China's 'special zones' face new challenge

That way, Chinese leaders reckoned, other parts of the country would not be affected should the experiment fail.

But the SEZs exceeded expectations. Shenzhen, Shantou, Xiamen and Zhuhai — and later Hainan — fared so well that economic reform in communist China is almost taken for granted 30 years on.

Today, the whole of China has, in effect, been turned into a giant SEZ, where state-managed capitalism flourishes.

The success of the SEZs is that they are no longer special, at least in the economic sense.

“Most of the SEZs' preferential economic policies have been removed,” said Professor Yuan Yiming from Shenzhen University's China Center for Special Economic Zone Research.

“The challenge for the zones now is to strengthen their experiments and innovations in other reforms — political, cultural and social.”

The SEZs' bid to remain distinct and relevant has been much discussed, especially since Premier Wen Jiabao's speech in Shenzhen last month.

“The special zones should... keep being special, being good, being innovative, being one-up and being the doer,” he had said.

But how can that be done?

Wen urged Shenzhen to promote political reform, without which the fruits of economic reform would be lost.

State media made clear that Wen was not referring to Western-style democracy but was suggesting administrative reforms to streamline government institutions and separate administrative power into three independent branches — policy formulation, execution and supervision.

Shenzhen has tried, but observers said that the reforms have not gone well. Instead of “separation of powers”, the local government has become even more centralized and bureaucratic.

Attempts to introduce direct elections for Shenzhen's district-level officials and People's Congress deputies have also died a quiet death.

The Global Times offered more manageable ideas last month. These included drastically raising the wages of migrant workers and using Shenzhen to test the impact of yuan appreciation. There has been no indication whether the city would take up any of the suggestions.

“Although problems always emerge in the process of change, Shenzhen is definitely focused on reforming itself into a better-off city with an efficient government,” said the newspaper's editorial.

Such is the confidence in Shenzhen — the crown jewel of the SEZs — and the only one of the five zones which has discussed and made an attempt to pursue some form of administrative or political reforms.

It is, after all, a city which has defied the odds and made something unthinkable possible. From a fishing village of 300,000 people, today's Shenzhen is one of China's biggest cities with nearly nine million registered residents. Its gross domestic product (GDP) has shot up from 270 million yuan (US$39 million at current exchange rate) in 1980 to 820 billion yuan last year.

Famous national brands like Lenovo, Huawei, Tencent, ZTE, Ping An Insurance and China Merchants Bank all have their roots in Shenzhen.

In comparison, while the other SEZs have all done well, they have not succeeded as spectacularly as Shenzhen.

For instance, Zhuhai's GDP, about the same as Shenzhen's in 1980, was just 104 billion yuan last year.

“Perhaps it is because Shenzhen is the closest to Hong Kong,” said analyst Dang Guoying from the Chinese Academy of Social Sciences. “It has been able to absorb the advances in development more easily and quickly.”

But there is no doubt that the SEZs helped transform a country torn apart and turned upside down by extreme Maoist politics from 1949 to 1978.

“The zones have symbolic meaning in China's economic reforms,” said Prof Yuan. “They have fulfilled their mission in this massive experiment.”

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