A Tale of Three Zones - Promises and Pitfalls of Three Financial Experimental Zones in China

This article examines new financial policies and regulatory changes adopted in three financial reform oriented special economic zones in China, and analyzes some pitfalls and uncertainties in their liberalizing plans.After the Communist Party of China's (“CCP”) Third Plenum of the 11th Congress in 1978, the Chinese government instituted some political changes: four special economic zones were established in 1979, the development of the coastal region was set forth as national policy in the Sixth Five-Year Plan (1981-1985), 14 coastal cities were opened in 1984; three deltas, the Lower Yangtze delta, the Pearl River Delta and the Xiamen-Zhangzhou-Quanzhou Triangle, were declared as Coastal Economic Development Zones, and Hainan was established as a special economic province. These measures of selective territorial deregulation including special economic zones, coastal open cities, central economic cities allowed more than two dozen sub-provincial cities to implement more autonomous and preferential economic policies