How Chinese Silicon Valley Works
Posted: Sun Jan 05, 2025 7:19 am
China is a true dragon among nations. With each passing year, this country becomes bigger and more important in the global political and economic scenario. Much of this international success comes from a port city that a few years ago was a small fishing village and is now a metropolis with over 12 million inhabitants: Shenzhen.
Located in the Guangdong province, this city is considered the Chinese Silicon Valley. This is because Shenzhen is not only home to major Chinese technology corporations such as Huawei, ZTE, DJI and Tencent, but also to many innovative companies. The Chinese government itself offers subsidies to those who want to invest in technology and new products.
Shenzhen was China's first Special Economic Zone. SEZs emerged in the late 1970s as an economic stimulus policy formulated by then-Chinese President Deng Xiaoping. The SEZ was implemented so kuwait email list successfully in this city that the population grew by more than 5,000% and Shenzhen's GDP jumped by more than 9,000%, reaching US$338 billion. In global terms, its economic strength is equivalent to the GDP of Ireland and, by 2025, it will be greater than that of Hong Kong.
The secret to the success of China's Silicon Valley may lie in the region's high investment in research and development. Around 4.3% of its GDP is invested in this area. It is the city that invests the most in technology in all of China and the largest electronics manufacturer in all of Asia.
All this success has led to many migrants arriving in Shenzhen. Workers from all over China choose to try their luck there, and many have made their fortunes there. And it’s not just Chinese people; professionals and businesspeople from all over the world have moved to China’s Silicon Valley in an attempt to grow their finances in this region that is so welcoming to entrepreneurs. This is one of the few cities in China where there is no discrimination based on where you were born; for example, the word “outsider” is not used in Shenzhen. The welcoming of foreigners begins as soon as you arrive in the city. At the airport, you can read the phrase “You come to Shenzhen, you are from Shenzhen” in English.
There is a place there called Electronics Street. It is a long avenue that is a true paradise for those who like gadgets and new technologies. There are hundreds of stores selling all kinds of electronics, sharing the area with studios and factories. It is the favorite place for the so-called “makers”, professionals who have an excellent capacity for innovation to invent new equipment and products and become the businessmen so appreciated in today's China. The Chinese government itself offers support to these engineers, whether with financing or tax reductions.
There are companies in Shenzhen that specialize in providing – free of charge – all the support these technology creators need, such as a place to create and develop products, water and electricity. The return is a percentage of the sales value of these new devices. It is a true nursery for startups.
Silicon Valley in China is one of the sources of new products that will be sold on websites such as Amazon or Taobao. Agents from these companies look to Shenzhen for gadgets or other good ideas that have the potential to increase their online sales. To do this, it is worth asking for products to be adapted for Western markets to please customers, or even creating more appropriate or attractive packaging for these products.
There is also a darker side to technology in this city, which is counterfeiting. Many companies from inside and outside China use the variety of electronic components available in Shenzhen and the specialized workforce to assemble identical copies – of phones, cases and other products – of well-known and famous brands, with the difference of offering much lower prices than the original products. This is one of the reasons why large corporations keep the technology of their products secret and are so concerned about industrial espionage, since in large corporations, employees are not allowed to use their cell phones or cameras on the factory floor.
Now you know a little more about the so-called Chinese Silicon Valley. Who knows if your cell phone or any gadget you like wasn’t manufactured there? If the box says “Made in China” it’s very likely that it came from this eastern Silicon Valley.
Located in the Guangdong province, this city is considered the Chinese Silicon Valley. This is because Shenzhen is not only home to major Chinese technology corporations such as Huawei, ZTE, DJI and Tencent, but also to many innovative companies. The Chinese government itself offers subsidies to those who want to invest in technology and new products.
Shenzhen was China's first Special Economic Zone. SEZs emerged in the late 1970s as an economic stimulus policy formulated by then-Chinese President Deng Xiaoping. The SEZ was implemented so kuwait email list successfully in this city that the population grew by more than 5,000% and Shenzhen's GDP jumped by more than 9,000%, reaching US$338 billion. In global terms, its economic strength is equivalent to the GDP of Ireland and, by 2025, it will be greater than that of Hong Kong.
The secret to the success of China's Silicon Valley may lie in the region's high investment in research and development. Around 4.3% of its GDP is invested in this area. It is the city that invests the most in technology in all of China and the largest electronics manufacturer in all of Asia.
All this success has led to many migrants arriving in Shenzhen. Workers from all over China choose to try their luck there, and many have made their fortunes there. And it’s not just Chinese people; professionals and businesspeople from all over the world have moved to China’s Silicon Valley in an attempt to grow their finances in this region that is so welcoming to entrepreneurs. This is one of the few cities in China where there is no discrimination based on where you were born; for example, the word “outsider” is not used in Shenzhen. The welcoming of foreigners begins as soon as you arrive in the city. At the airport, you can read the phrase “You come to Shenzhen, you are from Shenzhen” in English.
There is a place there called Electronics Street. It is a long avenue that is a true paradise for those who like gadgets and new technologies. There are hundreds of stores selling all kinds of electronics, sharing the area with studios and factories. It is the favorite place for the so-called “makers”, professionals who have an excellent capacity for innovation to invent new equipment and products and become the businessmen so appreciated in today's China. The Chinese government itself offers support to these engineers, whether with financing or tax reductions.
There are companies in Shenzhen that specialize in providing – free of charge – all the support these technology creators need, such as a place to create and develop products, water and electricity. The return is a percentage of the sales value of these new devices. It is a true nursery for startups.
Silicon Valley in China is one of the sources of new products that will be sold on websites such as Amazon or Taobao. Agents from these companies look to Shenzhen for gadgets or other good ideas that have the potential to increase their online sales. To do this, it is worth asking for products to be adapted for Western markets to please customers, or even creating more appropriate or attractive packaging for these products.
There is also a darker side to technology in this city, which is counterfeiting. Many companies from inside and outside China use the variety of electronic components available in Shenzhen and the specialized workforce to assemble identical copies – of phones, cases and other products – of well-known and famous brands, with the difference of offering much lower prices than the original products. This is one of the reasons why large corporations keep the technology of their products secret and are so concerned about industrial espionage, since in large corporations, employees are not allowed to use their cell phones or cameras on the factory floor.
Now you know a little more about the so-called Chinese Silicon Valley. Who knows if your cell phone or any gadget you like wasn’t manufactured there? If the box says “Made in China” it’s very likely that it came from this eastern Silicon Valley.