Tale of two Guangdong cities: the reinvention of Shenzhen
Twin powerhouses of southern China face starkly different futures: both were major manufacturing engines but one has shifted gear into the new economy while the other is left spinning its wheels.
Hong Kong businessman Peter Chai Kwong-wah faced a tough choice: after 20 years of running a toy factory in Shenzhen, profits were locked in a downward spiral. At age 66, Chai could close up shop and retire or he could try to re-energise the business by relocating to another Asian country where the overheads were lower. He gave it another go and moved operations to Vietnam.
At around the same time, in another part of the city, Frenchman Homeric de Sarthe made a similar life-changing choice. After living in China for several years, the 27-year-old decided the time was right to launch his social media app, Shosha.
READ MORE: Stuck in the past: How China’s manufacturing powerhouse of Dongguan got left behind
Chai and Sarthe represent the broader transformation that Shenzhen is undergoing, shifting from a manufacturing powerhouse to a global technology hub. Its success in managing the transition is owed partly to forward-thinking policies, observers say. But it’s also due to its residents, many of whom originate from elsewhere and are comfortable taking risks, accepting failure and trying again.
These traits have helped Shenzhen to weather the economic headwinds better than most mainland cities. As Beijing limped along on 6.9 per cent growth in the first nine months, Shenzhen managed 8.9 per cent.
READ MORE: Surprise, Hong Kong’s next door neighbour Shenzhen is the priciest city in China
That expansion was partly on the back of six emerging industries – biotechnology, the internet, new energy, new materials, information technology, and cultural and creative industries, which together grew 17 per cent last year.