| On March 31.2017,10 cities in four inland provinces in China(Henan,Hubei,Sichuan,and Shaanxi),along with an inland municipality(Chongqing)and another inland provincial capital city(Shenyang)in a coastal province,became the cities that had been granted the 3rd batch of the Free Trade(Pilot)Zones(hereinafter referred to as“FT Pilot Zones”or“FTZ”)in China.This is the first time that the inland area has the legally identical novel special economic zones as the previous coastal area had before since 2013 when the FTZ strategy had initially begun.Later in 2019 and 2020,four more inland provinces and the inland capital Beijing have also been set with FTZs.The spreading of FTZs from coastland to hinterland signifies that China's efforts to expand and deepen the Reform and Opening-up have been effectively executed,and also means that China has entered a new stage of exploration and development of open economy since 2001.The reason why those FTZs located in inland areas are noteworthy is that that it would be both an imaginative attempt and a great challenge to promote the trade links and investment attraction between inland and overseas,based on the fact that their enclosing geographic conditions.Since the era of the Great Navigation,the coastal areas in most of the maritime countries had embarked on international trade and gradually established the trade rules for the globe;trade in goods had further developed into international capital movements,from which these coastal areas also benefited preferentially and largely through foreign direct investment(FDI)or equity investment.Based on these,some advanced coastal cities evolved into the international finance center(IFC)or the free trade port and became the growth poles leading the home country and even the globe.In the meantime,however,because of the being naturally far from the trading ports,the trade channels and foreign investments for the vast inland regions of most countries have been largely hindered,resulting in a greater gap between inland and coastal areas in the international division of labor.The deficient openness of inland can largely explain why they had been underdeveloped compared with coastal areas since the 18th century,and China is no exception here.For the coastal areas,FTZs can be considered as a natural outcome of the high level of openness;for those FTZs located in the inland regions that lack open economic factors,they shouldered much heavier tasks as the pioneer zone of deepening economic opening-up,with more traditional cognitions to break through and more practical obstacles to overcome.Fortunately,the inconvenient situation of economic external exchanges for the inland area is changing.As the global information communication approaches to advance and deepens,along with China's expansion of reform and opening-up,the potentialities of the inland are emerging,such as lower labor costs and continuously improved means of transportations including aviation,railway,highway,and the inland waterway,the conditions for open economies in inland areas have been ceaselessly strengthened.In that way,a corresponding policy to stimulate these potentialities of comparative advantages is in demand,which can change the current situation of low economic openness and fewer growth paths.The FTZ policy,consequently,can be considered to be the pioneer zone that may change the status quo of inland places.Based on the available economic data,it is necessary to conduct a comprehensive and objective assessment of China's earliest inland FTZs in terms of local economic development,trade growth,and foreign economic attractiveness.This dissertation has selected the third batch of China's FTZs mainly as objects of study,focused on 12 inland cities with FTZs(the cities are Shenyang,Zhengzhou,Kaifeng,Luoyang,Wuhan,Xiangyang,Yichang,Chongqing,Chengdu,Luzhou,Xi'an,and Xianyang),carried out empirical studies on economic growth,changes in import/export volume,and foreign capital flows that may have been affected by their FTZs.The empirical models adopted are econometric models that are based on quasi-natural experiments,with city panel data collected from 2010 to 2018.Meanwhile,inside these models,other homogeneous cities in economic scale and administrative level without FTZ policy before Dec.31.2018,are chosen to serve as the control group to reveal the former treated group.The results have shown that inland FTZs can prominently promote the cities'economic growth both in gross and in per capita,and this growth effect is increasing year by year;for trading,the FTZ policy can significantly facilitate the inland cities'import and output,with a ascending trend year by year;lastly,the FTZ policy can notably strengthen the foreign direct investment(FDI)in their inland cities,and this FDI promotion effect is about 3.73 times that of economic growth effect,proving FTZs'key role in attracting the foreign investments in inland cities.Additionally,in order to propose long-term development suggestions specifically adapted to the inland FTZs,this dissertation also uses three coastal cities(Dalian,Yingkou and Zhoushan)that have established FTZs at the same time as those inland cities.The three coastal cities are also treated as the experimental group(but are empirically analyzed separately),along with other coastal cities that did not set up FTZs concurrently settled as their control group.The same quasi-natural experimental models were used to conduct empirical quantitative analysis,and then their driving effect to the coastal cities was compared with the inland FTZs'.The comparative results turn out that the heterogeneity of the FTZ policy to the inland growth and coastland lies in the economic growth(GDP/GDP