Special Economic Zones: Pioneering Efforts on the Path of Socialism with Chinese Characteristics

From: English Edition of Qiushi Journal Updated: 2011-09-20 11:28
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Institutional Innovation Provides Endless Driving Force for the Creation of Miracles

Wang Rong

 The year 2010 marks the 30th anniversary of the Shenzhen Special Economic Zone (SEZ). As the birthplace of China’s socialist market economic system, Shenzhen has become a miracle in the global history of industrialization, urbanization and modernization over the past 30 years. Experience has shown that institutional innovation is the source of the Shenzhen SEZ’s miracles.


 In line with the CPC Central Committee’s great strategy of creating Special Economic Zones, Shenzhen has boldly risen to a historic task, carving out a path forward for China’s reform and opening up over the past 30 years. 

 Shenzhen initiated a series of bold innovations. Shenzhen broke away from the restraints of the traditional planned economic system to create many firsts. Shenzhen was home to the first auction of land use rights and the issuance of the first share after the founding of the New China. It has laid down the foundations for the reform of the administrative system, in which the breakthrough point is the establishment of greater departments, and has successfully probed into the classified management and engagement of public servants, thereby pointing out a path for the reform of China’s administrative system. Shenzhen has also led the way in the reform of the culture system by establishing the International Cultural Industries Fair, separating supervision from operations in cultural institutions and probing into industrial development modes that incorporate culture into science and technology, banking, and tourism.

  Central business district of Shenzhen August 18, 2010.  The city has made a great stride in its development from focusing on construction speed and height of buildings to focusing on environmental protection. The Shenzhen Jianke Building, known as “the building that lives and breathes,” was completed and put in operation in 2009, giving further credence to the city’s honorary title of “the capital of green buildings.” Shenzhen is one of the first group of model cities developed to demonstrate the application of renewable energy buildings and the city continues to serve as a model because of its green buildings and excellent ecological environment. / Photo by Xinhua reporter Lu Hanxin

 Institutional innovations have stimulated the rapid growth of the Shenzhen SEZ. A series of institutional innovations liberated productive forces and stimulated their growth. This allowed the people of Shenzhen to create four miracles. The first such miracle is Shenzhen’s sustained rapid economic growth. In the period from 1979 to 2009, Shenzhen’s GDP grew at an average rate of 25.8% per year. In 2009, Shenzhen’s GDP reached 820.123 billion yuan, 4,176 times as large as the GDP in 1979. Shenzhen’s favorable institutional environment led to the highly effective convergence of various essential resources from both inside and outside of China. This has allowed Shenzhen to attract 166 Fortune 500 companies and given rise to native multinational corporations such as Huawei and ZTE. The second miracle is the rapid rise of the city. Shenzhen has grown rapidly from a small border town into a large modern metropolis. In addition to having been appraised as a National Ecological Garden City, Shenzhen boasts leading urban functions domestically and a fully integrated transportation network that covers land, sea and air. The third miracle is the rapid social progress that has been made in Shenzhen. In 2009, the per capita disposable income of Shenzhen residents reached 29,244.52 yuan, making it the highest earning city in the country. Education, health, culture and sports have also undergone vigorous development, an example being Shenzhen’s winning of the rights to host the 26th Summer Universiade. The fourth miracle is the common development of material and intellectual, cultural and ideological civilization. Over the past 30 years, Shenzhen has cultivated the “Shenzhen spirit,” whose core elements are reform and innovation. It has been home to a number of excellent literary and artistic works that have enjoyed nationwide influence and showcased itself as a place for the vigorous development and thriving of culture.  

 Successful institutional innovations have been applied throughout China. Shenzhen’s reform initiatives have been highly praised by the CPC and the state. Shenzhen’s experiences in institutional innovation provided China with practical grounds for the revision of the Constitution and the Land Administration Law, the abolition of food and edible oil rationing with coupons, the introduction of the public bidding mode for construction projects, the development of the capital market, and the establishment of the public servant system. Delegates from around China have paid fact-finding visits to Shenzhen in large numbers. As a result, Shenzhen’s successful experiences have been applied throughout China.


 Innovation is the essence of the Shenzhen SEZ. The rich experience in institutional innovation that Shenzhen has gained is a treasured possession in its reform and development.

