Publication: Building Engines for Growth and
Competitiveness in China : Experience with Special Economic
Zones and Industrial Clusters
Loading...
Date
2010
ISSN
Published
2010
Author(s)
Editor(s)
Abstract
China's meteoric economic rise over the past three decades is an unprecedented "growth miracle" in human history. Since the Open Door policy and reforms that began in 1978, China's gross domestic product (GDP) has been growing at an average annual rate of more than 9 percent, with its global share increasing from 1 percent in 1980 to almost 6.5 percent in 2008 and its per capita GDP increasing from US$193 to US$3,263. Total exports have been growing at an average annual rate of 13 percent (21.5 percent from 1998 to 2007), with China's share of total exports increasing from 1.7 percent in 1980 to 9.5 percent in 2008. In 2007, China's incremental growth in real GDP actually exceeded its entire real GDP in 1979. In 2010, China is set to outpace Japan and become the world's second-largest economy. China has indisputably become an important growth engine of the global economy and a leader in international trade and investment. Rapid growth in the past decades has helped lift more than 400 million people out of poverty. These results are truly impressive. While China's rapid rise has become a hot topic for development debate among policy makers, business people, and scholars all over the world, the numerous special economic zones (SEZs) and industrial clusters that have sprung up since the reforms are undoubtedly two important engines for driving the country's growth.
Link to Data Set
Citation
“Zeng, Douglas Zhihua. 2010. Building Engines for Growth and
Competitiveness in China : Experience with Special Economic
Zones and Industrial Clusters. Directions in Development ; countries and regions. © World Bank. http://hdl.handle.net/10986/2501 License: CC BY 3.0 IGO.”
Associated URLs
Associated content
Other publications in this report series
Publication Democratic Republic of Congo Urbanization Review(Washington, DC: World Bank, 2018)The Democratic Republic of Congo has the third largest urban population in sub-Saharan Africa (estimated at 43% in 2016) after South Africa and Nigeria. It is expected to grow at a rate of 4.1% per year, which corresponds to an additional 1 million residents moving to cities every year. If this trend continues, the urban population could double in just 15 years. Thus, with a population of 12 million and a growth rate of 5.1% per year, Kinshasa is poised to become the most populous city in Africa by 2030. Such strong urban growth comes with two main challenges – the need to make cities livable and inclusive by meeting the high demand for social services, infrastructure, education, health, and other basic services; and the need to make cities more productive by addressing the lack of concentrated economic activity. The Urbanization Review of the Democratic Republic of Congo argues that the country is urbanizing at different rates and identifies five regions (East, South, Central, West and Congo Basin) that present specific challenges and opportunities. The Urbanization Review proposes policy options based on three sets of instruments, known as the three 'I's – Institutions, Infrastructures and Interventions – to help each region respond to its specific needs while reaping the benefits of economic agglomeration The Democratic Republic of the Congo is at a crossroads. The recent decline in commodity prices could constitute an opportunity for the country to diversify its economy and invest in the manufacturing sector. Now is an opportune time for Congolese decision-makers to invest in cities that can lead the country's structural transformation and facilitate greater integration with African and global markets. Such action would position the country well on the path to emergence.Publication Entrepreneurship Education and Training Programs around the World : Dimensions for Success(Washington, DC: World Bank, 2014-04-23)Entrepreneurship has attracted global interest for its potential to catalyze economic and social development. Research suggesting that certain entrepreneurial mindsets and skills can be learned has given rise to the field of entrepreneurship education and training (EET). Despite the growth of EET, global knowledge about these programs and their impact remains thin. In response, this study surveys the available literature and program evaluations to propose a Conceptual Framework for understanding the EET program landscape. The study finds that EET today consists of a heterogeneous mix of programs that can be broken into two groups: entrepreneurship education and entrepreneurship training. These programs target a range of participants: secondary and post-secondary education students, as well as potential and practicing entrepreneurs. The outcomes measured by program evaluations are equally diverse but generally fall under the domains of entrepreneurial mindsets and capabilities, entrepreneurial status, and entrepreneurial performance. The dimensions of EET programs vary according the particular target group. Programs targeting secondary education students focus on the development of foundational skills linked