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Shenzhen quick facts
- Location: Guangdong province, south China
- Time zone: China Standard Time, GMT +0800
- Population: 12 million
- GDP: US$363.1 billion 1
- Industrial strengths: Electronics, financial services, logistics.
- Growth sectors: Artificial intelligence, robotics
- Regional access: Hong Kong - 20 minutes (high-speed train); Shanghai - 2 hours, 15 minutes by air; Beijing - 3 hours, 10 minutes; Tokyo - 4 hours; Kuala Lumpur - 4 hours; Singapore - 3 hours, 40 minutes.
The key to Shenzhen’s success is its location. We are right next to Hong Kong and we have excellent access into mainland China.
Another major factor in Shenzhen’s appeal is the fact it is a young, vital and market-oriented city, established just over 40 years ago. Shenzhen was the first special economic zone in China – special economic zone (SEZ) status was granted in 1980 – and the city played a crucial, pioneering role in the country’s economic reforms in the years that followed.
This gives Shenzhen a great mix of advantages. The people are new as well: they are young, talented and competitive. Shenzhen attracts creative and innovative graduates, workers and entrepreneurs, and the local government has built up a world-class education system, so we have a highly educated and skilled workforce.
Shenzhen’s unique demographic structure makes it a dynamic location with a diverse range of talents on offer. People here can enjoy different cultures and exchange different ideas. Innovations, creativity and inventions emerge in an endless stream, making Shenzhen a truly global city.
Shenzhen’s modernity also means it has developed to a greater extent along the lines of major cities in the west. So for businesses locating here from the likes of Europe and the United States, there is likely to be more familiarity with the attitudes, language and economic infrastructure.
Heart of the Greater Bay Area development
Shenzhen is also benefiting from the Chinese authorities’ investment in the Greater Bay Area initiative, which is designed to improve transport and trading links between major southern coastal regions, including Hong Kong, Macau, Guangzhou, Dongguan and Shenzhen itself. The development, which includes major infrastructure projects, such as a 34-mile sea bridge connecting Hong Kong, Zhuhai and Macau, has been likened to that of Silicon Valley on the US west coast.
The incentives for businesses to set up in Shenzhen are considerable, Wang says. As one of China’s original SEZs, it's subject to regulations that have helped it develop a vibrant financial sector. The recently established Qianhai zone in western Shenzhen offers preferential tax treatment, as well as a more-competitive business environment for foreign investors.
China’s innovation paradise
It’s in electronics and other high-tech sectors, however, that Shenzhen really has the edge over rival cities, such as Shanghai and Beijing. Chinese tech giants Tencent and Huawei are based here and there is excellent support for innovation, research and development. Increasingly, we are seeing companies base their R&D operations here while manufacturing is carried out elsewhere, either outside the city, for example in the industrial centres of Dongguan and Guangzhou, or increasingly, in countries such as Malaysia, Vietnam or India.
Shenzhen has a number of industrial parks focusing on technology, software and product design, each of which provides high levels of support and incubation services to start-up businesses.
The city’s location means that foreign investors can use it as a base to sell into the main Chinese market, as well as into Hong Kong and the wider south-east Asian region. As an important transportation hub and logistics centre in the Asia-Pacific region, Shenzhen's modern logistics system is well developed, providing fast and effective services for enterprises. The local authorities have, in recent years, made it easier for overseas investors to set up new entities in the city; no longer is it necessary to obtain pre-approval.
Gateway to China and south-east Asia
Shenzhen is probably the most vibrant and forward-looking city in China, and along with Shanghai, it’s one of the most-enticing locations for foreign investors. But it is its location at the heart of south-east Asia that makes it the ideal gateway to the region.
To find out more about establishing your business in Shenzhen and discuss your international plans, get in touch with Simon Bevan.
References
1 GlobalData.com
