The Status and Formation Mechanism of China''s New Functional Zones
中国新经济功能区现状与形成机制

The international financial crisis hit the coastal areas of China especially hard because of their export-oriented economies. Because of this, people have begun to think about the current economic model of development -a virtual economy with excessive debt and consumption growth and that this may be difficult to sustain in the longer-term. The use of cheap labor to obtain an international competitive advantage, relying on resource consumption at a cost to the environment, and relying on foreign demand and investment have been questioned. In dealing with the international financial crisis, the State Council approved 16 regional development plans that later became a national strategy to reply to the crisis. The emergence of these new economic zones has changed the old economic pattern across China. Here we analyze new regional planning, the characteristics of new regional planning from six aspects and the spatial distribution. The new economic zones can be divided into four categories coastal economic region, border economic region, central economic region and western economic region. Based on this analysis we then try to answer the questions: what are the real causes that lead to this new system of 16 regional planning? Does the government want stronger macro-control? Were these changes driven by local governments’ need for policy? We find that reasons for adopting a new economic zone system are 1) demands for response to the financial crisis; 2) economic structural adjustment; 3) narrowing the regional gap;4) expanding domestic demand requirements; 5) improving the sustainability of regional development, and 6) a demand for breaking the policy constraint on development.