to entrepreneurship, while post-secondary education programs emphasize skills related to strategic business planning. Programs targeting potential entrepreneurs generally are embedded within broader support programs and tend to target vulnerable populations for whom employment alternatives may be limited. While programs serving practicing entrepreneurs focus on strengthening entrepreneurs’ knowledge, skills and business practices, which while unlikely to transform an enterprise in the near term, may accrue benefits to entrepreneurs over time. The study also offers implications for policy and program implementation, emphasizing the importance of clarity about target groups and desired outcomes when making program choices, and sound understanding of extent to which publicly-supported programs offer a broader public good, and compare favorably to policy alternatives for supporting the targeted individuals as well as the overall economic and social objectives.Publication At a Crossroads(World Bank, Washington, DC, 2017-05-02)Higher education (HE) has expanded dramatically in Latin America and the Caribbean (LAC) since 2000. While access became more equitable, quality concerns remain. This volume studies the expansion, as well as HE quality, variety and equity in LAC. It investigates the expansion’s demand and supply drivers, and outlines policy implications.Publication Options for Aged Care in China(Washington, DC: World Bank, 2018-11-20)China is aging at an unprecedented rate. Improvements in life expectancy and the consequences of the decades-old family planning policy have led to a rapid increase in the elderly population. According to the United Nations World Population Prospects, the proportion of older people age 65 and over will increase by about one-fourth by 2030, and the elderly will account for about one quarter of the total population by 2050. Population aging will not only pose challenges for elder care but also have an impact on the economy and all aspects of society (World Bank, 2016a). The government is aware of the need to develop an efficient and sustainable approach to aged care. To this end, the General Office of the State Council issued the 12th Five-Year Plan for the Development of Aged Care Services in China and the Development Plan for a System of Social Services for the Aged (2011-2015). It is now in the process of formulating the 13th Five-Year National Plan on Aging, which will further elaborate and finalize the reform roadmap for 2016 to 2020. The Plan is expected to be finalized and launched by June 2016. The National Development and Reform Commission (NDRC) helped draft these plans and is now leading the development of policy measures for the provision of social services for the elderly. This volume has been prepared to support the translation of the broad ideas on aged care provision expressed in the 12th and 13th Five-Year Plans and other government plans into reality and to help the government tackle the challenges described above. It strives to identify a policy framework that fits the Chinese context and can be put in place gradually. Specifically, it aims to provide an up-to-date understanding of the evolving aged care landscape in China; review international experiences in long-term care provision, financing, and quality assurance and assess their relevance to China’s current situation; discuss implications of current developments and trends for the future of aged care in China; and propose policy options based on available evidence and best practices.Publication An Investment Framework for Nutrition(Washington, DC: World Bank, 2017-04-12)The report estimates the costs, impacts and financing scenarios to achieve the World Health Assembly global nutrition targets for stunting, anemia in women, exclusive breastfeeding and the scaling up of the treatment of severe wasting among young children. To reach these four targets, the world needs $70 billion over 10 years to invest in high-impact nutrition-specific interventions. This investment would have enormous benefits: 65 million cases of stunting and 265 million cases of anemia in women would be prevented in 2025 as compared with the 2015 baseline. In addition, at least 91 million more children would be treated for severe wasting and 105 million additional babies would be exclusively breastfed during the first six months of life over 10 years. Altogether, achieving these targets would avert at least 3.7 million child deaths. Every dollar invested in this package of interventions would yield between $4 and $35 in economic returns, making investing in early nutrition one of the best value-for-money development actions. Although some of the targets—especially those for reducing stunting in children and anemia in women—are ambitious and will require concerted efforts in financing, scale-up, and sustained commitment, recent experience from several countries suggests that meeting these targets is feasible. These investments in the critical 1000 day window of early childhood are inalienable and portable and will pay lifelong dividends – not only for children directly affected but also for us all in the form of more robust societies – that will drive future economies.
