Rethinking the Economic Performance of Chinese Special Economic Zones

Beginning with the 1979 open-door policy, China began its transition from a planned to market economy. Special Economic Zones (SEZ), the first step toward an open door policy, were established. Although Shenzhen, as a representative of SEZ, is widely known for excellent outputs, we do not altogether agree that Chinese economic growth was heavily induced by the development of SEZ. The objectives of this paper are to analyze the economic performance of each SEZ, to explain that China's economic performance relied not only on unbalanced development policy but also on initial conditions, and to prove the role of continuous and increasing open-door policy in Chinese economic growth. This paper closely analyzed economic performance of all SEZ (Shenzhen, Zhuhai, Shantou, Xiamen, and Hannan) from 1980 to 2002 and found the following conclusions: 1) economic development of SEZ are more affected by location and initial conditions instead of a special policy; 2) the effect of SEZ to economic growth is not known; 3) widely performed open door policy revealed a bigger effect to economic growth than development of SEZ. Therefore the effect of the SEZ to economic growth was restricted considerably, and the growth of the Chinese economy is feasible by continuous and stepped up open-door policy