Updated: Jun 17, 2021
Guangdong province is in the South of China and is surrounded by the provinces of Fujian, Jiangxi, Hunan, and Guangxi. Before the communists came into power, the province of Guangdong was characterized by fertile land in valleys and very poor land in hills. After the People’s Republic of China was established in 1949, between 1962 and 1964, a decollectivization campaign was launched by the CPC, allowing new infrastructures such as the extent of hydraulic developments and great progress due to the just leadership of the CPC and the power of the municipalities. Two special administrative regions are located in this province: Hong Kong and Macao, giving this province an important factor in the decisions made within the government and the CPC. (Toyojiro, 1991).
In 2020, the province was described as “one of the country’s economic powerhouses” (Xinhua, 2020) with an estimated GDP of around 6.3% to 10.5 trillion yuan (1.52 trillion US dollars) in 2019. The governor of the province, Ma Zingrui, announced in early 2020 the annual provincial legislative session. In 2019, its imports and exports were at 7.14 trillion yuan (down 0.3%). The province has a strong trade volume with the European Union and ASEAN and should rise to 10.7% and 4.9%. Its foreign capital was 150 billion yuan in 2019. Measures have been adopted to accelerate the growth of the economy of the province. (Xinhua, 2020).
More than 30,000 industrial companies in the province had technological reforms with a spending of 307.6 billion yuan for these reforms by the authorities. In China, authorities are important in the growth of the companies, including the innovation ecosystem of China and the Guangdong province. 6 000 companies have industrial internet, and 500 000 small and medium companies are using cloud computing technology. Compared to the rest of the world, the province of Guangdong has a strong technological and innovation capital and attracts foreign companies and investments (Xinhua 2020).
The city of Shenzhen is in the Guangdong Province located in the South of China. The city’s borders are with Dongguan in the North West, Huiyang and Huizhou in the North East and Hong Kong in the South (Top China Travels). With 12.7 million people, Shenzhen is the fourth largest city of China with 2.4 trillion yuan of GDP in 2018 and 190k yuan of GDP per capita (China Highlights, 2021). From a rural fishing village to China’s base for industrial output and higher technology products, the city hasn’t experienced this growth in one day (SCMP, 2008).
Deng Xiaoping, the paramount leader from 1978 to 1989, opened China’s economy (SCMP, 2018). “If you want to reform you have to introduce a market economy” (MacFarquhar, 1987), and that is what he did with the economic reforms in 1979 introducing special economic zones (SEZ). These zones were under the four modernizations of the industry to further economic reforms (SCMP, 2018). In April 1979, the idea of SEZ’s was argued by Deng at the Central Committee conference and the theory became reality in 1980 with Shenzhen as the first SEZ (MacFarquhar, 1987). On the 14th of October 2021, Shenzhen will celebrate its 41st anniversary as China’s first special economic zone (Xinhua, 2020). The other SEZ are the cities of Zhuhai, Shantou, and Xiamen (Toyojiro, 1991).
The city has developed a vast network of companies specialized in the manufacture of electronic products, unbranded personal computers known as whiteboxes, and are specialized in making copies of existing models at a lower cost known as ‘shanzhai’: attracting even more foreign companies and investments. Shenzhen and Guangdong province can be compared to Silicon Valley: a province attracting companies for its transformations and technological innovations. The practice of disassembly/study/assembly is used for the fabrication of new innovations, allowing a less expensive model or offering a different functionality to stand out in the competitive market. These factories are in the suburbs of Shenzhen, in the Baoan district. The proximity between these factories and the disassemble/study/assemble process leads to a rapid development of the transports of goods in China and abroad. (Renaud, 2017).
French architect David Mangin points out the example of Shenzhen as a positive achievement by the CPC in the creation of an urban village. The explanation of the growth of its population from 30,000 to 12 million is explained by a real estate deal with the villages with dense dormitory buildings of eight floors, allowing workers to live in the city instead of travelling from their home village to their work in the province. These dormitory buildings became districts and their way of life started to elevate positively, allowing factories to be installed in the suburbs and the old factories to be transformed into offices, shopping arcades and mostly apartments. (Donzel, Mongin, 2013).
Started as an experiment, Shenzhen flourished over time and has affirmed its importance for the economy of the country and transformed from a village to a globalized city. In 1979 a law on joint ventures was passed to allow foreign investment. The yuan value resulted in China’s attraction to companies such as Foxconn (headquartered in Taiwan) which today produces and assembles Apple and Samsung machines in Shenzhen. In 1984, 14 more cities became SEZ: the experiment was a success and China’s trade has increased. With a “Made in China” development policy in the early 1980s, Shenzhen is at the heart from production to recycling electronic waste with every part or product containing electronics passing through this city. The announcement of “Made in China 2025” will allow Shenzhen and the province of Guangdong to be in the center of innovation and services. (UN- Habitat, 2019).
According to the Mayor of Shenzhen, Chen Rugui, the metropolis’ GDP has grown 20.7% with its GDP per capital up to 30,000 US dollars. It’s import and export volume was over 430 billion dollars (10% of foreign trade). Shenzhen shelters eight Fortune 500 companies and 436 listed ones such as Huawei, Tencent, and DJI. The city is home to 70,000 technology-based companies spending 4.9% of its GDP on research and development. (Xinhua 2020).
The goal of Shenzhen is to continue its exchanges with Hong Kong as both cities attract foreign companies and research and development. The growth of Guangdong province was one of the key issues for the communist party and has brought cities that were small villages such as Shenzhen to an elevated metropolis, making this city the heart of China’s economy. (Xinhua, 2020).
Prisca Mirchandani is a second-year student of a trilingual master’s degree of Global Security and Analysis (French, English, and Chinese) at the University of Bordeaux, France. She earned her bachelor’s degree in Political Science at the University “Lumière” Lyon 2, France, studied Chinese language with the University and participated in language exchanges with students coming from China to study in Lyon. She is passionate about China- EU relations, China-France relations, and China Hong Kong’s history. You can find her on LinkedIn.
The opinions expressed here are those of the writers and do not represent the views of European Guanxi.
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