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication How Do Special Economic Zones and Industrial Clusters Drive China’s Rapid Development?(2011-03-01)In the past 30 years, China has achieved phenomenal economic growth, an unprecedented development "miracle" in human history. How did China achieve this rapid growth? What have been its key drivers? And, most important, what can be learned from China's success? Policy makers, business people, and scholars all over the world continue to debate these topics, but one thing is clear: the numerous special economic zones and industrial clusters that emerged after the country's reforms are without doubt two important engines of China's remarkable development. The special economic zones and industrial clusters have made crucial contributions to China's economic success. Foremost, the special economic zones (especially the first several) successfully tested the market economy and new institutions and became role models for the rest of the country to follow. Together with the numerous industrial clusters, the special economic zones have contributed significantly to gross domestic product, employment, exports, and attraction of foreign investment. The special economic zones have also played important roles in bringing new technologies to China and in adopting modern management practices. This study briefly summarizes the development experiences of China's special economic zones and industrial clusters (their formation, success factors, challenges, and possible areas or measures for policy intervention), based on case studies, interviews, field visits, and extensive reviews of the existing literature in an attempt to benefit other developing countries as well as the broader development community.Publication Two Dragon Heads : Contrasting Development Paths for Beijing and Shanghai(World Bank, 2010)In broad terms, the sources of economic growth are well understood, but relatively few countries have succeeded in effectively harnessing this knowledge for policy purposes so as to sustain high rates of growth over an extended period of time. Among the ones that have done so, China stands out. Its gross domestic product (GDP) growth rate, which averaged almost 10 percent between 1978 and 2008, is unmatched. Even more remarkable is the performance of China's three leading industrial regions: the Bohai region, the Pearl River Delta, and the Yangtze River (Changjiang) delta area. These regions have averaged growth rates well above 11 percent since 1985. Shanghai is the urban axis of the Yangtze River Delta's thriving economy; Beijing is the hinge of the Bohai region. Their performance and that of a handful of other urban regions will determine China's economic fortunes and innovativeness in the coming decades. The balance of this volume is divided into five chapters. Chapter two encapsulates the sources of China's growth and the current and future role of urban regions in China. The case for the continuing substantial presence of manufacturing industry for growth and innovation in the two urban centers is made in chapter three. Chapter four briefly examines the economic transformation of four global cities and distills stylized trends that can inform future development in Beijing and Shanghai. Chapter five describes the industrial structure of the two cities, identifies promising industrial areas, and analyzes the resource base that would underpin growth fueled by innovation. Finally, chapter six suggests how strategy could be reoriented on the basis of the lessons delineated in chapter four and the economic capabilities presented in chapter five.Publication Pakistan : NWFP Growth Policy Note, Volume 2. Annexes(Washington, DC, 2009-06)The Government of the North West Frontier Province requested, in the spring of 2007, an economic growth policy note as a follow up to the Provincial Economic Report of December 2005. The provincial government was in particular interested in analysis at the industry level of key industries with high growth potential, and a joint decision was quickly made to study the value chain of three industries; horticulture, furniture, and gems and jewelry. In addition to studying constraints to growth at the sector level, the intent has been to also have an in-depth analysis of the provincial investment climate in a chapter on crosscutting constraints. This would draw on data from the survey that would form the basis for the Second Investment Climate Assessment to be produced by the World Bank. The data from this survey has been delayed, so the crosscutting section of this policy note with the investment climate analysis will be presented in a follow up version of the policy note in the last quarter of 2008. Volume 1 is the main report, and Volume 2 consists of annexes.Publication Can Russia Complete?(Washington, DC: Brookings Institution Press, 2008)Russian economy has been growing at an average nominal rate of 6 percent annually for the past decade. Among the most important factors contributing to its expansion has been the skyrocketing cost of oil and gas. In 2000, when Vladimir Putin took office, the cost of oil was approximately $20 a barrel; at the end of his term, it was five times higher. Meanwhile, the competitiveness of Russian enterprises has become increasingly fragile because of the appreciating ruble, climbing resource prices, and rising wages as well as the exhaustion of Russia's excess industrial capacity. Observers have called for Russian authorities to take measures to counterbalance the nation's increasing economic dependence on natural resources. Economic diversification can cover a wide number of issues and involve many challenges, including entrepreneurship, foreign investment, regional development, and physical infrastructure. In Russia's case, it comes down to one thing: ensuring that the manufacturing sector can compete in the global economy. Russian competitiveness will not depend on centralized, top-down efforts to pick winners but on broader policy measures designed both to improve the investment climate-which affects firms' incentives to invest productively and create jobs-and to develop a more competitive, knowledge-based economy. Russian authorities are seeking to address many of the country's most important developmental challenges. Economic diversification will require reducing investment risks induced by national and regional policies and lowering barriers to entry for newer, more dynamic, and innovative firms, specifically by facilitating transfer of land from municipalities and from older, loss-making firms. It also will require greater inclusiveness in government decision making, more transparency regarding government decision making, and stable legislation at all levels of government. This book quantifies and benchmarks the relative strengths of Russian manufacturing and identifies opportunities to increase its productivity and competitiveness. This volume focuses on the challenges now facing enterprises in Russia, highlighting sources of productivity growth and competitiveness within enterprises, including technological progress (knowledge absorption and innovation), worker skills, and the investment climate. After the 1998 crisis, as gross domestic product rebounded, investment accelerated, and foreign direct investment increased dramatically, Russia's recovery surpassed expectations. Yet, a closer look at national accounts reveals that much of that shift has produced relative price increases in (non-tradable) services and full capacity utilization in industry-indicators more characteristic of a resource dependent economy than of successful industrial diversification.Publication Public and Private Investments in Innovation Capabilities : Structural Transformation in the Chilean Wine Industry(World Bank Group, Washington, DC, 2014-07)This paper assembles novel data on the Chilean wine industry to investigate the role of investments in knowledge capital on sales growth in domestic and international markets. The study uses archival data collected from the Government of Chile to compile and categorize public expenditures and programs supporting the Chilean wine industry over the period of 1990-2012 into investment in different types of knowledge capital. These spending categories are related to industry-level sales growth. The paper finds that the most important correlate is spending on research and development. The study also uses data from a new survey of Chilean wine firms to capture information on firm-specific investments in knowledge capital. The findings show that investments in collaboration capital, in particular hiring foreign consultants, as well as participation in international wine fairs are the strongest correlates of growth in export sales, while spending on aspects of branding (local advertising and brand design) are the strongest correlates of domestic market sales growth.
