Shenzhen’s unaffordable home prices could hurt Beijing’s plan to turn the Greater Bay Area tech hub into model city

Name: China to make Shenzhen into a model city with bolder reforms
Uploaded: 2020-10-14T03:30:07.000Z
Duration: 1 min 48 s
Description: China to make Shenzhen into a model city with bolder reforms

As Shenzhen grapples with the issue of finite land supply, tech workers who want to move to the city will be confronted by rapidly increasing property prices

Average home price in Shenzhen tripled to 56,100 yuan (US$8,330) per square metre in the 10 years to 2019

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Shenzhen has been granted autonomy by Beijing on a wide range of local policies, from land use to hiring global talent. Photo: Xinhua

Daniel RenandSandy Li

Published: 11:30am, 14 Oct 2020Updated: 1:55pm, 14 Oct 2020

Beijing’s blueprint to develop Shenzhen and showcase it a centrepiece of its economic reform and attract talent could hit a major stumbling block in the form of unaffordable housing prices, say analysts.

As part of a five-year plan to build the city into a “core engine” of reform by 2025, Shenzhen has been granted greater autonomy in using rural land for development purposes. The move, which will ease land supply crunch, is aimed at reining in escalating home prices and making the city more affordable to live. It was speculated that Beijing would give Shenzhen “additional land” by allowing it to absorb some neighbouring towns into its territory, but the central government did not do so.

“Home prices take up a major chunk of the cost of living,” said Hong Lingyun, a senior executive with recruitment services firm Joinlink Consulting. She added that young professionals are increasingly using it as a gauge of a city’s attractiveness to work and live, and could be put off by the cost of buying or even renting property.

The former fishing village was turned into the first of the country’s 220 special economic zones four decades ago. It was picked to become what the central government calls a “socialist model city” – an experimental urban centre where policies from tax reforms to property ownership and even currency liberalisation can take place.

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China to make Shenzhen into a model city with bolder reforms

President Xi Jinping will visit the Greater Bay Area city on Wednesday to mark 40 years since it was set up as a special economic zone.