(China Daily)
Updated: 2008-04-28 07:16

The pomp and glitter accompanying the celebrations of the 20th anniversary of the country's largest special economic zone (SEZ) last Saturday have faded, but the debate on the merits of SEZs goes on.

China came up with an SEZ policy in 1980 in order to overcome old problems like bad infrastructure and bureaucratic bottlenecks. Hainan province, a tropical island at the country's southernmost, is one of the country's large industrial estates and a world-class enclave that is virtually free from the red tape. Such enclaves are typically big enough to have their own ports and airports, and provide world-class infrastructure that attracts world-class investment. Their success in manufacturing and exports has become legendary.

Until 20 years ago the island was considered one of the most destitute, impoverished regions of the country.

The idea behind the SEZs was to experiment with liberal policies in certain regions earmarked for the purpose. There are several factors behind the success story of SEZs in China. Size, location, flexible labor laws and stable policies are among the factors that are primarily responsible for making these SEZs attractive to foreign investors.

More than just a customs-free industrial area, the island has served as one of the testing grounds for new ideas of reform. Haikou, capital of Hainan province, is home to the China Institute for Reform and Development, one of the country's leading reform think tanks.

Saturday's celebrations in Haikou were a ringing endorsement of the views of those who want to go ahead - Chinese style - with reform and the opening-up policy. Vice-Premier Li Keqiang's plea to the island to build itself into a shipping hub, logistic center and export processing base for Southeast Asia was a reaffirmation of the view that SEZs should continue to serve as the locomotive of the country's growth.

The new blueprint the island announced last week to turn itself into a major international tourist destination by 2028 includes a visa-free policy for tourists and freedom of aviation rights.

With beautiful tropic beaches and forests, Hainan focuses its strategy on developing tourism rather than on science and technology. It is a right approach based on its best resources.

We are expecting more messages from bigger parties the country throws when it observes the 30th anniversary of its reform and opening-up policies later this year. Reform's march will be on.

(China Daily 04/28/2008 page4)