How to Enter China

An increasing number of investors is interested in the Free Trade Zones (FTZ), which are the Special Economic Zones (SEZs) that have developed globally within recent years. However, in 1980 China led the SEZ movement by creating four free trade zones inside its territory. The first four SEZs were all based in south-eastern coastal China and were established in the cities of Shenzhen, Zhuhai, Shantou, and Xiamen. The expression “Special Economic Zone”, here after seen as SEZ, refers to a geographic region within a nation where there are fewer custom restrictions than in the rest of the country. SEZs are created to facilitate economic growth through the encouragement of direct foreign trade. FTZs and EPZs (Export Processing Zones) are more common and more easily-approved in China compared with other areas. During the 1990s, Special Economic Zones became significant especially in manufacturing sectors, encouraging investors to establish companies in these development zones thanks to incentives such as limited Corporate Income Tax (CIT fixed at 15%), triggering the economic growth of China to the WTO (2001).

The first stage (2000–2005), Japan’s investment in mainland China ushered in a new development stage of synchronous growth with the world’s investment in mainland China. The total contract amount reached $3.68 billion in 2000. In 2001, the growth rate of Japanese companies’ investment in mainland China far exceeded that of the world’s investment in mainland China, the total contract amount and the total use amount both accounted for more than 40%. In 2002, its investment in mainland China continued to show growth momentum, and Japanese companies accelerated in transferring its production bases to China, as China was increasingly becoming a global production base after joined the WTO. Annual report by Japan External Trade Organization noted that the main reason for a substantial increase of Japan’s investment in China in the second half of 2005 was that Japanese automobile manufacturers began to invest in China by a large-scale. Simultaneously, Japanese electronics manufacturers started to expand investment, increasing the supply of electronic products in China’s market. In addition, Japan’s investment of chemical pharmaceutical, finance and insurance, wholesale and retail, machinery and other industries in China surpassed $254 million.

This study aims to explore and identify key past research directions and propose future research avenues related to the legal framework of free trade zones (FTZs). The bibliometric data were collected through the Scopus and Web of Science (WoS) database systems. After merging the datasets and filtering English-language publications from 2004 to 2024, a total of 103 documents were retained. The research methodology employed in this study includes descriptive statistics and keyword co-occurrence analysis, supported by the VOSViewer software. The findings reveal that China is the leading country in publishing research on the legal aspects of FTZs. Past studies have formed four clusters corresponding to four fundamental research directions. They include (1) Arbitration and dispute resolution in China’s free trade areas; (2) The impact of international trade laws and regulations on risk assessment and tax systems in global trade, including FTZs; (3) The role of financial and governance regulations in pilot FTZs; and (4) The legal framework and impact of FTZs in Shanghai and special economic zones on international trade. This study contributes evidence showing that China is a pioneering country in researching, developing, and refining legal policies for free trade zones in order to enhance its impact on the global economy. AcknowledgmentsThe authors would like to thank the Editor-in-Chief and a reviewer for their helpful comments, which, in our view, have significantly improved the quality of the manuscript. This study is also the result of collaboration between researchers from the University of Law, Hue University, and Duy Tan University. The authors would like to thank both institutions for their support and facilitation in the publication of this research.

A Special Economic Zone (SEZ) is a geographical region that has economic laws that are more liberal than a country's typical economic laws. The category ‘SEZ’ covers a broad range of more specific zone types, including Free Trade Zones (FTZ), Export Processing Zones (EPZ), Free Zones (FZ), Industrial Estates (IE), Free Ports, Urban Enterprise Zones and others.Special Economic Zone (SEZ) policy is also one of the steps India has taken to boost economic growth through outward looking approach. Special economic zone is a specifically duty fee enclave and shall be deemed to be foreign territory for the purpose of trade operations and duties and tariffs.lt examines the determinants of investment and export performance empirically within the theoretical framework provided by the new growth theories. SEZ's will be the driving force towards a new era of high growth, a new mantra for filling the ‘gaps’ in economic reforms.

