Impressions of China, from Shenzhen

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My first impressions of China are tied to a single number. China has a current economic growth rate of 8 per cent.

8 per cent growth

Even if the UK economy were overheating in a boom, it would be barely running at 3  percent growth. 8 per cent growth creates a huge amount of activity.

It is something that would be more familiar to our industrial age forebears who would have experienced similar growth in the likes of Birmingham, Detroit, Manchester or Yokohama. I saw building sites working around the clock and infrastructure being thrown in at a speed that would inconceivable in the UK.

The comparison to Victorian Britain also bears up in terms of the emergence of a middle-class and a large working-class population for whom getting a good job is extremely competitive.

In many respects the middle-class Chinese has more in common with their American counterparts than Europeans. Home-grown mini-vans beloved of ‘soccer moms’ are popular on the roads and I saw more Buick and Cadillac saloons here than I have seen anywhere else outside the US.

This viewpoint has probably been reinforced by the fact that Shenzhen, like Los Angeles, is such a car city. The city authorities are addressing that at the moment. However, these surface impressions of China belie the fact that Chinese middle class still earn less than their US counterparts and have to save half their money to deal with future health costs.

The city of Shenzhen are putting in four mass transit lines at once: for a comparison London took over three decades to get the Jubilee Line in place.

I got to try the mass transit system which has already been put in. It is of a similar standard to rail systems in Singapore and Hong Kong. The ticket system is completely paperless with single tickets looking like an old-time milk bottle token that dairies used to issue to customers as a payment system. There is nothing old school about these tokens as they seem to be RFID tags.

Impressions of China Dream, from the perspective of the middle class

A quick scan of English-language books for sale revealed an interest in finance, stock-picking, management – particularly Peter Drucker and quality improvement / process improvement – the Juran Institute works and The Toyota Way seemed to be pretty popular. All of these books give impressions of a China dream that is based on the kind of hard work and getting ahead that would have been familiar to Americans in the immediate aftermath of world war 2.

I have been staying in a condo which would not look out of place in Mountain View or San Mateo.

Again surface impressions of China may lead to false assumptions about consumption. The growth of Shenzhen is also very Chinese, you may shop at a 7-Eleven and sip a latte at Starbucks, but there are very few recognisable names in neon at the top of the skyscrapers – the only ones I saw were Hyundai and Samsung. Traffic is much more chaotic in terms of the way people drive than we are used to in the UK. Electric scooters are popular and are lethal, hard to spot like a bicycle and silent.

Alongside the growth is coming reinvention. In a set of TV factory buildings; an area called OCT-LOFT is being developed as a mix of galleries and workplaces for the creative industries. A few hours people watching in the spacious Starbucks down there saw a plethora of Mac laptops open and busily working away on the free wi-fi: kind of equivalent to the Truman Brewery in London.

If the West deludes itself that China can make stuff, but can’t do the knowledge economy then it is in for a rude awakening. Although Shenzhen is the world’s workshop, there is a transition going on to higher-value products and services.

I got a change to talk to a local web developer and could see the sophistication of this market catching up the UK digital sector sooner rather than later. Couple this with China Telecom offering business web hosting at 200 Renimbi per year and you get a sense that things could move on here very fast.

A thirst for technology

Looking around the markets here, there is a thirst for technology similar to what you see in Japan. Mobile technology was particularly popular, there were handsets on display that I previously thought were Japan or Korea-only models with large swivel TV screens on the handsets.

I used a PAYG SIM by China Mobile which provided me with both a Chinese and Hong Kong number. Mobile devices have also become a luxury totem here with Vertu and Porsche Design devices displayed alongside the latest models from Nokia.

Value proposition

Chinese consumers are not all about price. Yes Chinsese consumers like free stuff, gifts and status recognition through VIP loyalty schemes and experiences. However impressions of China consumers are changing from price to a more complex value proposition. There are many foreign-made products as well as foreign brands on sale in the department stores. Ones that I immediately noticed were:

  • Zwilling – the German manufacturer of quality kitchen knives, personal tweezers and nail scissors
  • Carrera sunglasses and goggles
  • Victorinox Swiss Army Officers Knives
  • Ray-Ban sunglasses
  • Porsche Design

Whilst China may embrace many aspects of the market economy, the government is very good at putting in infrastructure for the greater public good such as art galleries and public parks. It is amazing how green the place actually is. For every Shenzhen, there is a rust belt down in Hubei province with a dark dystopian vibe. Impressions of China from Shenzhen have to be tempered with a knowledge of the hinterland. Shenzhen is a special economic zone. It is part of the vanguard of where China wants to go. It is at the top of what China hopes it can direct into trickle down economics.  More posts on Shenzhen here.