With the approval of the State Council, a special economic zone (SEZ) was established in an area of 2.5 square kilometers in the northwest of
Xiamen City in October, 1980. in March, 1984, the SEZ was enlarged to the whole island of Xiamen (including Gulangyu Island), covering an area of 131 square kilometers and the policy of free port was gradually introduced into the SEZ. In May 1989, an investment zone enjoying the same treatment as the SEZ exclusively open to Taiwanese investors was set up in Xinglin, Haicang and Jimei (three districts of Xiamen City) with the approval of the State Council. In November 1992,
Xiangyu Island Tax Bond Area was formed, again with the approval of the State Council.
Ever since Xiamen became a special economic zone, the municipal government has always been adhering to the fundamental policy of reform and opening-up. By taking full use of its geographical advantage, Xiamen has absorbed a huge amount of foreign capital, especially the funds from the overseas Chinese and Taiwanese to promote the economic integration among the enterprises of similar product structures. Now Xiamen has formed an export-oriented economic pattern with developing industry as the priority and three industries developing in a balanced way. After more than a decade's continuous improvement, Xiamen SEZ has created a relatively favorable investment environment and the foreign-invested companies have become an important force in developing the SEZ's export-oriented economy.
After years of construction, Xiamen City has now become a scenic coastal city boasting of complete infrastructure and robust internationally and domestically economic activities from a once closed and underdeveloped island. It ranks in the tenth place among the Chinese cities in terms of comprehensive economic strength. It is also one of the 40 Chinese cities with attractive physical investment environment.
Currently, Xiamen has defined its development target for the 21st century. The basic guideline for developing industries is to expand and adjust the secondary industry, vigorously develop the tertiary industry, optimize and upgrade the primary industry. The priorities in the development of industries will be in the following seven sectors: industry adopting advanced technology, communication and transportation, foreign and domestic trade and commerce, banking and insurance, tourist service, construction and real estate and information telecommunication.
