Page 62 - 2020 White Paper on the Business Environment in China
P. 62
0 White Paper on the Business Environment in China
such as slowing economic growth momentum and as migrant workers from inland provinces have
resource shortages, are common among other increasingly sought opportunities in the Yangtze
cities in coastal areas. As such, Shenzhen’s success River Delta and other Guangdong municipalities.
as a demonstration area will also be a model for With a close to 13 times increase in GDP per capita,
sustainable and high-quality economic growth. the city’s increase in income per capita over the past
25 years has not been far behind.
Shenzhen, first designated as an SEZ in 1979 Fig 4 Fig 4 Income growthIncome growth has accelerated in recent years has accelerated in recent years
by the then-leader Deng Xiaoping, is the most
successful of its contemporaries such as Shantou, 3,500
Xiamen and Zhuhai. In the 10 years between
1987 and 1996, Shenzhen’s economy expanded 3,000
at around 28.7% YoY per year, primarily driven
by labor-intensive manufacturing with support 2,500
from foreign investors, with a strong focus on re-
exports. In 1993, the secondary sector (mainly the 1988=100 2,000
manufacturing industry) contributed two-thirds of
Shenzhen’s economic growth compared to one- 1,500
third in more recent years.
1,000
500
0
1988 1991 1994 1997 2000 2003 2006 2009 2012 2015 2018
Average worker income GDP per capita
Source: WindSFoiugrc4e: WInincdome growth has accelerated in recent years
Fig 5 The limited supply of industrial land has led to increasing transaction prices
3,500
Fig 2 Shenzhen’s GDP growth has decelerated from M33,,500e000 anwhile, induInsdutstrriiaal lalnd land usesupply in Shenzhen fees have a3,5l0s0 o
over 30% YoY in the early 1990s incr32e,,0500a00 sed significantly, reflecting a growing la3,0n00 d
Fig 2 Shenzhen’s GDP growth has decelerated from over 30% YoY in the early 1990s sho22r,,50t0000age within the SEZ. In 2018, while Shenzhe2,5n00 ’s
40 Real GDP growth eco2n1,,0500o00 mic growth remained a leader compared2,000toRMB1/9s8q8.=m1.00 '000 sq.m.
35 the11r,,500e000st of the country at 7.6% YoY, it had modera1,t50e0 d
30 sign1,0i50f00i0cantly from 15 years ago. 1,000
Fig 2 Sh2e5nzhen’s GDP growth has decelerated from over 30% YoY in the early 1990s 5000 500
%YoY 20 Real GDP growth 0 1988 1991 1994 1997 2000 2003 2006 2009 2012 2015 0 2018
40 15 Average worker income GDP per capita
Fig 5 The limited supply of industrial land has led toSource:Wind
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Area supplied (RHS) Average transaction price
35 10
increasing transaction pricesSFoiugrc5e: WTihned limited supply of industrial land has led to increasing transaction prices
30 5
%YoY 25 0 The transformation has begun
Industrial land supply in Shenzhen
20 1988 1991 1994 1997 2000 2003 2006 2009 2012 2015 2018 Benefit3ti,n50g0from government leadership, a vibrant private economy and accumulation of technical3,k5n0o0w-how,
Shenzhen National linabteonrs-iinv3et,e0a0n0nsdiveteicnhdnuosltorigeys-darnivdetnrapdriotdiouncatilomnacnaupfaaccittuyr.iInngfaacret,bSehinegnzihnecnrehaassinegvlyolrveepdlaincetodabytemchonreolc3oa,g0p0yi0thaulb with
the hea2d,5q0u0arters of world leaders. In 1H2019, advanced and hi-tech manufacturing already accou2,n50te0d for
So1ur5ce: Wind i7n1t.e2rn%aat2i,no0d0n0a6l6p.a7t%enotfs,Sahcecnozuhnetnin’sginfodrunsetrairallyphraoldf uocftCiohnin. aR’esmaparpkliacbaltyi,oSnhseinnz2h0e1n8is. also a robust gen2,e0r0a0tor of
10 Source: Wind RMB/sq.m.
Fig 3 Shenzhen’s secondary industry as a share of its overall economy peaked in 1993
