How Shenzen Became The Fastest Developing 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 situated on the east bank of the Pearl River estuary on the central coast of Guangdong’s southern province, bordering Hong Kong to the south. Move fast and create things: the story of Shenzhen - Rest of World

Move fast and create things: the story of Shenzhen - Rest of World

As of 2020, the city’s population has been around 17.56 million, due to which it is considered to be the fifth most populated city in China. This city is also known as the universal centre for industrial work as well as finance and technology. Since this city has been emerging and is becoming a leading universal technology hub, the media has categorized it as the Silicon Valley of China or the “Silicon Valley of Hardware”.

How Shenzen Developed?

Due to its close proximity with Hong Kong and Deng Xiaoping’s economic reforms, the city became China’s first special economic zone in the early 1980s which attracted many foreign investors, multi-national corporations and migrants who were looking for opportunities. Due to this, the city’s economy and population have shown an explosion in these thirty years. It has subsequently developed itself as technological, international commerce, and a financial powerhouse; it is also become home to the Shenzhen Stock Exchange, which is considered to be one of the world’s largest stock exchanges by market value, as well as includes a free trade zone, Guangdong. Shenzhen is the 8th most competitive and largest financial hub in the world, according to the Globalization and World Cities Research Network, and has been ranked as an Alpha- (global first-tier) city in 2020. Its nominal GDP has overtaken that of nearby 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-largest number of billionaires, the world’s second-largest number of skyscrapers, the world’s 32nd-largest scientific research output, and a number of important educational institutions, including Shenzhen University and Southern University of Science and Technology. Shenzhen Travel Guide | Local Tips, Prices & Things to Do

Shenzhen Travel Guide | Local Tips, Prices & Things to Do

Shenzhen has been labelled as China’s Silicon Valley by the media due to its status as a top global technological centre. Due to its entrepreneurial, innovative, and competitive attitude, it is has become a home to a slew of small-scale manufacturers and software firms. Several of these companies went on and have become significant technology enterprises, including Huawei, Tencent Holdings, DJI, Huawei, ZTC, Hasee, OnePlus, etc. Therefore, it can be said that Shenzhen, being a major international metropolis, holds a number of national and e-China International High-tech Achievements Fair. Accordingly, is ranked 32^nd in the world for scientific research outputs according to the Nature’s Index.

DRIVING FORCES OF SHENZHEN’S ECONOMIC SUCCESS

Some of the driving forces which led to the economic success of Shenzhen are:

CAPITAL

Initially, it can be said that the main driving force for Shenzhen’s economic development was Foreign Direct Investment. Particularly those which were present in Hong Kong and Taiwan. One of the other reasons for its rise is the Economic Reform of China which took place in the late 1970s, since then the city has been trying to use different perspectives to fuse market orientation and a planned economic feature into a single piece. To attract more FDIs, it has offered urban policies like tax benefits, etc. to attract and lure them as well as reduced restrictions for doing businesses in comparison to other Chinese cities. Through these developments, the city has gained a lot of benefits and have become one of the leading recipients of private foreign funding in China. Their foreign capital was also reaching skies during the period of 1980-2015 i.e. an increase in the amount of around $0.028 bn to $6.6 bn per year was seen. Later in the mid-2010s, the Central Government of China set some policies to promote entrepreneurs and innovational activities, in which Shenzhen also joined in and sowed some innovative industries such as FinTech and encouraged start-ups to come forward.

MIGRATION AND TALENT

In the historic times, when Shenzhen was not established, the citizens in search of jobs and labour used to migrate to cities that were developing, even though it was difficult due to the border tightness. Only after its development, the people present in the other parts of the country aspired to reach out to the city in search of jobs, business opportunities, and the enjoyment of a modernised lifestyle. It is seen that since the 1980s, young graduates of China streamed to the city, Shenzhen did not have a shortage in talent, even when the city has its disadvantages. The city, today also enchants talents from all the parts of the world. It can be argued that the inflow of human capital be it national or international is the vital element in the economic success of Shenzhen, due to which the city is considered to have a fusion of diverse demographics. The talent pool, local component producers, technological access, presence of renowned universities, R&D base are the most valuable resources which had brought recognition to this region. It is seen that Shenzhen is the only city in China that comprises people with diverse demographics and is made by them.

UNIVERSITIES AND RESEARCH INSTITUTES

It is considered that institutions and universities play an important role in the development of a city as they are the suppliers of talent. This statement can be proven wrong as Shenzhen is a city that has emerged from being the “Factory of Consumer Electronic Goods” without having any reputed institutions or universities. Though the city has still not been able to overcome this disadvantage, many renowned universities have opened their satellite universities so as to provide education and bolster the research and development of the city. Manufacturing factory resumes operations in Shenzhen | MENAFN.COM

Manufacturing factory resumes operations in Shenzhen | MENAFN.COM

INNOVATION AND ENTREPRENEURSHIP

To gain the attraction of FDIs, and less restriction in taxes, the production cost of products in Shenzhen were less in comparison with other Chinese cities. Due to this advantage, it became the global processing and assembly centre of products like electronic gadgets, commercial gears, etc. Due to these productions, the city is also known for its pirated scandals, which in return has gnawed its reputation. To overcome this bad reputation, the city has been trying to upgrade its industries and have attempted to boost innovation and entrepreneurship by persuading technologically advanced people to become shareholders of private entities and start-ups. Some of the strategies that have been made to increase the technological industries were to establish industrial areas so that there was a streamline in the administrative services which would help in the progress of small and medium-sized enterprises. The Municipal corporation of Shenzhen also introduced Shenzhen High-Tech Industrial Parks so that overseas Chinese students get attracted ad introduce their business in the city. After these, many more establishments took place and have now focused on five pillars i.e. IT, high-end manufacturing, biology, green and low carbon, and digital creation. Adjoining these, Shenzhen has consistently tried and created more spaces for entrepreneurs where they can design, create prototypes and sell products. The success of this consistency could be reflected in the stats, in 2001, the value of exports was around $11.4 bn and it was increased to $140.3 bn by 2015. The patent applications also increased by around 40%. Therefore, it can be said that innovation and entrepreneurship has played a significant role in the economic development of the city.

How Shenzen Became The Fastest Developing City in The World [2021]

BySayon Bhattacharya

Where is Shenzen?

How Shenzen Developed?

DRIVING FORCES OF SHENZHEN’S ECONOMIC SUCCESS

By Sayon Bhattacharya

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