China is planning a Special Economic Zone in Idaho. Business professor Andrew Leung looks at his website into the concept of the SEZ’s and whether the successful concept can be used also outside China. Can China save the US economy?
China is already building five regional ‘Special Economic Zones’ across Africa – in Egypt, West Africa, Zambia, Tanzania,and Mauritius. (Martyn Davies, China into Africa, Trade, Aid and Influence, Robert Rotberg (Editor), Brookings Institution Press, Washington D.C., 2008, pp. 137 – 154.)
The African model consists of cooperative partnerships with the respective host governments, whose laws apply intact. There are of course special tax and other concessions for businesses inside the zone to attract the right mix of technologies, skills, and jobs. Usually, China is responsible for constructing the zones and selecting experienced Chinese enterprises to manage these zones. Businesses selected to operate inside the zones can be local, international or Chinese…
Sinomach is China’s third-largest contractor, with more than $14 billion in sales last year. It has been active in more than 130 countries in Asia, Africa, Latin America, Russia and Eastern Europe as general contractor for large infrastructure and building projects.
Sinomach executives told Southeast Idaho Energy, which is planning to build a $2 billion fertilizer plant in Power County, they want the contract for engineering, procurement and construction. Their access to financing is their deal sweetener.
Southeast Idaho Energy hopes to turn coal into gas to produce nitrogen fertilizer and sulfur. The company expects to hire 700 to 1,000 people during construction with 150 permanent workers.
The company also would separate the carbon dioxide that contributes to climate change and ship it to Wyoming, where it can be pumped underground to enhance the extraction of natural gas…
This idea may be a threat or it can be turned into a truly dynamic opportunity for much needed trust -building between the United States and China. If mishandled, it could spur a much wider Cold War syndrome that will be no good for any country. If handled wisely, this could well usher in a new era of leadership in international cooperation that augurs well in grappling with some of the global challenges like sustainable development and job creation not only in developing countries but in the West as well.
We seem to be witnessing a historical inflextion point where a new world order may well emerge for the two great powers of the 21st century to cooperate closer together to create a win-win situation for both countries and the broader world.