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The GDP of Shenzhen will rank first in China within 8 years, compared with that of Beijing and Shanghai (Volume II)

Date : 2022-09-09 16:18:01


IV. System       

For issues on the institutional reform and economic development, which is better or worse? Professor Lin Yifu and Mr. YangXiaokai exchanged their opinions years ago. Yang Xiaokai’s view is that a backward country will have a relatively high economic growth rate at the beginning after utilizing resources and learning from the experience of other countries, but the advantages and continuity of economic development will be difficult to ensure without an effective and in-depth reform of the basic system. For example, the present large-scale corruption and the distribution inequity of social wealth is the result of institutional defects, which is the hidden danger left before. Perhaps because of his early experience, Lin Yifu has always been politically correct. In his opinion, later-developing countries can continue to reform their existing economic and social systems in the process of economic development, and it is not necessary to complete the reform of the system before developing the economy. Time will wait for no one, and the dual-track system can be adopted for reform. China really did well in this respect in the first 40 years of development.

The interesting scenario is that the collision of the two systems and the economic gap create a historical window of opportunity for great development. Shenzhen has seized this golden opportunity to spearhead China's reform and opening up as well as economic prosperity. In terms of economy, Shenzhen has become a bridgehead of the third major industrial transfer, effectively absorbing the technology and resources of Hong Kong, Taiwan and Singapore, improving the soft power of science and technology, finance, education, rule of law, culture, talent, concept and management, and integrating with the most advanced Europe and America.

In terms of system, Shenzhen is the first city in China to enjoy the policy dividend and the pilot of political reform. With independent legislative power, Shenzhen has been stumbling out of the fetters of planned economy. Apart from the domestic population dividend and market dividend, there are a continuous supply of well-trained and inexpensive labor force from the Chinese mainland as well as a vast market, so the comparative advantage of Shenzhen is particularly prominent. Some contemporary economist like Mr. Lu Guoqiang put forward the free market theory, by studying East Asian economies in recent years they made the conclusion , that the economic success is the result of least government intervention. For example, the government has little or no control over prices, foreign trade and foreign exchange. What the government does is to provide a suitable environment for the production and operation of private enterprises and maximize the role of private economy and free market mechanism. This model is also true for Shenzhen.


 Some ceramic antenna products of Kinghelm(www.kinghelm.net)  


V. Finance 

The two stock exchanges in Shenzhen and Shanghai have made great contributions to China's economic development. Differ from that of Shanghai, the SME board is a special board set up by Shenzhen Stock Exchange in order to encourage independent innovation. Shenzhen Stock Exchange is seen as China's future "Nasdaq" because of SME’s fast revenue growth, high profitability and technology, as well as their active circulation and trade. With SME, Shenzhen attracts good financial resources , including "headquarters economy",which has a very obvious effect on the local economy.

There are more than 350 listed companies in Shenzhen, about 220 of them are listed domestically and 130 are listed in Hong Kong, the United States and elsewhere. These provide the functions of so called blood transfusion and hematopoiesis for the listed companies in Shenzhen, and prove that the governing level of Shenzhen companies is world-class. Shenzhen is adjacent to Hong Kong, and it's a geographical advantage to construct"Guangdong-Hong Kong-Macao Greater Bay Area". Hong Kong is the world's most dynamic financial centre, Shenzhen has Ping An, China's largest financial group with best performance in China, as well as China Merchants Bank, the most normative domestic bank in management. Together with Hongkong, Shenzhen can quickly develops into a big international financial center competing with London and New York. These will not only strengthen China's international competitiveness, but also introduce more worldwide financial resources for Shenzhen.

Currency is characterized by its good standardization and liquidity, only effective circulation of currency can produce social and economic benefits. Shenzhen does not have such political resources like Beijing, nor innate industrial advantages like Shanghai, but Shenzhen has efficiency and innovation, so Shenzhen’s financial industry will make greater achievements!

It is worth mentioning that the financial industry in Qianhai, Shenzhen is in full swing, and many good policies provided by the state to Qianhai are in line with Hong Kong. According to the ranking of global city finance Index by an international organization, Hong Kong ranks 4th, Shanghai ranks16th, Shenzhen ranks19th and Beijing ranks23rd. If Shenzhen and Hong Kong emerge, they will be more powerful!


VI. Other factors 

①Population dividend

Based on the characteristics of Shenzhen, three points of population dividend are analyzed here.


The first is the employment proportion of residents. The employment rate of women in Shenzhen is close to 90% (the employment rate of the whole China is 76%, also it’s the highest in the world). The age and education structure of Shenzhen residents are quite good, and most of them are in the normal working age.

 The website of Slkor (www.slkoric.com)


Second,  the dependence of employees on work. Most people who come to Shenzhen have nothing to rely on  except themselves, so their working initiative and efficiency are very high.

