Economic and urban changes in the Shenzhen special economic zone, 1979-1986

• Main Author: Yee, Francis Lok-Wing
• Language: English
• Published: 2009
• Online Access: http://hdl.handle.net/2429/5893

Since the Third Plenum, a series of reform measures has been adopted in their efforts to modernize China. The major aims of the reform program were to increase economic efficiency, raise living standards, improve enterprise management, and upgrade technology. An open door policy was pursued which was designed to expand foreign trade, introduce foreign capital, and promote technology transfer. One of the key components of the open door policy was the emphasis on the development of China's Coastal Region. Two southern coastal provinces, including Guangdong and Fujian, were granted the power to adopt "flexible and special" measures in introducing foreign investment and conducting foreign trade. To accelerate the open door program, four special economic zones (SEZs), Shenzhen, Zhuhai and Shantou in Guangdong and Xiamen in Fujian were created in the early 1980s. The major objective of this thesis is to assess the performance of the Shenzhen SEZ during the eight year period from 1979 to 1986. The thesis has five main aims: first, to analyze the development goals of China in the creation of its SEZs and the extent to which these goals were met by Shenzhen; second, to evaluate the performance of Shenzhen in its attraction of foreign investment and the contributions of foreign firms to the development of the SEZ; third, to assess the growth of income, changes in economic and employment structures, and the expansion of manufacturing exports in Shenzhen and its contributions to the regional development of Guangdong Province; fourth, to assess the processes of industrialization and technological development in Shenzhen and its importance as a model of development for the open coastal cities; fifth, to examine the impact of the SEZ on migration, urbanization, and urban development in Shenzhen. Data for the thesis are derived from both documentary research and field work. Two field studies were carried out in Shenzhen and other SEZs during 1986 and 1987. Extensive interviews were held with scholars, government officials, enterprise administrators, workers, and residents in these zones. An assessment of Shenzhen's performance indicates mixed results. By the end of 1986 Shenzhen had achieved almost all of its economic and production targets well ahead of schedule as specified in its economic and urban plan. Shenzhen emerged as the leading recipient of foreign investment amongst all Chinese cities. During the early 1980s, Shenzhen not only experienced high rates of economic and industrial growth but was transformed from an agricultural region to a highly commercialized city. During this eight year period, industrial exports from Shenzhen grew at a rapid rate, contributing significantly to the growth of exports from Guangdong Province. The rapid economic, income, and employment growth led to a large influx of migrants. Since 1979, Shenzhen's population increased seven fold to reach almost half a million. Shenzhen developed into a city with modernized transportation and telecommunication systems. Despite achievements in economic and urban growth, Shenzhen faced several critical issues, including the high cost of development, unstable growth, structural deficiency, low productivity, and declining comparative advantage in production.