Shenzhen – The World Economy of Tomorrow

You can read it in old German travel guides: Shenzhen was once a fishing village. Shenzhen is not mentioned in the five-volume “Der Neue Brockhaus” from 1975. In 1993, the renowned Brockhaus Encyclopedia reported in 24 volumes under the short keyword “Shenzhen” of only 280,000 inhabitants. Even then it may have irritated readers that the Brockhaus mentions the existence of a 52-story high-rise. In 2017, Shenzhen already had 12.53 million inhabitants. Any German reader looking for answers to the question of what happened there will be happy to encounter the book by Wolfgang Hirn: Shenzhen – Die Weltwirtschaft von morgen (2020 Campus Verlag GmbH, Frankfurt am Main).

Anyone who knows Wolfgang Hirn or his professional background does not have to worry about the technical requirements of the book – it reads evidence-based, detailed and also exciting. Wolfgang Hirn studied economics and political science in Tübingen. After working as a business editor, he worked as a reporter for manager magazin. He has been traveling to China regularly since 1986, published the bestseller “Challenge China” (2005) and most recently at Campus “Chinas Bosse” (2018). He lives as an author in Berlin and writes on topics related to China.

The book not only traces the history of a city that has been the pilot city of the central government for the promotion of electromobility since 2009 and today claims to have more than 200,000 charging stations. With his processing of the fairytale-like rise of Shenzhen to a global model city, Wolfgang Hirn gives the reader an understanding of the following chapters, which deal with “the factory of the world”, the city in the rush of founders and examples of the Tencent and Ping An corporations like them develop their power with alogrithms.

Wolfgang Hirn introduces Shenzhen as a “Smart City”, loaded with electromobility that connects companies, companies that – instead of universities – shape the research landscape and where Nobel Prize winners want to run their research laboratories. However, if you think that “Shenzhen Valley” is all about money, Wolfgang Hirn will open your eyes to the art of building and the architects, artists and designers who create a city.

Finally, Wolfgang Hirn also shows the relationship between the two “difficult neighbors”: How Shenzhen is profiting from the decline of Hong Kong. Anyone who looks at the unprecedented rise of Shenzhen will reconsider whether the “Hong Kong democracy movement” is really about democracy, or perhaps also about a self-confidence that many Hong Kongers have disturbed: “The former British crown colony was bursting with self-confidence,” writes Wolfgang Hirn: Hong Kong looks like a museum today, suddenly looks old.

Who still remembers the “hidden champions” in Germany, German ingenuity? “In 2005, the following five companies worldwide had the most patent applications filed,” writes Wolfgang Hirn: “Philips, Panasonic, Siemens, Nokia and Bosch. So four Europeans – including two Germans – and one Japanese.” Anyone who knows today’s conditions, these words come across as from an old history book with stories from a forgotten time. “In 2018 none of these companies was among the top five. The order is now: Huawei, Mitsubishi Electric, Intel, Qualcomm and ZTE. There was no longer a European, instead two companies from Shenzhen.”

Instead of marveling at the “today” in California, in Silicon Valley, the gaze of politicians, business leaders and journalists who constantly look at extroverted billionaires of the so-called PayPal mafia (Elon Musk etc.) should focus on “tomorrow”, turn east and see the still unknown stars. “The ladies and gentlemen should change direction”, so the appeal of Wolfgang Hirn, who on the one hand was lucky to have seen China’s starting conditions in the 1980s and on the other hand had the foresight to return to China again and again to witness an unprecedented climb.

This rise of China is particularly concretized in the example of the model city, the reform laboratory “Shenzhen”, the city that is closer to Hong Kong than Frankfurt to Wiesbaden, closer than Cologne to Düsseldorf. “Shenzhen still benefits greatly from the fact that the surrounding area has the greatest density of factories in the world. I was able to see with my own eyes how this came about when I traveled to Shenzhen for the first time in the early 1990s,” writes Wolfgang Hirn.

Wolfgang Hirn analyzes the fundamental reforms on which the success was based: In agriculture, in private entrepreneurship, in the free labor market and the abolition of state prices. Against the background of developments in the West, especially in Europe, it becomes clear to the reader in which tragedy Europe and especially Germany is steering: more collectivization of agriculture, private companies on the drip of public contracts and subsidies, in detail state-regulated jobs and tariffs, prices manipulated by monetary and fiscal policy, etc., which lead to where China came from: waste of resources, queues, inefficiency, up to and including insufficient supply.

After Xi Jinping was elected in November 2021, his first eagerly awaited trip took him to Shenzhen to, among other things, visit Tencent and the Qinhai development zone – “without much pomp”, as Wolfgang Hirn reports and quotes the president: “China’s reform and opening-up policy will never stop. In the next 40 years, China will impress the world with further successes,” announced Xi Jinping.

Wolfgang Hirn shows the downsides that went along with the opening. In the shadow of Shenzhen, the megacity of Dongguan emerged “as the Mecca of the global shoe industry”. Dongguan was the filthy kid in the Pearl River Delta, a city that once had a bad reputation. “It was the capital of prostitution,” said Leslie C. Chang from her book “Factory Girls”. The China expert Wolfgang Hirn succeeds in showing the different phases of development and differentiated how the rise of China and especially of Shenzhen was not just characterized by good news, but rather the removal of grievances in one area was bought at the price of grievances in another. Unfortunately, the German state media often do not differentiate which grievances in China have been overcome, which have been added and which have been added but have already been overcome again. Anyone who reads Wolfgang Hirn book carefully will be able to form his own, more informed opinion.

The author succeeds in repeatedly speaking on two sides of the same thing, for example in the case of drones and the leading manufacturer in Shenzhen: “DJI estimates that a third of China’s agricultural area could be cultivated with drones. In XAircraft from nearby Guangzhou, founded by the former Microsoft manager Peng Bin, DJI has a serious competitor in this segment.” Wolfgang Hirn adds another use of drones that is still unimaginable for German readers: “And another important application area for drones was discovered in Shenzhen. The traffic police there have been using drones since 2016 to track down traffic offenders of all kinds – from high-speed drivers to parking offenders – from above. Obviously with success: every three minutes they would register irregular behavior with their drones, reports the police.”

“We will have to remember a new abbreviation. Three letters that will play an important role in the future: GBA “, writes Wolfgang Hirn and foresees a new center of power in the world: “Greater Bay Area.” It is about the merger of the two special administrative areas and former colonies of Hong Kong and Macau with nine cities in Guangdong Province.

Anyone who does not deal with Wolfgang Hirn‘s point of view will hardly understand ratings for countries, industries, cities and companies in the future. “The emerging countries, including the rest of China, see how growth can be accelerated through a clever industrial policy. And developed and even well-developed industrialized countries like Germany see how to promote high-tech industries, how to create an entrepreneurial spirit in a city, and how to pursue a consistent transport policy. “