B. Summarize the text by writing out key characteristics of each type of zone.

Free Ports. Free ports are free zones that cover a lager physical area, typically an entire port city. Free ports often combine the characteristics of free trade zones (FTZ), industrial free zones (IFZ), and enterprise zones (EZ). Perhaps the most famous have been the city-states of Hong Kong and Singapore.

Commercial Free Zones. Commercial free zones also developed out of the trading activities of port cities, but with more limitations and controls than a free port. The main objective of a commercial free zone is the promotion of trade, and most commercial free trade zones function as adjacent to ports, airports, or other international transportation hubs. The physical facilities of commercial free zones are generally simple warehouses and economic activity is trading-oriented. A leading example of this kind is the Jebel Ali Free Zone in Dubai.

Enterprise Zones. In these zones various incentives such as reduced taxes, regulations, and low-cost financing of investments, land are offered to expand employment, export, and import substitution.

Export Processing Zones. EPZs, also called industrial free zones are a relatively recent free trade zone innovation. While sharing the same fundamental characteristics of the free trade concept, EPZs are explicitly designed to facilitate production of goods and services for export market, rather than simple transshipment activities.

Industrial Free Zones. Area or industrial estates outside customs barrier adjacent or near a port, which offer duty free movement of goods, in and out of zone, as well as fiscal, regulatory, and tax incentives. Usually used to encourage establishment of export industries by domestic and foreign investors.

Special Economic Zones. China introduced the Special Economic Zone (SEZ) concept in 1979 as part of its “open door policy” which consciously used the SEZs as proving grounds for market – oriented economic reforms. Although patterned after the EPZ and free port concepts, SEZs feature several important differences, first, they cover a much larger territory than any EPZ and most free ports, from 15 square kilometers to 23,000 square kilometers, secondly, they allow a broad range of economic activities, and thirdly, they offer differential incentives among the various projects. Lastly, strict controls are placed on sales of SEZ goods into the Chinese custom territory, even upon full payment of import duties and taxes.

Hybrid Models. Several countries have allowed for the creation of hybrid zones, which combine features of two or more of the types listed above. The most common combines an industrial EPZ model with a commercial free zone.

There are currently 845 free trade zones that offer comprehensive logistics and production capabilities (UNCTAD, 1999). Particular attention should paid to China which began expanding its logistics facilities through large-scale foreign capital inducement and developed a free trade, adopting a free trade zone system to ensure the free trade of global firms. In case of China, a large number of special economic zones (SEZs) had been established since 1970s and foreign investment incentives were granted to 'coastal cities' to stimulate economic growth and trade development. For example, special economic zones had been established in Fujian and Guangdong provinces in the late 1970s and in the cities of Shenzhen, Zhuhai, Shantou by the end of 1980s. China has transformed many port areas into modern FTZs, and existing ports have equipped themselves with large FTZ areas, providing customers with one-stop shopping services that guarantee both industrial activities and logistics activities in the same place.

In addition, economies in the ESCAP region such as Japan, Singapore, Hong Kong, and Chinese Taipei have already established free trade zones in ports and developed several logistics centres in the FTZs in order to provide value added service and strengthen logistics function of the ports. For example, Yokohama Port Cargo Centre in the Port of Yokohama, Distriparks in the Port of Singapore, ATL Logistics Centre in Hong Kong and several distribution centres in Kaohsiung port were developed for the purpose of strengthening logistics function of the port.

 

c. Translate the following terms and be ready to explain them in English:

1. FTZ	2. IFZ
3. EZ	4. transshipment activities
5. free trade	6. incentive
7. SEZ	8. import substitution
9. commercial free zone	10.transportation hub

d. Write synonyms for these words consulting the text:

1. hub	2. incentive
3. to reduce	4. regulation
5. investment	6. employment
7. innovation	8. to feature
9. various	10. to ensure
11. to expand	12. facility

e. Make word combinations consulting the text: