30 Years and Counting

Today marks the 30th anniversary of the creation of China's first Special Economic Zone in the southern coastal city of Shenzhen (Guangdong province). In a previous post, Sino-Gist discussed the theoretical implications behind the SEZ programme, and how it fits in with China's continued stated socialist aims. The subject of the SEZs is worth revisiting, as Chinese media has been adorned with stories to commemorate the 30th anniversary landmark, with the People's Daily running a front-page editorial on the successes of this aspect of China's economic 'opening up'.

In Shenzhen itself, a special rally is being held in which Hu Jintao is scheduled to give an address. Adding to this the visit to the region by Premier Wen Jiabao over the weekend, it is obvious that the Chinese Communist Party is trying to exploit as much political capital from the the SEZ success story as is possible. It was Deng Xiaoping who first conceived the idea, and since 1980 the 5 selected areas have been transformed into hives of industrial activity, such that Shenzhen is now the second biggest port in China after Shanghai, handling over 100 million tons of cargo in the first half of 2010 (an increase of around 22% on 2009 levels). In addition, Guangdong province as a whole, where three of the SEZs are located (Shenzhen, Zhuhai and Shantou), now produces 25% of China's total exports.

The editorial in the People's Daily makes interesting reading. Not surprisingly, the first paragraph is quick to point out that the CCP's Central Committee and the State Council have taken the lead in the development of the SEZs over the last three decades. The newspaper then goes on to describe the policy as a “miracle” in the history of industrialisation across the world. While the growth of areas like Shenzhen is certainly impressive, this cannot be regarded as a miracle in the 'stepping outside the boundaries of impossibility' sense. Rather, what should be emphasised is that the SEZ policy has worked thus far because the has Party borrowed from conventional economic theory rather than strictly adhering to Marxist principles. The success has been based on making areas like Shenzhen open to investment from abroad, which has come in the form of billions of dollars.

Success in Shenzhen

This year will see the anniversary of the establishment of the Shenzhen Special Economic Zone (SEZ), the first one of its kind to be created under Deng Xiaoping's economic 'opening up' policy in 1980. Today, the five Chinese SEZs- the cities of Shenzhen, Zhuhai, Shantou, Xiamen; and the province of Hainan- enjoy more flexibility in their economic policy-making, making them more attractive areas in which to do business than the rest of the PRC. Tellingly, Shenzhen, Zhutai and Shantou are all located on the coast of southern China's Guangdong province, where trade by sea is the area's economic backbone.

The SEZ experiment in Shenzhen has been hugely successful for the government, and is often cited to justify the decision to implement economic reform after the restrictive policies of the Maoist era. Since 1980, the area has received billions of dollars of foreign investment, and is now the second biggest port in China after Shanghai, handling over 100 million tons of cargo in the first half of 2010 (an increase of around 22% on 2009 levels).

China's new economic approach is often interpreted as a sign that the CCP has abandoned the path of socialist development in favour of creating a wealthy and sophisticated Chinese nation. However, when observed within the perspective of Marxist theory, policies like creating the SEZs and Coastal Development Areas (e.g. Shanghai) can be seen as China attempting to set itself back on the straight and narrow after the failed Maoist jump straight from the feudal to socialist stage of development. Chairman Mao believed that Chinese society did not need to pass through an era of capitalist prosperity before realising the socialist society. Luckily for China, his successors in the CCP have long since abandoned the Maoist notion and have returned to more orthodox Marxist economics. In this way, CCP policy-makers are still able to talk about the Chinese road to socialism, while at the same time instigating distinctly capitalist economic measures.

Of course, once Marx's capitalist 'foundation' has been established (if this can ever be determined), whether or not the CCP will be willing to take another adventure down the socialist road is a question of ideological loyalty versus the 'if it ain't broke, don't fix it' mentality. As China continues its seemingly relentless march towards being the world's biggest economic superpower, it will take serious commitment to the socialist cause for the CCP's leadership to risk a comfortable economic position in the pursuit of the Marxist dream. More likely than not, the Party will look to find a new way to rationalise the practical with the theoretical.