average wage increased only by 1.2% relative to the matched control municipalities, with the CPI increasing by 0.4% (Wang 2013). To avoid the “racing to the bottom” syndrome and prevent further declining of the investment efficiency, the current new round of reform in China is trying to let the market play a bigger role in resource allocations.

- **_Environmental degradation_ .** In China, GDP performance used to be the top priority for the government officials, also related to China’s growth model based on low technology and labor- and resource intensive manufacturing, many SEZs face serious environmental and resource challenges. With the increasing emphasis on climate change problems, the environmental challenges call for particular attention: chief one is the serious water, air, and land pollution and the huge amount of industrial waste. The World Bank estimates that the environmental cost in China is about 8% of GDP. To tackle these issues, China has implemented tougher environmental standards and tried to use fiscal policies to force firms to adopt “green technologies” and conduct innovations. At the national level, the government is promoting the transformation of the growth model from investment and exports driven to consumption driven, which will focus more on quality, with emphasis on technology upgrading and service sectors.

- **_Unbalance between industrial development and social dimensions._** While the special economic zones have achieved great economic success, many of them are somewhat lagging behind in providing the commensurate social and urban services, except a few such as the Suzhou Industrial Park and Kunshan Industrial Park, where industrial and urban development are well integrated. Many of them do not have sufficient health and education services or public transportation to accommodate their increasing population. Some SEZs are at a distance from their host cities, like an “isolated island” with few cultural and leisure activities. Such zones have problems attracting highquality investments and talents and face great challenges in sustaining their growth or upgrading their industrial structures. To mitigate these problems, the new generation of zones in China is now encouraged to integrate with urban planning and development, with good public services and urban amenities.

# **III. SEZs in Africa – A Long Journey Ahead**

In the Sub-Saharan Africa region, several countries launched zone programs in the early 1970s (Liberia in 1970, Mauritius in 1971, and Senegal in 1974), but they did not operationalize programs until the 1990s or 2000s (table 1). Also, these zones are largely different from the modern large scale multi-use zones that are currently being proposed (Farole 2011).

**Table 1. Overview of African zone programs by decade of launch**

|1970s|Liberia,Senegal,Mauritius|
|---|---|
|1980s|Djibouti,Togo|
|1990s|Burundi, Cameroon, Cape Verde, Equatorial Guinea, Ghana, Kenya, Madagascar, Malawi,<br>Mozambique,Namibia,Nigeria,Rwanda,Seychelles,Sudan,Uganda,Zimbabwe|
|2000s|Gabon, Gambia, Mali, South Africa, Botswana, Zambia, Eritrea, Mauritania, DRC Congo, Tanzania,<br>Ethiopia|

_Source:_ FIAS (2008) with author’s amendments. Note that this list is not exhaustive.

The lack of data makes it hard to have a comprehensive analysis of Africa’s performance in SEZs—in terms of investments, exports, and employment—relative to other regions. The available evidence suggests that SSA’s experience with traditional EPZs and IZs has been relatively poor in terms of both employment generation and export performance (Table 2).

10