Special Economic Zones & China Manufacturing

In 1980, Deng Xiaoping, China’s leader from the late 70’s until 1997, wished to promote China manufacturing by attracting foreign trade and investment while increasing exports. To do so, Special Economic Zones (SEZs) were established.

  These zones are coastal regions that would not have the same state control and regulatory “red tape” as the rest of China. The goal was to ensure that China would be a major economic player on the world’s stage.  These special manufacturing regions have been significant in boosting China’s overall economic growth to this day.

Development of the SEZs

Without SEZs, and the more recent development of Free Trade Zones (FTZ), it is doubtful that China’s economy would be where it is today. China knew it would take lower tax rates and other incentives to convince foreign investors to bring their money and technologies to partner with Chinese manufacturers.

Initially, China did not wish to extend this grand economic experiment to the entire nation; therefore, SEZs were confined to five coastal regions. Since then, further coastal manufacturing regions have been established with differing priorities, such as a focus on certain high-tech industries or custom products. The Chinese government is also considering a further relaxation of government regulations.

SEZs Have Been Incredibly Successful

China’s early efforts with SEZs were cautious; yet, the success of these market-driven economic regions has led to increased economic development, as well as additional benefits for foreign investors.

SEZs have been largely responsible for:

  • 22% of China’s GDP
  • 45% of the direct foreign investment
  • 60% of exports
  • 30 million jobs
  • 30% increase in the income of participating farmers
  • Accelerated modernization and industrialization
  • Growth of urban regions

SEZs Have Been a Win-Win

The tremendous growth of foreign investment in China manufacturing would not exist if it were not a win-win for both China and foreign businesses and manufacturers. Today, China is emphasizing the production of high-quality products manufactured with advanced technologies. US Companies who have not considered China manufacturing in the past, may now want to take advantage of the opportunities to advance and expand business revenue due to this win-win scenario.

ITI Manufacturing has been focused-in on helping American businesses benefit from outsourcing to China manufacturing services for more than 40 years.  Our headquarters are in Texas, but our full-time, dedicated China-based staff works directly with the factories, speak the language, understand the business culture, and have long-standing relationships with manufacturers, shippers, and related businesses in China. We take pride in ensuring the success of USA-based companies and entrepreneurs who have their custom products manufactured in China. Contact ITI today and learn how your business could benefit from China manufacturing services.

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