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{{Short description|Geographical region in which business and trade laws are different from the rest of the country}}
{{Redirect|SEZ|the airport|Seychelles International Airport}}
{{Distinguish|Exclusive economic zone}}
{{Use dmy dates|date=October 2021}}

A '''special economic zone''' ('''SEZ''') is an area in which the business and trade laws are different from the rest of the country. SEZs are located within a country's national borders, and their aims include increasing trade balance, employment, increased investment, job creation and effective administration. To encourage businesses to set up in the zone, financial policies are introduced. These policies typically encompass investing, [[taxation]], trading, quotas, [[customs]] and [[labour regulations]]. Additionally, companies may be offered [[tax holiday]]s, where upon establishing themselves in a zone, they are granted a period of lower taxation.

The creation of special economic zones by the host country may be motivated by the desire to attract [[foreign direct investment]] (FDI).<ref name="WorldBank2011"/><ref name="Tralac2013"/> The benefits a company gains by being in a special economic zone may mean that it can produce and trade [[Good (economics)|goods]] at a lower price, aimed at being globally competitive.<ref name="WorldBank2011"/><ref name="BusinessToday"/> In some countries, the zones have been criticized for being little more than [[labor camps]], with workers denied fundamental [[labor rights]].<ref>Watson, Peggy (23 July 2012). [https://www.theguardian.com/commentisfree/2012/jul/23/sackings-poland-junk-jobs-chung-hong "Sackings expose the harsh reality of Poland's junk jobs"]. ''[[The Guardian]]''.</ref>

==Definition==
The definition of an SEZ is determined individually by each country. According to the [[World Bank]] in 2008, the modern-day special economic zone typically includes a "geographically limited area, usually physically secured (fenced-in); single management or administration; eligibility for benefits based upon physical location within the zone; separate customs area (duty-free benefits) and streamlined procedures."<ref name=WorldBank2009>{{citation |title=Special Economic Zone: Performance, Lessons Learned, and Implication for Zone Development |publisher=World Bank |location=Washington DC |year=2008 |chapter-url=http://documents.worldbank.org/curated/en/343901468330977533/Special-economic-zone-performance-lessons-learned-and-implication-for-zone-development |chapter=Zone Definition |pages=9–11 }}</ref>

==History==
Modern SEZs appeared from the late-1950s in industrial countries. The first was in [[Shannon Airport]] in [[County Clare|Clare]], [[Republic of Ireland|Ireland]].<ref name="economist.com">[https://www.economist.com/news/finance-and-economics/21647630-free-trade-zones-are-more-popular-everwith-politicians-if-not "Political priority, economic gamble"]. ''[[The Economist]]''. 4 April 2015</ref> Some tax-free jurisdictions such as the [[Cayman Islands]] offer technology companies a way to keep their IP offshore in a Special Economic Zone (see [[Cayman Enterprise City]]).

From the 1970s onward, zones providing labour-intensive manufacturing have been established, starting in [[Latin America]] and [[East Asia]]. The first in China following the opening of China in 1979 by [[Deng Xiaoping]] was the [[Shenzhen Special Economic Zone]], which encouraged foreign investment and simultaneously accelerated industrialization in this region.<ref name=":33">{{Cite book |last=Liu |first=Zongyuan Zoe |title=Sovereign Funds: How the Communist Party of China Finances its Global Ambitions |publisher=The Belknap Press of [[Harvard University Press]] |year=2023 |isbn=9780674271913 |pages= |doi=10.2307/jj.2915805 |jstor=jj.2915805}}</ref>{{Rp|pages=50-51}} These zones attracted investment from multinational corporations<ref name="WorldBank2011"/> and allowed export-oriented Chinese businesses to respond quickly to demand in foreign markets.<ref name=":33" />{{Rp|page=50}} [[Special economic zones of China|China continues to maintain Special Economic Zones]] and certain open coastal areas. Most of China's SEZs are located in former treaty ports and therefore have symbolic significance in demonstrating a "reversal of fortunes" in China's dealings with foreigners since the [[century of humiliation]].<ref name=":33" />{{Rp|page=51}} Researcher Zongyuan Zoe Liu writes that "[t]he success of these cities as 'red' treaty ports represented another step in China's overall [[Reform and opening up|reform and opening-up]] plan while legitimizing the leadership of the CPC over the Chinese state and people."<ref name=":33" />{{Rp|page=51}}

