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[Week 15] City a Success Story Among SEZs: Magazine
2015-April-17 Source: Newsgd.com
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Shenzhen, China's first special economic zone (SEZ), was dubbed "a success story" by The Economist in its April 3 edition.

"The biggest success story (of SEZs) is China, whose decision in 1980 to create a zone in Shenzhen transformed the city into an export powerhouse," the newsmagazine said in an article titled "Political Priority, Economic Gamble."

Dozens of SEZs have since popped up across the country. In March, President Xi Jinping urged a faster pace of rollouts.

The first modern SEZ in the world was set up at Shannon airport in Ireland in 1959, but the idea took off in the 1980s after China embraced them, according to the article. There are now more than 4,000 SEZs throughout the world.

Most economists agree that SEZs catalyzed liberalization in China, which used them to test reforms that were seen as too hard to unveil nationwide. SEZs come in many forms, from basic "export processing zones" to "charter cities" which are urban zones that set their own regulations in all sorts of areas that affect business.

The overall impact of SEZs on trade is poorly understood, according to the article. A paper published in 2014 by economists at Paris-Dauphine University found that, for a given level of tariff protection, SEZs increase exports for the countries they are in and for other countries that provide intermediate goods or components. This helps explain why the World Trade Organization generally tolerates SEZs, even though many breach its subsidy rules.

South Korea and Thailand are developing eco-industrial parks and other countries are considering SEZs for refugee populations. The number of SEZs around the world could top 5,000 before long, the article said.

Editor: Chan
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