Special Economic Zones: A Comparison of the Economic Policies of China and Pakistan

Abstract

China established Special Economic Zones (SEZs) in the late seventies and eighties which later became major drivers of their economic development. Now China is replicating the same phenomenon in Pakistan under CPEC. China, through the China Pakistan Economic Corridor (CPEC), the flagship project of One Belt One Road, has pledged to invest sixty-two (62) billion US dollars in Pakistan. The development of SEZs in Pakistan is divided into two phases. Phase one started in 2012, and the main focus in this phase was on Dhabeji, Rashakai Faisalabad. In phase two nine SEZs will be developed. If Pakistan successfully manages the SEZs it will shift the country towards industrialization in the long run and stabilize the Pakistani economy in the short run. However, many inconsistencies have originated due to Pakistans weak economic policies. This paper will provide a comparison between the SEZs in Pakistan and China, and how Pakistan can capitalize on the SEZs and pave the way for industrialization.