ABSTRACT
This chapter, based on data published in China, delineates what opened up in Shenzhen and why, and explains the reasoning that led to the creation of China's Special Economic Zones and the hopes of central government officials that the Zones would benefit the entire nation. It outlines the preferential policies for foreign capital investment that were adopted in the largest of the original Zones, at Shenzhen. The chapter aims to evaluate the first five years of results from opening up Shenzhen: the dramatic effects on local development, which were nonetheless inadequate from the state's point of view. The considerable subsidies Beijing poured into Shenzhen to lay a basis for its development helped build a structure that drained hard currency from Chinese firms and consumers. Besides national economic benefits from local exposure to advanced technology, China had political purposes in promoting Special Economic Zones.
