chapter  2
30 Pages

The Politics of SEZ Creation

WithGeorge T. Crane

The SEZs were foreshadowed by economic policy debates of the mid-1970s. At that time, Deng Xiaoping took the lead in criticizing China’s economy. He pointed to widespread and fundamental problems: stagnant grain production per capita; declining industrial productivity; obsolete production technology; low standards of living; and inadequate use of international resources. The peculiar conception of a “Special Economic Zone” arose out of discussions among individuals in Hong Kong, Guangdong, and Beijing over the course of about a year from December 1978 to December 1979. The process started in Hong Kong. In the midst of the Third Plenum, Minister of Communications Ye Fei stopped there on his return from a European trip. From the outset the SEZs enjoyed support from some of the highest-ranking leaders in China. Premier Zhao Ziyang added his name to the list of zone proponents, which by then included Deng Xiaoping, Gu Mu, Xi Zhongxun, and Yang Shangkun, when he traveled to Shenzhen in August 1981.