Shenzhen reveals tech plans for industrial resurgence
The southern city of Shenzhen where China’s economic transformation began more than four decades ago, and which has seen its hi-tech industry become the bellwether for growth, is vowing to double down on efforts to shore up the sector as the nation strives to move up the industrial chain and counteract U.S.-led tech restrictions.
Renowned for its cutting-edge industrial chains that have earned it the nickname “China’s Silicon Valley,” Shenzhen plans to achieve industrial output of more than $209 billion in its strategic emerging industries in 2024, which would represent a growth pace of more than 7 percent.
That’s a lofty target, given the high base of comparison from 2023, when the tech hub’s strategic industries — including those specializing in new energy and artificial intelligence — grew by 8 percent and accounted for 41.9 percent of the city’s gross domestic product (GDP).
Shenzhen’s overall economy grew by 6 percent in 2023, in line with its official target and outpacing both the 4.6 percent growth in Guangzhou, the capital of Guangdong province, and the projected 3.2 percent growth in Hong Kong, just across the border.
This year, Shenzhen aims to grow its economy by 5.5 percent, city mayor Qin Weizhong said at a parliamentary meeting last month. That goal exceeds the anticipated 2024 growths set by Guangzhou and Shanghai of 5 pe cent.
“We have to break free of the West’s tech strangulation, break through their ‘small-yard, highfence’ strategy, and forge strong scientific and technological innovation,” Qin said.
The referenced strategy refers to Washington’s bans or restrictions on the export of hi-tech products to China, as well as related investment and talent flows.
Home of Huawei, BYD, DJI
As China’s pre-eminent tech hub, Shenzhen is home to industry giants such as Huawei Technologies, BYD and DJI. Yet, dozens of companies headquartered here are now on Washington’s “Entity List” that comprises companies and individuals from a range of countries, and which represents perceived threats to U.S. national security.
Nonetheless, Shenzhen is shouldering the weight of innovation to achieve Chinese tech breakthroughs in strategic industries while propelling the entire country up the value chain to hedge against economic headwinds, punctuated by four “D’s” — debt, deflation, de-risking and demographics.
“Shenzhen was the first municipal victim in the U.S.-China tech war, and this shows that the city has the capability to even affect global markets,” said Peng Peng, executive chairman of the Guangdong Society of Reform.
“Therefore, Shenzhen has a very urgent task of stabilizing China’s industrial and supply chain, and needs to provide experience in industrial upgrading nationwide,” Peng added, noting how the city’s new plans for a tech revamp remain closely related to a broader transformation of the world’s second-largest economy.
According to its governmental report, Shenzhen aims to further upgrade its pillar industries - including those dealing in communications and smart devices — while exploring prospects in emerging sectors such as internet-connected vehicles, aerospace, and the low-altitude economy, which could include drones and even flying cars.
Fostering future industries
The city is also striving for further developments in automobiles, semiconductors and high-end precision instruments, while fostering future industries that include intelligent robots, synthetic biology, brain science, cellular genetics and quantum information.
Shenzhen, which remains in a prominent position to lead integration in the Greater Bay Area (GBA), also vowed to establish an international commercial dispute resolution service center and an international legal services center, which appear intended to help resolve disputes involving foreign investors.
The Greater Bay Area refers to the central government’s ambitious scheme to link the cities of Hong Kong, Macau, Guangzhou, Shenzhen, Zhuhai, Foshan, Zhongshan, Dongguan, Huizhou, Jiangmen and Zhaoqing into an integrated economic and business hub.
Additionally, Shenzhen intends to “add more than 20 high-end scientific research institutes, enterprise R&D centers and high-level scientific research teams,” but details remained scarce.
Last year, exports of Shenzhen’s “new three” —electric vehicles, solar cells and lithium batteries — rose by 33.9 percent, which surpassed the national level of 29.9 percent and was higher than the 19.7 percent recorded in the Yangtze River Delta, another big manufacturing hub and economic driver for China.
The “new three” reflects a shift from China’s “old three” pillars of exports that comprised clothing, home appliances and furniture.
“The 0.5-percentage-point reduction in Shenzhen’s growth target for 2024 is due to last year’s high base, but its goals for fixed-asset investment, retail sales and trade are very similar,” Peng said.
“So, given all of the external uncertainties in the environment, Shenzhen could play a much bigger role in the GBA, and even in science and technological innovations and in counterbalancing the West, for the whole country,” Peng added.