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Print Edition> Business
UPDATED: September 12, 2014 NO. 38 SEPTEMBER 18, 2014
The Twilight of the Zones
China's industrial parks are seeking ways to realize innovation-driven growth
By Zhou Xiaoyan

LEARNING FROM SUCCESS STORIES: People visit a pavilion for ETDZs during the 18th China International Fair for Investment and Trade held in Xiamen, southeast China's Fujian Province, on September 8 (ZHOU XIAOYAN)

Three decades ago, a vast saline area to the southwest of downtown Tianjin lay idle. This once discarded and infertile land, situated near the Bohai Sea, soon became the very spot that has borne the most economic fruit in the north China municipality. All of this can be attributed to the Central Government's decision to build an economic and technological development zone (ETDZ) there in 1984, in a bid to further open up the country to the outside world.

ETDZs are industrial parks where businesses, especially foreign businesses, can enjoy preferential policies in taxation and favorable prices for land usage.

"The ETDZ in Tianjin has become the strongest driving force behind the city's economic development. It has 5,282 foreign businesses from 88 countries, among which 89 are listed on the Fortune Global 500. Over 4,000 foreigners and 500,000 Chinese people live and work in the zone," said Xu Hongxing, Chairman of the Administrative Committee of Tianjin ETDZ, which is ranked No.1 in terms of comprehensive competitiveness among all ETDZs in China.

Tianjin's model was later duplicated across the country. To date, 215 national-level ETDZs have been set up, collectively playing a major role in creating jobs, attracting foreign investment and generating tax revenues. Xu said that ETDZs have been an engine for China's economic growth for the past three decades.

However, thirty years after their inception, ETDZs are facing challenges related to upgrade and transformation.

"The primary functions of ETDZs in China should be transformed from simply pursuing speed to quality, from government-led to market-led growth, from homogeneous competition to differentiated growth patterns and from focusing on infrastructure construction to the establishment of a favorable soft environment," said Chinese Vice Premier Wang Yang, during his keynote speech at the International Investment Forum, a sideline of the 18th China International Fair for Investment and Trade (CIFIT), held in Xiamen, southeast China's coastal Fujian Province on September 8.

A powerful engine

In 1984, the Chinese Government decided to establish ETDZs in China's eastern coastal cities to expedite the country's reform and opening up.

From 1984 to 1988, 14 national-level ETDZs were established, including those in Tianjin, Dalian of northeast China's Liaoning Province, Qinhuangdao of north China's Hebei Province and Qingdao of east China's Shandong Province.

"ETDZs enjoy the most effective and convenient system in China. When they were first established, they were mainly designed to attract foreign investment, so it's very important to have a globalized investment environment, including an efficient and service-oriented government, a fair market, sufficient human resources and good educational and medical environments," Xu said.

Later, the national program was extended to the less developed inland cities and then to west China.

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