Special Economic Zones and Economic Transformation.The Case of the People's Republic of China

The thesis analyses the question whether the special economic zones in the People's Republic of China have supported the transition of the Chinese socialist economic system into a market economic system. Besides, it is analysed which lessons can be learned for other transition economies from the Chinese experiences with their special economic zones. For this end, the concept of special economic zones is presented and the role of the special zones in the Chinese open door policy is analysed. Also the foreign and domestic interests related to the establishment of special economic zones are discussed. The comprehensive presentation of the statistical data on the development of the five Chinese special economic zones between 1979 and 1997 shows the differences between the zones. The analysis of the available models of international trade theory shows that many important aspects of the real special zones are not yet included in these models so that the conclusions of the models are only of very limited value. The estimation of an econometric model was not able to produce any evidence that the reform policy in the coastal provinces had any positive effects on the development of the interior provinces of China. The thesis comes to the conclusion that the special economic zones have played an important role in the transformation process of the Chinese economy, but that not all expectations of the Chinese government have been fulfilled. The experiences cannot be easily transferred to other countries, because a number of very special conditions (for example the role of the ethnic Chinese from other countries as foreign investors) have very much influenced the outcome. At the end, the thesis gives a number of policy recommendations which should be considered when a special zone is established