain measures that are conducive to foreign direct investment. • Receive tax incentives and the opportunity to pay lower tariffs. • Includes FTZ, EPZ • 3rd Plenary Session of the 11th CPC Central Committee in 1978 • Implementation of overall reform and opening to the outside world.
POLITICAL FACETS
POLITICAL CONSIDERATIONS
• China's dramatic post-Mao opening to the west. • "Special Economic Zones" (SEZs) symbolized the boldness of China's break with the autarchic policies of the past. • In 1984, “Learning from Shenzhen“ was propagated, wherein the largest of the SEZs-Shenzhen, led to the expansion in size of the smaller existing zones and the opening of fourteen additional coastal cities as preferred sites for foreign investment. • Major spurt in foreign investment in the SEZs followed thereafter.
HOWEVER, DOUBTS PERSISTED..
• Cost- effectiveness of the zone option • Uneconomic concessions to foreign investors • While Chinese economists were attracted by the successes of the Korean and Taiwan EPZs, they were determined to limit their own risks. • Decision was taken to restrict the experiment to four zones, in areas where suitable pre-conditions gave a reasonable assurance of success.
THE NEXT STEPS…
• Guangdong and Fujian provinces were plausible options - physical location, access to funds, expertise and markets.
• Only Shenzhen was mandated to establish a large-scale "comprehensive” zone. The other zones were, to varying degrees, sharply hedged in by policy directives which called for limiting zone size and for gearing zone objectives to local resources.
• The May 1980 Central Committee guidelines directed zone authorities to lay primary emphasis on utilizing their existing industrial foundation and capital stock to accelerate export production of light industrial goods, particularly machinery. • Overall development strategy was to be dictated by each city's “fundamental character”.
SOCIAL COST-BENEFIT FRAMEWORK
• China?s SEZ venture need not be seen in the capitalist limelight. • Aim to strike a balance between Chinese model of socialism and the capitalist economic forces, under state control. • SEZs are essentially an experimental laboratory. • Significant insights could be drawn OR else the „Ripple Effect’ could be controlled harmoniously. • Tactful move to cover up for the Chinese inexperience in handling the „capitalist?.
GEO-POLITICAL FACTOR
• Disastrous impact of Great Leap Forward Campaign and Cultural Revolution • Lack of confidence on the part of foreign investors • Strategic move to establish SEZs in the vicinity of Hong Kong and Macao- attracting capital investment from these areas
CHINESE DECISION OF CLAIMING SOVEREIGNITY OVER HONGKONG & TAIWAN
• Strategic decision to follow an open door policy • Hong Kong- one of the few successfully developed industrializing countries • Shenzhen SEZ as a buffer zone- a hybrid between capitalist nature of Hong Kong and socialist nature of China • Progressive role of capitalism- ideological justification of SEZs • An important historical mission to be fulfilled- Chinese reunification with Taiwan and Hong Kong
A POLITICO-ECONOMIC BALANCE.. • Further boosts the argument that SEZs were not only created for an economic purpose, but had a deep underlying political message!! • Yet, whatever be the relative payoffs to the SEZs or their domestic partners, from the national perspective-the shift of investment to the zones represents fulfillment of part of a broader restructuring reform, centering on enhancing the economic role of cities as focal points for commercial and industrial development.
KEY EXPECTATIONS…
• Play a catalytic role in the regional development of its own zone-hinterland • Decision to enlarge the existing zones so that they could more adequately fulfill this strategic function • “Boldest use of the zones”- backed by all of China, and become "pivotal points" for the transformation of China's ties with the world.
ECONOMIC RATIONALE FOR SEZ
ECONOMIC RATIONALE
1. Faster Economic Growth ? Relative backwardness with other Asian economies ? In line with new economic policy
? Reflected in decadal growth of above 10%
2. Promotion of Regional Economic development
? Focus on lesser developed provinces
? Promote infrastructure investment in provinces other than Shanghai
ECONOMIC RATIONALE CONTD..
