China SEZ policy compared with India

SHENZHEN, CHINA: The two countries are not only fighting a financial battle but also on several other fronts. With the opening of Special Economic Zones (SEZs) for the manufacturing companies across India. Here is a look at the two countries on where they figure in respect with the SEZs.

* China started its liberalization and industrialization with the formation of SEZs in late 70s and early 80s.

* China had a master plan and an economic framework on how to build and proceed with SEZs. Massive cities for manufacturing and industrialization were built as part of the SEZ framework.

* China rolled out the red carpet for foreign companies to build and operate from these SEZs.

* China has only five SEZs, while India has approved 200 and still counting.

* All the Chinese SEZs are located along the coast line while the Indian SEZs are mostly concentrated near major cities and more than half are being developed by real estate companies attracted by the cheap land prices.

KPMG India, Tax Head, Sudhir Kapadia says, "Chinese SEZs are close to ports and trade nations like Hong Kong, Macau and Taiwan. A lot of thought has gone into the location of these SEZs."

* Shenzhen is the largest SEZ in China and is spread over 493 square kilometers while the largest SEZ in India, Reliance — Navi Mumbai and Maha Mumbai SEZ, is a mere 14,000 hectares.

* Exports from Shenzen SEZ reached $100 billion in 2005. The total Chinese exports for 2005 was around $700 billion which suggests Shenzen contributed 15% of Chinese exports and also Chinese SEZ initiative is government driven while the Indian SEZs are driven by private sector.