A tale of two cities – the development and reform experiences of Shenzhen and Shanghai

Abstract

Following gaige kaifang, the twin strategy of reform and opening up, Shenzhen has been designated as a Special Economic Zone. The city appeared to have bright future and would serve as the growth engine in China. Despite having an impressive record of economic development since 1979, the prestige of Shenzhen as a commercial centre has always been overshadowed by Shanghai and Hong Kong. A breakthrough finally came when the State Council of China decided to develop Qianhai, a town near Shenzhen, into an international commercial centre. However, shortly after, the China (Shanghai) Pilot Free Trade Zone representing an unprecedented degree of openness in relation to foreign investment and international trade was launched. No one seems to remember the once-hopeful Qianhai area. The aim of this paper is to examine the path of development of the two leading commercial centres in China amidst the wider context of Chinese economic reform. A common issue facing both cities is, although the state generally has no problem in outlining a vision of reform, a translation of this vision into actual credible measures that could be implemented is often problematic.