Shenzhen aims to be world hub of innovation
President to speak in city as plan set to provide boost to technology, creativity
Shenzhen, a high-tech hub adjacent to Hong Kong, is expected to further grow into a center of innovation, entrepreneurship and creativity with global influence and strong policy support from the central government, experts said.
They said they expect China’s detailed plan to build Shenzhen into a pilot demonstration area of socialism with Chinese characteristics will boost high-quality development in the city, further drive the development of the Guangdong-Hong KongMacao Greater Bay Area and set a model for other Chinese cities in economic transformation.
The new plan came as this year marked the 40th anniversary of Shenzhen’s designation as China’s first special economic zone. President Xi Jinping will attend a celebration in Shenzhen on Wednesday and deliver a speech to mark the anniversary, Xinhua reported on Monday.
The ChiNext index, which tracks Shenzhen’s innovative startup-heavy board, rose 3.91 percent to 2,777.39 points on Monday.
“Over the past 40 years, Shenzhen has been transformed from a small fishing village into an international city full of charm, vitality, innovation and creativity, ” said Wang Changlin, president of the Academy of Macroeconomic Research of the National Development and Reform Commission. “However, there are still gaps in the levels of innovation, science and technology education and public service between Shenzhen and innovative cities with global influence.
“With a booming population and rapid economic development, Shenzhen also faces new constraints and problems in growth. To pursue high-quality development, it is necessary for Shenzhen, a modern metropolis with a population of more than 20 million, to rely on reforms to inject new impetus and overcome difficulties,” Wang said.
“With the support of preferential policies outlined in the plan, Shenzhen will not only foster high-quality development, but also will play a key role in boosting the development of the Greater Bay Area and the nation.”
Last year, Shenzhen’s gross domestic product exceeded 2.6 trillion yuan ($385.5 billion), comparable to Singapore. The output of the high-tech industry in Shenzhen — mainly comprising electronics and information, biopharmaceuticals, advanced manufacturing, new energy and new materials businesses — rose 10.08 percent year-on-year, according to official data.
Under the three-step plan issued by the general offices of the Communist Party of China Central Committee and the State Council, reforms will be launched this year in fields such as market-based allocation of production factors, business environment optimization and the utilization of urban space. The first list of pilot reforms will be formulated and implemented this year.
By 2022, significant progress is to be made. By 2025, reforms are expected to achieve landmark results, and pilot reform tasks are expected to be basically complete by then.
“Over decades, Shenzhen has become the window and experimental field for China’s reform and opening-up. The new plan marks a key move to deepen reforms and expand opening-up at a higher level,” said Wang Yiming, former deputy director of the Development Research Center of the State Council.
Preferential policies, including fostering a business-friendly environment, easing market access and opening more industries to foreign investors, will boost investment, introduce more high technology and attract talent to Shenzhen, Wang Yiming said. “It will help the country create a new economic development pattern of ‘dual circulation’ that uses the domestic market as the mainstay while domestic and foreign markets complement each other.”
The new plan stresses accelerating the cultivation of the data market, which is in line with the technological revolution and will help further drive digital transformation, he said.
Liu Shijin, deputy director of the Economic Committee of the National Committee of the Chinese People’s Political Consultative Conference, said the free flow of production factors in land, labor, capital, technology and data will help vitalize the market and boost innovation.
“More efforts are also needed to select innovative talent willing to carry out bolder reforms, explore incentives and create a fault-tolerant mechanism to encourage reforms,” Liu added.
As a child, Zhan Kada had developed a passion for playing with building blocks after his father brought them back from an overseas business trip in 1994.
“My father was then inspired to create an original Chinese building block brand,” said Zhan, general manager of Guangdong Qman Toys Industry Co Ltd.
Before creating Qman, the building block brand, Zhan’s father had already owned a plastic molding factory in Chenghai district, Shantou, Guangdong province, which is widely known as one of China’s leading toy manufacturing bases.
The factory, founded in 1984 — four years after the establishment of the Shantou Special Economic Zone — was originally focused on toy mold processing.
“At a time when market demand for qualified toys surpassed supply in the 1980s, there were many opportunities for us to start making toys and related processing businesses,” said Zhan.
Transforming the company’s business from simply processing to creating its own brand helped greatly boost Qman’s market performance, according to Zhan.
“When we were engaged in simply assembling toys, the orders were actually from customers. After having our own brand, the company’s entire business changed — from design, production and sales,” said Zhan.
Following years of innovation and market expansion, the company has become one of the leading plastic building block producers in the domestic market, with more than 20 series being sold to over 30 provinces, municipalities and autonomous regions.
The company realized 123 million yuan ($18.16 million) in sales in 2019, also selling its innovative products to more than 40 countries and regions.
“By building our own brand, we could invest more in innovation and market promotion, which has eventually helped increase business profits,” Zhan said.
Qman’s growth over the past decades mirrored thousands of local toy companies’ development in Shantou — from processing to creating.
Since the 1980s, there have been 16,410 toy companies registered in Chenghai district, with industrial output of 58 billion yuan in 2019, accounting for 21.8 percent of the country’s total, according to a Chenghai toy industry association.
Driven by the toy industry, Shantou’s economy developed by an average annual growth rate of 12.5 percent from 1980 to 269.41 billion yuan in 2019, according to the local government.
“It was a tremendous change since the 1980s — we grew from a small plastic factory to a global toymaker. For us toy companies, we will focus more on innovation to make sustainable business growth in the years ahead,” Zhan said.
According to Zhan, the company — which has invested about 20 percent of its revenue into research and development — will make more efforts in the production of toys for adults as overseas and domestic markets have large demand for such products.
“There is a market trend — more adults have started to buy toys as they are looking to relive childhood memories,” Zhan added.
As the COVID-19 pandemic has had a huge impact on exports since early this year, Zhan said the company had to shift its business to the domestic market.
“We have developed a stronger relationship with online trading platforms which provide more innovative products and services for domestic buyers in the past several months,” said Zhan.
An increasing number of local toymakers have resumed full production, according to the Chenghai i ndustry and i nformation bureau.
Chenghai’s toy sector industrial value topped 13.5 billion yuan in the first half, a year-on-year increase of 5 percent, according to the bureau.
The district’s exports of toys also grew by 8.5 percent year-on-year to 2.68 billion yuan in the first six months.
“The increased industrial value and exports were mainly driven by boosted efforts in innovation, which eventually helped increase added value of toy products,” said Wang Chubin, Chenghai district chief.