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This is interesting. So, you are saying the meltdown is due to government actively sponsoring malls/hotels instead of more manufacturing capacity?

baybal2 8y ago
Yes, totally. Their desire to turn Shenzhen into "Fancy Global City®" borders on being a maniacal obsession. These people have really hard time distinguishing in between cause and effect. SF, and SV got the title of a global tech capital not because of dotcoms moving there, but because these localities made it possible for these dotcoms to grew up there. Them turning into global cities as a result is a consequence of this, not the cause. Shenzhen was on track to becoming of a city where 80% of worlds production of anything electronic takes place, until demolitions of 2009-2011 that were catastrophic to the industry, and the later pivot to being a "Fancy Global City".
- danmaz74 8y ago
  > demolitions of 2009-2011 that were catastrophic to the industry Sounds interesting; any references?
  - baybal2 8y ago
    Not much on it in English, but that was like a magnitude 9 seismic event for the electronics industry globally. Any industry insider will confirm that. http://www.lankadesha.com/china-to-close-down-polluting-factories-in-beijing-shenzhen/ http://www.lankadesha.com/china-to-close-down-polluting-fact... http://www.bjreview.com.cn/headline/txt/2011-11/28/content_408262.htm http://www.bjreview.com.cn/headline/txt/2011-11/28/content_4... First, demolitions began in 2009, the month new mayor moved in. At first, compensations were laughable. Imagine putting a factory for $20m USD just to discover a year after that you have to shutdown and and only be compensated for the land it stood on for $1m? In 2010, they began offering a relocation option to Shanwei, a totally middle-of-nowhere town without even one percent of Shenzhen's workforce. And in 2012, they very well made an ultimatum: "demolition by the end of the year, or right now if you refuse" In total, around 15000 to 16000 factories were closed over the years and their land expropriated.
    - danmaz74 8y ago
      Thanks, this was really interesting!
    - justinclift 8y ago
      Any idea if those factories outright closed, or did many of them move location to somewhere else? If many of them moved somewhere else, then maybe that location(s) will become future areas of high growth?
      - baybal2 8y ago
        Most moved to outskirts of Shenzhen municipality, just to be 1 cm outside of Shenzhen city jurisdiction. Longhua, Baoan outskirst, Dongguan. Zhuhai in particular scored a lot of heavy hitters, to Shenzhen mayor's disdain. Zhuhai gave "refugees" a complete carte-blanche to setup any factories they wanted. Very very few factories did use their relocation option to Shanwei. Those were real heavy industry companies in their majority, because for them facilities relocation cost was a genuine life and death matter. Best to say that 2009-2012 events have led to growth being scattered, and great loss of "cluster effect." While Longhua was a rural locality before these event, it did scored few companies who moved into already existing, vacant plan economy era factories and refurbished them. Our Wi-Fi OEM contractor rents one of such factories. Longhua's officials were, of course, very glad to see such developments. There are few residential high rises there now for people who moved to work in those factories from Shenzhen. It will certainly acquire title of a city before the end of a decade. Dongguan was already the second biggest manufacturing hub in the province after Shenzhen, and will soon take the first place from it. Zhuhai, I bet, will be becoming what mayor of Shenzhen city originally wanted, a high-tech, high-value service/product hub. The city was very receptive to genuine tech companies, and was very accommodating when it was coming to securing land for factories and campuses, as well as guarding newcomer companies from overzealous bureaucracy. P.S. I think I need to clarify what to understand under factory. The digit of 15000 companies is given for all "manufacturing enterprises," which could be anything from a garage workshop, to a one man factory ran from a flat.

baybal2 8y ago

Yes, totally. Their desire to turn Shenzhen into "Fancy Global City®" borders on being a maniacal obsession. These people have really hard time distinguishing in between cause and effect. SF, and SV got the title of a global tech capital not because of dotcoms moving there, but because these localities made it possible for these dotcoms to grew up there. Them turning into global cities as a result is a consequence of this, not the cause. Shenzhen was on track to becoming of a city where 80% of worlds production of anything electronic takes place, until demolitions of 2009-2011 that were catastrophic to the industry, and the later pivot to being a "Fancy Global City".

danmaz74 8y ago
> demolitions of 2009-2011 that were catastrophic to the industry Sounds interesting; any references?
- baybal2 8y ago
  Not much on it in English, but that was like a magnitude 9 seismic event for the electronics industry globally. Any industry insider will confirm that. http://www.lankadesha.com/china-to-close-down-polluting-factories-in-beijing-shenzhen/ http://www.lankadesha.com/china-to-close-down-polluting-fact... http://www.bjreview.com.cn/headline/txt/2011-11/28/content_408262.htm http://www.bjreview.com.cn/headline/txt/2011-11/28/content_4... First, demolitions began in 2009, the month new mayor moved in. At first, compensations were laughable. Imagine putting a factory for $20m USD just to discover a year after that you have to shutdown and and only be compensated for the land it stood on for $1m? In 2010, they began offering a relocation option to Shanwei, a totally middle-of-nowhere town without even one percent of Shenzhen's workforce. And in 2012, they very well made an ultimatum: "demolition by the end of the year, or right now if you refuse" In total, around 15000 to 16000 factories were closed over the years and their land expropriated.
  - danmaz74 8y ago
    Thanks, this was really interesting!
  - justinclift 8y ago
    Any idea if those factories outright closed, or did many of them move location to somewhere else? If many of them moved somewhere else, then maybe that location(s) will become future areas of high growth?
    - baybal2 8y ago
      Most moved to outskirts of Shenzhen municipality, just to be 1 cm outside of Shenzhen city jurisdiction. Longhua, Baoan outskirst, Dongguan. Zhuhai in particular scored a lot of heavy hitters, to Shenzhen mayor's disdain. Zhuhai gave "refugees" a complete carte-blanche to setup any factories they wanted. Very very few factories did use their relocation option to Shanwei. Those were real heavy industry companies in their majority, because for them facilities relocation cost was a genuine life and death matter. Best to say that 2009-2012 events have led to growth being scattered, and great loss of "cluster effect." While Longhua was a rural locality before these event, it did scored few companies who moved into already existing, vacant plan economy era factories and refurbished them. Our Wi-Fi OEM contractor rents one of such factories. Longhua's officials were, of course, very glad to see such developments. There are few residential high rises there now for people who moved to work in those factories from Shenzhen. It will certainly acquire title of a city before the end of a decade. Dongguan was already the second biggest manufacturing hub in the province after Shenzhen, and will soon take the first place from it. Zhuhai, I bet, will be becoming what mayor of Shenzhen city originally wanted, a high-tech, high-value service/product hub. The city was very receptive to genuine tech companies, and was very accommodating when it was coming to securing land for factories and campuses, as well as guarding newcomer companies from overzealous bureaucracy. P.S. I think I need to clarify what to understand under factory. The digit of 15000 companies is given for all "manufacturing enterprises," which could be anything from a garage workshop, to a one man factory ran from a flat.