Abstract
WITH THE CHINESE STATE COUNCIL'S directive in 1978 authorizing the establishment of special economic zones (SEZs) in Fujian and Guangdong, the government in Beijing embarked upon a path pioneered by the leadership in Taipei some fifteen years earlier. The establishment of export zones, for both regimes, is part of a set of policy initiatives designed to give foreign capital a pivotal role in economic development. By offering special privileges to foreign corporations, the zones are intended to attract large-scale foreign investment. The government expects the influx of foreign capital to act as the mainspring of local industrial development. As the economy becomes geared to the exportoriented development encouraged by the zones, the social and political systems are altered. While the benefits brought by the zones can be considerable, they do not always live up to expectations and can create new sets of problems for the government. This article will analyze the impact of the export processing zones (EPZs) on the economic, social, and political development of Taiwan and from this analysis offer some tentative conclusions about the impact of the SEZs in the People's Republic of China.
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