Vol. 12 No.3 Spring 1987 / 21 China's Special Economic Zones: The Cultural and Managerial Challenges Martin Lockett Since China's policy of Special Economic Zones was announced in 1979, the areas affected by these policies have changed at a rapid pace. In 1975 when I first went through what is now the Shenzhen Special Economic Zone, it was just a border railway station and a small town. Passing through in 1981, it looked like a huge building site - which it still is to some degree. But by 1985, it was taking shape as a new city and was totally unrecognizable when compared with ten years before. Attitudes and organization have changed fast too: ten years ago, Shenzhen station was covered in political slogans, today it is covered in advertising as well as being much larger. In this article I will first outline the present position of China's Special Economic Zones (SEZ) and other areas in which there are special incen- tives for foreign investors - the 14 coastal cities and three 'open economic zones' - as well as the Chinese goals in setting them up. In particular cer- tain conflicts can be identified between these goals which may affect organizations in the Zones. Second, I shall look at the Special Economic Zones in terms of culture - seeing them as a meeting place of both Chinese and Western culture, and between aspects of capitalism and socialism. Particular emphasis will be given to the cultural similarities between over- seas Chinese and those in the People's Republic of China (PRC), in con- trast to Western culture. Third, issues of negotiating joint venture and other agreements in the Special Economic Zones will be dealt with and the effect of cultural factors will be stressed. Fourth, I shall look at some of the issues which are now faced by management in the Special Economic Zones, relating these to culture where appropriate. Acknowledgement This article is based on a paper presented at the Economist Conference on 'Chinese Culture and Management', Paris, 23-24 January 1986.