Xiamen Special Economic Zone (), established in October 1980, is one of the five special economic zones in the People's Republic of China. Originally comprising a territory of 2.5 km<sup>2</sup> in Xiamen City, it was expanded to 131 km<sup>2</sup> in 1984, covering the entire Xiamen Island, which comprises Huli District and Siming District excluding Gulangyu.
Haicang and Xinglin districts were designated "Taiwan Businessmen Investment Zones" on 20 May 1989, and Jimei District was designated in 1992. Foreign investment enjoys the same economic policies as in the special economic zone.
Geography
Xiamen is in southeastern Fujian (Minnan), China, beside the Taiwan Strait. The Kinmen Islands administered by Taiwan lie roughly 10 km away. Xiamen is next to Hong Kong, Macau and Taiwan. Xiamen has a good harbor, with a depth of 12 meters or more. The harbor is wide and rarely foggy or frozen and less silted, so cargo ships can enter and leave at essentially any time. Since the Ming and Qing dynasties, Xiamen has been one of the important ports for foreign transportation and trade in China.
Demographics
Becoming a special economic zone has greatly influenced Xiamen's demographics and economy. Xiamen Special Economic Zone has a resident population of about 5.1 million, according to the 2020 census. However, it has a large floating population of temporary residents estimated to be around 2.7 million. The city has experienced rapid population growth since it was designated as a SEZ in 1980.
Economic History of Xiamen (Pre-1945)
During the Song and Yuan Dynasties, Xiamen was a hub of contraband trade and pirate activity. It was fortified, in 1387 to try and ward off pirates which is also when the name "Xiamen" was first used. During the Qing dynasty, after the opium wars, trade with Europeans opened as Xiamen was designated as a treaty port and it continued its dynastic characteristic of being a maritime trade hub. British trade expanded from 380,000 silver dollars in 1843 to over 2 million in 1852.
It was also a migration hub of the time as more than 100,000 Chinese annually returned or left China through this treaty port from 1866. Throughout the Republican Era, the Second Sino-Japanese War, and the resumption of the Chinese Civil War in 1945 later put an end to Xiamen's economic prosperity.
Economics of Xiamen (Post-1980)
In October 1980, the State Council of the People's Republic China approved the establishment of the Xiamen Special Economic Zone, designating 2.5 square kilometers of land in the Huli area in the northwest of Xiamen Island. Xiamen was one of five Special Economic Zones designated in 1980.
Continuing from its dynastic period, Xiamen became an important maritime cargo and container port to allow shipping from major world ports into China. The Xiamen Special Economic Zone has expanded to cover the entire Xiamen Island, including Gulangyu Island, with a total area of 131 square kilometers in 1985. In 1988, the State Council approved the establishment of Xiamen as a planned city (计划单列市), giving it economic management authority equivalent to that of a province. In 1989 and 1992, the State Council approved the establishment of three Taiwan investment zones, namely Haicang, Xinglin and Jimei, with investments in the zones being handled in accordance with the current special economic zone policies. Xiamen's GDP also passed Taiwans in 2020.
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|+Statistics of GDP & Population of Xiamen
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|+Foreign Capital Utilization by District With the release of the cities most recent 5 year plan, the 14th one, the city has committed to invest more in national innovation platforms and research centers. The SEZ will add half a percent more of the cities GDP to R&D spending. Xiamen will also continue to invest in the core of their industries, including "trade and logistics, financial services, software, information and technology services, and creative cultural tourism". With each Special economic zones and its own set of preferential policies, Xiamen's most recent incentive plan April 13, 2018 encapsulates:
Opening Wider to Foreign Investments
- Incentive encouragement to actual paid-in foreign capital amounting to two percent of total for up to 20 million RMB per enterprise.
- Foreign direct investment over 10 million RMB will receive a reward for contributing VAT of 100 percent for the first two years and 50 percent for the three years following. It had the goal of modernizing China's aviation industry during the opening up and reform period. Currently, it has a market capitalization of 5.072 billion RMB and is rated the 4th best airline in China as of 2022 by Skytrax. It has more than 145 airplanes serving 320 domestic and international routes and is now a Star Alliance member.
Maritime
Maritime trade accounts for 22% of the local GDP, which is mainly processed through the Port of Xiamen. This port is the 8th largest in China and is a crucial port for the region, including Taiwan and other key trade partners around the globe. The local government is also looking to increase the recreational maritime economy with cruises, fishing, and sailing, which will in turn increase tourism.