Users also downloaded
Showing related downloaded files
Publication Developing China’s Ports(Washington, DC: World Bank, 2022-05-17)Many countries in Africa and Asia have coastlines that present opportunities for them to become gateways for trade between the hinterlands and global trading routes. However, policy makers struggle to translate this potential into engines of economic development and social transformation. In the past 40 years, China has taken advantage of its strategic geographical location and its status as one of the world’s top manufacturing regions. From a very low position on almost all metrics, today China has become home to more than half of the world’s top 50 ports. The rapid development of China’s ports was critical for the country’s remarkable economic growth. What China achieved can be informative; how and why China revived and modernized its port sector is especially relevant and provides valuable lessons for other countries. This book explores the transformation of China’s port sector through four topics and four periods, beginning with China’s major economic reforms that started in 1978. The first topic addresses the links between China’s macroeconomic and regional development strategies and development of the port sector. During this period—through about 1991—China began decentralizing port management to facilitate development of special economic zones. The second topic—during the period 1992 through about 2001—is more specific about the ports and analyzes changes in port governance, including the way in which essential investments were determined and financed. The third topic examines the relationship of ports to the cities where they are located and to the hinterlands on which they depend—coinciding with the period 2002–11. Domestic and international investment resulted in many new export-oriented processing factories during this period. The accompanying boost in trade required further expansion of port capacity. The fourth topic addresses how—from 2011 onward—human resource and innovation policies in the port sector have responded to changing demands as the country looks to become a less resource-dependent and more regionally balanced economy.Publication The Growth Report : Strategies for Sustained Growth and Inclusive Development(Washington, DC : World Bank, 2008)The report has four main parts. In the first, the commission reviews the 13 economies that have sustained, high growth in the postwar period. Their growth models had some common flavors: the strategic integration with the world economy; the mobility of resources, particularly labor; the high savings and investment rates; and a capable government committed to growth. The report goes on to describe the cast of mind and techniques of policy making that leaders will need if they are to emulate such a growth model. It concludes that their policy making will need to be patient, pragmatic, and experimental. In the second part, the commission lays out the ingredients a growth strategy might include. These range from public investment and exchange rate policies to land sales and redistribution. A list of ingredients is not enough to make a dish, of course, as Bob Solow, a Nobel Prize-winning economist and a member of the Commission, points out. The commission, however, refrains from offering policy makers a recipe, or growth strategy, to follow. This is because no single recipe exists. Timing and circumstance will determine how the ingredients should be combined, in what quantities, and in what sequence. Formulating a full growth strategy, then, is not a job for this Commission but for a dedicated team of policy makers and economists, working on a single economy over time. Instead of a country-specific recipe, the commission offers some more general thoughts on the opportunities and constraints faced by nations in Sub-Saharan Africa, countries rich in resources, small states with fewer than 2 million people, and middle-income countries that have lost their economic momentum. In the final part of the report, the commission discusses global trends that are beyond the control of any single developing-country policy maker. Global warming is one example; the surge in protectionist sentiment another; the rise of commodity prices a third. In addition, the commission discusses the aging of the world population and the potential dangers of America's external deficit. These trends are new enough that the 13 high-growth economies of the postwar period did not have to face them. The question is whether they now make it impossible for other countries to emulate that postwar success.Publication World Development Report 2024(Washington, DC: World Bank, 2024-08-01)Middle-income countries are in a race against time. Many of them have done well since the 1990s to escape low-income levels and eradicate extreme poverty, leading to the perception that the last three decades have been great for development. But the ambition of the more than 100 economies with incomes per capita between US$1,100 and US$14,000 is to reach high-income status within the next generation. When assessed against this goal, their record is discouraging. Since the 1970s, income per capita in the median middle-income country has stagnated at less than a tenth of the US