Hands up who’s been to Shenzhen recently? I’m embarrassed to confess that I’ve not been for over 25 years, unless a taxi drive last summer past the outskirts of the city on the way to the Artists Village counts. Well, I reckon things are passing me by at a rapid rate, given what Barry Wilson, proprietor of Barry Wilson Project Initiatives and Chairman of the Shenzhen British Chamber had to say at a recent British Business Association of Macao breakfast briefing.
Wilson is an old Asia hand, with the last 20 years spent in the business of troubleshooting, accessing and managing project feasibility studies, and planning and delivering sustainable design solutions related to land, drainage, water use, energy consumption and quality of life. His Hong Kong portfolio focuses on large scale public sector infrastructure projects and his Shenzhen studio concentrates on the problems related to rapid urbanization and city expansion.
With all this experience under his belt, Wilson came to give his audience an update on the incredible changes that have occurred over the last six years in Shenzhen. But first some background. China’s Five-Year Plan programme is a blue print that details the government’s main policy goals and development initiatives for a period of five years. The 13th Five-year Plan was adopted in March last year and is the first Five-Year Plan to be developed under President Xi Jinping’s leadership, and the first since China’s economy entered the “new normal” pace of economic growth. Outlining China’s goals, principles and targets for development through to 2020, it is interesting to note that they are heavily weighted towards environmental protection and sustainable development, topics close to Wilson’s heart.
As one of the pioneers of China’s new economy, Shenzhen has been reinventing itself; it’s now known as the “Silicon Valley of hardware” where the integration of innovation and manufacturing has made Shenzhen a rising incubator of innovative technology businesses. Following the central government’s 2014 initiative to encourage mass entrepreneurship and innovation, Shenzhen has been striving to provide a platform for new companies. Relatively low levels of traffic and air pollution compared with other major cities such as Beijing and Shanghai, is also proving to be an advantage to entice new businesses. Tech companies at the forefront of R&D like Huawei, Tencent, and DJI all have offices there. Some corporate headquarters such as Alibaba have even chosen to relocate from Beijing to Shenzhen.
Shenzhen’s transformation has happened at a mindboggling rate. It’s the test bed for design and creativity; everything that’s happening in China starts there. According to the Chinese Academy of Social Sciences (CASS) it is the most economically competitive city in China, overtaking second place Hong Kong, then Shanghai, Guangzhou and Taipei in an overall economic competitiveness ranking in 2014. Recent data indicates Shenzhen has overtaken Guangzhou as the third-largest city in China and is expected to soon surpass Shanghai.
Wilson pointed out that Shenzhen has the lowest energy and water consumption on the mainland; it ranks fourth in terms of sustainable competitiveness, and sixth for livability. The average population age is the lowest of all China cities. Shenzhen’s GDP in 2016 was up nine percent to 1.95 trillion Yuan (US$284 billion – similar to Hong Kong’s). At 4.05 percent of GDP, R&D spending was the highest per capita in China – by comparison, Hong Kong’s R&D spending was only 0.73 percent.
The Qianhai and Shekou areas of Shenzhen in the China (Guangdong) Pilot Free Trade Zone opened in 2015 with a focus on finance, modern logistics, information and technology services, and professional services. The development intention was to lead Shenzhen and the Pearl River Delta (PRD) to transform from blue collar to white collar, from the world’s factory to a major player in the innovation space. Qianhai has a number of unique supportive business incentives, including various subsidies and tax breaks and Hong Kong legal framework.
And the transportation links are nothing short of awesome. The Battle of the Bridges is in full swing. We think that the Hong Kong/Macau/Zhuhai Bridge is going to make a miraculous change to the PRD are. I tend to think that it’s rather too late; sure, the tourists will pile over in their coachloads from Hong Kong International Airport, but much of the targeted cargo movement is likely to use the existing Humen bridge which already connects Dongguan in the east with Guangzhou in the west. Connecting the same provinces further upstream is Humen 2 bridge, due to open in 2019.
The ShenZhong bridge from Shenzhen’s Boa’an International Airport into the heart of Zhongshan is due to open in 2021. And then there’s the high-speed railway from Shenzhen all the way west to Maoming.
There’s been a mobility revolution in Shenzhen too, from E-taxis to E-buses, E-bikes and E-charging points. No less than four GPS-based public bike platforms have arrived; Mobike, Bluegogo, Ofo and Xiaoming. The Shenzhen Metro, which opened in 2004, now has 11 lines. This is the same number that London’s Underground has, and that was opened 150 years ago in 1863. Two new lines and various extensions are under construction and this year will see the start of a further four lines.
Shenzhen’s ability to attract talent due to the jobs being offered by internet and finance companies headquartered in the area, has pushed up economic growth and property prices. Shenzhen surpassed Beijing and Shanghai last year to become the most expensive housing market on the mainland, the highest housing price-to-income ratio in China. Population growth is the highest among China’s four first-tier cities. With government calming interventions, the residential market has cooled considerably, so investment funds are moving into commercial space and there’s a huge quantity of grade A offices coming on line from this year.
Thankfully the place is not being ruined with all these commercial interests as so many other Chinese cities have been. Shenzhen is experiencing a new emphasis on development of culture and tourism promotion. Civic buildings are being regenerated, parks built, heritage areas protected and an international image is being promoted overseas.
Wilson forecasts yet further radical speed of change. “Expect the unexpected”, he ends his talk with, “and get over to Shenzhen yourselves to see what’s happening there!”
