Shenzhen the new Hong Kong?

China’s plan for a model city . . .

According to a state document issued on August 18, China plans to develop Shenzhen into a model city that showcases the best traits of “socialism with Chinese characteristics,” Beijing-speak for signalling robust investment into the city to raise its profile. According to this plan, Shenzhen is to become “an example of high-quality development, a demonstration of rule of law, a model of civilization and societal satisfaction, and a pioneer in sustainable development.” To that end, the plan set out the following goals for Shenzhen:

  • By 2025, to become an internationalized innovative city in the world.
  • By 2035, an innovative city with global influence.
  • By the mid-21 century, a leading world city in innovation, entrepreneurship, and creativity.

Shenzhen to play more prominent role . . .

Shenzhen, neighbouring Hong Kong, is the country's first special economic zone. In China’s outline development plan for Guangdong-Hong Kong-Macau Greater Bay Area released in February 2019, Shenzhen, together with Hong Kong, Macau, and Guangzhou, is named as one of the four core cities for regional development. The new plan announced this week attributes an even more prominent role to Shenzhen and comes at a time when Hong Kong enters its eleventh week of demonstrations. Beijing also announced its plan to double the size of the Shanghai Free Trade Zone with new tax incentives and import duty exemptions about two weeks ago.

Alternate economic hubs . . .

Analysts believe these recent moves signal Beijing’s plan to ‘replace’ Hong Kong with Shenzhen, Shanghai, and potentially other cities by making them better places to do business in light of the social and political uncertainties highlighted by the unrest in Hong Kong. Since the hand-over, Hong Kong’s economic and commercial importance has been leveraged to maintain some degree of autonomy. Recent protests, however, have likely prompted Beijing’s leadership to consider alternative plans.