BEYOND THE GREAT WALL; The China I heard about and the China I have seen

How Industrial Parks and Special Economic Zones Are Driving China’s Economic and Social Development And Lessons Liberia Can Learn

By Fredrick P. W. Gaye, Monrovia, Liberia

 

In the past 30 years, China has achieved phenomenal economic growth, an unprecedented development “miracle” in human history. Since the institution of its reforms and Open Door policy in 1978, China’s gross domestic product (GDP) has been growing at an average annual rate of more than 9 percent (figure 1). In 2010, it became the world’s second-largest economy, according to World Bank..

Though I am not an economist, during my 10-month stay in China, I found out that the creation of industrial parks and economic zones is the driving force behind this success.

The success comes by collective efforts by central and local officials in opening up to the world while attracting partners and investments in ensuring dreams come to reality.

We, 28 journalists from 27 African countries on 2016 media fellowship, toured many industrial parks and economic zones in China.

The Suzhou Industrial Park in Suzhou, Jiangsu provincial, the Sci-Tech Industrial Park of Gaungzhou University of Chinese Medicine in Guangzhou, Guangdong Province and other economic zones including the Waigaoqiao Free Trade Zone in Shanghai.

However, I admired the Suzhou Industrial Park (SIP) because we visited it twice. And it indicates that China’s opening up policy in this sector is working.

In April 2016, we (Africa journalists) visited Suzhou, such as Suzhou Industrial Park, Higer Bus, SJEC Elevator, Suzhou Classical Gardens, Kunqu Opera House, Suzhou Embroidery Institute, Kunshan Economic Zone, as well as Zhouzhuang Water Village.

In addition, we were invited to cover the events of Coordinators’ Meeting on Implementation of Follow-up Actions of Johannesburg Summit of Forum on China-Africa Cooperation in July.

As part of this event, we also went along with African delegates to visit the Suzhou Industrial Park (SIP).

SIP is a joint initiative by China and Singapore, thus bearing the name “China-Singapore Suzhou Industrial Park”

Accelerating the optimization of the industrial structure

Authorities of the park told us that SIP voluntarily grasps the new normal of the economy and accelerates the transformation of the method of economic development. The total number of projects attracting foreign investment has exceeded 5,600. The actual utilization of foreign capital reaches over 29 billion US dollars. A total of 93 Fortune 500 companies have invested in 154 projects in SIP, forming an industry cluster with certain competitiveness in electronic information, machinery manufacturing and etc. The proportion of the output of hi-tech industry and new industry on the total above-scale industrial output has reached 67% and 59% respectively. The output of three major emerging industries, namely bio-medicine, nanotechnology applications and cloud computing industry has maintained a rapid average growth of 30% annually. The service economy is booming, with the value added output of the service industry and the culture industry taking 42.5% and 7.1% of the GDP in 2015 respectively.  There have been a total of 70 accredited projects of headquarters of all levels, and over 700 financial institutions gathered in SIP. A regional highland of financial center is forming rapidly.

Continue to improve the well-being of the people

Another thing I observed at SIP is that people-oriented and people’s livelihood as top priority has always been put in a prominent position.

Great efforts have been taken to improve people’s livelihood. With regional integration as the goal, there has been steady progress in the reform of replacing the town with sub-district, and accelerated implementation in the urban renewal plans of the old town. The establishment of special funds to enrich the people has been explored, so as to achieve the full coverage of the low marginal households.

For the coordination of the causes of education, health care, old age, social security and culture, a “full coverage, multi-level” social security system has been established.

With the comprehensive merger of the urban and rural social security, the integration of urban and rural social security system has been achieved.

The experimental project of social management cooperation between China and Singapore has been carried out in depth, and the innovation of social governance has been strengthened. A new community service management system has been established, based on the neighborhood centers, community service centers and community clubs. SIP has been honored as “National Experimental Zone of Community Management and Service Innovation” and “National Demonstration District of Harmonious Community Building”.

Lessons Liberia can learn

Since the resumption of diplomatic relations, China and Liberia have been increasing bilateral operations in recent years.

Special economic zones are geographically designated trade areas that are used to attract foreign investors and boost industrialization. They generally have trade laws that differ from the rest of the country and companies are offered tax incentives to set up operations.

One may say Liberia does not have the economic backing and facilities to set up economic zones. But its better to start something. There is a saying that “where there is no vision, the people perish”.

For Liberia, setting up special economic zones can boost the diversification its economy and promote manufacturing.

China’s experiences indicate that for zones to succeed, African governments must improve infrastructure and technology and have an educated and competent labor force as well as efficient and effective administration.

China introduced special economic zones in the 1970s as part of its policy to open up to international trade. Deng Xiaoping’s economic reforms became the turning point towards a market-oriented economy. A series of experiments, including the establishment of special economic zones, became the driving force for growth.

This inspired African countries and became the rationale to establish Chinese led-SEZs in Egypt, Mauritius, Nigeria, Zambia and Ethiopia in the mid-2000s. More African countries are planning to establish special economic zones. In South Africa, the Special Economic Zones Act was passed recently and ten were selected.

If these countries are moving forward, Liberia can be inspired. This is the win-win situation that China aims to achieve with Africa, benefiting all sides.

China set up zones in Southern coastal areas as part of the economic reforms under the open door policy. They were very successful and led to unprecedented growth. Shenzhen, a small fishing town, became the first special economic zones. It is now the most prominent manufacturing hub on the globe. When I was told Shenzhen was a small fishing town few years ago I could not believe. This is because it has turned into also a municipality as you see high rise buildings with road networks and it is highly industrialized.

Also, in many cases, policy makers in Africa have not set up long term plans and there is a lack of consultation with local communities. Therefore, it is important to take in any plans intended to growth and development.

An industrial park (also known as industrial estate, trading estate) is an area zoned and planned for the purpose of industrial development. An industrial park can be thought of as a more “heavyweight” version of a business park or office park, which has offices and light industry, rather than heavy industry. It is clear why China incorporated such an initiative in its economic reforms.

China’s economic reforms termed “Socialism with Chinese characteristics” in the People’s Republic of China (PRC) that was started in December 1978 by reformists within the Communist Party of China, led by Deng Xiaoping.

 

 

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