Section 3：Core questions and the thesis plan

Only relatively few case studies have focused on the regional economic effects，problems and prospects of FEZs in China，except for some publications that have focused on Special Economic Zones（SEZs）in South China. Clearly，these SEZs have played a dominant role in China’s economic development since the late 1970s. However，since 1978，various different types of FEZs have been established，including a large number of ETDZs located in several coastal cities. The ETDZs have also become a driven force in contributing to China’s economic development. The ETDZs of the coastal regions have increasingly contributed to expanding the open policy and recovering old coastal economic centres（Meng 1989）. Therefore，it is necessary to choose one of the most successful ETDZs of the coastal regions of China as an example to help an analysis of the successful experience and prospects of the ETDZs. As the title of the thesis illustrates，the core question of the research is：What is the contribution of FEZs to the Economic Development of China？ By studying the case of YEDA，this thesis examines the development of FEZs in China，and assesses how YEDA’s model of development has adapted and changed to meet the needs of the contemporary Chinese economy. This study seeks to answer the following questions.

1. Is the Model of the FEZ relevant to today’s China？

2. What are the lessons to be learnt from the YEDA model？

3. Are these lessons applicable to the development of other FEZs in China，especially those being established in the less-developed regions in the West of China？

4. Are there aspects of FEZ development which should be avoided in terms of the specific governmental structures in China？

Yantai Economic and Technological Development Zone/Area（YEDA）is one of China’s most successfully operating ETDZs，and is located in China’s east coastal city-Yantai，a comparatively small/medium-sized coastal agricultural city in China. From 1949，when the People’s Republic of China was founded，until the early 1980，Yantai as an area（not a city yet）did not maintain its excellent record of economic development. In some ways，Yantai lost its tradition and advantages during that time. The original，limited，modern industries which had been left by German colonists were largely destroyed and closed during the “cultural revolution”. Before the 1980s，Yantai was regarded as a small village which was good at fishing and producing apples. In 1983，Yantai was established as a city，and the ETDZ was established the following year. Following the success of YEDA and China’s “opening up” policy，Yantai slowly emerged from the shadow of the nearby large economic and industrial city-Qingdao- from the late 1980s to the early 1990s，and quickly improved its economic position in China from the early 1990s. YEDA itself has now become one of the top 7 leading ETDZs of China. Because of the success of YEDA，Yantai ranked No. 20 in GDP performance among all Chinese cities in 2008，a great achievement for such a relatively medium-sized city. As there has been no comprehensive empirical study on analysing this successful model，the economic impacts of YEDA within a case study of YEDA is thus worthy of analysis. There is a further reason why YEDA has been chosen；YEDA is regarded as being instructive to some FEZs which may not have many innate advantages. In other words，these FEZs may be regarded lacking various essential conditions for achieving success，since it is widely held that YEDA’s success relies more on its way of management than its innate advantages.

In order to answer these questions，the main body of this study will be divided into 4 main parts. Chapters 2，3 and 4 will constitute the literature review chapters. In Chapter 2，the history and theory of FEZs will begin with a general definition. In Section 1 of this chapter，a definition of FEZs will be reviewed and discussed. In Section 2，the history of FEZs globally will be reviewed. In Section 3 of this chapter，the author will provide a brief introduction to the different types of FEZs in China，based on the literature review of Chinese FEZs. In Section 4，a structural and spatial evolution model of FEZs which was devised by Meng（2005）will be studied. Chapter 3 will constitute a review of China’s economic development direction and political environment. This chapter aims to analyse the internal reasons why China decided to establish FEZs，by looking back at China’s economic development policies from 1949，when the People’s Republic of China was founded，to the year 1978，when China decided to open up and then from 1978 to the present day. This will provide a theoretical basis that can help to understand YEDA，the chosen case study in the latter chapter. Chapter 4 is a literature review of SEZs in China. This chapter aims to support the study of ETDZs and YEDA；ETDZs were established 6 years after the establishment of SEZs，and based on the successful experience of the SEZs. As Ling（1992），Mao（1992）and Zhi（1994）state，“The latest developments in other coastal cities have proved that Shenzhen is being used as a model to increase urban investment and speed up urbanisation”.

Chapter 5 is the methodology chapter of this thesis. After reviewing the theory，history and evolution of FEZs，both at a regional and an international level，this chapter will discuss the research philosophy of the author，and the research methods adopted throughout the whole study. This is a crucial chapter that will help to keep the study on a sound course and ensure the study has reliable results by collecting reliable data and information.

Chapters 6，7，8 and 9 are focused on an analysis of YEDA. Empirical evidence of both YEDA’s successes and failures will be analysed for the other，less-developed FEZs to learn from. To achieve this，a general introduction to YEDA will be provided in section 1 of Chapter 6；this will help the reader to know more about YEDA in terms of its establishment，development and various other general conditions. In section 2，the objectives and characteristics of YEDA over a period of time will be discussed. In section 3，various economic data regarding both YEDA and its mother city-Yantai-will be analysed，in order to ascertain what YEDA means to the economic development of Yantai. Some general information about Yantai city will also be presented in this section. In section 4 of Chapter 6，the author will analyse how YEDA is governed，with the aim of ascertaining why YEDA has been successful in helping to boost the economy.

From Chapter 7，the primary data collected from the face-to-face interviews to YEDA businessmen begin to be analysed. In Chapter 7，the logical sequences that interviewees were using or they thought other investors might use to justify YEDA as a location to invest in are analysed. These logical sequences will help ascertain the advantages of YEDA，and how these advantages have helped YEDA to attract investment and to achieve success. Furthermore，these advantages can be regarded as driving forces for YEDA’s success.

In Chapter 8，a model that depicts YEDA’s success is devised；how this model functions will be explained by using the results from Chapter 7. Additionally，each driving force will be analysed and discussed. By determining the driving forces and their importance to FEZs，it can be discussed whether they are applicable to other FEZs tin achieving success.

In Chapter 9，the shortcomings of YEDA will be analysed and discussed，based on the face-to-face interviews. In this chapter，two aspects of these shortcomings will be analysed. One aspect is the problems that YEDA is currently facing，and the other is the limitations of the YEDA region，i. e. factors that may prevent some investors from investing in YEDA.

The final Chapter is the Conclusion. The objectives of this study will be realised and summarised in terms of answering the questions detailed above. Firstly，a review on what has been done throughout the whole thesis will be undertaken. Secondly，each of the research questions will be answered. Finally，comments on the future of FEZs will be provided and the limitations of the thesis will also be discussed.