In 1977, Hua Guofeng started the Open Door policy, which was incorporated in the developmental "Four Modernizations" blueprint of Deng Xiaoping
in 1978. By opening its doors to the outside world, China would be able
to attract foreign investment which in turn would contribute to the
modernization of both production processes and the Chinese product mix.
Through the setting up of Special Economic Zones (SEZ) in Southern
China, where bureaucratic interference, stifling rules and tax burdens
were envisioned to be cut back, foreign companies were lured into
cooperation with Chinese industrial complexes. Such cooperation
preferably should take the form of joint ventures, in which the Chinese
side would contribute raw materials, soil, infrastructure and (cheap)
labour, and the foreign partner would supply advanced technology and
production processes. In a later stage, even wholly-owned foreign
companies were allowed to profit from the PRC's relatively cheap labour
and less stringent zoning rules, for example those concerning possible
environmental damages. The best known SEZ intially were Shenzhen, North
of Hong Kong, and Xiamen, opposite Taiwan. Later, cities along the
seaboard, including Shanghai, were "opened up" and given a status that
is comparable to SEZ. In the late 1980s, practically every Chinese city
or township had opened its own "Science and Technology Development Zone",
where conditions were similar to those of the SEZ.
The benefits ascribed to the SEZ never really
materialized. Instead of export bases of industrial production, the
factories produced for the domestic market. Instead of joint ventures
with foreign companies, domestic companies set up shop. Soon, SEZ were
equated with corruption and land speculation. Many Chinese considered
goods produced in the SEZ as the acme of sophistication. Whatever the
worth of the SEZ, they in a sense did function as laboratories,
offering the leadership opportunities to experiment.
s.r.landsberger@let.leidenuniv.nl
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International Institute of Social History