3. Earning more Foreign Exchange ? Low on reserves 4. Employment Generation on a large scale ? Huge unemployment base ? Rising wages
ECONOMIC RATIONALE CONTD..
5. Creation of economic links with the domestic economy ? Hong Kong (close to Shenzhen), Macao (close to Zhuhai), Taiwan (close to Xiamen) and overseas Chinese communities (Shantou) 6. Infusion of modern technologies ? Focusing on export competitiveness ? Six pillar industries 7. Linkages between the domestic and zone economies ? Implementing the slogan “Wai yin nei lian”
THE JOURNEY..
SEZ’s Strategic reasons
Shenzhen Near Hongkong
Zhuhai Macao
Shanton
Xiamen
Hainan Whole island Thailand DFZ’s 30 % 3-8 Yrs YOP -----------
Shanghai Nearest to Taiwan Malaysia FTZ’s 28 % 5-10 yrs YOP 70-100 % -----------
NRI’s, HK, Across Taiwan Taiwan India SEZ 33.9 % Phillipines Ecozones 35 % 4-8 Years (from year of profit) -----------
China SEZ Corp. Tax Rates 15 % 100% tax holiday 50% Tax
2 Yrs(from year 5 Yrs( from of profit) 1st year) Next 3 Years Next 10 Yrs
Primary Motivation : To attract foreign capital to „progress? along capitalist lines Incentives & concessions offered: 1. Allowing wholly owned foreign private units 2. Vast autonomy 3. exemptions from Export & Import duty 4. Tax rates 5. Wage rates lower than in Hongkong 6. Free movement of labour 7. Strikes prohibited, labour laws 8. Miscellaneous benefits
STATISTICS- SHENZHEN
Shenzhen's Economic Development 1978-1984 (in 100 MN Yuan)
1978 1979 1980 1981 1982 1983 1st half-84
Industrial output value
0.6 0.6061 0.8444 2.4282 3.6212 7.2014
5.55
Construction
Foreign investments( HK $100 MN) Total Retail sales
-
0.4988 1.2487 2.7039 6.3265 8.8593
6.03
1.17
1.2 1.48
2.5 2.2
5.9 3.5
8.8 5.54
11.3 12.51
5.9 8.61
DEVELOPMENTS..
• Measures of Capitalist Reforms undertaken: – Reforms undertaken in agriculture sector – Unemployed labourforce created – “Long March” – Township & Village Enterprises system developed. – TVE?s & State industries start to crumble leading to increased privatisation – Capitalists emerged and cheap unemployed labour force created • Mid-1990’s : New Trend of FDI coming in from Japan , USA, European Countries ? 1960-1970 – EPZ?s in S Korea & Taiwan used as export base ? Mid 1970?s Shift of FDI to low-wage EPZs of Indonesia, Thailand, Mexico ? Shift of FDI to China in mid 1990?s ? Reason for these shifts : Wages becoming uncompetitive
BENEFITS
* Faster economic growth- Growth rate of 20 % every year- Shenzhen unique. 38% CAGR from 1981 till now * Employment generation on a large scale – 10 crores now * Earning more foreign exchange * Infusion of modern technologies & their demonstration and spread effects * Economies in production due to clustering
* Experimentation-based and trade-based learning
* Facilitating economic liberalization, including trade, financial and institutional liberalization * World Class Infrastructure development & overall growth- Hainan (agriculture now contributes 44.6 percent to the province's economic growth); Tourism Standardized
CRITIQUE
SEZ’s- ARE THEY REALLY SPECIAL??
• China is considered as a shinning example of development via SEZ?s. • SEZ are one of the major reasons of degradation of human rights in China. • Focus on: 1. Economic Loss 2. Land Loss 3. Labor Abuse
ECONOMIC LOSS DUE TO SEZ’s
• Durable goods entered the market legally and illegally. • To counter this government moves towards “Market Socialization”. • Investment patterns were dependent on regulatory policies. • Lower than expected contribution by SEZ to export earnings
LABOR ABUSE
• Workers were not provided social or legal protection. • In 1992 there were more than 0.5 Million child laborers in China. • Seven Million people of Shenzhen total population of twelve Million are migrants . • According to study in 2003 one third of the Chinese Laborers receive less than minimum wages.
