Housing crisis in China’s ‘Silicon Valley’: Huawei, other hi-tech giants head for cheaper cities as rising costs deter talent
Home prices in Shenzhen surged almost 50 per cent last year and are now more than double those in provincial capital
Shenzhen, the southern city known as China’s Silicon Valley, could be losing its lustre due to a housing affordability crisis much like the one that struck the American original.
Led by tech behemoth Huawei, talent, resources and money have been flowing out of Shenzhen to cheaper locations, in particularly Dongguan, about an hour’s drive north.
Nanshan, in southwestern Shenzhen, has been the breeding ground for its hundreds of hi-tech start-ups and listed companies, housing the mainland’s top innovation powerhouses such as Tencent and ZTE. However, its prohibitive property prices are scaring off talent and causing a headache for young hi-tech firms looking to expand their operations.
It is getting harder to get hold of ideal job candidates, and what we can do is to offer higher salaries
It’s a situation that has startling parallels with the plight of workers on low incomes in Silicon Valley, California, due to what has become known as the Facebook effect, where nurses and firefighters have been priced out of the local property market.
David Huang, co-founder of Sleepace, which develops sleep-quality trackers, has seen his five-man start-up, launched five years ago, become a firm with 81 employees that sells its patented gadgets in more than 60 countries.