In the future, India will be a major hub of successful SEZs, producing a variety of goods for exports and employing large number of people.
The idea of SEZs is not new. Much before the Chinese had set up special economic zones, there were countries that were going for free trade zones, and several such zones had already come up in East and South East Asia. However, the Chinese concept has evoked wide interest everywhere and, therefore, needs to be understood properly.
When China decided to adopt an `open door' policy in 1979, it was essentially an experiment of opening up the Chinese economy to global market. Not only did China have a long coastline but it also had the advantage of proximity to the booming economies of East and South East Asia. It was, therefore, a natural idea to establish a distinct class of open coastal economies.
For China, it was difficult to begin with an outright exposure to the global market and especially that of the West. Accordingly, it was felt that the `opening up' could begin with the coastal provinces, in order to gain the necessary experience. The relationship between the central government in Beijing and the provincial governments was also helpful in launching this kind of experiment. As the latter enjoyed certain autonomies with respect to formulating their economic policies. The green signal had to come from the central government, and with that the coastal provinces went whole hog and were able to formulate special economic packages for the development of their provinces. It was only incidental that these coastal economies, subsequently, came to be called as special economic zones. The point to be noted here is the `autonomy' of the provinces. Initially, this experiment was limited to four coastal provinces and, later on, the same model was extended to other coastal provinces. |