LABOR ABUSE CONTD..
• In Shenzhen more than 10,000 strikes took place in 2006. • Crime rate nine times higher than Shanghai. • Shantou and Xiamen are victims of large scale women trafficking and hit by massive tax and smuggling frauds
LAND LOSS
• Land in China were state property till 1991. • SEZ were given freedom to create their own land regulation. • Only Urban land can be transferred to private parties. • Rural land can be sold to the state which can then sell it to a private party after classifying it as an urban land.
LAND LOSS CONTD..
• • • • • • • • As SEZ?s expanded so did demand and price for land. However farmers almost always got lower than market price. Speculators gained control over the market. By 2006 there were 5 SEZ?s in China. Over 8,700 zones were developed by local authorities. Between 1986 and 1995 more than 5 Million Hectare of arable land was transferred to real estate development. Economist in 1992 branded Hanian SEZ as the “ World?s Biggest Speculative Bubble”. The Bankruptcy of Hainan Bank and Guangdong Investment Corporation. Government in 1998 had to put in stringent measures to counter the misuse of land.
INDIAN EXPERIENCE WITH SEZs..
INDIA & EPZs
? 1st EPZ- Kandla in 1965 ? Provided only 0.01% of total employment ? FDI was less than 20% of total investment ? Accounted for less than 4% of exports. Net export much lower as imports were over 60% of exports ? Limited Success ? 8 EPZ set up in India with combined area of 3.37 Sq Miles
WHY EPZs NEVER TOOK OFF IN INDIA??
? ? ? ? ? Inadequate infrastructure Restrictive policies Lengthy procedures – No Single Window Locational disadvantages Stringent labour laws
A COMPARITIVE LEARNING..
INDIA & SEZs
? In India, the Government came up with an SEZ Policy in 2000 and the SEZ Act was passed in 2005. ? Unlike China the Indian SEZ s are poised to be promoted by Central Government, Foreign Company, State Government, Private & Public Company or jointly by any of the above. ? 41 functional and 195 approved SEZ s as of January 2008 Some Features of Indian SEZ s are: • Conditions for automatic approval relaxed considerably • Customs procedures simplified • Units could produce items reserved for SSI units in domestic market • 100% FDI investment for manufacturing • Profits could be repatriated fully • Freedom for sub-contracting • 100% I.T. exemption for five years • Exemption from Central Excise Duty on capital goods, raw materials, consumable spares from domestic market • Reimbursement of CST paid on domestic purchases
CHINA & SEZs
? In China SEZs were started in the late 1970?s along with reforms. 5 SEZs were formed. ? All SEZ s are Government promoted ? The Objective was to attract foreign investment, companies and technology ? All the SEZ s were located along coastlines ? The SEZ s played a crucial role in making China the global manufacturing hub. ? Primary focus is on Infrastructure and manufacturing. ? The importance of SEZ s in the Chinese economy has diminished over the years with opening up of SEZ facilities to other cities ? However in 2005 Shenzhen exported $700 billion
A COMPARITIVE STUDY
? In China the SEZ s are located along the coasts whereas in India they have developed around major cities ? The Chinese SEZ s are more manufacturing oriented whereas the Indian SEZ s particularly the ones that are coming up are Service based. ? The Indian SEZ s are much smaller in size compared to their Chinese counterpart. ? Reliance?s Mumbai SEZ is about 14000 Hectares compared to ? China?s Shenzhen which is about 56000 Hectares. ? In 2007 software development and gem and jewelry industry comprised 75% of total SEZ export of about $15 billion in India ? Chinese SEZ s were set up along with liberalization. In India SEZ s started coming up good 15 years after the reforms began. ? India has started focusing on SEZ s when the attention is shifting away from SEZ s in China. ? Establishing SEZ s in India lacks in central planning and coordination unlike China
A COMPARTIVE STUDY CONTD..
