What’s Special in China’s Special Zones?

Text written by Jiang Jun, designer, editor and critic.

Special zones might not be China’s invention, but it could be the society most in need of them. Chinese civilisation is well known for two unique features: a power that has occupied most of the territories in East Asia, where the span of both climate zones and elevation has given birth to the most diversified ecology on the planet, and a sustainable society that has been dominated for 2000 years by the Great Unity system, in which the vast territory of China is unified by a centralised authority. Consequently, as this eco-diversity resulted in a diversity of economies, there have been considerable difficulties in balancing the two paradoxical features. Pre-modern China used to solve the puzzle with a philosophy that “seeks common ground while preserving minor differences”. This meant that diversified economic models could be developed within a self-organised family structure, as part of the Great Unity system framework.

Under Confucianism, an isomorphic model between family and state was established in order to minimise differences in political structure, while maximising the vitalities of local economies. If China’s eco-diversity has given birth to special zones, it is the flexibility and inclusiveness of the regime that has given them the space to exist. China needs special zones in order to stabilise itself within the tension created by Great Unity and eco-diversity.

In a densely populated society, the Great Unity system was able to make the most of economic benefits by means of integrating resources throughout its territory by way of national power. With the “socialist transformation”, however, it was the national power itself that increased in order to concentrate core resources on the industrialisation of China, rather than the country’s agricultural economy. Industrialisation was a revolution that drastically changed these valued ideas of “localness” and “specialness”. Urbanisation could be made generic when absorbed into an industrial chain of processes. When Communist China tried to construct an independent macro-industrial system in 1950s, the whole country was unified under a planned economy, in which national zones were given priority over special zones. When Deng inherited Mao’s upstream industry in the 1980s, however, he opened up spaces for downstream industry, thus reinstating the importance of special zones. Special Economic Zones, or SEZs, were established in South China as Petri dishes for China’s experiments in market economics. The military-guarded form of the SEZs was actually a spatial indication of how the market economy was planned. The 1980s experiment was not about market economics per se, but about a “planned market economy”: a fusion of an upstream planned economy and a downstream free-trade economy, which is special not only to China, but also in global economic structures.

China’s special zones of the 1980s echoed a number of other state projects from preceding decades. The Special Trade Zone in Guangzhou was established by the Ming and Qing Governments, where “official merchants” with government-issued trading licenses could cooperate with foreign merchants in a designated area. In the 1940s, Mao also set up Yan’an, the temporary “red” capital city of the Communist Party, as a Special Political Zone in wartime China. Even in the 1960s, when China was highly centralised, Panzhihua and Liupanshui, in the hinterland of Southwest China, were designated as Special Industrial Zones because of their iron and coal mines – so important in supporting China’s independent industrialisation during the Cold War. Hong Kong and Macau were also developed as Special Administrative Zones after their turnover to China as part of the “one country, two systems” policy… All these special zones are testaments to “what is special” at different historical moments in China.

In the experiments of the 1980s, SEZs were only successful in Shenzhen, because of its proximity to Hong Kong–with its Post-war geopolitical significance. Special economic achievement has here been determined by a special geopolitical situation, or a fusion of natural endowments, because of eco-diversity and socio-political configuration due to cultural diversity. Yan’an became a Special Political Zone because of its marginal position, away from both its enemies, the Kuomintang and the Japanese. Panzhihua and Liupanshui became Special Industrial Zones because of their natural resources. In a Great Unity system, a special zone could be easily set up by simply answering the question, “what’s special?” For a special zone to be successful, however, the question should be not what, but “how to be special?”

This is why China’s largest economic zone, Hainan, which was established along with Shenzhen in the 1980s, with the ambition to create another Hong Kong, became a failed experiment in an economic bubble created by the real estate market in the early 1990s, leaving over 20 million square metres of construction abandoned. The Hainan Lesson, however, did not filter throughout the whole country, as the Shenzhen Experience did. When “development zones”–miniature special zones directly initiated by city governments–were flourishing throughout the country, some became miniature Shenzhens, while others became miniature Hainans, revealing the double-edged effects of special zones in the Great Unity system.

The year Hainan’s laisser-faire approach broke the economic bubble was when Shanghai began its more planned, “5 Years, Big Change” (1993-1998) policy. It became evident that despite its ambition, Hainan is too close to Hong Kong to replace it. Hong Kong’s success was based on its position as the gateway city between a blockaded mainland and the international world in the 30 years after the Korean War, while Shanghai was the gateway city between an opened mainland and the international world in the wake of Deng’s policy of reform and opening. Hong Kong is at the mouth of the Pearl River, which connects only the Pearl River Delta, while Shanghai is at the mouth of the Yangtze River, which connects the whole of China along one of the world’s most important major arteries.

