Do Special Economic Zones enhance the economic performance of the surrounding areas? It determines whether regional economic development model is reasonable or not. Based on both the political closeness and geographic closeness, we distinguish two kinds of spillover index between SEZ of other cities in the same province and neighbor cities. This paper explores the effect on SEZs to the surrounding areas of economic growth、foreign investment and labor employment, using Chinese city panel data from 1994 to 2006.The estimations show that SEZs can significantly promote the economic development of surrounding areas. In addition, it confirms the positive effect of absorptive capacity on the spillover effect of the SEZs. Such conclusion remains the same for various robustness tests, like considering various SEZs’ geographic locations and SEZs’ basic types.