? The SEZ s in China were instrumental in achieving the desired growth but in India SEZ s are being set up piggybacking the high growth rate. ? Chinese SEZ s are Government promoted but Indian SEZ s are mostly privately controlled. ? India being a democracy, forced acquisition of land has caused unrest. The Chinese government using its autocratic power spearheaded its policies ? Major Investors in Indian SEZ are real estate companies ? Real Estate investment in SEZ creates doubt about effectiveness and utility of SEZ s. ? Corruption and shady transactions involved in setting up SEZ s and acquiring land
REFERENCES
• • • • • • • • • • • • http://gulzar05.blogspot.com/2007/10/why-sezs-may-not-be-solution.html http://sanhati.com/articles/231/ http://www.thehindubusinessline.com/2006/06/21/stories/2006062103770900.htm www.cmdkerala.net/downloads/Presentation.ppt http://reliancesez.blogspot.com/2006/10/china-vs-india-sezs-comparison-and.html www.economictimes.indiatimes.com/articleshow/432604.cms www.supplychain.cn/en/art/?1486 www.asiapacificbusiness.ca/apbn/pdfs/bulletin244.pdf http://en.wikipedia.org/wiki/Image
R_China-SAR_%26_SEZ-English.png The Origins And Performance Of China's Special Economic Zones- by Kung Kai-sing, James The Political Economy Of China?s SEZ?s- by Victor C. Falkenheim Political Economy of FDI and Economic Growth in China: A Longitudinal Test at Provincial Level- by Han Gya Lheem & Sujian Guo
doc_502551051.ppt
This is a presentation includes covers SEZ in China.
SPECIAL ECONOMIC ZONES IN CHINA
AGENDA
• • • • • • • • SEz- Meaning and Origin Political facets Economic rationale Developments and benefits Critique Indian experience with SEZs A comparative study References
SEZ- MEANING & ORIGIN
• Designated areas in countries that possess special economic regulations • These regulations tend to contain measures that are conducive to foreign direct investment. • Receive tax incentives and the opportunity to pay lower tariffs. • Includes FTZ, EPZ • 3rd Plenary Session of the 11th CPC Central Committee in 1978 • Implementation of overall reform and opening to the outside world.
POLITICAL FACETS
POLITICAL CONSIDERATIONS
• China's dramatic post-Mao opening to the west. • "Special Economic Zones" (SEZs) symbolized the boldness of China's break with the autarchic policies of the past. • In 1984, “Learning from Shenzhen“ was propagated, wherein the largest of the SEZs-Shenzhen, led to the expansion in size of the smaller existing zones and the opening of fourteen additional coastal cities as preferred sites for foreign investment. • Major spurt in foreign investment in the SEZs followed thereafter.
HOWEVER, DOUBTS PERSISTED..
• Cost- effectiveness of the zone option • Uneconomic concessions to foreign investors • While Chinese economists were attracted by the successes of the Korean and Taiwan EPZs, they were determined to limit their own risks. • Decision was taken to restrict the experiment to four zones, in areas where suitable pre-conditions gave a reasonable assurance of success.
THE NEXT STEPS…
• Guangdong and Fujian provinces were plausible options - physical location, access to funds, expertise and markets.
• Only Shenzhen was mandated to establish a large-scale "comprehensive” zone. The other zones were, to varying degrees, sharply hedged in by policy directives which called for limiting zone size and for gearing zone objectives to local resources.
• The May 1980 Central Committee guidelines directed zone authorities to lay primary emphasis on utilizing their existing industrial foundation and capital stock to accelerate export production of light industrial goods, particularly machinery. • Overall development strategy was to be dictated by each city's “fundamental character”.
