Thursday, March 15, 2007

The Perfect Red Storm

In my February 24th post entitled Money Money Money, I attempted to discuss Shenzhen and its unique-ness. As everyone might already know, Shenzhen was a fishing village 20 years ago. Now it is one of the biggest cities in China with an average income comparable to that of Beijing and Shanghai.

With a combination of a favorable political environment, location and local culture, Shenzhen has become a bustling metropolis that is comparable to just about anywhere in the world.

Here’s an excerpt from a recent Bloomberg article:

World's Factory

Shenzhen became the world's factory because Deng, then the paramount leader, selected it in 1980 as the launching pad for his open-door policy. Driven by his vision, the municipal authorities put in place the key amenities long before international investors took the bait.

What in 1979 was an agrarian backwater of 300,000 people is today a bustling metropolitan city of 11 million.

Shenzhen now has the world's fourth-busiest container port and China's fourth-largest airport. Expressways connect the industrial areas to a vibrant downtown. A subway system became operational in 2004. New towns are constantly being built, distances are getting squeezed.

This description of Shenzhen (as well as others like it) is just the tip of what Shenzhen is. In a recent Shanghai Daily article, Shenzhen was mentioned again. This time it was compared to Shanghai.

The Shanghai Labor and Social Security Bureau surveyed 23,000 city residents aged 16 to 64 in their homes last December about their attitudes towards starting a business.

The number of respondents who had opened their own company by the end of last year - 5.01 percent - was up slightly from 4.9 percent at the end of 2005.

By comparison, only 3.42 percent of respondents to a similar survey in Beijing said they had started a business, while a whopping 10.49 percent of those surveyed in Shenzhen, Guangdong Province, had opened their own company.


Shenzhen’s population is 2x more likely to start a business than the people in Shanghai, and almost 3x more likely than Beijing. It’s amazing what the last 20 years has done here in the Pearl River delta.

Here were my thoughts on Money and Shenzhen:

  • I often try and think/develop business ideas. Moreover, I have a few possibly successful ideas that I’m working on.
  • This is why Guangdong province is so incredibly successful in the world stage. This is not only where Chinese people who want to make money (whether it’s migrant labor trying to get ahead, HK businessmen with capital, ect.), but it is where the world is coming as well. Of course its location and proximity to HK has something to do with it as well.
  • I wonder if the culture is similar in the Shanghai region as well. Can anyone who knows about Shanghai add their 2 cents?
  • This entrepreneurial spirit feels like pure excitement. There are so many opportunities in China for anyone with a good idea. It is the ability as a person to take advantage of these opportunities. This is a big difference from the seemingly repetitive life of the US and even NYC.

I guess the Shanghai Daily article partly answered my question. Even Shanghai, the financial capital of China, can't compare to Shenzhen when it comes to the entrepreneurial spirit.

Just to repeat this point and beat it over the head:

Shenzhen is a place like none that has ever existed in the world. Its unique combination of culture (or lack there of), government regulation, people, location, resources, ect. have created a place where capitalism is existing in an almost pure form.

It might as well be the Perfect Red Storm.


jasonp said...

In terms of comparing Shenzhen entrepreneurial to Beijing, the statistic is not that shocking. The Northeast is much more well known for their politics, not business. However the Shanghai stat is quite interesting. Most of my friends at home were questioning my move to Shenzhen, rather than Shangai. Is it possible with further growth in Shenzhen, that it overtakes Shanghai as the financial capital of China? If D.C. is compared to Beijing, New York is compared to Shanghai, does Shenzhen equal Silicon Valley?

shopgirl said...

always wanted to visit shenzhen!!!

Mike said...

I could see that. Shenzhen is a poor man's silicon alley. Instead of doing high tech stuff, we do manufacturing.

So i guess it's the Tooling Valley.

In terms of future growth in an economic sense, i think it really depends on the current climate of FDI as well as government regulation. Shanghai was supported by Jiangzimin and his policies when he was the President. We'll see what Hu Jingtao does.

In a cultural sense, I would consider it impossible. It is absolutely difficult to create culture. This is actually what Macao is currently trying to do, create culture. Their city is based on its Protrugal influence and gambling. It is a graeyard for academics. Howeer, now the goernment is inesting millions of dollars in its major uniersities and are trying to attract world talent with this money. we'll see how it works out.