5
0 Share of real GDP '000 sq.m.
Fig1001988 31991She19n94zhe19n97’s s2e00c0 on2d003ary20i0n6 du20s09try 2a012s a20s15har20e18 of
Shenzhen National 1,500 1,500
its overallSource:Wi8n0d economy peaked in 1993 1,000 1,000
Fig 3 Shenzhen’s secondary industry as a share of its overall economy peaked in 1993 500 500
60
ppt Share of real GDP 0 0
ppt
100 40 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Area supplied (RHS) Average transaction price
80 20 Source: Wind
60 0 The tSraonusfrocrmea: tWioninhads begun
1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018
Benefitting from government leadership, a vibrant private economy and accumulation of technical know-how,
40 Secondary Tertiary Primary
The Transformation Has Begunlabor-intensive industries and traditional manufacturing are being increasingly replaced by more capital
Source: Wind
intensive and technology-driven production capacity. In fact, Shenzhen has evolved into a technology hub with
20 the headquarters of world leaders. In 1H2019, advanced and hi-tech manufacturing already accounted for
71.2% and 66.7% of Shenzhen’s industrial production. Remarkably, Shenzhen is also a robust generator of
The end as a low-cost production center
internBatioenanl peatfeinttst, ianccoguntingffroronemarly halfgofoChvinea’rs napmplicaetionnstin 20l1e8.adership, a
Owvo0erkre1ti9rms88efr,opm1r9o9idn0ulacn1tid9o9np2rcoov1si9nt9sc4ehsa1vh9ea9vi6necirn1e9ca9rse8eads2idn0u0g0elytso2o0tuh0g2ehetx2oh0p0ap4uosrtt2iuo0nn0i6toief s2c0hi0ne8athpe2la0Y1ba0onrgst2zo0eu1R2rcieve2s0r,1eD4seplte2ac0ai1a6nlldy2oa0tsh1m8erigrant
Guangdong municipaliSteiecso.nWdairtyh a close to 13 times inTcerretiaasrye in GDP per capita, thePrciimtya’rsyincrease in income per vibrant private economy and accumulation of
Sourccea: pWiintda over the past 25 years has not been far behind. Meanwhile, industrial land use fees have also increased technical know-how, labor-intensive industries and
Source: WindThsreeigmenainfiindceadnataslyl,aeraeldfoleewrcct-ioncmgopasagtrrepodwrtoiondgthuleacnretdisosthonofrctthaeegnectoweuinrthtriny the SEZ. In 2018, while Shenzhen’s economic growth
at 7.6% YoY, it had moderated significantly from 15 years traditional manufacturing are being increasingly
Oveargtoim. e, production costs have increased due to the exhaustion of cheap labor sources, especially as migrant
workers from inland provinces have increasingly sought opportunities in the Yangtze River Delta and other replaced by more capital intensive and technology-
The End as a Low-cost ProductionGuangdong municipalities. With a close to 13 times increase in GDP per capita, the city’s increase in income per driven production capacity. In fact, Shenzhen has
Centercapita over the past 25 years has not been far behind. Meanwhile, industrial land use fees have also increased
evolved into a technology hub with the headquarters
significantly, reflecting a growing land shortage within the SEZ. In 2018, while Shenzhen’s economic growth
remained a leader compared to the rest of the country at 7.6% YoY, it had moderated significantly from 15 years
ago. of world leaders. In 1H2019, advanced and hi-
Over time, production costs have increased due tech manufacturing already accounted for 71.2%
to the exhaustion of cheap labor sources, especially and 66.7% of Shenzhen’s industrial production.
62
such as slowing economic growth momentum and as migrant workers from inland provinces have
resource shortages, are common among other increasingly sought opportunities in the Yangtze
cities in coastal areas. As such, Shenzhen’s success River Delta and other Guangdong municipalities.
as a demonstration area will also be a model for With a close to 13 times increase in GDP per capita,
sustainable and high-quality economic growth. the city’s increase in income per capita over the past
25 years has not been far behind.
Shenzhen, first designated as an SEZ in 1979 Fig 4 Fig 4 Income growthIncome growth has accelerated in recent years has accelerated in recent years
by the then-leader Deng Xiaoping, is the most
successful of its contemporaries such as Shantou, 3,500
Xiamen and Zhuhai. In the 10 years between
1987 and 1996, Shenzhen’s economy expanded 3,000
at around 28.7% YoY per year, primarily driven
by labor-intensive manufacturing with support 2,500
from foreign investors, with a strong focus on re-
exports. In 1993, the secondary sector (mainly the 1988=100 2,000
manufacturing industry) contributed two-thirds of
Shenzhen’s economic growth compared to one- 1,500
third in more recent years.
1,000
500
0
1988 1991 1994 1997 2000 2003 2006 2009 2012 2015 2018
Average worker income GDP per capita
Source: WindSFoiugrc4e: WInincdome growth has accelerated in recent years
Fig 5 The limited supply of industrial land has led to increasing transaction prices
3,500
Fig 2 Shenzhen’s GDP growth has decelerated from M33,,500e000 anwhile, induInsdutstrriiaal lalnd land usesupply in Shenzhen fees have a3,5l0s0 o
over 30% YoY in the early 1990s incr32e,,0500a00 sed significantly, reflecting a growing la3,0n00 d
Fig 2 Shenzhen’s GDP growth has decelerated from over 30% YoY in the early 1990s sho22r,,50t0000age within the SEZ. In 2018, while Shenzhe2,5n00 ’s
