Proceedings of the 15 th Annual Conference of the Association for Chinese Economics Studies Australia (ACESA) “Building nests to attract birds”: China’s hi-tech zones and their impacts on transition from low-skill to high-value added process Mark Yaolin Wang 1 The University of Melbourne Xiaochen Meng Peking University Abstract The special economic zones (SEZs) and open areas in China have led its opening up, making China the largest foreign investment destination since 2002. Global capital and multinational corporations (MNCs) have found their homes in China, especially along the coastal region where the open cities and special economic zones are located. However, there is limited transfer of technology from MNCs home countries and ‘made- in-China’ products are mainly labour-intense. The introduction of hi-tech zones in many Chinese cities represents an attempt to overcome these obstacles and to draw on both technology transfer and indigenous technology development in a more effective way. Using Shenzhen city as an example, this paper discuss the following three issues: 1) How has a Chinese FDI host city attracted hi-tech firms in its hi-tech zones? 2) Why was it possible for Shenzhen to select FDI it wants and discourage or even ban sanlai yibu within its SEZ? 3) What are the spatial patterns of these hi-tech firms. This paper concludes that Shenzhen has managed to create a strategy to maximise its ability to benefit from economic globalisation. The case study demonstrates an importance of a strong city state of managing growth and reacting decisively to economic globalisation. 1 Correspondence to: Dr. Mark Yaolin Wang School of Anthropology, Geography and Environmental Studies University of Melbourne VIC., AUSTRALIA Email: myw@unimelb.edu.au Ph: +613 8344 6338 Fax: +613 8344 4972 Wang, M.Y., & Meng, X., ‘ “Building Nests to Attract Birds”: China’s Hi-tech Zones and their Impacts on Transition from Low- skill to High Value Added Process’. 1