SEZ :Lessons from China

China’s record economic growth fuelled by SEZ is often advocated as the reason for India to adopt this approach.

China’s SEZ policy driven only to achieve growth since 1980’s incurring huge resources and environmental costs.

It is home to 26 million poor, adding 10 million mouths to be fed each year. Even with this daunting target between 1996-2005 “development” caused diversion of more than 21% of arable lands to non-agricultural uses, highways, industries, and SEZ’s .20 million farmers were laid off agriculture due to land acquisition.

Protests against land acquisition and deprivation have become a common feature in rural China. Some 74,000 riots were reported in 2004.

SEZ like Shenzen which clocked 28% growth for 25 years has become a hotspot of crime, corruption, prostitution.

UNEP has designated Shenzen as a “global environmental hotspot” meaning a region had suffered rapid environmental destruction.

High input, high consumption are the mantras of development in China. Most of the companies violate emission rules. And China has officially admitted that pollution costs it 10% of GDP.

Income gap is widening.GINI coefficient –a measure of income destruction where 0 means perfect inequality and 1 means maximum inequality. For China it is 0.496,wherea for India it is 0.33.

In case of a country with a a sizeable domestic market, the choice lies with the producer to export or supply to domestic market.

Indian consumption is 68% GDP, Chinese consumption is only 35% GDP.

The good point are: New insurance policy for farmers, medical services,$ 1.5 billion dollars as subsidies ,More selling price for the crops.

So it is for India to decide whether to follow the “Chinese model”.