Numerous [[African countries]] have set up SEZs in connection with China,<ref name=Tralac2013 /> including over the period 1990 to 2018 establishing SEZs in Nigeria (two), Zambia, Djibouti, Kenya, Mauritius, Mauritania, Egypt, and Algeria.<ref name=":0">{{Cite book |last=Murphy |first=Dawn C. |url=https://www.worldcat.org/oclc/1249712936 |title=China's rise in the Global South : the Middle East, Africa, and Beijing's alternative world order |date=2022 |publisher=Stanford University Press |isbn=978-1-5036-3060-4 |location=Stanford, California |pages=177 |oclc=1249712936}}</ref> Generally, the Chinese government takes a hands-off approach, leaving it to Chinese enterprises to work to establish such zones (although it does provide support in the form of grants, loans, and subsidies, including support via the [[China-Africa Development Fund|China Africa Development Fund]]).<ref name=":0" /> The [[Forum on China–Africa Cooperation|Forum on China-Africa Cooperation]] promotes these SEZs heavily.<ref name=":0" />

==Types==
The term special economic zone<ref>[https://elibrary.ru/download/elibrary_41726948_30519387.pdf УПРАВЛЕНИЕ ОСОБЫМИ ЭКОНОМИЧЕСКИМИ ЗОНАМИ СУБЪЕКТА] РФ Масаев С.Н. В сборнике: XIII Всероссийское совещание по проблемам управления ВСПУ-2019 Труды. Под общей редакцией Д.А. Новикова. 2019. С. 1773–1778.</ref><ref>Masaev S. [https://ieeexplore.ieee.org/document/8910997 Destruction of the Resident Enterprise in the Special Economic Zone with Sanctions]. Publisher: IEEE. 2019</ref> can include:<ref name="WorldBank2011" /><ref>{{citation |title=Economic Zones in the ASEAN |publisher=[[United Nations Industrial Development Organization]] |url=https://www.unido.org/fileadmin/user_media_upgrade/Resources/Publications/UCO_Viet_Nam_Study_FINAL.pdf |year=2015 |page=26 |access-date=16 September 2016 |archive-date=30 September 2020 |archive-url=https://web.archive.org/web/20200930053234/https://www.unido.org/sites/default/files/2015-08/UCO_Viet_Nam_Study_FINAL_0.pdf |url-status=dead }}</ref>
*[[Free-trade zone]]s (FTZ)
*[[Export processing zones]] (EPZ)
*[[Free economic zone]]s (FZ/ FEZ)
*[[Industrial park]]s / estates (IE)
*[[Free economic zone|Free ports]]
*[[Bonded logistics park]]s (BLP)
*[[Urban enterprise zone]]s

{| class="wikitable sortable" style="width: auto;"
|+World Bank special economic zone types<ref name="WorldBank2009" />
|-
!scope="col"| Type
!scope="col"| Objective
!scope="col"| Size
!scope="col"| Typical Location
!scope="col"| Typical Activities
!scope="col"| Markets
|-
|scope="row"|FTZ
|Support trade
|<{{convert|50|ha}}
|Port of entry
|Entrepôts and trade related
|[[Domestic market|Domestic]], re-export
|-
|scope="row"|EPZ (traditional)
|Export manufacturing
|<{{convert|100|ha}}
|None
|Manufacturing, processing
|Mostly export
|-
|scope="row"|EPZ (single Unit/free enterprise)
|Export manufacturing
|No minimum
|Countrywide
|Manufacturing, processing
|Mostly export
|-
|scope="row"|EPZ (hybrid)
|Export manufacturing
|<{{convert|100|ha}}
|None
|Manufacturing, processing
|Export, domestic
|-
|scope="row"|Free port/SEZ
|Integrated development
|>{{convert|1000|ha}}
|None
|Multi-use
|Internal, domestic, export
|-
|scope="row"|Urban enterprise zone
|Urban revitalization
|<{{convert|50|ha}}
|Urban/rural
|Multi-use
|Domestic
|-
|}

