Chapter 12: “A tale of three zones” and financial reforms
After the Communist Party of China’s (CCP) Third Plenum of the 11th Congress in 1978, the Chinese government instituted some political changes: four special economic zones were established in 1979, the development of the coastal region was set forth as national policy in the Sixth Five-Year Plan (1981–1985), 14 coastal cities were opened in 1984; three deltas, the Lower Yangtze delta, the Pearl River Delta and the Xiamen-Zhangzhou-Quanzhou Triangle, were declared as Coastal Economic Development Zones, and Hainan was established as a special economic province. These measures of selective territorial deregulation including special economic zones, coastal open cities and central economic cities allowed more than two dozen sub-provincial cities to implement more autonomous and preferential economic policies. The key objective of the set-up of special economic zones is to attract foreign investment, capital and technology. A series of preferential policies has been granted to the special economic zones in the past three decades so that they can attract more foreign investment, advanced technology and managerial skills. The underlying rationale of the economic zone model is a “trickle-down” strategy not only diffusing growth but also governance or policymaking experience from the coastal to other areas. Therefore, these zones are labeled as “windows” to implement more liberal and deregulatory economic policies, and are used as “corridors” through which developmental ideologies and experiences can be diffused into other localities.
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