Xinhua Insight: Thriving Shenzhen tells tale of old man and the city

Deng Zhibiao has always regretted letting his son leave Shenzhen.

"I should have stopped my second son from going to Hong Kong 40 years ago," said Deng, 75, at his home in Shenzhen, a business city in southern China's Guangdong Province.

The city has served Deng's eldest and youngest sons well. Both have more than one apartment in the city, as well as large incomes of several hundred thousand yuan.

"My second son has come back to work in Shenzhen, but has to rent an apartment," Deng said.

Deng was once head of Yumin Village, a hamlet of fishermen, in Shenzhen. In many ways, Deng's family life has run hand-in-hand with the life of Shenzhen, which has developed so much over the last few decades.

As one of China's first special economic zones, Shenzhen has evolved from a tiny fishing village into a vast metropolis. The city has a population of nearly 12 million, and its GDP ranks the fourth after the cities of Shanghai, Beijing and Guangzhou.

There is another Deng whose relationship with Shenzhen is more well known.

Deng Xiaoping was known as the chief architect of China's economic reform, opening up and modernization, and it was his landmark speeches during his famous southern China tour in 1992 that further inspired the fast developing city to keep on its way.

The city became free to reform and pursue wealth. Deng Zhibiao certainly venerates his namesake: "Without his policies, such development would be unimaginable."

CHANGE OF POLICIES

Deng Zhibiao often recalls the poverty in the 1970s and being offered bread and soda water that had come from neighboring Hong Kong.

"I dared not eat them!" he said. "They were products of capitalism."

Shenzhen's poverty made many of the villagers to attempt to sneak into Hong Kong.

"We fished in the Shenzhen River. Many fishermen didn't come back," said Deng Zhibiao. "Among more than 70 households, about 30 left."

Deng Xiaoping visited Guangdong in 1977. Three years later, Shenzhen became a special economic zone, an area where special business policies were experimented with.

Deng Zhibiao started buying second-hand cars in Hong Kong to sell in Shenzhen.

"Before the reform I couldn't do that. It was called capitalism."

By 1980, many people in Yumin Village had televisions, fridges, stereos and electric cookers -- all luxuries at that time. While other Chinese citizens earned less than 100 yuan (about 14.6 U.S. dollars) a month, the average annual household income in the village exceeded 10,000 yuan.

By 1985, the villagers had started factories making clothes, watches and jewelry. Businesses in Hong Kong were soon investing in Shenzhen.

HEATED DEBATE

Huaqiangbei, a sub-district in the city center of Shenzhen, used to be a congregation of manufacturers.

"At first they made electronic devices. Shenzhen Electronics Group (SEG) came into being in 1986 when they needed a market to buy components," said Hu Jianping, vice general manager of SEG.

Following SEG, more companies were founded and Shenzhen started to take shape as a manufacturing hub. "The then Ministry of Electronics Industry provided experts; the city government of Shenzhen gave us land and exempted our taxes," Hu said.

However, the development was not all plain sailing.

"From a planned economy to a market economy, the model for SEG invited dispute," he said.

Chen Xitian, 76, former vice editor-in-chief with the Shenzhen Special Zone Daily, said that reform and opening up were stagnating at the beginning of the 1990s when the world saw serious setbacks in socialist movement in the former Soviet Union and eastern Europe.

"In China, there were heated discussions about socialism or capitalism," Chen said.

Deng's 1992 southern tour brought the debates to an end.

"A planned economy is not just socialism as there is also planning under capitalism; a market economy is not just capitalism as there are also markets under socialism," he said.

After that, Deng Zhibiao's village was converted into a joint stock company.

Hu Jianping, then 30, quit his job as a teacher in northwest China's Shaanxi Province and went to Shenzhen.

SEG started manufacturing mobile phones.

"At the height of its prosperity, about 70 percent of the world's mobile phones were made in China, while 80 percent of China's mobile phones were from Huaqiangbei," Hu said.

HIGH-TECH HUB

Years later, Shenzhen faced a new set of challenges.

To protect intellectual property, Shenzhen began cracking down on copycat phones in 2011. E-commerce and the construction of a pedestrian street also affected SEG's popularity. The city had to change again.

"At the worst time, the rent of a booth in SEG mall was cut by half, and 40 percent of booths were empty," Hu said.

Things changed from 2012 when Xi Jinping, general secretary of the Communist Party of China (CPC) Central Committee, took an inspection tour to Guangdong.

Xi said that China's reform had came to a juncture where it would be more complicated to tackle difficult issues, and the CPC had to use political courage and deepen reform in important areas.

SEG began cooperating with Internet and technology giants, including Tencent, Huawei and Alibaba, shifting its focus to "Chuangke" -- hands-on technology enthusiasts who use 3D printers, robotics and other advanced tools to create products. The innovation revolution has been under way.

In Huaqiangbei, San Francisco-headquartered HAX, a hardware accelerator, has attracted teams from the United States and Europe, as a platform helping developers.

At a roadshow outside the HAX office, Bitome from the United States presented its health monitoring products.

Herbert Ryan, a co-founder and CEO of Bitome in Shenzhen, admitted that R&D costs in the city were lower than in the United States. A printed circuit board costs around 700 yuan in the United States, but only 200 in Shenzhen.

Ryan learned about the HAX Shenzhen office in an American magazine. He said the HAX staff had provided lots of help for them to choose materials and seek manufacturers.

Jack Ge, a graduate from Imperial College London, worked with five team members to develop a lamp capable of improving sleep.

Ge, 23, did not know much about Shenzhen, but his friends recommended Huaqiangbei to him, claiming that all the best hardware talent was in Shenzhen.

Ge said that it takes one month to make a prototype in Britain, but it takes half the time and one-third of the cost in Shenzhen.

"Even people behind the booths at Huaqiangbei have a good knowledge of hardware," Ge said.

Ge's team intend to register a company in Shenzhen.

The move to a more innovative economy has not just been with HAX and in Huaqiangbei but throughout Shenzhen. Cutting-edge technology is now a cornerstone of the city.

Shenzhen's transformation has been nothing short of miracles.

Chen Xitian remembers Deng Xiaoping standing by the side of the Shenzhen River in 1992 in the cold wind, gazing upon Hong Kong on the other side.

Deng Xiaoping died on Feb. 19, 1997, about four months before Hong Kong's return to the motherland.

On Jan. 3 this year, a memorandum was signed between Shenzhen and Hong Kong. The land Deng looked at 25 years ago will soon become a technology park.

It was a long and winding road, and few people knew exactly where the constant changes in Shenzhen would lead. However, there are solid and certain things. A huge portrait of Deng Xiaoping in the city is emblazoned with large red Chinese characters featuring: "Stick to the Party's basic line unwaveringly for 100 years." Endi