China’s Silicon Valley

Shenzhen is often referred to as the Chinese Silicon Valley, but it should be referred to as “the other Silicon Valley”, as its importance as a high-tech center has long exceeded China’s borders.

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Shenzhen is often referred to as the Chinese Silicon Valley, but it should be referred to as “the other Silicon Valley”, as its importance as a high-tech center has long exceeded China’s borders. In fact, for some aspects, it is probably better than San Francisco when starting a business.

Currently, Shenzhen is one of the main cities of China, although it has not always been like this, although it was more than a fishing village, today it shows the great success of what could be China. The great economic and technological power capable of overcoming in these fields any other nation in the world.

Shenzhen, what is it?

Shenzhen until 1970 was a little known and little relevant place. It was completely surpassed by its neighbors, Hong Kong with which it adjoined and Guangzhou (Canton) on which I depended administratively. Between the two metropolises nobody was very interested in what happened there. But this changed in 1979, with the first ZEE that driven by Deng Xiaoping and his famous phrase “it does not matter if the cat is black or white but catches mice”, began the economic opening of China to what it is now.

In May 1980, it became the first of the first special economic zones that marked the beginning of the opening of the People’s Republic of China to the rest of the world. If Shenzhen had been a failure as an EEZ, China probably would not be what it is now. However, its proximity to Hong Kong and the great difference between one territory and another, made the success of the project quite likely, even if it had been as a low-cost center in Hong Kong. But the success of Shenzhen was much more spectacular. The city grew more than the architects of the project could have foreseen, in fact it is possible that it could have grown faster than any other city in the history of humanity. Shenzhen in turn became the one that has probably been the most successful example of the Chinese economic opening.

Its GDP grew until 1993 at 40% per year, compared to 9.8% for the whole country. In 2016 it had already moderated, at 8% per year. However, today it is the third most important city in China, behind Beijing (Beijing) and Shanghai. In Shenzhen live more than ten million people and more than twenty in the metropolitan area. It is estimated that 120 million people live in the Pearl River delta, consisting of Canton, Macao, Hong Kong and other cities.

Nowadays Shenzhen is a brutally important business center, there is more to see the multinationals that have their headquarters in this area: ZTE, Huawei (both manufacturers of telecommunications products and mobile phones), Tencent (the conglomerate that among other businesses has the successful WeChat application), OnePlus (manufacturer of mobile phones), DJI (manufacturer of drones), BYD (manufacturer of cars, including electric cars), etc. It is estimated that 90% of the world’s electronic products come out totally or partially from Shenzhen. In this environment universities are close to the economic rhythm, and Shenzhen has a campus of Peking University, the Harbin Technology Institute, the Chinese University of Hong Kong.

China also leads mobile payment systems, far ahead of any other country. WeChat and Alipay connect directly to Chinese bank accounts, causing people to jump from cash to mobile payments without going through credit cards.

Shenzhen as a city of entrepreneurs

But the great advantage of Shenzhen is not only in the large companies that have their headquarters or offices in this city, its great advantage is in the entrepreneurial ecosystem for the emergence of new software companies and especially hardware. Nowadays, entrepreneurs from all over the world go to Shenzhen to start their business. It is much easier to make prototypes and find components.

Shenzhen has several markets only for electronic components, the largest in the world is Huaquiangbei, with more than 800 stores, in some of them you will be able to join the components you require, as you need. In fact, sometimes

products that one or two years later will enter the market enter the market, since it is much faster to start a product in Shenzhen than anywhere else in the world. There are also fakes and products similar to the best known. The defense of patents is not fashionable in Shenzhen, plus the Open Source, included for hardware, recycle designs and improve and evolve the existing.

Shenzhen’s hardware entrepreneurs are in the crosshairs of the major component manufacturers, as they know they are their new customers. For example, hardware startup accelerator HAX has two locations, the other is in San Francisco and focuses on financing and distribution.

Because one of the disadvantages that they have in Shenzhen is that although they are attached to the production lines and can make prototypes in days and sell them in months, it is because cultural differences mean that product marketing may not be easy in the West. It is also a problem the potential gentrification that is taking Shenzhen, which some Westerners see as a threat to the culture “maker” that could be a problem for entrepreneurs in Shenzhen.