China
Many experts and economists are oftentimes puzzled at China’s success in its implementation of special economic zones. There are various reasons being put forward why the degree of its success cannot be replicated elsewhere despite attempts by some countries to duplicate its example. Perhaps one interesting factor behind China’s success is its single-minded pursuit of export-led economic growth. Alone among most countries, it is China’s political system that allowed it to achieve a stunning success. Its political dictatorship under a communist ideology enabled projects to get moving despite opposition. Its economic system is partly capitalist now (free-market economy) with people allowed to pursue entrepreneurial activities. In reality, China is a country with two systems (a Communist political system but a free enterprise economic system). People are now permitted to own private property. Strategic national policies are mandated by the Chinese state but people have been given a lot of latitude and flexibility to pursue individual economic activities as long as these are within the ambit of state policies.
Being a dictatorship allowed China to escape most of the problems that is facing India with regards to the establishment of special economic zones. Foremost of these problems is the issue of land acquisitions for use by these SEZ. In China, most of the protests by farmers were forcefully put down by the army and the police with no further dissent allowed. In contrast, India has a thriving democracy where people are allowed to demand fair price compensation for land “forcibly” used or acquired by the state governments. India has 1.1 billion people of whom some 70% depend on agriculture for a living, either directly or indirectly. The primary issue in India is the role of SEZ in its national economic development program since putting them up takes away very valuable arable land in a country that is bursting at the seams with people on a limited resource - land. China’s experience is slightly different in the sense that most of its zones were intentionally located in the not-so productive agricultural land so as not to impair its food security program. This policy choice caused less resistance to land acquisitions done by state fiat. Less productive or marginal farmlands were put alternatively to better use instead.
Another success factor in China’s implementation of its SEZ program is the relative size of each special economic zone. These zones are really big and generally 10 times larger than the average size of a SEZ in India. The sheer size allowed these zones to be economically viable. They attained a certain degree of self-sufficiency and in the long run became self-sustaining enclaves by themselves. Chinese special economic zones had attained a certain “critical mass” not otherwise present in other countries. These special economic zones, especially those located at the eastern seaboard of the country, became “growth generators” themselves. One can compare this experience to that of either Hong Kong, Macau or Singapore in which the entire country is a “virtual special economic zone” and has generated enough internal growth to support themselves.