Shenzhen: Silicon Valley of China

Shenzhen was known among Thai people as the gate to mainland China from Hong Kong and a popular shopping place for B grade products. However, nowadays, whoever visits Shenzhen will be thrilled with the scene of a modern big city that is heading towards becoming a high-tech city. This article will introduce readers to Shenzhen in the 21st century that is even bestowed a nickname of “Silicon Valley of China”.


From a fishing village to a big city

Going back to 40 years ago, Shenzhen was just a small city near the shoreline. It was a border between mainland China and Hong Kong. But, when President Deng Xiaoping, a visionary leader who practiced liberal market to improve the economy in China and the man who came up with the quote: “It doesn't matter whether a cat is black or white, as long as it catches mice, it’s a good cat”, opened the southern coastal city. He turned it into the Special Economic Zone in 1979 to prepare for foreign investment. Among the first 4 Special Economic Zones; namely Shenzhen, Zhuhai, Shantou, and Xiamen; Shenzhen is located on the Pearl River Delta. It has developed leaps and bounds from an agricultural city, the fishing village with a population of less than 30 000 people, into the world’s leading technological city with more than 13 million population.

4 phases to become a high-end producer

From 1979 up to the present, Shenzhen divided its development into 4 stages which are:

Phase 1 (1979-1992). This phase focused mainly on using manpower for development. As one of the Special Economic Zones, many businesses from Hong Kong invested in Shenzhen, holding it as a fort for production, starting from basic industrial production and later on, the electronic and information industry. This made Shenzhen a part of the world’s manufacturing chain and paved their way to innovative technology and high-end technological product. As there were transnational investments, there was a surge of workforce from other regions of the country entering Shenzhen and it also caused Shenzhen to expand rapidly. There were residential development and various facilities such as port, power plant, road, communication, etc.

Phase 2 (1992-2002). In this decade, Shenzhen had become a business city and there were more business owners which were the results of becoming a Socialist Market Economy and financial innovation. At the same time, there was a change in the structure of the electronic industry in the world. All these resulted in investment and technology from big international companies, upgrading Shenzhen’s manufacturing industry from focusing on using manpower to capital and high technology such as communication devices. In the world’s manufacturing aspect, Shenzhen developed from lower to lower-medium and, in this phase, there was growth in the high-tech industry, logistics, and finance by local entrepreneurs as well.

Phase 3 (2003-2012). Shenzhen had made a significant change when the whole of China changed its economic system into Socialist Market Economy. As a result, Shenzhen did not have any advantage from being the Special Economic Zone anymore. Besides, the city was faced with a lack of resources like land, energy, and water from the increasing population. Therefore, Shenzhen found a need to establish new strength by promoting innovation. In the production aspect, there was a promotion of strategic industries such as biotechnology, the internet, new energy, new generation IT, etc. This pushed Shenzhen to have its place in the world’s lower-medium production in chain.

And during Phase 4 (2013-2018), in these recent years, Shenzhen had successfully entered the developing stages that were driven by innovation and risen to the top in the world’s manufacturing chain. With the effect of the policy to promote systematic innovative technology, Shenzhen was able to have an ecosystem, capital, and talents. Also, together with the basic structure, conducive environment for innovative development, growth of start-up and budget, Shenzhen was able to establish new innovative manufacturing that was able to attract resources from the global stage. This can be seen from 2012-2017 that the number of high-tech products increased 3.9 times, grew 12.2% yearly from 413 billion Yuan to 735 billion Yuan. This was accounted for 32.8% of the GDP. Moreover, more than 2 000 companies that are located in Shenzhen have invested in more than 120 countries in every region globally. This includes famous brands like Huawei, ZTE, CIMC, and BYD that are leaders in technological innovation and have expanded their business and production all over the world.

Becoming a high-technology city of the East

From the fishing village in the past, with a consistent policy that promotes technology like AI 2023 policy, Shenzhen of today is being referred to as “Silicon Valley of China” because it is the home to leading Chinese Tech Company like Huawei, the big producer of network hardware and communicating devices; Tencent, a social platform; WeChat; QQ; BYD, the manufacturer of electronic cars; BGI, bio-science researcher; DJI, the drone and aerial technology as well as foreign Tech Company like SenseTime, AI business from Hong Kong. Lately, Tencent has a megaproject plan to build “Net City”, the future city, on an area of more than 2 million meter square that is going to be where its research and development center is and it will also be a residential area. The special part of this project would be that it is a city that urban lifestyle and nature will be blended together with the emphasis on the green area, bicycle lane, park and there will be no usage of cars that all will be connected to public transport.

Nevertheless, many analysts think that Shenzhen will gradually gain more importance with its readiness in both software and hardware. This differs from Silicon Valley of USA that their only forte is software. Also, before this, the Chinese government had announced the trial of using digital Yuan money and Shenzhen is one of the first 4 trial cities to use digital Yuan as well as the world’s first city to try 5G.

Now, all eyes on Shenzhen, a city of technology of the East that has risen to become one of the global innovation centers, making “Made in China” products not so simple anymore.