per capita)and international trade(import/export),,but not in the growth of foreign investment(FDI).The specific manifestations are as follows:First of all,in terms of economic growth,the growth effect of FTZ on the coastal cities is not significant,they cannot have a significant driving effect like the inland FTZs do;then,in terms of trade import growth,the FTZ The improvement effect is not significant as the inland FTZs does;thirdly,the export effect of FTZ is also not exist in coastland;finally,for foreign capital attraction,the FTZs has a positive effect on the foreign direct investment in the corresponding coastal cities,and is even higher than the inland FTZs can absorb.Based on the empirical results of this part,this dissertation believes that the inland FTZs have a unique role in building open economies in hinterlands.This dissertation has also demonstrated the necessity of driving the growth and opening-up of inland regions with active policies,and has proposed constructive suggestions to the development of inland regions which have inferior economic positions compared to the coastal regions.In fact,there have already been plenty of successful cases of setting up inland special economic zones in many foreign countries apart from China.Although these inland special zones have various names other than free trade(pilot)zones,they all reflect the development principles of"free trade"and"expand opening-up".This dissertation lists the location distribution,main functions,characteristic industries and management models of several successful inland FTZs in developing countries and developed countries outside of China,analyzes their respective successful paths,and summarizes the long-term impact on China,then summarizes their enlightenments of achieving long-term economic growth and expanding opening-up to China's inland FTZs.The academic contributions and innovations of this dissertation are mainly in the following aspects:First of all,in the selection of research objects,this paper mainly emphasizes the selection and research of the free trade pilot zone on the feature of"inland".Although there is no conceptual distinction between"coastal"and"inland"in the definition of Free Trade(pilot)Zone,plenties of countries in the world,including China,have higher economically developed and openness coastal cities compared with their inland regions.Based on the inherent economic development model and geographical location,the coastal areas can maintain sustained economic growth and the continuous expansion of trade and foreign investment even without the free trade zone policy;On the contrary,in inland areas with relatively low economic openness,such measures as the Free Trade Pilot Zone can activate the potentialities of inland areas and develop their own open economies.It is reasonable to believe that inland areas can actively explore and develop open development modes in line with their own characteristics after the establishment of the FTZ,and achieve some positive results in a short time.Secondly,in terms of research methods,this paper compares four empirical measurement methods of policy analysis,namely,instrumental variable method,breakpoint regression method,the difference-in-difference method and synthetic control method,and points out that the difference-in-difference method is the most suitable method to analyze the driving effect of economic growth,trade promotion and foreign investment attraction for the inland free trade zones.In fact,the Free Trade Pilot Zone policy is a naturally good quasi-natural experiment,which can be regarded as a typical exogenous shock variable.The difference-in-difference method is more suitable than the tool variable method and breakpoint regression method.Compared with the synthetic control method which can only analyze the experimental groups(processing group)one after another,and the difference-in-difference method can combine several experimental groups for the empirical research,which is more appropriate for the 12municipal inland Free Trade Zones established in 2017.In addition,unlike many other empirical studies that adopted the provincial panel data the examine the FTZ policy effect,this paper utilizes the municipal panel data,which can make the FTZs more tightly linked to the region,showing more objective empirical results;Because the heterogeneity between provinces is generally greater than that between cities,and the number of cities with FTZs in a province is different(generally 1?3),the use of provincial panel data will cause the policy effects to be diluted by the vast of prefecture-level cities without free trade zones in their provinces.Finally,in the empirical studies,this dissertation especially uses the coastal cities that also set up the FTZs in the same period as the comparative study objects,and distinguishes the differences and possible heterogeneities of the amount of incremental economy,incremental trade and incremental investment between inland cities and coastal cities under the condition of ensuring the observation of time synchronization.The comparative empirical results show that the economic growth effect of inland FTZs is significant whereas that of coastal FTZs are not;Similarily,in terms of trade growth,the inland FTZs can also positively affect the local cities both in import and in export,where their coastal counterparts turned to be insignificant;For attracting the foreign investment,however,there is not an obvious heterogeneity between inland FTZs and coastal FTZs,as both the inland and coastal FTZs can prominently draw more FDI for their regions,but quantity of this driving effect is higher from coastal FTZs. |
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