Shenzhen, often hailed as China’s Silicon Valley, stands as a remarkable testament to the nation’s rapid growth and innovation. It has earned its position as the fastest-growing city in China and is esteemed by the Chinese Academy of Social Sciences as a top city on the mainland. When it comes to total economic competitiveness, Shenzhen reigns supreme and proudly holds the title of China’s premier Special Economic Zone (SEZ) city for foreign investment. For those considering doing business in Shenzhen, its status as a sub-city at the provincial level further underscores its significance in the global economic landscape.
Shenzhen was declared China’s first special economic zone in 1979 by then-Communist Party (CCP) Chairman Deng Xiaoping, with the help of easy capital flowing in from Hong Kong. This city has therefore changed from a small fishing village to To a big, bustling city
Every year, millions of people flock to city centers as part-time workers or immigrants. Entrepreneurs from around the world are trying to take advantage of investment-friendly practices. And tourists admire the futuristic landscape.
Shenzhen is located in Guangdong Province. It is only 100 km (62 miles) southeast of the capital Guangzhou. It is strategically located in the Pearl River Delta that serves as the border with Hong Kong. The city center is less than 20 minutes by high-speed rail from Kowloon. Other nearby cities include Zhongshan, Dongguan and Foshan.
Economic overview in 2021
Shenzhen is China’s third-largest city in terms of GDP after Shanghai and Beijing. Its GDP exceeded 3 trillion yuan in 2021, up 6.7 percent from the previous year. This is a significant recovery from the 3.1 percent year-on-year growth of 2020. Shenzhen also had the highest per capita growth rate of any city in China, reaching 173,663 yuan (US$25,889). In 2021
Shenzhen is a service economy. The tertiary sector accounts for nearly 63 percent of GDP. However, the manufacturing sector remains an important pillar. It accounts for almost all of the remaining added value of GDP.
According to the development plan for the Guangdong-Hong Kong-Macau Greater Bay Area (GBA), Shenzhen is one of four major cities serving as the driving force for development in the region. Shenzhen is often asked to be the technology and R&D hub of GBA. In 2018, four percent of Shenzhen’s GDP was invested in research. and more than 11,000 high-tech companies call the city home.
Shenzhen’s economic composition
Foreign trade and investment
Shenzhen is China’s largest export city. Ranked as one of China’s most important cities for 29 consecutive years, the port of Shenzhen is the fourth largest port in the world. Its annual transport volume will be 28.77 million TEU in 2021, an increase of 8.4 percent from the previous year.
In 2021, Shenzhen’s merchandise trade increased 16.2% year-on-year to 3.54 trillion yuan (US$528.3 billion). Exports increased 13.5% year-on-year to 1.9 trillion yuan. ($283.9 billion), while imports rose 19.5% to 1.6 trillion yuan ($239 billion).
The growth rate of trade was significantly higher than in 2020. The merchandise trade expanded by 2.4 percent year-on-year. Exports 1.5 percent and imports 3.6 percent. The recovery in foreign trade in 2021 is reflected in higher trade figures across the country. as China benefits from strong demand from foreign consumers still under COVID-19 restrictions. and due to the relative lack of COVID-19 restrictions at home, which caused high production numbers.
Shenzhen exports the largest volume of goods to Hong Kong. Its exports to special administrative regions totaled 707.5 billion yuan (US$105.7 billion), with a year-on-year growth rate of 17.3%. Meanwhile Shenzhen imports the largest volume of goods from ASEAN. Imports from the 10-nation region reached 356 billion yuan (US$53.2 billion), up 11.1% year-on-year.
Actual foreign capital use increased 26.3 percent in 2021 to reach $11 billion. A total of 5,788 new FDI projects were signed throughout the year.
A total of $3.1 billion was spent on leasing and business services. This accounted for the largest share (28.7 percent) of the actual use of foreign capital. The next largest sectors are data transmission, software and IT services. This represented 28 percent of the total and received $3 billion through the actual use of foreign capital.
FDI inflows to Shenzhen 2022
The technology industry is the backbone of Shenzhen’s economy and leads the country in the digital economy. Some of the biggest companies in the tech industry are headquartered in Shenzhen – Huawei.