Many developing countries operate geographically delineated economic areas in the form of export processing zones, special industrial zones, or free trade zones. This paper provides an overview of the application of World Trade Organization disciplines to incentive programs typically employed by developing countries in connection with such special economic zone programs. The analysis finds that the disciplines under the Agreement on Subsidies and Countervailing Measures have the most immediate relevance for middle-income World Trade Organization members that are not exempt for certain grandfathered programs, but will also concern other developing countries in the future, as their exemption expires or their per-capita income passes a threshold of US$1,000. Incentives related to special economic zones can be broadly grouped into three categories: (i) measures that are consistent with the World Trade Organization, notably exemptions from duties and taxes on goods exported from special economic zones; (ii) measures that are prohibited or subject to challenge under World Trade Organization law, notably export subsidies and import substitution or domestic content subsidies; and (iii) and measures where World Trade Orgainzation consistency depends on the facts of the particular case. The paper provides a set of recommendations on how to eliminate questionable incentives. The single most important zone policy reform to achieve World Trade Organization compliance is to remove all requirements to export and permit importation of goods manufactured in special economic zones into the national customs territory without any restrictions other than the application of import duties and taxes.

Locational Determinants of Japanese Foreign Direct Investment in China

This paper highlights the territorial importance of the presence of SEZs (Special Economic Zones) and FTZs (Free Trade Zones), the effects generated in macroeconomic terms, and the relevance of some contextual variables. Some research questions were asked regarding how relevant the presence or absence of SEZs/FTZs is for the purposes of attracting Foreign Direct Investments, the consequent income generated by them, the impact on foreign trade, and on the "quality of exports". These elements are investigated to detect the magnitude of the importance of the presence of SEZs/FTZs, along with a positive and welcoming context represented by variables like GDP (Gross Domestic Product), population, taxation burden, and port endowment, which are sometimes taken for granted and not quantified jointly econometrically.

Special economic zones are an important strategic tool of territorial development. Socio-economic development of special economic zones is seen to be a key economic task. To perform this task, special environment is arranged for their development and manufacturing enterprises and the service sector. These special conditions should stimulate their economic development and ensure their sustainable economic growth. The main objective of the study is to assess the development of labor potential in the Russian regions with the special economic zones and a preferential taxation scheme. The research task is to evaluate the economic and social indicators of the special economic zones. The study looks at the labor potential indicators which affect the development and functioning of these territories. The novelty is a comparative analysis of the labor potential indicators before and after a special economic zone is established. The results of the analysis show the impact of preferential conditions on the employment rate, a decrease of the unemployment rate, and changes in the structural disproportion rate and contribute into developing recommendations for efficient managerial decisions in this area. The statistical data of the Federal State Statistics Service, as well as information resources of territorial entities served as the information base for analytical studies. The statistical data analysis revealed the behavior of individual economic and social indicators; the role of a territorial status in economic growth was determined. The results also show that special environment does not stimulate territorial development in manufacturing and service sectors. Most existing territorial entities do not demonstrate high development rates, including by labor potential indicators. The exceptions are metropolitan and large urban agglomerations characterized by high economic development rates due to a high development level in financial and banking sectors, concentration of manufacturing capacities, and a significant agglomeration effect. The identified development trends evaluate the efficiency of tax incentives, the development of special economic zones, and reveal the mechanisms to improve areas of development. The results obtained in the study contribute into a more efficient investigation of the socio-economic situation in special economic zones, adjust their development directions, can be used for preparing strategic and policy documents for the development of territorial entities, including the territories with special tax privileges and preferential conditions for work.

This study aims to evaluate the free trade zone system that has been carried out with the planned implementation of special economic zones in Batam City. The economic downturn in the city of Batam has made stakeholders think again about the concept of free trade zone (ftz) or Free Port and Free Trade Zone. The FTZ concept is deemed no longer compatible with the current flow and competitiveness of change. For this reason, the central government offers the concept of special economic zones (KEK) to revive the passion of economic growth in this Industrial City. However, in the implementation there were many criticisms made by the community, especially businessmen who considered SEZ not to answer the problems that exist in Batam's economic growth. This study uses a qualitative approach to see each perception from stakeholders (stakeholders) to be a consideration in making decisions. Based on the results of the analysis, it was found that it was important that all stakeholders would sit together to discuss the good about the economy. The government must prioritize a bottom-up approach to find solutions to problems regarding the polemic of the best economic system problems for Batam City.

