China’s Silicon Valley to create ‘another miracle’ in 5 years

Shenzhen’s new policy explained, with a graphical history of the international tech hub.

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In the past few decades, Shenzhen has wowed the world with its rapid economic development. In less than 40 years, the southern port city sharing a border with Hong Kong has evolved from a little-known fishing village to an international tech hub that incubated topnotch companies like Tencent (HKG: 0700), Huawei, and DJI.

At the height of their differences in 1997, the gross domestic product (GDP) of the Asian financial center Hong Kong was once 11 times that of Shenzhen. Yet Shenzhen overtook its neighbor in 2018 due to the city’s breakneck growth.

It all started in 1979, when Shenzhen opened to foreign direct investment as China’s first “special economic zone.” While welcoming foreign funds into the city’s financial markets, setting grounds to build the country’s first commercial bank, first stock exchange, and even the first McDonald’s, the relaxed regulation and fundraising requirements created a frontier ripe for entrepreneurship.

Now, as China faces uncertainty and accelerates its national ambition to become a leader in deep tech and intelligent infrastructure, Shenzhen is handed a new mission: “Create another miracle in the next five years,” as the country’s leader Xi Jinping said during a visit to Shenzhen in October.

Granted greater autonomy in the decision-making process around legal, financial, technological, institutional, and social management, the new policy package is set to improve market access in sectors like energy, telecommunications, public utilities, transportation, and education.

Shenzhen’s New 5-year plan

Open up the financial market and “internationalize” RMB

  • Promote IPO registration system
  • Expanding fundraising channels
  • Promote Digital RMB
  • Allow foreign financial institutions to set up securities and fund management companies and obtain payment licences in Shenzhen
Open up the financial market and “internationalize” RMB

Encourage technology innovation

  • Develop a data sharing platform for the Greater Bay Area; protect intellectual property and digital information
  • Improve the drone flight management system
  • Relax restrictions on foreign investment in frontier technology fields
  • Faster market-driven investments in technical projects
Encourage technology innovation

Attract more talent

  • Optimize the approval process for foreigners to work in Shenzhen
  • Increase the remuneration of workers especially blue-collar workers
Attract more talent

Improve Urban Environment

  • Create Better medical, education, social security, culture and sports environment for local citizens
  • Entrust Shenzhen with the right to convert agricultural land for other uses
Improve Urban Environment

Shenzhen's land problems

High population density

High population density
Per Capita living space m2 on Big Cities

Scarce residential land

Scarce residential land
Land usage right transactions in Shenzhen, 2010-2020

Result - high real estate prices

Real estate prices in China big cities
Real estate prices in China big cities

The Story of Shenzhen

From a fishing village to China’s Silicon Valley in 40 years.

Key Events

Key Events

Breathtaking GDP growth

Breathtaking GDP growth

High-tech industry contributed more than a third of Shenzhen’s 2018 GDP

High-tech industry contributed more than a third of Shenzhen’s 2018 GDP

2020 Fortune Global top 500 companies

2020 Fortune Global top 500 companies

This article was initially published by KrAsia and Julianna Wu on the 25th of November 2020. Graphic by Julianna Wu. Sources: China Bureau of Statistics, World Bank, Securities Times, Fang.com, Guyu Data, Census and Statistics Department of Hong Kong, Fortune.


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