SOCIAL COST-BENEFIT FRAMEWORK
• China?s SEZ venture need not be seen in the capitalist limelight. • Aim to strike a balance between Chinese model of socialism and the capitalist economic forces, under state control. • SEZs are essentially an experimental laboratory. • Significant insights could be drawn OR else the „Ripple Effect’ could be controlled harmoniously. • Tactful move to cover up for the Chinese inexperience in handling the „capitalist?.
GEO-POLITICAL FACTOR
• Disastrous impact of Great Leap Forward Campaign and Cultural Revolution • Lack of confidence on the part of foreign investors • Strategic move to establish SEZs in the vicinity of Hong Kong and Macao- attracting capital investment from these areas
CHINESE DECISION OF CLAIMING SOVEREIGNITY OVER HONGKONG & TAIWAN
• Strategic decision to follow an open door policy • Hong Kong- one of the few successfully developed industrializing countries • Shenzhen SEZ as a buffer zone- a hybrid between capitalist nature of Hong Kong and socialist nature of China • Progressive role of capitalism- ideological justification of SEZs • An important historical mission to be fulfilled- Chinese reunification with Taiwan and Hong Kong
A POLITICO-ECONOMIC BALANCE.. • Further boosts the argument that SEZs were not only created for an economic purpose, but had a deep underlying political message!! • Yet, whatever be the relative payoffs to the SEZs or their domestic partners, from the national perspective-the shift of investment to the zones represents fulfillment of part of a broader restructuring reform, centering on enhancing the economic role of cities as focal points for commercial and industrial development.
KEY EXPECTATIONS…
• Play a catalytic role in the regional development of its own zone-hinterland • Decision to enlarge the existing zones so that they could more adequately fulfill this strategic function • “Boldest use of the zones”- backed by all of China, and become "pivotal points" for the transformation of China's ties with the world.
ECONOMIC RATIONALE FOR SEZ
ECONOMIC RATIONALE
1. Faster Economic Growth ? Relative backwardness with other Asian economies ? In line with new economic policy
? Reflected in decadal growth of above 10%
2. Promotion of Regional Economic development
? Focus on lesser developed provinces
? Promote infrastructure investment in provinces other than Shanghai
ECONOMIC RATIONALE CONTD..
3. Earning more Foreign Exchange ? Low on reserves 4. Employment Generation on a large scale ? Huge unemployment base ? Rising wages
ECONOMIC RATIONALE CONTD..
5. Creation of economic links with the domestic economy ? Hong Kong (close to Shenzhen), Macao (close to Zhuhai), Taiwan (close to Xiamen) and overseas Chinese communities (Shantou) 6. Infusion of modern technologies ? Focusing on export competitiveness ? Six pillar industries 7. Linkages between the domestic and zone economies ? Implementing the slogan “Wai yin nei lian”
THE JOURNEY..
SEZ’s Strategic reasons
Shenzhen Near Hongkong
Zhuhai Macao
Shanton
Xiamen
Hainan Whole island Thailand DFZ’s 30 % 3-8 Yrs YOP -----------
Shanghai Nearest to Taiwan Malaysia FTZ’s 28 % 5-10 yrs YOP 70-100 % -----------
NRI’s, HK, Across Taiwan Taiwan India SEZ 33.9 % Phillipines Ecozones 35 % 4-8 Years (from year of profit) -----------
China SEZ Corp. Tax Rates 15 % 100% tax holiday 50% Tax
2 Yrs(from year 5 Yrs( from of profit) 1st year) Next 3 Years Next 10 Yrs
Primary Motivation : To attract foreign capital to „progress? along capitalist lines Incentives & concessions offered: 1. Allowing wholly owned foreign private units 2. Vast autonomy 3. exemptions from Export & Import duty 4. Tax rates 5. Wage rates lower than in Hongkong 6. Free movement of labour 7. Strikes prohibited, labour laws 8. Miscellaneous benefits
STATISTICS- SHENZHEN
Shenzhen's Economic Development 1978-1984 (in 100 MN Yuan)
1978 1979 1980 1981 1982 1983 1st half-84
Industrial output value
0.6 0.6061 0.8444 2.4282 3.6212 7.2014
5.55
Construction
Foreign investments( HK $100 MN) Total Retail sales
-
0.4988 1.2487 2.7039 6.3265 8.8593
6.03
1.17
1.2 1.48
2.5 2.2
5.9 3.5
8.8 5.54
11.3 12.51
5.9 8.61
DEVELOPMENTS..