==See also==
* [[List of special economic zones|List of special economic zones by country]]
* [[Exclusive economic zone]]
* [[Urban enterprise zone]]
* [[Four Asian Tigers]]
* [[Free economic zone]]

== References ==
{{Reflist
|refs =
<ref name=WorldBank2011>{{cite web|title=Special Economic Zones Progress, Emerging Challenges, and Future Directions|url=https://openknowledge.worldbank.org/bitstream/handle/10986/2341/638440PUB0Exto00Box0361527B0PUBLIC0.pdf|publisher=The International Bank for Reconstruction and Development/The World Bank|access-date=25 May 2014|location=Washington DC|year=2011}}</ref>

<ref name=BusinessToday>{{cite web|title=Goldman Sachs says reforms to create 110 mn jobs for economy in 10 yrs|url=http://www.businesstoday.in/current/economy-politics/goldman-sachs-says-reforms-to-create-110-mn-jobs-for-economy-in-10-yrs/story/204721.html|newspaper=[[Business Today (business magazine)|Business Today]]|date=29 March 2014}}</ref>


<ref name=Tralac2013>{{cite web|author=Woolfrey, Sean|title=Special economic zones and regional integration in Africa|url=http://www.tralac.org/files/2013/07/S13WP102013-Woolfrey-Special-economic-zones-regional-integration-in-Africa-20130710-fin.pdf|publisher=Trade Law Center|access-date=25 May 2014|year=2013}}</ref>

}}

==Further reading==
* Chee Kian Leong, (2007) ''A Tale of Two Countries: Openness and Growth in China and India'', Dynamics, Economic Growth, and International Trade'', DEGIT Conference Paper [https://web.archive.org/web/20080408215608/http://www.degit.ifw-kiel.de/papers/degit_12/C012_042.pdf pdf]
* Chee Kian Leong, (forthcoming) ''Special economic zones and growth in China and India: an empirical investigation'', International Economics and Economic Policy. [https://link.springer.com/article/10.1007%2Fs10368-012-0223-6 link]
* Thomas Farole, (2011) ''Special Economic Zones in Africa: Comparing Performance and Learning from Global Experiences'', Washington, DC, World Bank

== External links ==
* [http://issuu.com/n.shmonov/docs/monography_historical12/ Шмонов Н.Н. «Историческое исследование проблем развития особых экономических зон»]
* [https://web.archive.org/web/20110706133128/http://www.epzbangladesh.org.bd/index.php Bangladesh Export Processing Zone Authority BEPZA]
* [https://web.archive.org/web/20071215235429/http://www.textilezone.kz/ South Kazakhstan "Ontustyk" special economic zone]
* [http://www.sezindia.nic.in/ Indian Special Economic Zones]
* [http://www.epza.gov.pk/ Export Processing Zones Authority Pakistan]
* [https://web.archive.org/web/20070304140527/http://www.peza.gov.ph/ PEZA Philippines website]
* [https://web.archive.org/web/20210425181118/http://special-economic-zones.mapunity.org/ India Special Economic zones map]
* [http://www.oao-oez.ru/ Open Joint Stock Company "Special Economic Zones" (Russia)] {{Webarchive|url=https://web.archive.org/web/20100128223206/http://www.oao-oez.ru/ |date=28 January 2010 }}
* [http://simon31.narod.ru/syndromeofsocialism.htm U.S.S.R. Special Economic Zones] [https://search.rsl.ru/ru/record/01001617356]
* [https://web.archive.org/web/20110927014306/http://southasia.oneworld.net/todaysheadlines/citizens-group-demand-moratorium-on-sezs India: Citizens group demand moratorium on SEZs OneWorld South Asia]

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{{Globalization}}
{{International trade}}
{{Terms for types of administrative territorial entities}}

{{Authority control}}

[[Category:Special economic zones| ]]
[[Category:Foreign direct investment]]
[[Category:Commercial policy]]
[[Category:Economic development policy]]

Special economic zone - Revision history

Ajay Kumar: Created a new article