 We must free our minds. An open mind is a prerequisite to institutional innovation. The breadth and depth of freeing of minds have a direct bearing on the amount of impetus behind institutional innovation. The Shenzhen SEZ has undergone three waves of freeing of minds. Faced with doubts over the establishment of Special Economic Zones, the people of Shenzhen led the charge against traditional ideological taboos, put forward the slogan, “Practical work brings prosperity, empty talk endangers the nation,” and created “Shenzhen Speed,” which became a world-famous phenomenon synonymous with rapid development. Inspired by Deng Xiaoping’s important talks during his inspection tour of South China, the people of Shenzhen engaged in a second wave of freeing of minds, which would lead to the establishment of the basic framework for what is now the socialist market economic system. In the face of prominent issues calling for the transformation of modes of development, Shenzhen did not rest on its laurels or prescribe to a certain mindset, but instead broadened its horizons, rose to challenges and achieved consensus in application of the Scientific Outlook on Development.

 We must be bold in learning from others. We must approach institutional innovation with a broad mind and open arms. This will allow us to use the achievements of all human civilizations to our advantage. In the early days of the Special Economic Zone, Shenzhen took advantage of its close proximity to Hong Kong by drawing courageously on Hong Kong’s experiences in economic development, urban management and rule by law. As the Special Economic Zone continued to develop, Shenzhen gradually set its sights on developed countries in Europe and America. Shenzhen would select and dispatch bureau-level cadres to learn from these countries every year. This aided Shenzhen in the implementation of a scheme to improve the government’s ability to perform its duties. The now developed Shenzhen has set itself the goal of catching up with the most advanced cities in the world, and is looking towards Singapore, Hong Kong and Seoul as models to learn from.

 We must seek truth from facts. We must respect objective laws and avoid blindness in institutional innovation. First of all, we should follow market principles. Shenzhen gives full play to the fundamental role of the market in the allocation of resources. It has gradually constructed the most developed market system in the country. Second, we should follow international practices. After China’s entry into the WTO, Shenzhen conducted a comprehensive overhaul of its local regulations to establish rules and systems that fall in line with international practices. This has allowed it to gain the initiative in the handling of international trade disputes and effectively protect China’s economic interests. Third, we should take the local reality into consideration. Shenzhen has balanced the momentum of reform, the speed of development and the capacity of the people to adapt. It has accurately paced its institutional innovation so as to ensure that these initiatives progress steadily.

 We must make systematic designs. Institutional innovation is a complicated system of engineering project. We must transform the way of reform by engaging in comprehensive reforms instead of single reforms and by developing a sound institutional system instead of just filling in the blanks. We must ensure that every single institutional innovation becomes a complete system of its own. Different systems should be integrated as a whole to support one another. This integrated approach to institutional innovation is certain to spur on a leap forward in the development of a city. Shenzhen has made institutional innovations in various fields such as economy, administration, society and culture over the past 30 years. In addition to being systems in their own right, these institutional innovations are also able to coordinate with one another as a whole. This has driven on the rapid development of Shenzhen.


 Achieving scientific development will be a long and arduous task. Institutional innovation should provide a source of impetus for scientific development.

 Institutional innovation will be required to meet new requirements in the new era. The CPC Central Committee stated that the Special Economic Zones should play an increased role in reform, opening up and independent innovation, calling on SEZs to play the role of a pacesetter in the promotion of scientific development and social harmony. At the present time, the world economy is undergoing difficult readjustments in the wake of the global financial crisis. A new technological revolution is in the making, the restructuring of industries and the global economy is accelerating and traditional industrial structures and economic modes are being challenged. Under this backdrop, more will be asked of institutional development if we are to achieve scientific development.

 Institutional innovation calls for new ideas. The State Council officially replied to the Overall Plan for Comprehensive Reform in Shenzhen in 2009 and it has approved the expansion of the Special Economic Zone to cover the entire administrative area of Shenzhen in 2010. Shenzhen has recently defined comprehensive arrangements to make further institutional innovations. It is leading the way in the breakaway from systems and mechanisms that are restricting its scientific development and boldly probing into reforms that will influence the future development of the country, wherein an emphasis has been placed on institutional innovation in regard to the system of government administration, economic system, the system of social management, independent innovation, cooperation between Shenzhen and Hong Kong, resource conservation and environmental protection.

 Institutional innovations should provide driving force for scientific development. To Shenzhen, scientific development means innovative development, transforming development, low-carbon development and harmonious development. Institutional innovation should provide the necessary space and driving force for these four types of development to be achieved. We need to turn institutional strengths into a resource for development and build institutions and mechanisms that are conducive to scientific development. We need to take a new path of scientific development with strong willingness, courage and great enthusiasm for our work and make a new contribution to the rejuvenation of the Chinese nation.

Note: Author: Member of the Standing Committee of the CPC Guangdong Provincial Committee and Secretary of the CPC Shenzhen Municipal Committee


Scientific Development Is the Essence of the Path of Socialism with Chinese Characteristics

Yu Weiguo

 The Xiamen Special Economic Zone was officially established in August 1980. Thereafter, Xiamen undertook the historic task of serving as an experimental unit in China’s reform and opening up drive. It also took on the special mission of developing exchanges and cooperation across the Taiwan Straits and promoting the peaceful reunification of the motherland.


