context: Following expansion and development of free trade zones and free trade ports, China is looking to revamp its earlier zones, such as comprehensive bonded zones, econ zones and high-tech zones. Aiming at high-tech agglomeration, the measure reveals path dependency on past state-subsidised development models.

China is drafting policies to upgrade its 219 national economic and technological development zones (econ zones) by granting them more autonomy in initiating reforms and fostering advanced manufacturing clusters, says Economic Information Daily.

Ministry of Commerce (MofCOM) will roll out a series of policies this year to stabilise foreign investment, and one of the keys will be upgrading econ zones, says the newspaper.

A policy framework is taking shape

  • in 2017, State Council issued opinions on promoting reforms and innovation in development zones
  • in 2018, MofCOM made innovating econ zones a key task
  • recently, MofCOM completed a quantitative assessment of econ zones

MofCOM’s 2018 list ranks Suzhou Industrial Park at the top for overall performance. A spokesperson of the park attributed its success to focus on strategic emerging industries such as digital information, nanotechnology, biomedicine and artificial intelligence and building up interconnected industrial clusters. Other zones follow suit, with

  • Nanjing econ zone prioritising artificial intelligence
  • Changsha econ zone betting on the automobile industry to make it the first zone to generate 500 bn per year

In response to rising production cost, resource restraints and competition from free trade zones, at least ten econ zones have integrated with high tech industrial development zones (high-tech zones), including those in

  • Shanghai
  • Guangzhou
  • Suzhou
  • Qingdao
  • Nanjing
  • Jingmen

Econ zones should gradually rely on themselves rather than state support, argues Zhang Shuang 张爽 CCID Consulting Development Zones Research Centre senior analyst. Zhang advocates zones to cultivate

  • innovation and entrepreneurship
  • science and technology service
  • finance
  • talent services
  • coordinated opening
  • policy and regulation