ABSTRACT
This chapter addresses the consequences of promoting foreign investment, particularly the effects on labor; articulates some investment policies applicable elsewhere; contemplates the role of a zone policy; and speculates on the prospects for China's Special Economic Zones. Shenzhen's experience can be a useful reference for other developing countries pursuing a similar zone policy to attract foreign investment, just as China learned a great deal from zones in South Korea and Taiwan. The importance of policy openness cannot be overstated, since it is the most important component of an investment environment. Supportive investment policies often can serve as a kind of guarantee of a government's commitment to an open investment regime, as clearly shown by Shenzhen's experience. Shenzhen has been a valuable opportunity for foreign investors and has helped to build their confidence in China's open-door policy. In the earlier stage of China's reform era, foreign investors' uncertainty was very high due to the lack of information and contact.
