China Daily Global Edition (USA)
Innovation continues to fuel Shenzhen’s growth
R&D spending in entrepreneurial hub has helped city’s GDP more than double in past 10 years
Editor’s note: In this series, China Daily looks at some of the areas in which major progress has been made in the 10 years since the 18th National Congress of the Communist Party of China was held in November 2012.
Looking out from an office window in Shenzhen, Guangdong province, entrepreneur Zhou Jian recalled how factories and old villages once stood there. Now, however, the area has been transformed into a large, high-tech industrial park that fosters the growth of scientific and technological innovation enterprises.
In fact, the office area of Zhou’s startup at Nanshan iPark has expanded from one floor to nine.
Zhou is among the innovators pursuing their dreams in Shenzhen. Ten years ago, he established UBTech Robotics, which has since developed into one of the world’s top designers and manufacturers of intelligent humanoid robots.
As a pioneer of China’s reform and opening-up, Shenzhen has long embraced innovation, and the past decade has witnessed its innovative “DNA” playing a unique role in driving economic growth.
Shenzhen was the first stop that Xi Jinping chose to visit on his first inspection tour after being elected general secretary of the Communist Party of China Central Committee during the 18th National Congress of the CPC in 2012. Since then, he has visited the city two more times to show China’s determination in pursuing expansion of reform and opening-up.
‘Primary driving force’
During a visit to Shenzhen in October 2020 to celebrate the 40th anniversary of the founding of Shenzhen Special Economic Zone, President Xi identified the valuable experience of Shenzhen, including “taking innovation as the primary driving force”.
Xi also stressed that Shenzhen should modernize its urban governance system and capacity through innovation, and solve problems in urban governance with a rule-of-law mindset and methods.
Innovation has been driving up Shenzhen’s economic growth, improving the business environment and benefiting people’s lives in various ways. In the past decade, Shenzhen’s gross domestic product has surged from 1.295 trillion yuan ($192 billion) in 2012 to 3 trillion yuan in 2021.
The southern coastal city, known for its scientific and technological innovation, has been increasing investment in research and development. In 2021, the total R&D investment accounted for 5.46 percent of the city’s GDP, ranking among the top in China, while the proportion is about 3.81 percent in 2012, according to government statistics.
According to data from the Shenzhen Administration for Market Regulation, the city ranks at the top nationally in entrepreneurship density, with the total number of market entities reaching about 3.8 million in 2021, the city’s permanent population standing at 17.68 million, and more than one in 10 people having their own business.
However, technological innovation has never been smooth sailing. The first obstacle for Zhou Jian’s startup was to make the servo actuator — a core component used to induce or control motion in mechanical systems that is highly technological and expensive and provided by just a handful of foreign producers.
It took his team about five years to independently develop the high-performance servo actuators and algorithms needed for movement control, computer vision, autonomous navigation and positioning of the company’s robotic devices.
During the darkest time, he recalled that he had to sell his car and apartment, and move the startup to an industrial park far from the downtown area to save on rent.
Shenzhen began to give priority in 2013 to five “future industries”, including artificial intelligence robots, wearable devices and other smart equipment. A detailed five-year plan for bolstering these fields through technological and capital support was released the following year.
A number of incubators have been set up, with preferential policies and rental discounts to attract and cultivate innovative enterprises, especially those in emerging industries.
Zhou had applied to locate to one of the facilities in Nanshan iPark but failed to meet the requirement for the total amount of taxes paid.
“But I was not refused directly,” he said. “On the contrary, the managers of Nanshan iPark reached out to me to learn more about our production,” and eventually UBTech was approved to move in.
He said the surging number of entrepreneurs in Shenzhen also boosted his confidence in pursuing his dream.
“Shenzhen is one of the cities with the best combination of capital and technology in the country, and both the government and investment platforms pay great attention to scientific and technological innovation enterprises,” he said.
The city has established about 20 advanced manufacturing industrial parks in order to augment industrial chains and clusters. In 2021, the added value of strategic emerging industries reached 1.12 trillion yuan, accounting for 38.6 percent of Shenzhen’s GDP.
Shenzhen’s favorable investment environment has attracted many startups and talent from the Hong Kong and Macao special administrative regions. For instance, the Qianhai Shenzhen-Hong Kong Youth Innovation and Entrepreneur Hub had welcomed more than 150 Hong Kong startups by the end of 2021.
In addition, Shenzhen and Hong Kong are jointly establishing the Hong KongShenzhen Innovation and Technology Park in the Lok Ma Chau Loop, a major platform of cooperation in the Guangdong-Hong Kong-Macao Greater Bay Area.
So far, more than 100 innovative projects have been set up in the park, and Hong Kong University of Science and Technology has set up an incubator, Blue Bay, to help commercialize the school’s scientific research results.
Besides technology, the city has made strides in institutional innovation with a series of first-in-China regulations unveiled over the past 10 years, including those regarding individual bankruptcy, data management and a punitive compensation system for intellectual property infringement.
