1-Introduction
The Shenzhen Special Economic Zone in China is recognized as one of the most successful special economic zones in the world. By utilizing innovative development strategies, the zone has become an advanced example of “smart special economic zones.” This article examines Shenzhen’s characteristics, actions, and success factors.
2- History and formation of the Shenzhen Special Economic Zone
Shenzhen was established in 1980 as China’s first special economic zone. The main purpose of the zone was to attract foreign investment, promote exports, and experiment with new economic policies. Modern infrastructure, favorable regulations, and tax incentives have laid the foundation for Shenzhen’s success (World Bank, 2020).
3- Characteristics of Shenzhen’s smartization
3.1- Digital infrastructure
Shenzhen is one of the first regions in China to be equipped with advanced technologies such as the Internet of Things (IoT), 5G, and artificial intelligence (AI). These technologies have been able to optimize production, logistics, and services (UNCTAD, 2021).
3-2- Sustainable development
Shenzhen is a leader in the use of renewable energy. The region uses solar and wind resources to provide energy and has developed smart energy management systems to reduce consumption and carbon (IRENA, 2022).
3-3- Innovation and Research and Development (R&D)
Shenzhen is known as an “innovation hub.” As such, it is a kind of high-tech center for Chinese technology companies. Companies such as Tencent, telecommunications company Huawei, and drone manufacturer DJI are located in the Shenzhen Special Economic Zone. Shenzhen is also the center of the stock exchange and is one of the busiest financial centers in the world.
China is leading the technological innovation competition with huge investments in technological research and development. In this regard, more than 4.2% of Shenzhen’s GDP was spent on research and development by 2020.
4- Supportive policies and the role of the government
The Shenzhen Special Economic Zone was expanded from four zones to the entire city in 2010. Businesses in the Shenzhen Special Economic Zone benefit from a wide range of tax exemptions, grants and loans, and reduced rates (OECD, 2023). These include in particular:
Three to five-year tax breaks for manufacturing and operational sites by high-tech companies.
Value Added Tax (VAT) and tariff exemptions for imported materials used for finished products.
Reduced cost of living rates for foreigners and local citizens.
Immunity from government quotas or production licenses.
VAT exemption for manufactured goods and domestic sales.
5- Economic and social impacts of smartization in Shenzhen
5.1- Economic growth
The GDP of the Shenzhen Special Economic Zone has increased from 270 million yuan in 1980 to 3.46 trillion yuan in 2023.
5-2- Job creation
Creating job opportunities in various industries, including information technology and renewable energy, is one of Shenzhen’s major achievements (UNDP, 2020).
5.3- Improving the quality of life
The development of smart infrastructure and digital services has significantly improved the quality of life of Shenzhen residents. Services such as smart transportation and digital citizenship have facilitated daily life (World Bank, 2021).
6. Shenzhen’s challenges and lessons for other regions
Despite its successes, Shenzhen faces challenges such as rising living costs and urban traffic. However, the region’s experience shows that smart policymaking can lead to sustainable growth and attract investment (OECD, 2023).
7- Conclusion
The Shenzhen Special Economic Zone is a clear example of success in smartening special zones. By utilizing new technologies, supportive policies, and sustainable development, this zone has become one of the most prominent economic hubs in the world. Shenzhen’s experience can be a valuable model for the Kashan Special Economic Zone.
