I read above titled article in Daily Indian Express (Pune Edition) written by Sreemati Chakrabarti, Professor of Chinese Studies, Department of East Asian Studies, University of Delhi. I contacted the author with certain queries and received the full article. Gist of the article is as under.
After liberation of China in 1949 Chinese leaders preferred economic development addressing basic needs of overwhelmingly large population rather than financial growth of nation. There had been a few who differed from this strategy. Economic growth was not impressive but there had been remarkable progress in reducing disparity among people and improving literacy and health standards of both the rural and urban populace.
Economic growth was not impressive but there had been remarkable progress in reducing disparity among people and improving literacy and health standards of both the rural and urban populace.
Post-Mao leadership changed the policy during 1978 and gave more importance to economical growth. This appears to be the second step taken when the first objective had been achieved. Reforms were first initiated in the agricultural sector. 1980s showed phenomenal prosperity in the Chinese countryside. At Communist Party’s 14th Congress in 1992, Decision was taken that China shall be a “socialist market economy”. This policy decision had made China a free market capitalist economy. This has been accepted to accelerate growth. The result is China is the fastest growing economy, cities in certain region have prospered and village condition is pathetic. Almost 80% of villagers are either unemployed or under- unemployed. China’s Special Economic Zones did result in creating imbalance, both regional and city vs. villages.
There is another aspect why China needed SEZs. Prior to liberation of China, colonial powers and Japan forced China to open her market for exporting goods to China. Certain ports on east coast had been developed for this purpose. Thus China had sort of economic zones during past. In post liberation era China was not open to foreign direct investment. China recognised need of capital for speedy development and had to depend on foreign investment. There was yet another reason why SEZs were important for China. They were bridges to link China to Hong Kong and Macao and through them to the rest of the world. SEZ is a need of China for attracting foreign investments.
Chinese also hoped SEZs would serve for reunification of Hong Kong, Macao and Taiwan. ‘One country, two systems’ policy is basically to entice Taiwan. One more important function of the SEZs was to serve as mechanisms for the introduction, study and absorption of technology in a wider range of industries and agriculture. They have gone to extent of setting up casinos and brothels to make these places attractive to both the foreign investors and tourists. With time China's idea of SEZ has been replaced with SER (Special Economic Region), the entire east coast is having capitalistic economic system.
To conclude I would say, Chinese adopted this policy for faster economic growth. Growth needed foreign capital which could not have been available in their socialistic economy model. SEZs did bring out modern outlook and prosperity to a few. At the same time 80% of the rural population has been neglected. China is paying for it through unrest, loosing culture and providing Chinese women for pleasure of the capitalists. Mahatma Gandhi once said 'to achieve western style development in India we need at least 7 Earths as colonies'. China is dividing her own country 20:80 to build modern China. A large population pays for a few to prosper. Subject of next article is 'Does India need SEZs and in what shape?'