Bankruptcy ruling
China’s first regulation on individual bankruptcy, for example, can provide a second chance for businesspeople. Since the regulation took effect on March 1, 2021, the Shenzhen court had reviewed more than 940 individual bankruptcy cases as of the beginning of this year, covering the three procedures of liquidation, restructuring and reconciliation under the new regulation.
In June 2021, the Shenzhen Intermediate People’s Court made the nation’s first bankruptcy ruling regarding an individual.
A business owner surnamed Hu had to close her store six years ago due to external reasons, and owed 4.8 million yuan to creditors. In 2018, she sold her house and used all of the 2.6 million yuan in proceeds to help pay her debts.
She continued to pay more each month since then, but her income was cut off entirely in 2020.
“I still want to pay off my debts, but the reality is I just can’t make it,” she is quoted as saying in a news release from the court.
Her payment was overdue for more than a
year, and the accumulated debt pushed her to “the darkest days” of her life, she said.
The individual bankruptcy judgment gave Hu a chance by exempting her from paying any remaining debt following a three-year observation period, during which she needs to report her income and spending, and continue to make payments toward her debts. Hu said it was like being “reborn”.
“In a few years, we will be free from debt. ... Regulations and laws are not ruthless, and we really need to believe in the law.”
The regulation sets up a system for entities to withdraw from the market by rule of law, but it does not help them avoid paying debts, said Cao Qixuan, chief judge of the Shenzhen Bankruptcy Court at the Shenzhen Intermediate People’s Court.
He said he believes that Shenzhen “needs such a system and should take more responsibility for making new rules, because the city has diversified and prosperous commercial activities.
“We have fully activated the personal bankruptcy system design, popularized the concept of individual bankruptcy and protected the vitality of innovation and entrepreneurship,” Cao said.
“Shenzhen has accumulated valuable experience for the national practice of an individual bankruptcy system,” he added.
Innovative reform measures have also brought down-to-earth benefits to people’s lives. The University of Hong Kong-Shenzhen Hospital, which opened in 2012, was built and funded by the Shenzhen government and has become an integral part of the nation’s medical reform process.
It is the first hospital to pilot the Hong Kong and Macao Medicine and Equipment Connect policy, which was issued by the
National Medical Products Administration in November 2020.
The program allows designated mainland hospitals to use Hong Kong-approved drugs and medical devices without prior certification from the National Medical Products Administration, which otherwise could take years for approval.
According to the hospital, 13 urgently needed drugs and four medical devices had been imported as of March under the program, benefiting more than 450 people.
The innovative medical policy benefits not only local residents but also patients in other areas of the mainland. The first medical device obtained under the medical connect program was used to perform an operation on a 9-year-old boy who is from a small town in Hebei province and who has severe scoliosis, a medical condition in which a person’s spine has a sideways curve.
While conventional treatment would involve inserting a growth rod into the child’s back, a surgical procedure that would need to be repeated every six months until the boy fully recovered, the new treatment introduced from Hong Kong required a single minimally invasive operation that was performed at the University of Hong KongShenzhen Hospital.
Integration explored
Moreover, Lo Chung-mau, secretary for health of the sixth-term Hong Kong SAR government and former chief executive of the University of Hong Kong-Shenzhen Hospital, said the hospital is exploring new ways to integrate the mainland and international medical training systems in order to bring in more top international medical professionals.
Lo said that he is encouraged by the central government’s reform measures supporting Shenzhen’s building of a pilot zone for socialism with Chinese characteristics, since the measures mention medical care in particular.
The next mission is to further promote cross-boundary medical cooperation and training, Lo said.
“In the past decade of reform, we remained true to the original aspiration of exploring more innovative methods in order to provide pilot experiences to cross-boundary healthcare and building in Shenzhen a pilot demonstration area for socialism with Chinese characteristics,” he said.
The CPC Central Committee and the State Council, China’s Cabinet, unveiled a guideline in 2019 on supporting Shenzhen in building a pilot demonstration area of socialism with Chinese characteristics. In 2020, a detailed implementation plan for the guideline was released to support Shenzhen with 40 major reform measures.
“In the next stage, we will firmly shoulder the historic mission of building a pilot demonstration zone and take the lead in building a world-class international, innovative and modern city,” Vice-Mayor Huang Min said earlier this year.
International talent and industry heavyweights are swarming to the thriving city. In 2021, Shenzhen’s import and export of goods reached a record high of 3.54 trillion yuan, ranking first in China for the 29th consecutive year, according to Shenzhen Customs data. More than 6,000 foreign-invested enterprises have been established in the city.
In particular, the Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone, approved in 2010 by the State Council, has become a hub for Hong Kong and Macao enterprises and investors, as well as for cross-boundary cooperation breakthroughs, Huang said.
In 2021, the number of Hong Kong-invested enterprises in Qianhai totaled 11,900 — double the number in the previous year.
Qianhai has launched a variety of pioneer measures to promote the integration of Shenzhen and Hong Kong, including the first joint venture between the mainland and Hong Kong in the legal profession, an international arbitration center, and the first investments under the Cross-boundary Wealth Management Connect program.