ABSTRACT
The creation of the Special Economic Zones (SEZ) policy and the subsequent establishment of several zones in Guangdong and Fujian Provinces were a direct response to the changes in China's economic policies around 1979. This chapter provides an account of the conceptual and policy context for the SEZs and reviews the pertinent research in order to devise a framework for evaluating SEZs' performance in promoting foreign investment and technology transfer. It outlines the political changes leading to the creation of the SEZs, the legal and administrative framework established to promote foreign investment, and a chronology of investment guidelines developed for the SEZs. The discussion of factors in relation to China's SEZs draws upon the "neoclassical" theory of foreign investment. The domestic policy shift in China in the late 1970s was reinforced by changes in the international arena at that time, particularly in the global economic and production systems.