• Measures of Capitalist Reforms undertaken: – Reforms undertaken in agriculture sector – Unemployed labourforce created – “Long March” – Township & Village Enterprises system developed. – TVE?s & State industries start to crumble leading to increased privatisation – Capitalists emerged and cheap unemployed labour force created • Mid-1990’s : New Trend of FDI coming in from Japan , USA, European Countries ? 1960-1970 – EPZ?s in S Korea & Taiwan used as export base ? Mid 1970?s Shift of FDI to low-wage EPZs of Indonesia, Thailand, Mexico ? Shift of FDI to China in mid 1990?s ? Reason for these shifts : Wages becoming uncompetitive
BENEFITS
* Faster economic growth- Growth rate of 20 % every year- Shenzhen unique. 38% CAGR from 1981 till now * Employment generation on a large scale – 10 crores now * Earning more foreign exchange * Infusion of modern technologies & their demonstration and spread effects * Economies in production due to clustering
* Experimentation-based and trade-based learning
* Facilitating economic liberalization, including trade, financial and institutional liberalization * World Class Infrastructure development & overall growth- Hainan (agriculture now contributes 44.6 percent to the province's economic growth); Tourism Standardized
CRITIQUE
SEZ’s- ARE THEY REALLY SPECIAL??
• China is considered as a shinning example of development via SEZ?s. • SEZ are one of the major reasons of degradation of human rights in China. • Focus on: 1. Economic Loss 2. Land Loss 3. Labor Abuse
ECONOMIC LOSS DUE TO SEZ’s
• Durable goods entered the market legally and illegally. • To counter this government moves towards “Market Socialization”. • Investment patterns were dependent on regulatory policies. • Lower than expected contribution by SEZ to export earnings
LABOR ABUSE
• Workers were not provided social or legal protection. • In 1992 there were more than 0.5 Million child laborers in China. • Seven Million people of Shenzhen total population of twelve Million are migrants . • According to study in 2003 one third of the Chinese Laborers receive less than minimum wages.
LABOR ABUSE CONTD..
• In Shenzhen more than 10,000 strikes took place in 2006. • Crime rate nine times higher than Shanghai. • Shantou and Xiamen are victims of large scale women trafficking and hit by massive tax and smuggling frauds
LAND LOSS
• Land in China were state property till 1991. • SEZ were given freedom to create their own land regulation. • Only Urban land can be transferred to private parties. • Rural land can be sold to the state which can then sell it to a private party after classifying it as an urban land.
LAND LOSS CONTD..
• • • • • • • • As SEZ?s expanded so did demand and price for land. However farmers almost always got lower than market price. Speculators gained control over the market. By 2006 there were 5 SEZ?s in China. Over 8,700 zones were developed by local authorities. Between 1986 and 1995 more than 5 Million Hectare of arable land was transferred to real estate development. Economist in 1992 branded Hanian SEZ as the “ World?s Biggest Speculative Bubble”. The Bankruptcy of Hainan Bank and Guangdong Investment Corporation. Government in 1998 had to put in stringent measures to counter the misuse of land.
INDIAN EXPERIENCE WITH SEZs..
INDIA & EPZs
? 1st EPZ- Kandla in 1965 ? Provided only 0.01% of total employment ? FDI was less than 20% of total investment ? Accounted for less than 4% of exports. Net export much lower as imports were over 60% of exports ? Limited Success ? 8 EPZ set up in India with combined area of 3.37 Sq Miles
WHY EPZs NEVER TOOK OFF IN INDIA??
