Shenzhen's reputation as a dirty factory town is a thing of the past. Photo: Getty
Shenzhen's reputation as a dirty factory town is a thing of the past. Photo: Getty
ChinaEconomyTale of two cities

Shenzhen: shaping its own Chinese dream

As China shifts gear from labor-intensive industries to higher-value innovation, some cities are adjusting better than others. Shenzhen is thriving

October 18, 2016 3:25 PM (UTC+8)

With a practiced hand, Phoebe Chen performs the honors in a tiny tea ceremony at her office in Shenzhen’s tallest skyscraper.

Chen is CEO of Harmony Family Office, a start-up asset management company. As a visitor, it feels like one has entered an ancient teahouse, one with low, chunky wooden furniture and walls covered in calligraphy. A water fountain stands in the foyer beside a bamboo vase.

When our clients come to us, they should feel that we care about them,” says Chen, clad in traditional Chinese garments. “If we are going to help them manage their assets and inheritance from one generation to the next, they have to feel a sense of harmony here. Many of our clients trust neither the government nor big banks, so they have to be able to trust us.”

Harmony Family Office is just one of many examples of how Shenzhen, located on mainland China’s border with Hong Kong, has been transformed from a dirty factory town into a modern metropolis with a modern economy.

Phoebe Chen and her three colleagues all made their careers in international banking, working for institutions such as Citibank and Standard Chartered. Their new firm, aimed at China’s super rich — people with fortunes of at least 10 million yuan (US$1.5 million) — is their way of generating their own fortune but also of working on their own terms.

The dirtiest factories have left Shenzhen,” she says. “Today, the city is built on high finance, hi-tech and creativity. There is a special atmosphere that you won’t find anywhere else. There is a constant energy and a special dynamic here.”

Shenzhen surpassed Hong Kong last year as China’s most competitive region. Now, the city is even likely to overtake Hong Kong in terms of local GDP

Thirty years ago, Shenzhen was a sleepy fishing village. Today, it is a city of more than 10 million inhabitants and home to some of the world’s largest companies, including the telecoms conglomerate Huawei, the e-commerce giant Tencent and electric carmaker BYD Auto. The city has the fourth largest local economy in the country and invests more than 4 percent of its GDP annually in research and development, putting it on a par with South Korea and Sweden.

Shenzhen surpassed Hong Kong last year as China’s most competitive region. Now, the city is even likely to overtake Hong Kong in terms of local GDP

Today, innovation-driven sectors such as biotechnology, ICT and new energy represent 40 percent of Shenzhen’s economy, higher than any other city in China, according to its mayor, Xu Qin.

But it’s not just business and the local economy that are growing. In areas such as lifestyle and living environments the city has undergone an enormous change, adding new parks and restaurant areas, and improving air quality. Jessica, an art gallery worker who grew up in Shenzhen, says that there is an entirely different pulse in the city compared to just a few years ago.

My friends and I used to always head down to Hong Kong to go clubbing and find new trends and cultures before,” she said. “Now we stay here. This is where’s things are happening.”

One example of that change is OCT Loft. This is an old factory area that has been transformed into one of the country’s most vibrant cultural and artistic enclaves. Art galleries and book cafes jostle for space with art studios and music clubs on leafy pedestrian walkways. Building fronts still maintain their factory-roughened style but many of the stores and restaurants are meticulously styled.

Here you’ll find Mann Li’s café, Gee Coffee. With the scent of freshly-ground coffee in the air, local hipsters mingle with tourists and freelancers with their laptops. Mann Li first encountered coffee when he was exporting electronic components to Ethiopia and decided to start shipping beans back to China.

When the market prices for beans plummeted a few years ago, we were sitting on a huge inventory and lost almost all our money,” he says as we sip espressos, perhaps the best I have ever had in Asia. “But that made no difference. I had been overcome with a burning interest in coffee culture.” 

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Luming Zhou is known as Shenzhen’s “Father of Tech Startups”. Picture: Johan Nylander

His plan is to expand by one or two new cafes every year. But he strikes a note of caution. If you want to make money, do not open a cafe. I am doing this because I love coffee. It is an incredibly tough job, but also a great way of life,” he said.

This ethos — that business is not just about money — is typical of the new generation in Shenzhen. Where the previous generation worked hard and saved for the future, younger people have much less reverence for money, reflecting a similar trend in the West.

During the course of several trips to Shenzhen, I asked residents both young and old what was driving the city. What is the key to its success? Everyone gave me the same answer: an unabashed spirit of entrepreneurship.

At the launch of a new business incubator, I meet Luming Zhou. For 20 years, he worked for the Chinese government and was responsible for turning Shenzhen into a hub for hi-tech firms, an achievement for which he is now known as the “Father of Tech Startups”. Unsatisfied, he founded China Radical Innovator, an incubator company for firms in sectors such as e-commerce, digital health and IT security.

The government is poor at making market-oriented decisions,” he says. “So I quit in order to better bring together innovation among entrepreneurs.”

What is the key to its success? Everyone gave me the same answer: an unabashed spirit of entrepreneurship

The opening event is bursting with activity. Enthusiastic young pioneers mingle with investors, corporate executives and local politicians. Champagne and chocolate delicacies are in abundance, but one group from a health tech start-up company are glued to their screens trying to finish a project. Quotes from famous thinkers ranging from Salvador Dali to Steve Jobs cover the walls.

Introducing reforms in China is a step-by-step process and Shenzhen is often used as a testing ground. Developments that are banned in other places in China are allowed here, explains Zhou. The bureaucracy is described as far more flexible than in other places.

It’s easier to commercialize intellectual property rights here, such as innovations that have been developed at state universities,” he says. “That has been encouraged by the central government. You see, here is where we build the Chinese dream.”

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