Fields of the Future

This year is the 40th anniversary of the establishment of China’s first group of national economic and technological development zones (NETDZs).

When they were first introduced in 1984, 14 such zones were scattered throughout the eastern coastal region. Today their number reaches 229, located in 31 provincial-level regions. The eastern region leads the count with 103, followed by the central region’s 55, the western region’s 50, and the northeastern region’s 21.

Over the past four decades, these zones have created “local micro-climates” conducive to the attraction of foreign capital, advanced technologies and management experience by transforming methods of economic growth, readjusting economic structures and promoting economic model transition, acting as major drivers of China’s economic and social development.

In 2023, the NETDZs reported a combined GDP of 15.7 trillion yuan ($2.2 trillion), with a total fiscal revenue of 2.7 trillion yuan ($376 billion) and tax revenue of 2.5 trillion yuan ($351 billion). Accounting for only 0.3 percent of the country’s land area, these zones contributed 10 percent of national GDP and tax revenue.

In 2023, the total import and export volume of the 229 development zones hit 10.1 trillion yuan ($1.4 trillion), and paid-in foreign direct investment reached $39.5 billion, approaching a quarter of the country’s total foreign trade and capital inflows. They have become a major driving force for growth in foreign trade and investment.

Successful pioneers 

Reform has always been key to NETDZ development, with a view to defining clear powers and responsibilities, establishing market-oriented operation mechanisms, and optimising their business environment. Initially serving as trailblazers in China’s reform and opening up, which began in 1978, the zones currently take on the mission of exploring new paths for high-level opening up to the outside world.

For instance, seizing the opportunity brought about by the implementation of the Regional Comprehensive Economic Partnership (RCEP), the Kunming NETDZ in Kunming, capital of the southwestern province of Yunnan, has greatly simplified its customs clearance procedures to align with the RCEP’s trade facilitation measures, effectively reducing transport time and costs.

The RCEP, the world’s largest free trade agreement, comprises 15 Asia-Pacific countries: 10 Association of Southeast Asian Nations (ASEAN) member states and their five major trading partners – China, Japan, the Republic of Korea, Australia and New Zealand.

These development zones have taken the lead in adopting international economic and trade rules. By teaming up with pilot free trade zones, comprehensive bonded zones, cross-border e-commerce pilot zones, and so on, the development zones are able to achieve much more than if they were acting alone. Their explorations into cultivating new industries and business models, and improving investment and trade facilitation have produced replicable experiences, helping propel China’s opening up to higher levels. 

Innovation-driven development 

Innovation has always been the primary driving force behind the development of the NETDZs, and they nurture a variety of science and technology innovative entities. In the Shenyang NETDZ in Shenyang, capital of the northeastern province of Liaoning, assistance is given to innovation champions like Shengu Group Co. Ltd. and Northern Heavy Industries Group Co. Ltd. to partner with the Chinese Academy of Sciences. Thanks to this technological support, Shengu has developed China’s first 9 mw offshore platform compressor, so that the country no longer needs to depend on imported compressors to drill for gas offshore.

The Wuhan NETDZ in Wuhan, capital of Hubei Province in central China, joins hands with Wuhan Donghu Hi-Tech Industrial Development Zone in the same city in tackling key technological problems in the development of vehicle chips.

To facilitate the commercialisation of innovation outcomes in the Dongying NETDZ in Dongying, a coastal city in Shandong Province in east China, eight leading players in their industries, including hi-tech incubator China GRINM Group and diesel engine maker Weichai Power Co. Ltd., created the National Rare Earth Catalysis Research Institute in partnership with Tianjin University. Rare earth metals can be used as catalysts to process combustion engine emissions. Thanks to the highly efficient technologies developed by the institute, Weichai alone is able to save more than 300 million yuan ($42 million) in purchasing costs every year.

Over the past four decades, the NETDZs have grown from being pioneers in the importation of advanced technologies and systems to now being at the forefront of China’s efforts to enhance its research and development capacity and transform itself into a global powerhouse of intellectual property.

As the major actors promoting China’s technological innovation and with more than 40 years of achievements and experience, the NETDZs are poised to play an even greater role in cultivating new quality productive forces featuring high technology, high efficiency and high quality, and injecting more vitality into the country’s high-quality economic and social development.