level. With aging populations, growing protectionism, and escalating pressures to speed up the energy transition, today’s middle-income economies face ever more daunting odds. To become advanced economies despite the growing headwinds, they will have to make miracles. Drawing on the development experience and advances in economic analysis since the 1950s, World Development Report 2024 identifies pathways for developing economies to avoid the “middle-income trap.” It points to the need for not one but two transitions for those at the middle-income level: the first from investment to infusion and the second from infusion to innovation. Governments in lower-middle-income countries must drop the habit of repeating the same investment-driven strategies and work instead to infuse modern technologies and successful business processes from around the world into their economies. This requires reshaping large swaths of those economies into globally competitive suppliers of goods and services. Upper-middle-income countries that have mastered infusion can accelerate the shift to innovation—not just borrowing ideas from the global frontiers of technology but also beginning to push the frontiers outward. This requires restructuring enterprise, work, and energy use once again, with an even greater emphasis on economic freedom, social mobility, and political contestability. Neither transition is automatic. The handful of economies that made speedy transitions from middle- to high-income status have encouraged enterprise by disciplining powerful incumbents, developed talent by rewarding merit, and capitalized on crises to alter policies and institutions that no longer suit the purposes they were once designed to serve. Today’s middle-income countries will have to do the same.Publication Classroom Assessment to Support Foundational Literacy(Washington, DC: World Bank, 2025-03-21)This document focuses primarily on how classroom assessment activities can measure students’ literacy skills as they progress along a learning trajectory towards reading fluently and with comprehension by the end of primary school grades. The document addresses considerations regarding the design and implementation of early grade reading classroom assessment, provides examples of assessment activities from a variety of countries and contexts, and discusses the importance of incorporating classroom assessment practices into teacher training and professional development opportunities for teachers. The structure of the document is as follows. The first section presents definitions and addresses basic questions on classroom assessment. Section 2 covers the intersection between assessment and early grade reading by discussing how learning assessment can measure early grade reading skills following the reading learning trajectory. Section 3 compares some of the most common early grade literacy assessment tools with respect to the early grade reading skills and developmental phases. Section 4 of the document addresses teacher training considerations in developing, scoring, and using early grade reading assessment. Additional issues in assessing reading skills in the classroom and using assessment results to improve teaching and learning are reviewed in section 5. Throughout the document, country cases are presented to demonstrate how assessment activities can be implemented in the classroom in different contexts.Publication Two Dragon Heads : Contrasting Development Paths for Beijing and Shanghai(World Bank, 2010)In broad terms, the sources of economic growth are well understood, but relatively few countries have succeeded in effectively harnessing this knowledge for policy purposes so as to sustain high rates of growth over an extended period of time. Among the ones that have done so, China stands out. Its gross domestic product (GDP) growth rate, which averaged almost 10 percent between 1978 and 2008, is unmatched. Even more remarkable is the performance of China's three leading industrial regions: the Bohai region, the Pearl River Delta, and the Yangtze River (Changjiang) delta area. These regions have averaged growth rates well above 11 percent since 1985. Shanghai is the urban axis of the Yangtze River Delta's thriving economy; Beijing is the hinge of the Bohai region. Their performance and that of a handful of other urban regions will determine China's economic fortunes and innovativeness in the coming decades. The balance of this volume is divided into five chapters. Chapter two encapsulates the sources of China's growth and the current and future role of urban regions in China. The case for the continuing substantial presence of manufacturing industry for growth and innovation in the two urban centers is made in chapter three. Chapter four briefly examines the economic transformation of four global cities and distills stylized trends that can inform future development in Beijing and Shanghai. Chapter five describes the industrial structure of the two cities, identifies promising industrial areas, and analyzes the resource base that would underpin growth fueled by innovation. Finally, chapter six suggests how strategy could be reoriented on the basis of the lessons delineated in chapter four and the economic capabilities presented in chapter five.