Shenzhen: China's Silicon Valley
Shenzhen is a city that many people have rather never heard of. Rather strange really, as no fewer than 12 million people live there and it is situated 50 kilometres north of Hong Kong, which has a population of just 7 million.
Massive growth of Shenzhen
Actually it is not strange, because in 1980 the city had only 60,000 inhabitants and is now an economic powerhouse with a focus on technology. It lies in the Pearl River Delta together with other mega-cities such as Guangzhou and Dongguan. A total of around 50 million people live in this area with an economic size just as large as Great Britain. At the moment, anyway.
Silicon Valley of China
What Silicon Valley is to the USA, Shenzhen is to China. Given that Shenzhen is growing much faster than its counterpart in the USA, that might well be a reason for the fear surrounding the technology being developed in China.
In the 1990s, Shenzhen was designated as a special economic zone by the Chinese government. It served as a place to absorb the huge migration flow from China's poor countryside to the cities. This was to prevent the coastal cities from becoming overcrowded. The establishment of factories provided poor peasant families with work, shelter, and the opportunity to send their children to school. Those children have now grown up and possess enormous energy and a drive for development.
Retail trip to Shenzhen
Recently we were in Shenzhen to explore the city and put together a programme for a group of 30 entrepreneurs from the retail sector. Now I can say that I've seen quite a bit of the world, but what we saw there was a world that is easily 20 years ahead of us. What's more, I thought that Tokyo always was an example of how to design a city, but Shenzhen certainly surpasses that!
The city has almost no motorised traffic left. Scooters, kick scooters, taxis, lorries, buses and cars: all electric! You can even hear the birds singing along the busy roads above the gentle whirr of tyres on the road surface. A completely new experience! For example, this also means that hospitality and retail venues are located alongside the busy 4-lane roads that cross the city. Imagine being able to quietly drink a cup of coffee instead of enduring the noise along the “allées” in Paris!
12 million people in Shenzhen
12 million people in that city and a huge number of young people who are all focusing on technological developments. You don't see that directly in the city, but you certainly notice it well when you walk into a shop. As I in my vlog As I mentioned earlier, you can hardly pay anywhere like we are used to with a debit card or credit card (or cash). 95% of all transactions go through WeChat or AliPay.
The smartphone serves as a means of payment. Whether you are buying a coffee on the street or vegetables in a supermarket, everything is digital.
PSD2 in Shenzhen?
In the Netherlands we are also making progress with the PSD2 story, but that is already water under the bridge in Shenzhen. We were allowed a quick look on a smartphone and the system doesn't actually work with money, but with a sort of credit on an account. Imagine this as a gift voucher that you can redeem anywhere and that is valid everywhere. So you shoot some credit from one account to the other account and your payment is done. So no bank gets involved anymore. Super fast and convenient! Want to buy a train ticket? That's also possible via the WeChat and AliPay platforms. And if you want to convert the credit back to money, you can do that too at the push of a button. Your credit goes down and your bank balance goes back up!
It is quite difficult for us “Westerners” because Google doesn't work in China and we can't just open an account there via WeChat either. So if you are going, two things are important: take enough cash with you from the Netherlands because card payments don't work, and make sure you have the addresses of where you want to go in the Chinese language with you because almost nobody speaks English, and why should they anyway?
There is much more to tell about Shenzhen, but I would say go and take a look for yourself and discover what is happening here! The group going on the retail trip to Shenzhen will soon be back in the Netherlands and we will certainly write another blog featuring their experiences!
Source infographic: Visual Capitalist https://www.visualcapitalist.com // Images: Pim van den Berg Perspectives BV