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'The last special policy is done. Over.'

MARCH 8-The pin on a gloomy Li Youwei's chest indicates that he participated in the Chinese People's Political Consultative. The 69 year-old member of the Consultative's standing committee was the first party secretary of Shenzhen province.

In 1990, after Li had just been appointed vice-governor of Hubei Province, he had an encounter at the capital airport with a member of the Central Committee of the Chinese Communist Party, who mentioned special economic zones. Not knowing what special zones were, Li was told to look it up when he got home.

A few years later he became the Shenzhen party secretary, where he remained until he stepped down in 1998.

What Li calls 'the last special policy' is the preferential 15 percent income tax enjoyed by foreign-invested firms in special economic zones.

On the morning of March 8, Jin Renqing, director of the Ministry of Finance, under commission by the State Council, presented the new income tax law to the 2,000-strong Congress. Jin discussed how the new tax would integrate foreign and local firms, and that its immediate passage would be beneficial.

'I knew there was no going back,' Li admitted a few hours later.

During the session, Li and ten other officials signed a draft resolution calling for the saving of the preferential tax.

One party secretary, one party mayor, and two provincial leaders-- all deeply interested in Shenzhen's economic developments-- contacted ten members of the CPPCC seeking their signatures on a resolution advocating to maintain the preferential tax.

Li believes that if the tax rate changes suddenly from 15 percent to 25 percent, the continuity of the SEZ policy will be disrupted and it will be an SEZ in name only.

The group also believes the adjustment will affect Hong Kong's recent boom. They expressed concern that if the tax rate exceeds Hong Kong's 17.5 percent, the favorable trade relationship between Hong Kong and Shenzhen will be disrupted, and that they will both become less internationally competitive.

The group points out that these kinds of taxes are not just in-line with China's current economic plans, but also with international practice, and that regional economic development policy trends are cohesive with the reality of China. Li Suowei mentions how Russia, in the year before last, passed a law covering special economic zones. India is also an example.