? ? ? ? ? Inadequate infrastructure Restrictive policies Lengthy procedures – No Single Window Locational disadvantages Stringent labour laws
A COMPARITIVE LEARNING..
INDIA & SEZs
? In India, the Government came up with an SEZ Policy in 2000 and the SEZ Act was passed in 2005. ? Unlike China the Indian SEZ s are poised to be promoted by Central Government, Foreign Company, State Government, Private & Public Company or jointly by any of the above. ? 41 functional and 195 approved SEZ s as of January 2008 Some Features of Indian SEZ s are: • Conditions for automatic approval relaxed considerably • Customs procedures simplified • Units could produce items reserved for SSI units in domestic market • 100% FDI investment for manufacturing • Profits could be repatriated fully • Freedom for sub-contracting • 100% I.T. exemption for five years • Exemption from Central Excise Duty on capital goods, raw materials, consumable spares from domestic market • Reimbursement of CST paid on domestic purchases
CHINA & SEZs
? In China SEZs were started in the late 1970?s along with reforms. 5 SEZs were formed. ? All SEZ s are Government promoted ? The Objective was to attract foreign investment, companies and technology ? All the SEZ s were located along coastlines ? The SEZ s played a crucial role in making China the global manufacturing hub. ? Primary focus is on Infrastructure and manufacturing. ? The importance of SEZ s in the Chinese economy has diminished over the years with opening up of SEZ facilities to other cities ? However in 2005 Shenzhen exported $700 billion
A COMPARITIVE STUDY
? In China the SEZ s are located along the coasts whereas in India they have developed around major cities ? The Chinese SEZ s are more manufacturing oriented whereas the Indian SEZ s particularly the ones that are coming up are Service based. ? The Indian SEZ s are much smaller in size compared to their Chinese counterpart. ? Reliance?s Mumbai SEZ is about 14000 Hectares compared to ? China?s Shenzhen which is about 56000 Hectares. ? In 2007 software development and gem and jewelry industry comprised 75% of total SEZ export of about $15 billion in India ? Chinese SEZ s were set up along with liberalization. In India SEZ s started coming up good 15 years after the reforms began. ? India has started focusing on SEZ s when the attention is shifting away from SEZ s in China. ? Establishing SEZ s in India lacks in central planning and coordination unlike China
A COMPARTIVE STUDY CONTD..
? The SEZ s in China were instrumental in achieving the desired growth but in India SEZ s are being set up piggybacking the high growth rate. ? Chinese SEZ s are Government promoted but Indian SEZ s are mostly privately controlled. ? India being a democracy, forced acquisition of land has caused unrest. The Chinese government using its autocratic power spearheaded its policies ? Major Investors in Indian SEZ are real estate companies ? Real Estate investment in SEZ creates doubt about effectiveness and utility of SEZ s. ? Corruption and shady transactions involved in setting up SEZ s and acquiring land
REFERENCES
• • • • • • • • • • • • http://gulzar05.blogspot.com/2007/10/why-sezs-may-not-be-solution.html http://sanhati.com/articles/231/ http://www.thehindubusinessline.com/2006/06/21/stories/2006062103770900.htm www.cmdkerala.net/downloads/Presentation.ppt http://reliancesez.blogspot.com/2006/10/china-vs-india-sezs-comparison-and.html www.economictimes.indiatimes.com/articleshow/432604.cms www.supplychain.cn/en/art/?1486 www.asiapacificbusiness.ca/apbn/pdfs/bulletin244.pdf http://en.wikipedia.org/wiki/Image
R_China-SAR_%26_SEZ-English.png The Origins And Performance Of China's Special Economic Zones- by Kung Kai-sing, James The Political Economy Of China?s SEZ?s- by Victor C. Falkenheim Political Economy of FDI and Economic Growth in China: A Longitudinal Test at Provincial Level- by Han Gya Lheem & Sujian Guodoc_502551051.ppt