SPECIAL ECONOMIC ZONES IN CHINA：LESSONS FOR VIETNAM

Nguyen Duc Trung

Special Economic Zones （SEZs）， one of economic zones， have been promoted as cornerstone strategies for economic development in countries around the world. The term “SEZs” covers a broad range of zones， such as free-trade zones， export-processing zones， industrial parks， economic and technology-development zones， high-tech zones， science and technology parks， free ports， enterprise zones， and others. Indeed， the SEZ is a designated estate where trade laws such as tariffs， quotas， or duties differ from the rest of the country.

In China， the first four SEZs were created in 1979-80 in the southeastern coastal China and consisted of what were then the small cities of Shenzhen， Zhuhai， and Shantou in Guangdong province and Xiamen （Amoy） in Fujian province. With the addition of an SEZ in Hainan in 1985， there were five major SEZs in China. It was estimated that in recent years， SEZs at national 4 level accounted for about 22% of national GDP， 46% of FDI， and 60% of exports and generated in excess of 30 million jobs. The SEZs have also played important roles in bringing new technologies to China and in adopting modern management practices.

In order to promote SEZs， Chinese government had adopted a lot of favorable policies related to finance， investment， land， etc.， especially those related to land reforms， investment incentives， etc. Besides， the right mixture of production factors also made a large contribution to the success of SEZs in China.

Lessons for Vietnam

Vietnam， recently showed interest in the establishment of SEZs， sees SEZs as the most important source for future economic growth momentum and breakthrough institutional reform. Via the success of China in establishing SEZs in the 1980s， Vietnam can draw some lessons as following：

Firstly， the government of China showed strong commitment and support to pilot market-oriented economic reforms.

Secondly， the government of China had adopted plenty of favourable policies related to land， investment， finance， etc.

Thirdly， the government of China promoted technology learning， innovation， upgrading and strong links between SEZs and the domestic economy.

Forthly， most SEZs in China had location advantages， in the coastal region or near major cities with a long history or tradition of foreign trade or business.

Last but not least， most of the SEZs competed with each other， and they had clear goals and targets in terms of GDP growth， exports， employment， revenues， FDI generation， etc.

To sum up， SEZs can be an effective instrument for one country to promote its industrialization and structural transformation， but only when implemented properly in the right context. Therefore， besides learning from the success of China in establishing SEZs in the 1980s， the government of Vietnam must pay much more attention to the environment protection and social security in order to make SEZs benefit for all， not for some.

[1] Nguyen Duc Trung， Sales Department， Duc Ninh Co.， Ltd， Hanoi ， Vietnam.

[2] Douglas Zhihua Zeng， Special Economic Zones： Lessons from the Global Experience， PEDL Synthesis Paper Series No. 1， retrieved from https：//assets.publishing.service.gov.uk/media/586f9727e5274a130700012d/PEDL_Synthesis_Paper_Piece_No_1.pdf.

[3] Bret Crane et al. （2018）， “Chinas special economic zones： an analysis of policy to reduce regional disparities”， Regional Studies， Regional Science， vol 5， issue 1， pp. 98-107.

[4] Douglas Zhihua Zeng， Global Experiences with Special Economic Zones – With a Focus on China and Africa， retrieved from

https：//www.worldbank.org/content/dam/Worldbank/Event/Africa/Investing%20in%20Africa%20Forum/2015/investing-in-africa-forum-global-experiences-with-special-economic-zones-with-a-focus-on-china-and-africa.pdf.