How Shenzhen surpassed Hong Kong to become China’s hi-tech hub – within 40 years?

Asia World

Hi-tech

Shenzhen’s hi-tech industrial development zone was set up in September 1996, originally occupying 11.5 sq km of land. Last year the government announced plans to expand the zone to 159.5 sq km to house an additional 2,000 hi-tech enterprises. The hi-tech industrial estates contributed 34 per cent of Shenzhen’s GDP in 2018.

Key industries in Shenzhen

Why Shenzhen?

Being a special administrative region brings with it tax incentives and special policies and regulations; The Special Economic Zone policy allows foreign capital access to the Chinese market, offers benefits to the overseas investor, including a reduced level of taxes and exclusive regulations for foreign direct investments. It also helps those companies that have not been able to obtain profits through tax exemption, when the company becomes profitable, it can pay reduced taxes in the next five years.

Shenzhen is widely regarded as China’s Silicon Valley. Tencent, which owns WeChat and social networking platform QQ was founded in Shenzhen. Other hi-tech companies headquartered there include BGI (China’s largest genome company), BYD (electric cars and buses), Shunfeng (electronic commerce) as well as ZTE and Huawei (telecommunications).

Shenzhen has held the country’s No 1 spot for registering the most patents over the past decade. In 2017, Shenzhen companies filed almost 20,000 applications, about half of all the patents in China outperforming Hong Kong companies, which only filed 13,299 applications that year.

To help entrepreneurs identify successful businesses and trial products before starting mass manufacturing, the Shenzhen government offers workshops incentives to prototype, test and validate new products in the dynamic local market.

Thanks to the city’s creative and innovative environment there are an estimated 10,000 local start-ups. The city’s workforce is well-educated, well-trained and with an average age of 33, it is native to digital technology.

The map below is based on an official government document of Shenzhen’s hi-tech industrial estates from 2009-2015.