US sanctions on China’s Huawei spell trouble for Shenzhen economy

When Ren Zhengfei, a former officer in the People’s Liberation Army, established Huawei in the Shenzhen special economic zone in 1987, the boomtown was still struggling to gain a meaningful spot in China’s economic landscape. It was dwarfed not only by neighbouring Hong Kong, but by other mainland Chinese cities.

Few could have imagined then that four decades later the one-time fishing village would emerge as the poster child for Chinese economic development. Fewer still would have predicted that Huawei, now a key part of the city’s economy, would become a global telecommunications equipment giant that Washington sees as a security threat and potential challenger to the US-led world order.

However, as Shenzhen celebrates its 40th anniversary as one of China’s four special economic zones, it is unclear whether the city of 13 million can keep shining as the country heads into a turbulent new era.

For Huawei, its luck is running out as Washington has relentlessly tried to prevent its involvement in next generation 5G communications networks around the globe while restricting the company’s access to vital American tech components.