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Shenzhen, home to social media and video game giant Tencent, plans to become China’s leading hub of unicorns, according to a new plan published this month. Photo: Bloomberg

China’s tech hub Shenzhen, home to Huawei and Tencent, wants to become a ‘unicorn’ paradise

  • The city plans to grow more highly valued tech start-ups and help them seek funding on stock exchanges, officials said in a new proposal
  • President Xi Jinping hand-picked Shenzhen to become a model socialist city in innovation

The southern tech hub of Shenzhen, known as China's Silicon Valley, has drafted a plan to cultivate more “unicorn” companies and help them achieve public listings, as the city competes with Beijing, Shanghai and Hangzhou as the top base for highly valued tech start-ups in the world's second-largest economy.

Under the blueprint unveiled by Shenzhen’s Development and Reform Commission last week, the city wants to build a pool of unicorns – privately-held technology start-ups worth at least US$1 billion – in areas including biotechnology, semiconductors, quantum technology and other emerging industries of strategic importance.

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The Shenzhen government said it will offer various funding support to eligible start-ups, including encouraging state-owned funds to invest directly in the companies or take part in their incubation.

The city also pledged to support unicorns to float their shares, or help those that are already listed abroad to seek listings at home. Another goal is to attract overseas unicorns to set up branches in Shenzhen.

Shenzhen officials will work with third-party think tanks and venture capitalists to draw up standards to identify and assess promising unicorns, which will receive a “service resource package” with tailor-made support from the government, investors and other parties, according to the plan.

Authorities are soliciting public opinion on the proposal until November 21.

The draft is part of a broader effort by Shenzhen to support private companies in different growth stages and drive the city’s economy forward to “speed up the cultivation of market players”, officials said.

The plan also highlighted the government’s support for hi-tech companies in general, especially small and medium-sized enterprises (SMEs), in research and development. The city wants to identify a group of SMEs targeting so-called vertical markets in areas such as core basic components and materials by providing them with resources in talent and branding.

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Shenzhen, hand-picked by President Xi Jinping in 2019 to serve as a model “socialist” city, has been a testing ground for China’s market-oriented reforms. Once a sleepy fishing village just a few decades ago, the city is now home to about 14,000 hi-tech firms, including some of the country’s biggest names such as telecommunications equipment makers Huawei Technologies Co and ZTE, as well as internet giant Tencent Holdings, operator of the world’s biggest video game business by revenue and multipurpose super app WeChat.

Shenzhen has previously pledged to invest more than 700 billion yuan (US$109 billion) in hi-tech research and development in the coming five years to reinforce its position as China’s innovation powerhouse.