OPINION - China and Brazil – A comparison of Economic Zones

José Nelson Bessa Maia China's remarkable progress and strong economic growth resulted from the intensive use of the so-called Special Economic Zones (SEZs), established from 1980 onward in the context of the reform and opening-up of the Chinese economy. Brazil created a similar instrument: the Export Processing Zones (EPZs), established under Decree-Law No. 2,452 of July 29, 1988, and currently governed by Law No. 11,508/2007. However, to this day, only the EPZ located in the Pecém Complex has effectively become fully operational. Both SEZs and EPZs have a similar conceptual origin: they use designated territories and differentiated tax regimes to stimulate investment, production, foreign trade, and economic growth. However, they differ significantly in terms of scale, scope of activities, economic autonomy, development strategy, and territorial integration, which helps explain the contrast between China's great success and Brazil's comparatively modest results. The first Chinese SEZs, initially established in Shenzhen, Zhuhai, Shantou, and Xiamen, were designed to promote economic opening, encourage industrialisation, attract foreign capital, absorb technology, and achieve competitive integration with the rest of the world. Chinese legislation provided for the attraction of foreign investors and for a broad range of economic activities, including industry, agriculture, tourism, construction, and high-technology activities. This was an ambitious and intelligent economic strategy aimed at stimulating productive transformation through economic experimentation, within the framework of an active industrial, export-oriented, and regional development policy. In Brazil, EPZs are free-trade areas connected to foreign markets and intended for the establishment of companies benefiting from specific tax, administrative, and foreign-exchange regimes. Brazilian legislation establishes as their objectives the promotion of an export culture, the strengthening of the balance of payments, technological diffusion, the reduction of regional disparities, and economic and social development. Brazilian EPZs, however, have a different configuration. They are normally conceived as designated business areas in which authorised companies may operate under a special tax regime. Based on the Chinese experience, an Export Processing Zone (EPZ) should not be treated merely as an isolated space, but rather as part of a broader regional development strategy The most important difference between the two models lies in their economic and territorial dimension. Chinese SEZs were conceived as instruments capable of transforming entire territories. In certain cases, they did not function merely as industrial parks or customs areas, but as spaces for economic and institutional experimentation. China used SEZs as laboratories for economic transformation; in other words, they served a purpose far beyond the simple granting of tax incentives. They were used as testing grounds to promote economic opening and innovation. The strategy began in coastal areas and was subsequently expanded to other regions and different types of economic zones. Over time, Chinese policy created a territorial architecture of openness that included special economic zones, open coastal cities, economic and technological development zones, high-technology zones, and other modalities. This aspect is particularly important: the Chinese SEZ was not merely a tax mechanism; it formed part of a national strategy for economic and spatial transformation. In China, an SEZ can function as a large territory for economic development. In Brazil, an EPZ operates predominantly as a special business area linked to production and foreign trade. Shenzhen Special Economic Zone, Guangdong province, China The Chinese experience demonstrated the importance of associating special zones with strategic infrastructure. SEZs were integrated with ports, airports, highways, railways, energy systems, telecommunications, housing, universities, and research centres. This integration enabled certain regions to connect rapidly with international supply chains. In Brazil, the Pecém EPZ was successful precisely because of its pioneering connection with strategic port and industrial infrastructure. Therefore, based on the Chinese experience, an EPZ should not be treated merely as an isolated space, but rather as part of a broader regional development strategy. In the case of a future EPZ in Ceará's Central Hinterland, comparison with the Chinese experience offers interesting lessons. The objective would not be to transform Quixeramobim and neighbouring municipalities into a replica of Shenzhen. Historical, cultural, territorial, demographic, and economic conditions are entirely different. Nevertheless, it would be possible to incorporate some of the principles of the Chinese strategy. The integration of an EPZ located in the Central Hinterland with regional railway corridors—particularly the Transnordestina Railway—and with Ceará's logistics system as a whole could create a connection between inland production and international markets. The establishment of a major foreign-owned anchor company could generate a network of suppliers and attract new industrial investments. Ceará has significant potential and investments related to the energy transition. This environmental sustainability factor could be incorporated more strongly into the state's industrial strategy. The creation of stronger and more innovative partnerships with universities, technological institutes, business organisations, and vocational training centres could contribute to improving workforce qualifications and promoting industrial activities with greater technological content. This may be the most important point. The EPZ could be conceived not merely as an industrial district, but as an instrument for coordinating and promoting the development of Ceará's Central Hinterland. (*) José Nelson Bessa Maia is an economist, holds a master's degree in Economics and a doctorate in International Relations, and is a former Secretary of International Relations for the State of Ceará, Brazil. Email: nbessamaia@gmail.com