Over the past 40 years of reform and opening-up, China’s economy has been integrated into the development of the world economy and has made tremendous achievements, such as joining the World Trade Organization (WTO) in 2001. The sustained and steady growth of China’s economy has had a positive impact on China and the world economy. Ii has become one of the important driving forces for promoting world economic growth and prosperity.
1. The Shenzhen Special Economic Zone
The Shenzhen Special Economic Zone of Guangdong Province was formally established in August 1980. Located in the southern coastal area of Guangdong Province, it had a total area of 327.5 square kilometers. The Special Economic Zone was extended to the whole city of Shenzhen in 2010 and extended to the Shenzhen Special Cooperation Zone in 2011. Shenzhen is adjacent to Hong Kong and has convenient transportation, a mild climate and beautiful scenery. It also possesses unique conditions for utilizing foreign capital to develop its economy. As per the government’s plan, the Shenzhen Special Economic Zone will eventually become a comprehensive special zone for various functions like industry, commerce, agriculture, housing and tourism. As per its founding guidelines, Shenzhen has formulated a series of preferential policies to attract foreign investment, including business autonomy, taxation, land use, foreign exchange management, product sales, and immigration management. Through processing incoming materials, compensation trade, joint ventures, cooperative operations, sole proprietorship and leasing, it has attracted a large amount of foreign investment and accelerated the rapid development of special economic zones. From 1979 to 2002, Shenzhen utilized a total foreign capital of 31.518 billion US dollars. In the 10 years from 1979 to 1989, Shenzhen signed more than 6, 890 agreements with businesses from more than thirty countries and regions in the world and utilized a total foreign capital of 2.7 billion US dollars. From 1979 to 1999, a total of 60 countries and regions had invested in Shenzhen, bringing a total contractual foreign investment of 29.839 billion US dollars (including a total actual foreign investment of 20.045 billion US dollars) in a total of 23,600 projects. In 2017, Shenzhen’s GDP was 2.2 trillion yuan. On January 6, 2018, the State Council agreed to remove the Shenzhen Special Economic Zone interior border which had been in place since its founding.
2. Free Trade Zones
China’s Free Trade Zones refer to multi-functional economic zones that are not subject to normal customs regulation. These zones use preferential taxation and special customs supervision policies to liberalize and facilitate trade. In principle, the establishment of Free Trade Zones means that goods are imported for manufacturing and re-exported without the “interference” from customs, and is the most important move by the Chinese government to upgrade economic growth. The impact and significance establishing Free Trade Zones are equivalent to the establishment of the Shenzhen Special Economic Zone in the 1980s and the development of Pudong in the 1990s. The core purpose is to create an international business environment that is internationally competitive and in line with international practices. From 2013 to 2017, China established 11 Free Trade Pilot Zones.
3. The Asian Infrastructure Investment Bank
The Asian Infrastructure Investment Bank (AIIB) is an intergovernmental multilateral development agency for Asia that focuses on infrastructure development. Its aim is to promote inter-connectivity and economic integration in Asia and strengthen the cooperation between China and other Asian countries. The AIIB is the first multilateral financial institution set up by China. It is headquartered in Beijing with a legal capital of US $100 billion. By May 13, 2017, the AIIB had 77 members.
The AIIB organization consists of three levels: the Board of Governors, the Board of Directors, and the management. The Board of Governors is the highest decision-making body, and each member has one director and one deputy director in the AIIB. The Board of Directors has twelve directors, including nine members from within the Asia-Pacific region and three from outside the region. The management consists of the president and five vice presidents.
4. The Belt and Road Initiative
In the fall of 2013, Chinese President Xi Jinping proposed the Belt and Road Initiative which comprises two enormous projects: the “New Silk Road Economic Belt” and the “21st Century Maritime Silk Road”. These programs which harken to ancient trading routes rely on the existing bilateral and multilateral mechanisms of China and countries along these routes, leveraging existing and effective regional cooperation platforms to actively develop economic partnerships with countries along the route, and to jointly create a community of mutual interest, destiny and responsibility with political trust, economic integration and cultural coexistence.
In early 2015, the National Development and Reform Commission, the Ministry of foreign Affairs, and the Ministry of Commerce jointly issued the "Vision and Action for Promoting the Construction of the Silk Road Economic Belt and the 21st Century Maritime Silk Road”. After the opening of the “Belt and Road” economic zone, more than 3, 000 contracted projects were put into motion. In 2015, Chinese companies made direct investments in 49 “Belt and Road” countries, with investment increasing by 18.2% annually. That same year, Chinn had total contractual investment of 17.83 billion US dollars in service contracting for “Belt and Road” related countries, and the execution amount was 12.15 billion US dollars, up 42.6% and 23.45% respectively. At the end of June 2016, China-Europe Railway Express made 1, 881 trips, including 502 return trips, achieving d total import and export trade volume of 17 billion US dollars. Since June 2016, China-Europe Railway Express has its own distinct livery. Against the dark blue freight cars, the red and black logo comprising of a swift train and a flying piece of silk has become the symbol of the prosperity of the “Belt and Road” economic zone.
Cultural Notes
The Shenzhen Special Economic Zone Management Line
The Shenzhen Special Economic Zone management line was established in June 1982 and is located between the Shenzhen Special Economic Zone and other parts of the country. The management line is 84.6 kilometers long and is a “second line” consisting of 2.8-meter-high barbed wire walls and patrol roads along the way. On January 15, 2018, the State Council approved of the cancellation of the Shenzhen Special Economic Zone management line, so that the whole city of Shenzhen became the Special Economic Zone.
Free Trade Pilot Zones
From September 2013 to March 2017, the State Council approved of the establishment of Free Trade Pilot Zones in the following provinces and direct-administered municipalities: Shanghai, Guangdong, Tianjin, Fujian, Liaoning, Zhejiang, Henan, Hubei, Chongqing, Sichuan, and Shaanxi.