Competition turns hot for "new special zones"

Development zones and city alliances in China's six provinces and regions nationwide are jostling in position to become China's third pilot zone or "new special zones", according to China Economic Weekly.

These provinces and regions include Southwest China's Guangxi Zhuang Autonomous Region, Sichuan Provinces, Northeast China's Liaoning Province, Central China's Hunan and Hubei provinces and South China's Guangdong Province.

Experts said the fierce competition is because of the central government's willingness to give more decision-making powers to the special zones, which are helpful for them to develop the economy and conduct reforms.

The Shenbei New Area, based in Shenyang, Liaoning Province, which was approved by the State Council to become a provincial pilot zone for overall reform in December 2006, and has submitted an application to the central government.

Wang Shiwei, secretary of Shenbei New Area's Party Committee, is busy promoting the new area all over the country, in an effort to attract more investment and improve its reputation.

During this year's sessions of the National People's Congress (NPC) and the Chinese People's Political Consultative Conference (CPPCC), 68 Guangxi NPC representatives and more than 10 Guangxi CPPCC deputies appealed the central government to designate the Beibu Gulf (Guangxi) Economic Zone as a national economic development zone, according to Wang Yuefei, general secretary of Guangxi Zhuang Autonomous Region's government.

Meanwhile, Hunan's top officials, Zhang Chunxian, secretary of the provincial party committee and Zhou Qiang, governor of the province, are supervising a team to prepare their case for why the Changsha-Zhuzhou-Xiangtan City Alliance should be a special zone.

The city alliance features traditional cultural industry, rapid development industry clusters, like heavy machinery, train manufacturing, high-end steel sector and environmentally-sustainable industry.

Currently, China has two such national pilot zones for overall reform, one is the Shanghai Pudong New Area, and the other is the Binhai New Area of Tianjin. Both of these areas witnessed rapid development after they were established.

Shanghai Pudong New Area's management system experienced a thorough reform, especially in the financial sector, including the establishment of the China Financial Futures Exchange and the introduction of the Shanghai Inter-bank Offered Rate.

The Binhai New Area of Tianjin also saw rapid reforms and development in recent years, including innovations in the financial sector, reforms in the land management system and opening up to overseas companies and reforms in administrative system.

China has set all inclusive targets for new special zones and the central government will give the local governments more powers, according to Sun Jiuwen, Professor at the Institute of Regional Economics and Urban Management, at Renmin University of China.

He went on to say the new special zone features systematic innovations, including reforms in ownership, administrative system, urban and rural management system and social undertakings.

Sun also pointed out the competition for becoming China's third new special zone reflected some contradictions in China.

The first is the distribution of resources. Currently, the central government controls the distribution of most resources, especially finance, land and taxation resources. If an area is promoted to become China's new special zone, the central government would loosen control of some resources and the zone will get more decision-making powers.

Sun says today, China's market economy is improving to become perfect, so policies are still important for China. But with loose policies, the new special zones can also record rapid development.

Since 1980, China has established special economic zones in Shenzhen, Zhuhai and Shantou in Guangdong Province and Xiamen in Fujian Province, and designated the entire province of Hainan a special economic zone.