ProLogis: SEZs key to China investment

A new report issued by the logistics investor says that special economic zones and economic and technological development zones have been, and continue to be, crucial for attracting foreign investment.

ProLogis, the Denver-based industrial property developer and investor, has released a new research report arguing that China’s special economic zones (SEZs) and economic and technological development zones (ETDZs) are the key openings for foreign investment into mainland China.

The report, entitled “China's Special Economic Zones and National Industrial Parks – Door Openers to Economic Reform,” credits China's SEZs with attracting foreign companies to invest in China and thereby nurturing China's economic revitalization.

SEZs and ETDZs operate as foreign territories for the purpose of regulation and taxation, and have been implemented throughout the world, most noticeably in India and China. Today, there are five SEZs and 54 ETDZs throughout China. Foreign enterprises establishing operations in these zones are granted tax breaks, the ability to repatriate profits and capital investments, below-market lease rates for land, government-financed hiring/training, employee housing and various customs exemptions.

The zones are particularly attractive to manufacturers, third-party logistics providers and other import/export-drive companies.

The report goes on to predict that SEZs will continue to be crucial for foreign investment in China but also for other emerging markets. “What SEZs and ETDZs have done for China, they can also do for other aspiring nations,” said Leonard Sahling, first vice president of research for ProLogis, in the report.