Monday, September 9, 2019
As the political turmoil in Hong Kong escalates, Beijing is swiftly preparing to bankroll Shenzhen, protecting one of its most prosperous mainland cities.
Shenzhen is only 17 miles away from the port of Hong Kong, a key gateway for commerce between China and the west. Shenzhen's proximity to Hong Kong has made it strategically important for China’s ruling clique. Its significance, however, does not necessarily relate to China’s tendency to show off its military might as a means to intimidate protesters in Hong Kong. Beijing’ priority, rather is to protect and advance Shenzhen, home to Huawei and Tencent, as China’s hub of international science and technology — with or without Hong Kong.
Given the difficult issues posed by the former British colony, still Asia’s financial center, the last thing China’s central government wants to see is Hong Kong’s troubles spill across the border into Shenzhen.
Seeking to forestall any disruptions in Shenzhen, Beijing last month unexpectedly issued an “opinion” affirming the central government’s strong commitment to support Shenzhen as a “model zone.”
The opinion stated that Beijing expects Shenzhen to “take the lead in building a modern economic system that reflects the requirements of high-quality development.” Guided and promoted by the Communist Party of China Central Committee and the State Council, businesses in Shenzhen that develop 5G, artificial intelligence, network technology, biomedicine, high-end communications devices and other favored industries will receive major government support.
One of the entrepreneurs I talked to last week in Shenzhen (who requested anonymity) described this opinion as “one of the most important documents that came out of the government this year.” This entrepreneur, who runs a startup in China, said that Beijing's pledge of support means, “I could probably get a free office space in Shenzhen, and a million (or two million) dollar investment from the government.”
The irony of the sudden statement by Beijing is, he observed, “Up until now, unlike other cities in China, Shenzhen had never asked for anything from the central government.”
The city has enjoyed economic autonomy, but it was also the beneficiary of Beijing's policy decisions. In 1980 the Chinese government designated Shenzhen (and several other small cities in southeastern coastal China) as a Special Economic Zone, setting Shenzhen on a path to success.
In the Special Economic Zone, foreign and domestic trade and investment can operate without authorization from Beijing. By design, special economic zones function as geographical areas of rapid economic growth, using tax and business incentives to attract foreign investment and technology.
Beijing sees Shenzhen as a "testing ground" for reform and a “window” opening to the world, which has helped China gain experiences in the nation's modernization. In the central government’s view, Shenzhen has become a model for China to handle the often-difficult relationship between the ruling Communist Party and the open market.
The success of Huawei and Tencent wouldn’t have been achieved without Shenzhen’s exceptional access to the financing of science and technology enterprises, a flexible talent policy, a free talent flow and international capital from Hong Kong and elsewhere. Hong Kong’s role was especially crucial.
The central government’s “opinion” says, “We will support Shenzhen in implementing a more open and convenient system of the introduction and entry and exit of foreign talents, allowing international talents who have obtained permanent residence status to set up science and technology-based enterprises in Shenzhen and act as legal representatives of scientific research institutions.”
To be clear, Beijing is not articulating a new policy pitting Shenzhen against Hong Kong. Government officials repeatedly deny any meddling in Hong Kong’s affairs, while accusing Western media of encouraging the protests.
Judging from the opinion, China’s short-term goal is to trust Shenzhen to do better than Hong Kong. In the long-term goal, the Party’s mission is for China to outperform western countries, leveraging what it calls “socialism with Chinese characteristics.”
The term, “socialism with Chinese characteristics,” unfamiliar to most Westerners, was coined in the era of then Party chief Deng Xiaoping, who adopted some elements of market economics, inviting foreign investment to promote growth and increase productivity.
Back in Hong Kong…
The unrest in Hong Kong, meanwhile, got more violent this past weekend. The city experienced a wave of clashes between police firing tear gas and protesters throwing Molotov cocktails. Demonstrators also choked travel routes to the airport Sunday. By Monday, hundreds of Hong Kong university and school students swapped classes for democracy demonstrations, Reuters reported.
The unrest has continued for 13 weeks, confounding predictions that it would be a short-lived phenomenon. Protesters are showing no signs of backing down.
The first demonstrations opposed a now-suspended extradition bill that would have allowed people in the city to be sent to China for trial in courts controlled by the Communist Party. This was the latest example of what many residents see as ever-tighter control by Beijing, despite the promise of autonomy.
Many observers regard Oct. 1st as tacit deadline for Hong Kong to revert to business as usual. That day marks the 70th anniversary of the founding of the People’s Republic of China. If Hong Kong doesn’t settle down by then, Beijing is likely to quash the protest at any cost, even by resorting to military power.
Fearful of that crisis, protesters might accept a temporary cease fire. But a complete return to the status quo ante is unlikely.
“What I am really worried about is things that could happen in Hong Kong after Oct. 1,” said an automotive engineer based in Hong Kong whom I met during a conference here last week.
In his opinion, it’s unrealistic to believe that the pent-up frustration among Hong Kongers will dissipate quickly.
When Hong Kong returned to China, Deng Xiaoping and British Prime Minister Margaret Thatcher negotiated the “one country, two systems” deal, allowing Hong Kong a high degree of autonomy at least until 2047, fifty years after reunification. Under the “one country, two systems” policy, Hong Kong residents were promised freedoms not enjoyed on the mainland. Their privileges include the right to protest and an independent legal system.
A visiting Swiss engineer asked a colleague in Hong Kong why — if an eventual integration with the mainland is a foregone conclusion — people in Hong Kong don't just acquiesce. The Hong Kong-based engineer explained that complete reunification won't affect just the young protesters. Among others, it would devastate major real-estate owners and builders.
Both Hong Kong and Shenzhen have prospered respectively under the combination of “one country, two systems” and “socialism with Chinese characteristics.”
Elements of capitalism have helped both cities. Yet, they both could face uncertainties, because the definitions of their economic and political systems, devised by the Communist Party for convenience’s sake, are constantly evolving.
Given China’s 3,000 years of history, the last 40 years barely count as a blip. But the drastic changes engineered in the Guangdong region during this short span are remarkable. In celebrating “40 years of Reform and Opening-up in Guangdong,” Shenzhen is hosting an exhibition titled “Great Tide Surge Along the Pearl River 1978–2018.”
Consider Shenzhen in 1978, compared to Hong Kong. Baoan County (Shenzhen) in those days was an impoverished agricultural backwater. A typical farmer there had an annual income of 134 RMB, while his counterpart in the neighboring New Territories (Hong Kong) had an annual income of HK $13,000. Farmers in Shenzhen regularly tried to migrate to the New Territories illegally to make more money.
Since those days, the rapid economic growth in Guangdong province has boosted disposable income among permanent residents ninefold, from 3,476.70 RMB in 1992 to 30,226.71 RMB in 2012.
In the following pages, we share graphics, art and photographs presented at the 1978-2018 Guangdong special exhibition in Shenzhen.
Average Age of Shenzhen Population: Less than 30
The average age in Shenzhen is less than 30. The age range includes a range of 8.49% between the age of 0 and 14, 88.41% between the age of 15 and 59, and 3.1% aged 65 or above. They are all eager to read and learn.
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