40 Real GDP growth eco2n1,,0500o00 mic growth remained a leader compared2,000toRMB1/9s8q8.=m1.00 '000 sq.m.
35 the11r,,500e000st of the country at 7.6% YoY, it had modera1,t50e0 d
30 sign1,0i50f00i0cantly from 15 years ago. 1,000
Fig 2 Sh2e5nzhen’s GDP growth has decelerated from over 30% YoY in the early 1990s 5000 500
%YoY 20 Real GDP growth 0 1988 1991 1994 1997 2000 2003 2006 2009 2012 2015 0 2018
40 15 Average worker income GDP per capita
Fig 5 The limited supply of industrial land has led toSource:Wind
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Area supplied (RHS) Average transaction price
35 10
increasing transaction pricesSFoiugrc5e: WTihned limited supply of industrial land has led to increasing transaction prices
30 5
%YoY 25 0 The transformation has begun
Industrial land supply in Shenzhen
20 1988 1991 1994 1997 2000 2003 2006 2009 2012 2015 2018 Benefit3ti,n50g0from government leadership, a vibrant private economy and accumulation of technical3,k5n0o0w-how,
Shenzhen National linabteonrs-iinv3et,e0a0n0nsdiveteicnhdnuosltorigeys-darnivdetnrapdriotdiouncatilomnacnaupfaaccittuyr.iInngfaacret,bSehinegnzihnecnrehaassinegvlyolrveepdlaincetodabytemchonreolc3oa,g0p0yi0thaulb with
the hea2d,5q0u0arters of world leaders. In 1H2019, advanced and hi-tech manufacturing already accou2,n50te0d for
So1ur5ce: Wind i7n1t.e2rn%aat2i,no0d0n0a6l6p.a7t%enotfs,Sahcecnozuhnetnin’sginfodrunsetrairallyphraoldf uocftCiohnin. aR’esmaparpkliacbaltyi,oSnhseinnz2h0e1n8is. also a robust gen2,e0r0a0tor of
10 Source: Wind RMB/sq.m.
Fig 3 Shenzhen’s secondary industry as a share of its overall economy peaked in 1993
5
0 Share of real GDP '000 sq.m.
Fig1001988 31991She19n94zhe19n97’s s2e00c0 on2d003ary20i0n6 du20s09try 2a012s a20s15har20e18 of
Shenzhen National 1,500 1,500
its overallSource:Wi8n0d economy peaked in 1993 1,000 1,000
Fig 3 Shenzhen’s secondary industry as a share of its overall economy peaked in 1993 500 500
60
ppt Share of real GDP 0 0
ppt
100 40 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Area supplied (RHS) Average transaction price
80 20 Source: Wind
60 0 The tSraonusfrocrmea: tWioninhads begun
1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018
Benefitting from government leadership, a vibrant private economy and accumulation of technical know-how,
40 Secondary Tertiary Primary
The Transformation Has Begunlabor-intensive industries and traditional manufacturing are being increasingly replaced by more capital
Source: Wind
intensive and technology-driven production capacity. In fact, Shenzhen has evolved into a technology hub with
20 the headquarters of world leaders. In 1H2019, advanced and hi-tech manufacturing already accounted for
71.2% and 66.7% of Shenzhen’s industrial production. Remarkably, Shenzhen is also a robust generator of
The end as a low-cost production center
internBatioenanl peatfeinttst, ianccoguntingffroronemarly halfgofoChvinea’rs napmplicaetionnstin 20l1e8.adership, a
Owvo0erkre1ti9rms88efr,opm1r9o9idn0ulacn1tid9o9np2rcoov1si9nt9sc4ehsa1vh9ea9vi6necirn1e9ca9rse8eads2idn0u0g0elytso2o0tuh0g2ehetx2oh0p0ap4uosrtt2iuo0nn0i6toief s2c0hi0ne8athpe2la0Y1ba0onrgst2zo0eu1R2rcieve2s0r,1eD4seplte2ac0ai1a6nlldy2oa0tsh1m8erigrant
Guangdong municipaliSteiecso.nWdairtyh a close to 13 times inTcerretiaasrye in GDP per capita, thePrciimtya’rsyincrease in income per vibrant private economy and accumulation of
Sourccea: pWiintda over the past 25 years has not been far behind. Meanwhile, industrial land use fees have also increased technical know-how, labor-intensive industries and
Source: WindThsreeigmenainfiindceadnataslyl,aeraeldfoleewrcct-ioncmgopasagtrrepodwrtoiondgthuleacnretdisosthonofrctthaeegnectoweuinrthtriny the SEZ. In 2018, while Shenzhen’s economic growth
at 7.6% YoY, it had moderated significantly from 15 years traditional manufacturing are being increasingly
Oveargtoim. e, production costs have increased due to the exhaustion of cheap labor sources, especially as migrant
workers from inland provinces have increasingly sought opportunities in the Yangtze River Delta and other replaced by more capital intensive and technology-
The End as a Low-cost ProductionGuangdong municipalities. With a close to 13 times increase in GDP per capita, the city’s increase in income per driven production capacity. In fact, Shenzhen has
Centercapita over the past 25 years has not been far behind. Meanwhile, industrial land use fees have also increased
evolved into a technology hub with the headquarters
significantly, reflecting a growing land shortage within the SEZ. In 2018, while Shenzhen’s economic growth
remained a leader compared to the rest of the country at 7.6% YoY, it had moderated significantly from 15 years
ago. of world leaders. In 1H2019, advanced and hi-
Over time, production costs have increased due tech manufacturing already accounted for 71.2%
to the exhaustion of cheap labor sources, especially and 66.7% of Shenzhen’s industrial production.
62
