Special Economic Zones Of China
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Special Economic Zones Of China

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In justifying opening up and the series of economic reforms that ensued in China, Deng Xiaoping referred to Karl Marx and his theories, which predicted that nations need to undergo urbanization and a stage of capitalism for a natural socialist transition. One of the most renowned reforms under Deng was establishing four "special economic zones" along the Southeastern coast of China, with Shenzhen, Shantou, and Zhuhai located in Guangdong province and Xiamen located in Fujian province. Special economic zones ( SEZs ) in mainland China are granted more free market-oriented economic policies and flexible governmental measures by the government of China, compared to the planned economy elsewhere.

This allows SEZs to utilize economic management which is more attractive to foreign and domestic businesses. In SEZs, "...foreign and domestic trade and investment are conducted without the authorization of the Chinese central government in Beijing" with "tax and business incentives to attract foreign investment and technology". Trade was originally controlled by China's centralized government. However, these special zones are where market-driven capitalist policies are implemented to entice foreign investments in China. In 1986, China then added 14 additional cities to the list of special economic zones.