Foreign Direct Investment Inflows and Economic Development: The Case of Shenzhen Special Economic Zone in China

in The Journal of World Investment & Trade
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Foreign Direct Investment Inflows and Economic Development: The Case of Shenzhen Special Economic Zone in China

in The Journal of World Investment & Trade


Most of the early leaders of the Chinese Communist Party were bom and raised in the central Yangtze valley provinces, came from peasant backgrounds, had little formal education, and had not traveled much abroad. Therefore, they were assumed to be xenophobic in general, suspicious of foreign powers, and against close relations with them (Dreyer, 2006: 10). 2 The concept of Sezs arose out of discussions among businessmen and government officials in Hong Kong, Guangdong, and Beijing over the period from December 1978 to December 1979. Shenzhen SEZ was initiated by the Hong Kong businessmen's proposal that a piece of land be set aside in Guangdong province as close to Hong Kong as possible, in which they could pursue new business ventures at low costs (Crane, 1990: 26).

3 Even the then somewhat leftist Standing Committee of the Politburo continued to value the technologies that could be learned in foreign countries to seek Fio. Market reforms moved ahead, and stock exchange markets were opened (Dreycr, 2006: 125).

° For the criticisms against the Shenzhen SEZ from within China in the early to mid-1980s, see Crane (1990: 4-6, 35-40).

I Until the mid-1980s, there had been a criticism that Shenzhen SEZ lacked export orientation. Meanwhile, since the late-1980s, the SEZS became more export-oriented (Phillips and Yeh, 1989: 126).

6 Businessmen in China, Hong Kong and Taiwan are known to emphasize guanxi meaning relationship or personal ties. In Chinese ways of doing business, there are no separate rules that distinguish the conduct of business from that of personal affairs, where the key factor is proper human relations (So and Walker, 2006: 1-4). For further details on the institutional similarity between Hong Kong and Shenzhen, see Wu (1997).

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