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The Theory and Practice of Free Economic Zones: a Case Study of Tianjin, People’S Republic of China

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The Theory and Practice of Free Economic Zones: a Case Study of Tianjin, People’S Republic of China The Theory and Practice of Free Economic Zones: A Case Study of Tianjin, People’s Republic of China Submitted to the Combined Faculties for the Natural Sciences and for Mathematics of the Ruprecht-Karls University of Heidelberg, Germany for the Degree of Doctor of Natural Sciences Submitted by Meng Guangwen Tianjin / People’s Republic of China Oral Examination: 14/02/2003 The Theory and Practice of Free Economic Zones: A Case Study of Tianjin, People’s Republic of China Referees: Prof. Dr. Hans Gebhardt (Heidelberg) Prof. Dr. Paul Reuber (Münster) To my Wife, my Son and my Mother Preface For several decades, Free Economic Zones (FEZs) have become a truly global economic phenomenon. As political tools and strategic measures FEZs have a great impact on the economic development and structural reform in both developed and developing countries, especially in China. Since 1986 I have been engaged in or been in charge of several studies on Tianjin’s regional development policy, urban and regional planning as well as FEZ’s planning. FEZ’s theory and practice, especially, the successful development of Tianjin Economic and Technological Development Area (TEDA), was one of my research interests during this period. As a visiting scholar I began my research work under the guidance of Prof. Dr. Jürgen G. Holnholz and Dr. Alfred Bittner at the Institute for Scientific Cooperation with Developing Countries / Tuebingen, and Prof. Dr. Hans Gebhardt, Prof. Dr. Gerd Kohlhepp, Prof. Dr. Dieter Eberle and Dr. Joachim Vogt at the Department of Geography, University of Tuebingen in 1994. I have participated in several seminars about “regional planning” in Germany, and made several field trips for the studies of urban and regional planning, industrial development and free ports in Europe. In 1995, I decided to continue my study on FEZs in Germany because it was easier here to have access to the abundant literature on FEZ’s development and theory, and also to directly observe the development of FEZs in Europe, which would be beneficial for preparing an empirical study in TEDA. I am very glad to have the chance to write this dissertation under the guidance of Prof. Dr. Hans Gebhardt of the Department of Geography at the University of Heidelberg in 1996. Although there were numerous difficulties, like, for example, the complex topic, no financial support, minding my baby, and the serious illness of my mother, I have finally finished my study at the end of 2002 with a lot of help. I am highly indebted to Prof. Dr. Hans Gebhardt for proposing the topic, for his ample support, guidance, and for his interest in this study. I am also grateful to Dr. Klaus Sachs for his many concrete constructive suggestions and amendments to this dissertation. I would like to acknowledge Dr. Markus Blumenschein for his help to draw four maps, Mr. Richard Szydlak for his amendments of six maps. Many thanks are also to Mr. James Kautt and Mr. Hans-Jörg Läpple for their help to improve the English of this dissertation based on my original stile, and to Dr. Hans-Joachim Rosner, Mr. Martin Samain (University Tuebingen), Mr. Holger Köppe and Ms. Christina Brueckner (University Heidelberg), Mr. Thomas Mietling for their technological support. Moreover, I would like to thank Prof. Dr. Zhang Junfang, and Prof. Jia Yangjie (Department of Geography, Tianjin Normal University); Dr. Zhang Hongru, Mr. Wei Yunjiu and Mr. Dong Weizhong (Tianjin Port Free Trade Zone); Dr. Ma Mei, Mr. Fang Dahai, Ms. Zhangying and Ms. Sun Xuchung (Tianjin Economic and Development Area - TEDA) as well as the Policy Research Bureau and the German Office of TEDA for their information and material support. Meng Guangwen, Tübingen, Feb. 2003 I TABLE OF CONTENTS Figures .................................................................................................................................. III Tables .................................................................................................................................... V Boxes .................................................................................................................................... VI Abbreviations .................................................................................................................... VII Introduction ....................................................................................................................... 1 Part A: The Evolution of Free Economic Zones in the World Economy – a Systematic Approach .................................................. 5 1. World Economic Integration and Free Economic Zones ................................. 7 1.1. World Economic Integration ................................................................................. 7 1.2. FEZs: A Necessary Step and Primary Stage of World Economic Integration ..... 13 2. The Various Types of Free Economic Zones ................................................... 17 2.1. Definition of FEZs ............................................................................................... 17 2.2. Typological Classification of Territorial FEZs .................................................... 18 3. The Different Generations and the Structural Evolution of FEZs ............... 25 3.1. Criteria of FEZ’s Evolution.................................................................................. 25 3.2. The 1st Generation of FEZs: Trade-Based FEZ from the late 16th Century to the 1940s ........................................................................................................ 26 3.3. The 2nd and 3rd Generations of FEZs: Manufacture- and Service-Based FEZs from the late 1940s to the 1970s ................................................................ 29 3.4. The 4th and 5th Generations of FEZs: Science-Based FEZ and Comprehensive FEZ from the late 1970s to the late 1980s ................................ 35 3.5. The 6th Generation of FEZs: Cross-Border FEZ since the 1990s ....................... 41 3.6. The Structural and Spatial Evolutionary Model of FEZs .................................... 46 Part B: Free Economic Zones in China – Policy and Practice ........... 55 4. China’s Economic Development in Review ..................................................... 57 4.1. China’s Economic Policies from 1949/50 to 1977 .............................................. 58 4.2. China’s Economic Policies since 1978 ............................................................... 62 5. Evolution and Characteristics of China’s FEZs ............................................... 75 5.1. Typologies of China’s FEZs ................................................................................ 75 5.2. Evolution of Varied Types of China’s FEZs ....................................................... 81 5.3. Location Patterns of China’s FEZs ..................................................................... 97 5.4. General Characteristics of Chinese FEZs .......................................................... 101 6. Experiences and Prospects after over 20 Years of FEZs in China ......... 109 6.1. FEZ’s Roles in Chinese Economic Development and Structural Reform ....... 109 6.2. The Environment Changes of Chinese FEZs .................................................... 110 6.3. Transformation of China’s FEZs: Models, Problems and Prospects. ................ 112 II Part C: Free Economic Zones in Tianjin – Empirical Evidences ... 121 7. The Economic and Urban Development of Tianjin and the Setup of TEDA .................................................................................................................. 125 7.1. Evolution of Tianjin’s Economic and Urban Structure ..................................... 125 7.2. Tianjin’s Regional Economic Development Strategy ....................................... 132 7.3. The Establishment of Free Economic Zones in Tianjin .................................... 135 8. Analysis of TEDA’s Development ................................................................... 139 8.1. TEDA’s Development Policy and Objectives ................................................... 139 8.2. Planning and Developing TEDA ....................................................................... 140 8.3. TEDA’s Preferential Policy ............................................................................... 143 8.4. TEDA’s Administration .................................................................................... 145 8.5. Foreign Capital–Oriented Development ........................................................... 147 8.6. Industry–Oriented Development ....................................................................... 148 8.7. Foreign Trade Development .............................................................................. 153 9. Evaluation and Prospect of TEDA’s Development – Achievements, Problems and Conceptions ................................................................................. 155 9.1. TEDA’s General Economic Development ........................................................ 155 9.2. TEDA’s Promoting Role on the National and Regional Level ......................... 156 9.3. Discussion of TEDA’s Development Policy and Objectives ............................ 162 9.4. Discussion of TEDA’s Development Model ..................................................... 164 9.5. Discussion of TEDA’s Preferential Policy and its Administration Structure ... 169 9.6. Discussion of TEDA’s Investment Promotion .................................................. 172
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