special economic zone

Syllable breakdown

Dictionary meaning

a geographically defined area within a country in which business and trade laws differ from the rest of the country, typically offering foreign investors preferential conditions including tax holidays, reduced tariffs, relaxed labour regulations, simplified customs procedures, and improved infrastructure, in order to attract foreign direct investment and stimulate export-oriented manufacturing or services; China's experience with special economic zones beginning in Shenzhen in 1980 demonstrated that such zones could serve as laboratories for market-oriented reform and engines of rapid industrial development, and the model spread across Asia, Africa, and Latin America; critics note that the benefits of zones are sometimes overstated — enclave industrialisation may generate few domestic linkages, labour conditions within zones may be exploitative, and the fiscal costs of incentives may outweigh revenue gains; nonetheless, well-designed zones with strong governance and infrastructure have contributed to industrial upgrading in countries including Malaysia, Bangladesh, and Vietnam