In 1980, Deng Xiaoping started China’s first special-economic zone in a coastal village that was nothing to look at. Today, Shenzhen is a teeming collage of huge skyscrapers, thriving industrial parks, 10 million people, one of the world’s busiest ports, and some of the biggest manufacturing and outsourcing industries anywhere…It’s the center of Chinese experimentation. There, officials can test what works and what doesn’t: which corporate tax rates offer the best balance of attracting foreign investment while filling government coffers in Beijing, which labor standards make the most sense, which corporate-governance standards are most advantageous, which immigration procedures are optimal, which regulations stay or go.
Outsourcing? See 2 above with the addendum that Dongmen continues to grow. One of the more recent examples was Foxcomm’s decision to move its manufacturing base out of Shenzhen and turn the Bantian campus into a research and development center.
Leaving aside Pesek’s shaky grasp of fact, his larger point, that Japan needs strong government intervention to grow the economy is based on the idea that tall skyscrapers, industrial parks, corporate tax rates, and immigration laws that work for industry are signs of economic success. Has he completely missed the fact of growing inequality throughout China more generally, but Shenzhen in particular?
The question of growing inequality is particularly relevant because preferential policies have predicated Shenzhen’s competitive advantage. The most famous of the quotations in this regard was Deng Xiaoping’s decision to “allow a few to get rich first”. More to the point, in Shenzhen wages for manual labor remain more or less what they were over 15 years ago, while white collar salaries continue to rise. Meanwhile, the price of housing has gone up even faster than white collar salaries creating a situation in which most young people are trying to figure out if they will be able to purchase a home.
This entry was posted in noted, shenzhen elsewhere and tagged deng xiaoping, japan, neoliberalism, response, shenzhen, special economic zone, william pesek. Bookmark the permalink.
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The economic free zone concept isn’t unique to China – you can find them all over the developing world, in places such as the UAE, Egypt, etc.
Thank you for joining the conversation. Yes, there are industrial processing zones and industrial parks and tax free zones all over the world. In fact, China learned from Singapore and Malaysia and Taiwan before establishing Shenzhen and the other four SEZs. And that’s part of my point: Today most of the world has heard of Shenzhen, but not the Zhuhai, Shantou, Xiamen, and Hainan SEZs; even in China, the rate of SEZ success (if we are judging by neoliberal economic indicators) is limited to Shenzhen, even though there are now special zones of various flavor all over the country.
Chongqing and Chengdu’s contrasting styles to development–with a mention to income inequality.
Curious as to your thoughts on the Chengdu v. Chongqing, and any tie-in to Shenzhen.
Thanks for the English summary of Shenzhen’s top firsts.
Hi Michael, thanks for the links to the nytimes view of Shenzhen. About Chongqing, all I know at the moment is how many Shenzhen based architectural firms are working there. I’m thinking a visit would be enlightening!