Export Processing Zones (EPZ) are generally considered to be like the "free ports". A Special Economic Zone (SEZ) can be described as a geographical region that has its own economic laws that are more liberal than a country's typical economic laws. Many SEZs have characteristics of bonded zones, export processing zone or free trade zones and provide special incentives, including tax exemption or reduction to investors.
China has embraced SEZs because of their varied economic activities (Wei, 47). They embrace a number of economic activities including manufacturing, tourism, real estate development, agriculture and commerce.
EPZs and SEZs are different in that EPZ are industrial estates whilst SEZ are industrial townships with fully developed infrastructure. Other differences include; there is no minimum export performance stipulation for SEZ units unlike EPZ and retention of a hundred percent export earnings by SEZs which are restricted to seventy percent in EPZs. Custom and central expurgate processes are simplified in SEZs, and EPZs are usually found in countries with a market economy whereas SEZs are located in transition economies.
There are a number of similarities between them which may include among others; conditions under which EPZs and SEZs operate are almost the same, tax exemption is given to investors, they cover large tracts of land, both contribute to the overall economy of the country and offer employment to thousands of residents.
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