 The Xiamen Special Economic Zone has undergone enormous historic changes over the past 30 years that have captivated the world. 

  Xiamen, Fujian Province from a distance. / Photo by Xinhua reporter Zhang Guojun

 Xiamen has grown from a small coastal town in southeastern China into a key city on the west shores of the Taiwan Straits. Xiamen’s GDP is growing at an average rate of 17.2% annually and its fiscal revenue is increasing by 21.1% per year. Xiamen’s per capita GDP (permanent residents) exceeds US$10,000, and its GDP per square kilometer is more than 110 million yuan. Moreover, the amount of energy consumed per unit of GDP is equivalent to half of the national average. The speed, quality and efficiency of Xiamen’s economic development are among the highest in the country. In addition to providing a model for the rest of China, Xiamen is also playing an increasingly prominent role in promoting the development of its surrounding areas. Xiamen’s overall competitiveness ranks among the top ten cities in China. Heralded as the “Gate of China,” Xiamen is rising rapidly on the west shores of the Taiwan Straits.

 Xiamen has grown from an underdeveloped and poor town into a civilized and harmonious city. The incomes of Xiamen’s urban and rural residents have increased in step with economic growth as the people have fully benefited from the success of the city. The medical insurance system, old-age insurance system and work injury compensation system maintain high standards and cover both urban and rural areas. Average life expectancy in the city has reached 78.72 years, which is among the highest in the world. Xiamen has long been lauded as a garden on the sea, and is universally regarded as a warm and welcoming city. When it was granted the UN-Habitat Scroll of Honor Award, Xiamen was praised for providing “a decent roof over everybody’s head.” During Expo 2010 Shanghai, Xiamen was selected to showcase its achievements at the Urban Best Practices Area alongside 80 other cities from around the world, being the first to display its unique charm to the world during the event. 

 Xiamen has transformed from the coastal front in the standoff across the Taiwan Straits to a forward platform for exchanges and cooperation. Xiamen carried out a series of ice-breaking initiatives in its efforts to promote the realization of direct mail, transport and trade between Taiwan and the Mainland. Xiamen was the first place to designate points of anchorage for fishing boats from Taiwan. In 1997, a cargo ship sailed directly from Xiamen to Taiwan, making the first direct journey across the straits in 48 years. In 2001, Xiamen and Jinmen opened up their doors to one another, representing a major breakthrough after 52 years. Today, more than 5 million people have traveled between Fujian Province on the Mainland and the islands of Jinmen and Mazu under the control of Taiwan. Three state-level Taiwanese Investment Zones have been established in Xiamen, which have attracted more than 3,600 Taiwanese enterprises. Investment from Taiwan accounts for a third of the total overseas investment in Xiamen. The two sides of the Taiwan Straits have made joint efforts to establish platforms for cooperation such as the China Xiamen Machinery and Electronics Exhibition, the Straits Forum and Cross-strait (Xiamen) Cultural Industry Fair. These efforts have transformed the waters around Xiamen and Jinmen from an area of military confrontation to a place of total harmony. Xiamen has become a forward platform for exchanges across the Taiwan Straits on which Taiwan has demonstrated more active trade and investment, more frequent passage of visitors, more intense exchanges and closer emotional bonds than it has done in any other place on the Mainland. 


 Over the past 30 years, Xiamen has formed a prototype model for scientific development under which production has grown steadily, quality of living has improved and environmental conditions have remained ideal. It has accumulated a wealth of valuable experience.

 Xiamen has diligently carried out pilot government policies and strived to take initiative in reform and opening up. It is important to take overall conditions into consideration when engaging in reform. In addition to being bold in innovation and breaking away from conventions, it is important to balance the momentum of reform, the speed of development and the capacity of the people to adapt. We made innovations in social management and social security in synchronization with or even earlier than the reform of state-owned enterprises. This turned enterprise employees into the supporters, the driving force and the beneficiaries of these reforms. When we were further opening up to the outside world, Xiamen worked hard to create new areas of economic growth in accordance with its conditions and practical needs. It was the first place in China to build an airport with the aid of foreign investment, the home of the first local airline company in China, and the first place in the country to grant fifth freedom rights for its airspace.

