Industrial development is an instrumental for a long run sustainable economic growth of a country subject to feasible industrial policies. For instance establishing business parks, export promotion zones, industrial clusters, and special economic zones (SEZs)would increase economic growth and development. SEZs are also known as investment promotion zones, industrial estates, free trade zones and export processing zones. China’s fastest sustained economic growth over the past four decades is an exception growth miracle ever in economic history. China grew at an annual average rate of 10 percent from 1978 to 2018.The World Bank has documented that China is the World largest exporter following US and World largest manufacturer. A rapid growth in China has pulled out more than 800 million eople out of poverty line. China’s miraculous rise has become a hot topic for development discourse. Special economic zones and industrial clusters are important engines of economic growth for China. Therefore China is a role model for developing countries in the context of special economic zones. China has established special economic zones to attain far-reaching economic transformations. China initially started four economic zones to test with market oriented economic reforms. After effective and successful trial; the special economic zones, industrial policy and economic reforms were deliberately rolled out throughout the masses. Later on diversified zones particularly high tech industrial parks were designed to bolster economic activities. It is remarkable that SEZs together with industrial sector contribute to 22 percent of GDP of China, 60 percent in total exports and 46 percent in attraction of foreign director investment (FDI) inflows. China’s SEZs and industrial clusters were successful due to innumerable reasons. For instance stout commitment of uppermost leadership, preferential and lenient tax policies, institutional transformation, resilient participation and patronage of the government in providing public goods and to deal with externalities, public-private partnership, FDI from diaspora and other international companies, technological diffusion, learning and skills acquisition. In 1980, Shenzhen was a trivial ancient town with a population of less than 30,000. In 1980, the Communist Party allocated one of four SEZs to this town. SEZs was given special tax paybacks and privileged treatment for direct foreign investment (FDI). This small village grew exponentially and GDP per capita of this town raised at an average of 24.57% from 1978 to 2014. GDP of Shenzhen exceeded GDP of U.S. by $338 billion in 2017 owing to successful technology sector, and this growth rate was even higher than the growth rate of Hong Kong and Singapore. Since then, the city has massively developed with state of the art technology and now its population is more than 12 million. Another of model of SEZ in term of inter-governmental collaboration is the China’s Suzhou industrial park (SIP).This industrial parks has recorded 90 billion yuan worth of international trade in 2016. This SIP adds 15 percent in city’s economy due to its competent management, virtuous infrastructure and a vibrant human capital. China has made incredible triumph in establishing SEZs to achieve remarkable economic growth. It is worth mentioning that China employed 30 million workforce in SEZs that have brought down inequalities and alleviated poverty. Moreover China attracted 46 percent of FDI around the globe and added 22 percent in its GDP growth. China effectively utilized SEZs for industrial and economic development by following comparative advantage and trickle up theoretical approaches. Additionally, China encouraged small industries; industries based on modern and advanced technology; export diversification; structural reforms that encouraged joint ventures coupled with private investment; and fiscal decentralization. SEZs leads to the development of cities having all modern facilities within a conducive environment. However China grabbed SEZs as a societal laboratory to assess economic restructurings and to attract FDI inflows. Correspondingly UAE has used economic zones as an instrument for export diversification and Vietnam recognized SEZs to attract FDI inflows to modernize economy. Pakistan should follow the footprints of these countries to establish SEZs as an engine growth and development strategy. Agriculture sector contributes 19 percent (38 percent employment), industrial sector 20 percent and services sector 61 percent in the GDP of Pakistan in 2019 respectively. Moreover agriculture sector grows at the rate of 0.85 percent, industrial sector 1.4 percent (11.02 percent in 1970) and services sector 4.71 percent in 2019. These numeric facts present the poor economic situation of Pakistan. Pakistan is striving hard to develop its industrial sector by establishing industrial clusters, industrial estates and special economic zones. Pakistan Industrial development Corporation was established in 1952 to foster industrial growth and this functioned productively till 1970. Industrial failure in 1970s compelled the government to launch industrial cluster or industrial estates across the country. Therefore more than 100 industrial estates were established to enhance exports and economic growth. Pakistan has some industrial cluster in different cities such as Sialkot Surgical Goods Cluster, Gujarat Ceramic industrial cluster, Faisalabad readymade Garments manufacturing clusters, KPK Marble Cluster, and Gujranwala Leather industrial Cluster etc. China Pakistan Economic Corridor is considered a game changer for both China and Pakistan in term of infrastructure development, energy sector and industrial sector development. According to the World Bank, Special Economic Zone is a specific vicinity of the land used to stimulate economic growth in a country given the isolated customs area, lenient tax policies, single management, and geographically demarcated area detained. Under CPEC, China and Pakistan are committed to establish nine economic zones, of which four zones will be initiated in near future. For example Rashakai Economic Zone, M-1, Nowshera, and China Special Economic Zone Dhabeji are also expected to start in April 2020.These special economic zones will create millions of jobs opportunities for skilled and unskilled workers that will reduce poverty. Infrastructure and location are key factors that determine the success of special economic zones vis a vis provision of feasible industrial and tax policies. SEZs will not only attract FDI in industry but also in agriculture, tourism, mining and housing as it did splendidly in China. It is vital to tangiblylink up all SEZs and to integrate in a main supply chain to attain inclusive growth. Pakistan is a lower middle income country and this should focus on labor abundant industries as Heckscher Ohlin theorem suggests for developing countries. Textile, leather, food processing, marble and pharmaceutical industries should be prioritized to exploit maximum benefit using its abundant labor and natural resources. To equip labor force with required skills, special arrangements should be made by developing academia-industry linkages. With the start of SEZs, new industries will be establish in Pakistan which would increase the production capacity of the country. These industries would vary from mining to manufacturing and food processing. Pakistan is exporting raw material to its trade partners and earning less revenues due to lack of processing plants and diversification. CPEC authority should pay a special attention to establish SEZs to foster industrial development. They should realize that six years have already gone and less time is left to materialize the SEZs in tangible form. SEZs will absorb the unemployed labor force and also enhance the exports of the country. Ministry of planning, development and special initiative and CPEC authority should envisage about SEZ at Mirpur Azad Kashmir. This city has a long history of emigration to the different part of the world particularly in United Kingdom. Therefore, they can help the country by investing in special economic zone at Mirpur if government will provide them conducive business environment and better industrial policy. Assistant Professor, Institute of Economics, the University of Azad Jammu and Kashmir Muzaffarabad