China Vs India, SEZs Comparison and Review

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.
India SEZ, China SEZ, Reliance SEZ, Shenzhen