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China Vs India, SEZs Comparison and Review

Friday, October 06, 2006

The Chinese started their liberalization and industrialization with the formation of SEZs in late 70s and early 80s. Unlike India, where SEZ is being incorporated 15 years after the start of liberalization process.

China had a Master Plan and an economic framework on how to build and proceed with SEZs, most probably inspired by the success of Asian Trading Hub, Hong Kong. The Dragons started building massive cities for manufacturing and industrialization under their SEZ framework. Dragons also rolled out red carpet for foreign companies to build and operate from these SEZs.

If you look at the Map on your left, China has only 5 SEZs, India has approved 200 and still counting. All the Chinese SEZs are located along the coast line. Indian SEZs are mostly concentrated near major cities and more than half are being developed by Real Estate Companies in order to make a quick buck by grabbing land at cheap prices under SEZ land acquisition act which is a scam in itself. KPMG India, Tax Head, Sudhir Kapadia said, "They(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. "

Dragon SEZ blueprint says, Size Matters for SEZ. Shenzhen is the largest SEZ in China and is spread over 493 Sq Kms.(49,300 hectares). While the largest SEZ in India, Reliance - Navi Mumbai and Maha Mumbai SEZ, is mere 14,000 hectares. Exports from Shenzen SEZ reached $100 Billion in 2005. Total Chinese exports for 2005 was around $700 Billion which implies Shenzen contributed 15% of Chinese exports.

Chinese SEZ initiative is government driven, Indian SEZs are driven by private sector. Check out my earlier post on praise for few MIDC SEZs and I called them True SEZs :-)

Dr. J J Irani, former CMD of Tata Steel and currently one of the powerful Directors on Tata Son's is of the opinion, "India should also go slowly like China has done".

Mohandas Pai, Executive Director, Infosys Technologies said,"We should look at entire districts, with a port and a hinterland for SEZ. We should make large-scale investments in that so there is synergy, and we should ensure that manufacturing has priority, followed by services, but the vision has to be much larger. The way it is today, the vision is too myopic, and too small, and I am afraid we will not get the benefit that China did".

Stay tuned, I will post the number of Real Estate Sharks that have joined the SEZ bandwagon pretty soon. Your thoughts and comments are most welcome.
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16 Comments:

At 4:35 PM, Blogger Varis said...

very well compiled and insightful

 
At 4:36 PM, Blogger Varis said...

very well compiledand insightful

 
At 4:37 PM, Blogger Varis said...

very well compiledand insightful

 
At 12:23 PM, Anonymous Anonymous said...

I think the article just about sums up everything which one might need to know when one questions the wisdom of India's decision to follow China and infact surpass it in an attempt to haphazardly march into granting approvals to SEZs.

 
At 3:56 PM, Anonymous Anonymous said...

hope the government is looking at all aspects before they go ahead clearing these applications for all the SEZ...randomly ,thoughtless
placed ..
Awaiting your list of big sharks...ready to make fast bucks....

 
At 10:22 PM, Anonymous Anonymous said...

It would be wonderful if the author can come up with few examples of impacts SEZ can have on India. Author should be really be appreciated for the efforts and the maps.

very informative article of SEZ in India.

 
At 7:15 PM, Anonymous Arushi said...

blog was really useful for a university project I'm working on...it was short and to the point...thanks

 
At 12:24 AM, Anonymous Anonymous said...

The purpose of SEZ was to make quick bugs and ultimate kick backs

 
At 7:51 PM, Blogger Dr. said...

What is the social impacts of SEZ in China? Do we need such massive SEZ driven markety economy?Does SEZ any way going to help the socially, economicallyimbalanced soceity of India?Can author clarify

 
At 9:57 PM, Anonymous Anonymous said...

very concise and yet informative ..hope govt puts in some thght and not just goes for myopic vision of progress!!

 
At 9:40 PM, Anonymous Anonymous said...

well in addition of what have you and comments i would like to add following:

in astrology (rawan samhita) the definition of politicians goes like this:
a man fooling a large crowd by speaking lies(modern day rally) and grabing through cheating part of there (public) money to become rich.

so rest you can guess.only amount of cheating is more or less m.k.gandi cheated(read collected) donation) now politician are super cheaters.

 
At 7:56 AM, Anonymous Anonymous said...

Its a well compiled article which exposes the intent of the politicians. The emulation of the Chinese model is just a mokery of our intelligence. How can one call it chinese model when our rulers frame their own rules which does not benifit our nation but develops their swiss bank accounts. Some times I wonder if these guys think that their grand children or children are not going to live in this land so they are behaving like the Invaders we read about in history who after plundering even destroyed the cities as they left.
Our politicians and beaurocrats sell away the nations wealth at pittance just for a few crores they alienate nations wealth worth millions of crores. few years ago the oil sector now its Real Estate

 
At 3:31 PM, Blogger sachin said...

we can faciliate any IT/ITeS COMPANY LOOKING FOR SPACE IN GURGAON FOR ACQUIRING OFFICE SPACE.
ONE SUCH OPTION IS IN THE GOVT. DESIGNATED IT ZONE/SEZ IN MANESAR SECTOR:-8, LOCATED BANG OPPOSITE TO MARUTI SUZUKI GREEN FIELD PLANT. SITE HAVE EXCELLENT LOCATION WITH ALL TAX INCENTIVES OF S.E.Z. ALSO THE NEIGHBOURHOOD COMPROMISES BIG M.N.Cs LIKE BHARTI AIRTEL,HCL,AGILENT TECHNOLOGIES,ANANTRAJ INDUSTRIES & MANY MORE. ALSO THE LOCATION IS SUPERB WITH NH-8 & KMP EXPRESSWAY CONNECTIVITY. YOU CAN SEE MORE ON www.ksdland.com
or contact@9811377199
ksd.land.trades@gmail.com

 
At 5:10 PM, Anonymous Anonymous said...

This is an interesting artcle.However,we need more detailed information about the working of Sezs in China to take lessons. B S Bhandari

 
At 7:08 PM, Anonymous Anonymous said...

why we cannot excute the sez project of mumbai sez in fast phase. we all know that it will benfit india. we have such good ports that can be developed for exports. government is creating problems in giving acquiring land. the land should be acquired earliest in the right price and the projects should be executed.

 
At 2:48 PM, Blogger sanjay bansal said...

area requirement for sez

Type For states other than special category states/UTs

Areas for special category states /UTs
Minimum total area requirement Processing area requirement Minimum total area requirement Processing area requirement
Multi-product 1000 Hectares 35% 200 hectares 35%
One/more services 100 hectares 50% 100 hectares 35%
Sector specific/port/airport 100 hectares 50% 50 hectares 50%
Electronic hardware & software or information technology enabled services 10 hectares with minimum built up area of one lakh sq.metre 50% 10 hectares with minimum built up area of 1 lakh sq.mt 50%
Gems &jewellery 10 hectares with minimum built up area of 50 thousand sq.metre 50% 10 hectares with minimum built up area of 50 thousand sq.metre 50%
Bio-tech/non-conventional energy including solar energy equipments/cells 10 hectares(and minimum built up area of 1 lakh sq.mts for IT) 50% 10 hectares(and minimum built up area of 1 lakh sq.mts for IT) 50%
Free trade warehousing zone 40 hectares(min. built up area of 1 lakh sq.metres) 50% 40 hectares(min. built up area of 1 lakh sq.metres) 50%
Note


definetly sez are boon for indian economy, they will not only generate revenues butmillion of new job options as well as bring fdi to india.
thanks to govt. of india for such a great move

regards

 

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