The third is people who come to Shenzhen have a restless heart. Everyone comes to Shenzhen with two hot kidneys to make money, which not only brings Shenzhen infinite imagination space and possibilities, but also becomes the Shenzhen spirit to fight and dare to break through.

②Urban vitality

Shenzhen is the most dynamic city in China. The dual structure of Beijing is basically fixed, people there are too lazy to move and scare to break through. Shanghai's management is too precise, which may damage the efficiency and stifle the creativity, as we can see in stiff Britain. Shenzhen is full of vigor and vitality, with the ambition of embracing the whole world, and put forward the slogan "You are the Shenzhen person once you come here". Shenzhen has a net inflow of 500,000 people a year. According to the historical rules, the vitality and economic growth of cities with increasing migrants are also the fastest, such as Shanghai in the 1930s, Hong Kong and Las Vegas in the 1970s.

Shenzhen's innovation brings vitality, and so does its incentive system. Dr. Zhu Junshan, an expert on Huaqiangbei, said that Shenzhen’s enterprises not only have a good management model, but also have the best distribution mechanism, which is also the incentive mechanism. With a high degree of privatization, the boss is easy to make decisions and flexible in the allocation, which is beneficial to stimulate the enthusiasm of employees. Huawei has paid the highest salary among domestic companies, Tencent’s staff has an average annual salary of 780,000 yuan, in addition, employees and agents of Kinghelm (www.kinghelm.net) and Slkor (www.slkoric.com) hold the equities of the two companies and have the opportunity to participate in the capital feast. These are all in line with the incentive of "surplus value claimants" in economics, which is the same as the "contracted production to households" in China’s rural areas in those days, and it’s a kind of institutional incentive!

Some products on the website of Slkor (www.slkoric.com)


③Benchmarking demonstration enterprises

Shenzhen's leading enterprises are of great value to social development. Vanke first put forward the concepts of "housing industrialization" and "urban operation", which enabled the real estate industry to find a model and project for rapid development. Huawei is benchmarked against world-class enterprises, and its products are sold all over the world, enabling Chinese enterprises and Chinese people to show themselves on a bigger stage. Therefore, thousands of suppliers in Shenzhen are then in line with the world level. Foxconn has trained a large number of high-quality industrial workers for advanced manufacturing, and also brought advanced concepts and strict management, which has driven the progress of its cooperative companies. China Merchants Bank has brought high quality service and long-term layout awareness to Shenzhen. Besides, the cultural industry of Huaqiang Group has made the animated film "Xiong Da Xiong Er" an honorary citizen of Shenzhen, and the cultural and creative industry has a prospect in Shenzhen.


VII. Weakness 

Shenzhen lacks education and medical resources, especially high-quality high-end resources. Shenzhen also lacks long-term strategic visions and topologies, especially some farmer-entrepreneurs. In addition, Shenzhen people also lack feelings and cultural accumulations, and Shenzhen may suffer losses in the future cultural soft power competition. To achieve the great Shenzhen dream, Shenzhen should overcame its weakness in both hard and soft power.

Brief Introduction of Song Shiqiang

Apart from CEO of Shenzhen SlkorMicro and Kinghelm, Mr. Song Shiqiang is currently holds a few important social positions: Private economic researcher of the Economic Development Center of the China State Council, member of the electronic information expert database of China Association for Science and Technology, commercial research expert of Huaqiangbei Alliance.

Prior to invest and to manage Shenzhen SlkorMicro Semicon Co., Ltd. and Shenzhen Kinghelm Electronics Co., Ltd., Mr. Song was the former CEO of an international real estate listed company. 

Mr. Song is working hard on building the Slkor and Kinghelm brands. Both Slkor and Kinghel are Chinese national high-tech companies and have obtained dozens of invention patents and software copyrights. Slkor is one of the fastest-growing semiconductor companies in China, and its vision is to become the leader of the domestic semiconductor industry.

"Kinghelm Connecting Beidou" is the slogan of Kinghelm company. Starts from the development of Beidou antenna, Kinghelm has now developed and produced microwave antenna, RF cables and electrical signal connector and other products, embracing the intelligent era for Internet of Everything.  Mr. Song has a wide reputation and influence in the Chinese semiconductor, Beidou positioning and navigation industry. As one of the renowned business leaders in Huaqiangbei Commercial Area of Shenzhen, Mr. Song is paying his best efforts to improve the business environment, hoping that Huaqiangbei will become a catalyst for reform and opening of  Shenzhen economic development.

Mr. Song Shiqiang's recent article“A Study of Huaqiangbei”, has beenreposted by Xinhua News Agency, People's Daily, Yangcheng Evening News and China Economic Daily, and its English version "Song Shiqiang's Point of View on Shenzhen Huaqiangbei" was reposted by more than 200 overseas media, including the Associated Press and the Wall Street Journal, which contributes to promote Shenzhen and Huaqiangbei.


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