To Investigate Potential Connections between China's Special Economic Zones and Local Businesses: A Field Trip to Zambia and Mauritius for Africa's Economic Growth Research

The keywords that connect these two countries are: China and special economic zone (SEZ). Zambia and Mauritius are at different development stage, but nonetheless both have attracted China to invest in their SEZs in hope of positive spillover effects such as future technological transfer and expansion of manufacturing activities.

If active commercial linkages can be built between local businesses and these zones, it would become possible to capitalize the benefit of Chinese economic initiatives. Yet, it would not be successful unless Zambian and Mauritian enterprises have enough absorptive capacities. Thus, to investigate this point, Maswana conducted a field survey with the participation of local small-and-medium-sized enterprises (SMEs) in both countries. He also met officials of public agencies, representatives of local commerce associations and foreign business people to examine the current situation relative to SEZs.

Mauritius has a rich experience in SEZ programs. Since the 1970s, it successfully shifted from mono-crop economy -- relying solely on agricultural produce like sugarcane and tea-- to diversified industry structure – tourism, textile and manufacturing besides agriculture – by drastically cutting tax for foreign enterprises to operate on its islands. China-led SEZ is called the Mauritius Jin Fei Trade and Economic Cooperation Zone (MJ-FETCZ) and China is expected to invest US$700million which would potentially create 40,000 new jobs, Maswana says. The Government of Mauritius hopes to boost light engineering, precision works, and high-tech industries here though the MJ-FETCZ has not started running at this point.

Regarding the knowledge absorption capacities, a brief look at the survey results indicate that Mauritian entrepreneurs perceive the skill shortage as the major constraint while their Zambian counterparts point to access to finance. Maswana explains, “In order to capitalize on SEZ spillovers, knowledge and technical skills are critical for African economies. Although access to finance can, to some extent, help improve their technology absorption capacities, it is my view that skills and knowledge are more crucial in a highly competitive world insofar as they can push outward the boundaries of what is possible.”

Still, Maswana has just begun analyzing the data from the surveys and final results will need to wait for a full review.