The Chinese say, if one wants to understand China’s past then move to Beijing if one wants to possess a glance at the country’s, present then visit Shanghai and for the futuristic view- Shenzhen is the right place. Shenzhen could be a very young and futuristic metropolis as per Chinese standards. town positively bristles with innovations.
50 years ago, the town was just a little fishing village but now the transformation can be seen and appreciated because it has 100 of sky create dominate the skyline. For the primary look, one will get the impression of the other dense metropolis city except for the entrepreneurs and programmers, it’s a technological Mecca. With this rapid technological and electronic advancement, there’s little doubt that Shenzhen is China’s geographical area.
Every month, a minimum of one international exhibition or trade fair is held within the city. It can be either electronics, IT, or automotive. The new enterprises that are established here are sprouts like mushrooms in Shenzhen’s subtropical climate. the quality of living during this city is highest among tired the country even attracting foreigner’s aspiration to measure here.
Paul Eremenko, Airbus chief technology officer, says that ‘ Shenzhen is that the next Silicon Valley because it is viewed as a milestone on the thanks to further economic prosperity.
What makes Shenzhen at the top-
- Investment in Research and Development
The city’s institutes and universities spent quite 90 billion yuan or 14 billion US dollars on R&D, Shenzhen is in charge of 4.1 percent of total GDP while the national average rate is around 2.1 percent.
- Applications for International Patents-
In 2017, World material possession Organization report, 49000 applications for international patents are filed by China and around 1/2 it came from Shenzhen itself, surpassing Germany in patent applications and standing 4th within the world.
- Market-driven tech investment-
Around 90% of the research investment is finished by the enterprises and 90%+ patent feeling requests leave Beijing and Shanghai behind.
- Global Hub for hardware innovation
The largest communication system provider is Shenzhen’s Huawei, which stood at 3rd as the largest smartphone producer behind Apple and Samsung. Another telecom, Tencent- China’s largest social media and gaming platform- is considered the Most worthy company in Asia and is now among the world’s top 10 companies within the market capitalization.
Driven by an insatiable hunger for fulfillment, the city’s entrepreneurs are revolutionizing the IoT, computing, and FinTech industries, among many others. The place has the world’s most complete supply chain for hardware products and South China contains a tremendous advantage to develop integration between hardware and software. Today, Shenzhen is home to multibillion-dollar tech companies like Tencent, Huawei, Konka, ZTE, JXD, and OnePlus. Even its coworking spaces are chock-full of fantastic tech startups–edtech, AI, you name it.
How Shenzhen become the next Silicon valley destination-
- In 1980, Shenzhen was discovered as the Special Economic Zone by Deng Xiaoping. The task of spearheading reforms was given to the city’s officials envisioned by then paramount leader Deng Xiaoping.
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- Shenzhen received many preferential policy grants from Beijing, and native officials adopted many business practices from the neighboring port.
- In 1982, the foreign banks opened the first mainland branches in Shenzhen. In 1987, the city experienced China’s first joint-stock bank development, breaking the monopoly of state-run banks. China’s first securities company was opened in Shenzhen in 1990 and 1992, the Shenzhen Stock exchange which is China’s two mainland stock exchanges, all these inducements produced the amazing growth ground for Shenzhen and is floating more measures to upgrade its role in the global value chain.
- Under a 5-year development plan 2021-2025, the city aims to become the nation’s ‘core engine’ of reform and to power growth and innovation in the Greatest Bay Area.
The Director of Shenzhen- based China Development Institute’s Finance and Modern Industry Department Liu Guohong said- “ The outlook for Shenzhen is still promising and will continue to be a leading city in China and part of its success is down to contributions by leading players in different sectors.
As per Hurun Report, in 2020, the city had the third-highest concentrated members in China’s 500 most valuable private companies. There are 3 companies of Shenzhen in the top, 59 firms made it top 100 based on valuations published in October 2020.
According to Liu, Shenzhen’s companies will report enormous growth over the next 5 years, while 60% + companies are engaged in sectors such as IT, property, finance, projects concerning climate change, and sustainable developments.
The city believes to grow its GDP by 4 trillion Yuan by 2025, making itself into a model city of digital China.
Why reach Shenzhen?
The city is emerging as the biggest tech hub in Asia, challenging the Silicon Valley of the United States, are generating living aspirations. After the outbreak of the pandemic, while countries like the US and EU facing worrying recessions, China is showing signs of growth and specifically the city Shenzhen. The foreign investment in this city would be beneficial as its local government may deem the investors eligible for the following aids and subsidies-
- Research and Development subsidies-
Up to RMB 10 million for international R&D teams fitting independent entities in emerging industries or technological transfer still as up to RMB 5 million for fixing R&D facilities for brand bright products and technologies in the internet, biomedicine, emerging, or advanced manufacturing industries.
- Subsidy for startups
This could reach RMB 1 million, provided certain conditions are met. Companies founded in Qianhai Venture park for quite six months will get a one-off fund adequate RMB 50,000.
- Establishment of headquarters of companies
For the establishment of headquarters of companies (subject to the necessities of The Implementations Measures for Encouraging the event of Headquarters in Shenzhen), subsidies granted is additionally up to RMB 20 million.
- Financial enterprises headquarters
For financial enterprises headquarters, subsidies are added up to RMB 10 million and 50 percent of support for relocation costs. Within the case of establishments of logistics companies, these aids are additionally within the quantity of RMB 10 million, reckoning on the amount of registered capital of the company in question.
- Professional services companies
Finally, within the case of companies providing professional services subsidies could even be up to RMB 2 million
- Talented individuals – foreign talents, hiring subsidies
For talented individuals, the subsidies in situ may reach RMB 6 million. The local Qianhai-Shekou trade zone provides rent support for foreigners who qualify as talented individuals, yet as scholarships and grants for companies hiring and/or providing internship and contract positions to foreigners Moreover, to attract foreign talent, a 15 percent exemption of personal levy is granted to overseas high-end talents located in Qianhai and who meet the requirements of the region and its development.
- Tracking local subsidy schemes
The above doesn’t constitute an exhaustive description of all the subsidies awarded by the authorities and also the method of applying for these subsidies, also as its range and amount, shall be updated on a routine. it’s therefore worth taking a look at the authorities’ websites to be updated on the necessities, as these tend to vary.
- Operational costs
Besides the above, despite the rising living costs, the operational costs of incorporating and maintaining a company within town remain quite low. Virtual offices are oftentimes allowed because of the legal registered address, even when a requirement of a physical office is imposed.
As of Q3 2020, the rental cost of office leasing was US$32 per unit, down 0.5 percent quarter-on-quarter. because the town develops more office buildings and also the value of rent continues to be low, the office spaces have an overall percentage of 18.4 percent.
Future Developments of Shenzhen
Only 2% of business establishments are accounted for by foreign-funded enterprises. Generating about one-fifth of the city’s GDP, export, and import volume around 40 percent and 30% of its tax revenue every year according to the Municipal Bureau of Commerce data, confirming the success of foreign companies in this region.
Recently, the EU announced China’s Comprehensive Agreement on Investment, the European countries can easily invest in China making Shenzhen more attractive for investors.