As a special zone, Pudong was located almost at the centre of the old colonial city, on the other side of the Huangpu River, and easily turned itself into a new financial centre because of this geography. As a city, Shanghai was located almost at the centre of the mainland coastline, easily introducing the first-mover advantage of those special zones in South China to the north. Historically, in the 1930s, Shanghai was seen to be the biggest city in the Far East, after China’s experience of Guangzhou’s special zone and the Opium War. Now the city seems to be claiming its former glory by redeveloping its unique geographic significance.

The superiority of socialism was also restored to Shanghai when the central government opted to focus not only policy but also financial support on a new planned economy. While Shenzhen relied on foreign direct investment (FDI), mostly from Hong Kong, Shanghai’s success was based on hundreds of billions of investments from the central financial authorities. The experiences of the Shenzhen SEZ were implemented in Shanghai as a national strategy, making the city the “dragon’s head” of the Yangtze River Delta, or YRD, and the Yangtze River Valley [the body behind the dragon’s head]. Shanghai was also intended to become a metropolitan landmark for China, with identifiable skylines to showcase the accomplishment of China’s modernisation under the leadership of the Communist Party. Geographically, the YRD has more advantages than the Pearl River Delta, or PRD, as being the largest metropolitan area, absorbing a more rural population into the city because of its connection to the deep hinterland and water resources, which is not the case in the Bohai Sea Rim in North China. From this perspective, we can see how the World Expo 2010 could be another opportunity for Shanghai to earn greater support from central government by making itself the centre of the biggest metropolitan area in the drastic urbanisation of China as a whole.

Special zones might not be China’s invention, but they can possess distinctly Chinese characteristics. When the potential differences on both sides of the Shenzhen-Hong Kong border were incorporated into the Shenzhen SEZ, it not only inspired diversified urban spaces along the border, but also created a number of institutions and enterprises with inherent borderline characteristics. The resulting initiatives in government reform and the restructuring of state-owned enterprises provided valuable templates for the development of the hinterland. The modernisation of China is a process in which pre-modern institutions are supposed to be reformed by gradual progression.

It is also a process parallel to the special reform of urbanisation, in which China will transform from agricultural China to urban China. Special zones provide both the impetus and space for an experiment in temporary institutions. The real ambition behind the SEZs is not a short-term economic leap forward, but a superstructure that is meant to underlie sustainable economic achievements. The focus of China’s special zones has shifted from economic to administrative and then political: the gradual evolution, rather than revolution, from a pre-modern regime.

In the last 30 years, we have witnessed a process of upgrading China’s special zones, from South China to North China; from the coastline to the hinterland; from the independent development of SEZs to national financial support in Shanghai and Tianjin; from the singular economic experiment to multi-directional exercises for strategic purposes – thereby transforming the government’s function in the Pudong New Area in Shanghai, balancing urban and rural development in Chengdu and Chongqing, implementing sustainable development in Wuhan and Changsha. With the increasingly diversified geo-political positioning of special zones, the visible hand of the national plan becomes proportionately powerful, while wearing the glove of a socialist market economy. The reforms in administrative and institutional areas, including land, finance and taxation systems, social security, urban and rural integration, environment and resource protection, together constitute China’s systematic transition from pre-modernisation to modernisation, while special zones revive the network of diversities on the map of a Great Unity civilization.

Jiang Jun specialises in urban research and experimental studies, exploring the interrelationships between design phenomena and urban dynamics. He founded Underline Office in late 2003 and has been editor-in-chief of Urban China Magazine since late 2004, while also working on his book, Hi-China. His work has been presented at Get It Louder (2005/2007), the Guangdong Triennial (2005), the Shenzhen Biennial (2005/2007), China Contemporary in Rotterdam (2006) and Documenta (2007). He curated the international exhibition, Street Belongs to … All of Us! in China in 2008. He has been invited to lecture at domestic and international universities, including Sun Yat-Sen University, Beijing University, CUHK, Harvard University, UCL, Tokyo University, Seoul University, Princeton University and Columbia University. In 2009, Urban China was exhibited at museums in New York, Los Angeles and Chicago, the first Chinese magazine to be exhibited in solo overseas travelling exhibitions. Born in Hubei in 1974, he received his Bachelor’s degree from Tongji University in Shanghai and his Master’s from Tsinghua University in Beijing. He is currently an associate professor at the Guangzhou Academy of Fine Arts.