British industrial investment in China before 1895 was slight - mainly marine engineering (51% share) and silk processing (25%). The liberalising Treaty of Shimonoseki then led to an upsurge of British investment which by the late 1930s was in real terms about a third of that currently. The profile of British investment changed rapidly - by 1897 cotton textiles accounted for 19% to be outstripped by mining (63% by 1903). By 1912 the tobacco industry took first place with a peak share of 70% in 1920. These three sectors account for less than 2% of current investment with 74% being in oil/gas and chemicals. The analysis then considers the various sectors of this British investment by 1940 and their differential impact on the Chinese economy. In terms of interface with other investing countries, there was modest competition with other Western countries - indeed, there was, especially with French and Belgian interests, significant cooperation with British investors. The greater competitive interface with Japan was marked in cotton textiles and tobacco. The effect of UK (and other foreign) industrial investment on Chinese development is a contentious area. In terms of alleged financial exploitation (high profitability well in excess of that in the investors' country and most of these profits being siphoned off abroad) analysis of the financial evidence suggests that these charges must be considerably tempered. This conclusion coupled with the prior analysis of the sectors of British investment implies that many of the charges concerning the impact of British industrial investment in China by 1940 must be given a more favourable verdict. It would seem that the reason for the disrepute in which UK industrial investment has been held by both Chinese and Western sources is more due to the arrogant manner in which, in many cases, these investments were carried out rather than the nature of the investment itself.

As an important "indicator" to evaluate the opening capacity, tax facilitation could reflect the attractiveness of China to foreign investors for investment and trade activities, and could explain the operation quality of the tax legal system in free trade zones (FTZs).In recent years, although China's FTZs have made obvious achievements in tax policy exploration and tax collection and administration reform, the consideration of improving the facilitation level of FTZs is still immature, and there are problems such as weak coordination of central and local tax authority, weak awareness of tax security, and "homogenization" of tax collection and administration innovation.By sorting out the existing tax facilitation measures in investment, trade, and other fields in China's FTZs, it can be found that the improvement of tax convenience mainly depends on the "reform of the tax legal system", "replicable experience", and "coordination of central and local reform authority".In the process of continuously promoting the development of the legal system for tax facilitation in FTZs, the above approaches will be effective in the long run.

Special economic zones, as the breakthrough points for the Chinese reform and opening-up, began the journey of exploring the path of China’s institutional changes. They constitute an imposed institutional arrangement that breaks the status of balance under the traditional system and makes the unbalanced development the best path selected for China’s institutional changes. The brilliant achievements of typical special economic zones represented by Shenzhen embody the “backwash effect”, the “spread effect” and the “trickle-down effect” in the traditional theory of regional economics by the “Chinese” mechanism in a “non-classical” manner, and interpret the unique path of China’s institutional changes. The transition from typical empirical special zones to special economic zones in a broad sense and then to the establishment and formation of free trade zones and bay areas, which are the extended forms of special economic zones, is the result of organically integrating “gradient development” and “reverse gradient development” and the harvest of institutional changes. The trajectory of the institutional changes reflects the internal logic of special economic zones and institutional changes, and constitutes the theoretical mechanism.

Local Economic Zones For Economic Development

Ethiopia’s special economic zones (SEZs) sustainability practices are aimed at achieving the country's sustainable development; however, their failure has resulted in repercussions for sustainable local community development. This study analyzed the repercussions on the sustainable development of local communities resulting from the failure of SEZs' sustainability practices, focusing on three SEZs: Eastern Special Economic Zone (ESEZ), Bole Lemi Special Economic Zone (BLSEZ), and Dire Dawa Free Trade Zone (DDFTZ). The study employed a mixed research approach with an exploratory sequential design in which the qualitative phase was carried out and analyzed using content and thematic analysis, followed by the quantitative phase using descriptive analysis and a multivariate multiple linear regression. The study found that SEZs' sustainability practices negatively contributed to the local community’s sustainable development in economic, social, environmental, and peace perspectives. The multivariate multiple linear regression results show that economic sustainability practices significantly influenced social and economic development challenges, while governance sustainability practices significantly influenced the environmental sustainability and sustainable peace of local communities. To this end, it is suggested that systemic measures should improve the sustainability practices of SEZs as they minimize the negative impacts of SEZs on the local communities' sustainable development.

In 2015, Kenya adopted a Special Economic Zone (SEZ) policy as one of its major economic growth and development pillars aimed at attracting investments to the country's manufacturing sector. However, the current SEZ scheme is not the first of such schemes adopted by Kenya – it is the latest in a string of schemes adopted in the last five decades. As the earlier schemes were mostly unsuccessful, the question is why would this new SEZ scheme succeed? This article examines Kenya's experience with SEZ. It assesses the scheme's legal and institutional framework, offers a critique of the scheme and makes some recommendations.