SPECIAL ECONOMIC ZONES AND INDUSTRIAL CLUSTERS DEVELOPMENT IN CHINA

Abstract

Special economic zones and clusters have become a noticeable trend of world development. Although foreign and domestic researchers closely examine each institution individually, the practice of clusters implementation in special economic zones and their comparison is yet understudied. The authors provide a comparative description of special economic zones and clusters, paying attention to their origin, trajectory of development, market segments, industrial structure, concentration of production level and success factors. Then the article illustrates the experience of China, where special economic zones and industrial clusters are two important country growth drivers contributing to the rapid rise of China. In China, especially in the Guangdong province, there is a tendency to integrate special economic zones and clusters. Such an integration can occur in two ways: firstly, a special economic zone may be a part of a cluster, and secondly, a cluster can be a part of a special economic zone. In this respect, the Chinese experience is unique in that both directions are used, indicating that China's government pragmatically uses any tools in order to achieve long-term industrial development goals. Combining special economic zones and industrial clusters in a single unit, the Chinese government provides a system of specific and mutually beneficial links, increasing the competitiveness of the region. The key features of the formation of special economic zones and industrial clusters in China include gradual experimental approach; determination; and active, pragmatic government support. Specific lessons include: preferential policies and institutional autonomy of zones and clusters; strong government support; attracting foreign direct investment and investment from the Chinese diaspora; the study of technologies, innovations and modernization, as well as strong links with the domestic economy; innovative culture; location advantages; public-private partnership approach. Many developing countries can get ideas, or even adopt the best practices of China. However, there is no universal tool for economic development. All the experience and lessons must be adapted to local conditions.