Development and its Discontents: From exogenous to endogenous growth or rebalancing China’s SEZ-driven law & development model

In recent years, a debate has been taking place among Chinese scholars and policy makers about the need to rebalance the Chinese economy so that it relies less on exogenous growth (through export of low-priced manufactured goods) and more on endogenous growth through domestic investments and domestic consumption. Furthermore, the claim has been made that the Wenzhou SEZ with its predominantly endogenous growth outperformed the Suzhou SEZ whose growth is exogenous.

This paper compares the development outcomes of the two SEZs and seeks to determine the extent to which the lessons learned from the Wenzhou and Suzhou SEZ models can help in China’s quest to rebalance its economy through an adjustment of its popular SEZ-driven law and development model. The paper also considers the extent to which the key factors can be replicated elsewhere in development strategies in other Asian market economies.