Invention

Export processing zone

Shannon Airport was about to become obsolete, so Ireland turned it into a model China would copy.

Ireland · 1959
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In the late 1950s, Shannon Airport on the west coast of Ireland depended on transatlantic flights that stopped to refuel. Advances in aircraft technology were about to make the stopover unnecessary. Planes would soon have the range to fly over Shannon entirely, and the airport, along with the rural economy around it, faced collapse.1

Brendan O'Regan, the airport's director, submitted a proposal to the Irish government. Rather than wait for decline, he suggested converting land adjacent to the airport into a dedicated manufacturing zone with special tax incentives and exemptions from customs duties on imported materials used for export assembly.2

In 1959, the Irish government incorporated the Shannon Free Airport Development Company and established the Shannon Free Zone on roughly 600 acres next to the runway. It was the world's first purpose-built modern free trade zone.3 Companies operating in the zone received a corporate tax exemption on export profits for twenty-five years. Early investors included De Beers and Sony. The zone's success required building Shannon Town from scratch on reclaimed marshland, Ireland's first new town in more than two centuries, to house the workers.4

600
Acres of land adjacent to Shannon Airport that became the world's first modern free trade zone in 1959.

In 1972, UNIDO organized an international training workshop on export processing zones at Shannon. Delegations from developing countries studied the model and returned home to replicate it.5 India established the Kandla Free Trade Zone in 1965. South Korea opened its Masan zone in 1968. Taiwan launched the Kaohsiung zone in 1966.

In 1980, a team of eight senior Chinese government officials, including Jiang Zemin, participated in a six-week UNIDO study that visited Shannon and five other countries. Their mission reports and recommendations were submitted to the State Council and the National People's Congress, and fed into legislation governing China's first special economic zones, including Shenzhen.6

1959
Ireland established the Shannon Free Zone, the world's first purpose-built modern free trade zone.
1965
India opened the Kandla Free Trade Zone, one of Asia's earliest export processing zones.
1980
A Chinese delegation including Jiang Zemin studied Shannon's model during a UNIDO training program.
1 Shannon Airport Group, "A History of Innovation."
2 Shannon Airport Group, "A History of Innovation."
3 Shannon Free Zone entry, confirmed by UNIDO, "A Tiny Irish Town and China's Rise to Superpower Status."
4 Declassified UK, "The Tiny Irish Town That Unleashed Corporate Power Around the World," June 2023.
5 UNIDO, "A Tiny Irish Town and China's Rise to Superpower Status."
6 UNIDO, "A Tiny Irish Town and China's Rise to Superpower Status."
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