 Xiamen has pursued scientific development and constantly explored comprehensive, balanced and sustainable development models. Xiamen has unfavorable natural conditions. Based on this realization, Xiamen consciously transformed its mode of economic development in the aim of maintaining rapid economic growth and winning markets amidst fierce competition whilst ensuring high quality and long-term sustainability. Xiamen has always been committed to benefiting the people. It has led the way in the development of social security systems such as the minimum wage, subsistence allowances and basic medical insurance for rural residents. Residents over 60 years old covered by these systems are entitled to at least 200 yuan per month. Xiamen was the first to offer work injury insurance, old-age pension insurance and medical insurance for the non-local population, and was also the first to establish the “Loving Care Supermarket,” which has been praised as a good policy to maintain the dignity of those that receive aid. Xiamen has also focused on improving the environment. The city formulated regulations on environmental protection after it received local legislative power, and has gone on to issue almost 20 sets of local regulations concerning ecological and environmental protection. Xiamen also developed the first index system for ecological conservation in China. Due to these measures, Xiamen has managed to maintain a high environmental quality despite the rapid growth of industry in the city.  

 Xiamen has strived to improve the quality of its citizens and the cultural and ethnical level of the city. Regarding the free and all-round development of people as the fundamental value of social progress, Xiamen has made concentrated efforts to increase the overall quality of its citizens. Since the establishment of the Special Economic Zone, Xiamen has advocated respect for the aged and care for the young in public places, calling on people to show more love and care. This has helped Xiamen to become the warm hearted city that it is today. We attached importance to exerting a subtle influence on people’s lives by making efforts to nurture and enhance a simple and honest way of life that had formed on the basis of local culture in the region. We organize family concerts on Gulang Islet, which is known as the Piano Island, and hold the Xiamen International Marathon on Huandao Road (The island ring road), which has been called one of the most picturesque marathon tracks in the world. These are ways to refine and nurture our citizens.

 We are ever aware of our special mission to play a unique role in relations across the Taiwan Straits. Taking advantage of the links in geographical area, the kinship in blood, the continuity in culture, the contacts in trade and the historical connection in administration that exist between Fujian Province and Taiwan, we have made pioneering efforts geared towards the most essential and practical aspects of exchanges and cooperation across the Taiwan Straits, and have thereby opened up the channels of communication between areas, people and trades. We have remained committed to putting people first as we carry out work related to Taiwan. We have come to share common interests through trade contacts, we have intensified spiritual ties through cultural interactions, and we have increased friendly exchanges through visits across the Straits. These things have played an important role in promoting the peaceful development of relations across the Taiwan Straits.


 Xiamen has now entered a crucial stage in reform and opening up. Taking advantage of the citywide expansion of the Xiamen Special Economic Zone, we will concentrate on accelerating the transformation of development modes in an all out drive to achieve a new leap forward in scientific development.

 We will strive to play a leading role in the transformation of development modes. We will work hard to promote the integration of planning, infrastructure development and public services both on and off Xiamen Island and make efforts to accelerate the development of a 260 square kilometer new municipal area outside of Xiamen Island. In addition, we will promote the transformation of the industrial structure to increase the proportion of mid-end and high-end industries, and promote the shift of the demand structure to make it more balanced and rational.

 We will strive to act as an experimental area for the innovation of systems and mechanisms. We will seize on opportunities to carry out reform in major areas and key links, focus on promoting scientific development and accelerating the transformation of modes of economic development, and make new breakthroughs in the reform of integrated systems and mechanisms related to overall support, industrial development and public services in urban and rural areas.

 We will strive to serve as a model in building a harmonious society. We will spare no effort in addressing the most pressing concerns of the people and accelerating the development of education, medical care and other social undertakings to ensure that all people become the beneficiaries of development. We will bolster our foundations as a National Civilized City, enhance culture as part of our soft power, and promote the vigorous development and thriving of culture. We will enhance our initiatives to protect the environment, implement low-carbon development modes and lifestyles and maintain our leading position in environmental conservation.

 We will strive to provide an example for harmonious exchanges and interactions across the Taiwan Straits. Taking advantage of the signing of the Economic Cooperation Framework Agreement (ECFA), we will accelerate the establishment of a financial services center for regional cooperation across the Taiwan Straits and develop a special zone for closer links between industries on both sides of the Straits. We will expand the scale of direct mail, transport and trade links between both sides of the Taiwan Straits, explore policies and measures to afford greater convenience for the passage of people and goods across the Straits, and open up a primary channel for the direct transit of people between both sides of the Taiwan Straits. We will continue to hold the Straits Forum, deepen exchanges and cooperation in culture, education, science and technology, folk customs, religion and other areas, build important platforms for non-government exchanges and make new contributions to usher in a new phase of peaceful development in cross-strait relations.

(From Qiushi Chinese editon, No.17, 2010)

Note: Author: Member of the Standing Committee of the CPC Fujian Provincial Committee and Secretary of the CPC Xiamen Municipal Committee

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