How Shenzhen Became the Fastest Growing City in the World [2021]

Where is Shenzen?

Shenzhen is a large suburban city in China and is home to one of the country’s special economic zones. The city is located on the east bank of the Pearl River estuary on the central coast of the southern province of Guangdong, bordering Hong Kong to the south. In 2020, the city’s population was around 17.56 million, making it considered the fifth most populous city in China. This city is also known as the universal center of industrial labor as well as finance and technology. Since this city is emerging and becoming a leading universal technology hub, the media have categorized it as Silicon Valley of China or “Silicon Valley of Hardware”.

How did Shenzen develop?

Due to its proximity to Hong Kong and the economic reforms of Deng Xiaoping, the city became China’s first special economic zone in the early 1980s, attracting many foreign investors, multinational companies and migrants seeking opportunities. As a result, the economy and the population of the city have exploded during these thirty years. It then developed as a technology, international trade and financial powerhouse; it is also home to the Shenzhen Stock Exchange, which is considered one of the largest exchanges in the world in terms of market value, and includes a free trade zone, the Guangdong. According to the Globalization and World Cities Research Network, Shenzhen is the 8th most competitive and largest financial center in the world, and was ranked Alpha city (world’s first) in 2020. Its nominal GDP has exceeded that of neighboring cities. Guangzhou and Hong Kong, and it is currently among the top 10 cities in the world with the largest economies. Shenzhen is also home to the world’s fifth-highest number of billionaires, the world’s second-highest number of skyscrapers, the world’s 32nd highest scientific research output, and a number of prominent educational institutions, including the Shenzhen University and the Southern University of Science and Technology. . Shenzhen has been called China’s Silicon Valley by the media because of its status as a leading global technology center. Due to its entrepreneurial, innovative and competitive attitude, it has become home to a large number of small manufacturers and software companies. Several of these companies continued and became major technology companies including Huawei, Tencent Holdings, DJI, Huawei, ZTC, Hasee, OnePlus, etc. Therefore, it can be said that Shenzhen, being a large international metropolis, holds a number of National and e-China International High-Tech Achievements Exhibition. Accordingly, is ranked 32^sd in the world for the results of scientific research according to the Nature’s Index.

THE DRIVERS OF SHENZHEN’S ECONOMIC SUCCESS

Some of the driving forces that led to the economic success of Shenzhen are: Initially, it can be said that the main driving force of the economic development of Shenzhen was foreign direct investment. Especially those who were present in Hong Kong and Taiwan. Another reason for its boom is China’s economic reform that took place in the late 1970s, since then the city has tried to use different perspectives to merge market orientation and an economic feature. planned in one piece. To attract more FDI, she proposed urban policies such as tax breaks, etc. to attract and attract them as well as reduced restrictions on doing business compared to other Chinese cities. Thanks to these developments, the city has obtained many advantages and has become one of the main recipients of private foreign funding in China. Their foreign capital also peaked during the period 1980-2015, that is, an increase of about 0.028 to 6.6 billion dollars per year was observed. Later in the mid-2010s, the central government of China put in place policies to promote entrepreneurs and innovative activities, which Shenzhen also joined and seeded some innovative industries such as FinTech and encouraged start-ups. -ups to show up. In historic times, when Shenzhen was not established, citizens in search of jobs and manpower used to migrate to developing cities, although it was difficult due to the narrowness of the borders. It was only after its development that people in other parts of the country aspired to join the city in search of jobs, business opportunities and enjoying a modernized way of life. We see that since the 1980s, young graduates from China have flocked to the city, Shenzhen was not lacking in talent, even when the city has its drawbacks. The city today also enchants talents from all parts of the world. It can be argued that the influx of human capital, whether national or international, is the lifeblood of Shenzhen’s economic success, due to which the city is seen as a fusion of various demographics. The talent pool, local component producers, technological access, the presence of renowned universities, the R&D base are the most precious resources that have brought recognition to this region. We see that Shenzhen is the only city in China that includes people with diverse demographics and is made by them.

• UNIVERSITIES AND RESEARCH INSTITUTES

Institutions and universities are considered to play an important role in the development of a city because they are the providers of talent. This claim can be denied, as Shenzhen is a city that emerged from the status of a “consumer electronics factory” without having any reputable institutions or universities. Although the city has still not been able to overcome this drawback, many well-known universities have opened their satellite universities in order to provide education and strengthen the city’s research and development.

• INNOVATION AND ENTREPRENEURSHIP

To attract FDI and reduce tax restrictions, production costs for products in Shenzhen were lower than in other Chinese cities. Due to this advantage, it has become the global center for processing and assembling products such as electronic gadgets, business gear, etc. As a result of these productions, the city is also known for its piracy scandals, which in turn have eaten away at its reputation. To overcome this bad reputation, the city tried to modernize its industries and tried to stimulate innovation and entrepreneurship by persuading technologically advanced people to become shareholders of private entities and start-ups. Some of the strategies that were made to increase the technological industries were to establish industrial zones so that there would be a rationalization of administrative services which would help the progress of small and medium enterprises. Shenzhen Municipal Corporation also introduced Shenzhen High-Tech Industrial Parks so that foreign Chinese students are attracted and showcase their business in the city. After these, many other establishments have sprung up and have now focused on five pillars, namely IT, high-end manufacturing, biology, green and low carbon and digital creation. Beside these, Shenzhen has constantly tried to create more spaces for entrepreneurs where they can design, prototype and sell products. The success of this consistency could be reflected in statistics, in 2001 the export value was around 11.4 billion dollars and it was increased to 140.3 billion dollars in 2015. Patent applications have also increased by about 40%. Therefore, it can be said that innovation and entrepreneurship have played an important role in the economic development of the city.