The pain of upgrading and transformation in Shenzhen industrial

From the peak to the plain, Huaqiang North’s pain in the road to upgrading and transformation is also a kind of cut-off made by Shenzhen for industrial upgrading.

When Huaqiang North faced vacant shops in the context of high-cost, low-profit industries, Shenzhen was also questioning the “industry hollowing out” of large-scale manufacturing outreach.

In an interview with the Southern Weekend, Tang Jie, the former deputy mayor of Shenzhen, explained the uniqueness of Shenzhen – Shenzhen is not the only city that has transformed its production methods, but the difference is that in the past 30 years Shenzhen will complete a major industrial transformation in almost 10 years.

The most recent one is “the transformation from the traditional industry to the high-tech industry-led industrial structure.”



(Shenzhen Industrial Structure Map Source China Business Research Institute)

When the brand itself achieved small profits but quick turnover through mass production, Huaqiang North’s low-cost replication technology also lost profit margins.

From copying the cottage to brand design, Huaqiang North experienced the trade-offs made by Shenzhen to promote industrial transformation and upgrading.

On the road of upgrading Huaqiang North, Shenzhen has cut off the “cottage” and “low-end manufacturing” and other parts that hinder its progress. How far can it go in the future? It depends on whether Huaqiang North can find more valuable labels.



In 2016, the Shenzhen Economic and Trade Information Commission issued the “Shenzhen Commercial Network Planning (2016-2020)”, which indicated that it will encourage the Huaqiangbei electronic market to brand experience, e-commerce, corporate headquarters, design, display, customization, supply chain management, and after-sales. Service and other aspects of transformation and upgrading.

Hope to build Huaqiangbei into a city “a high-end consumer electronics new product release, display exhibition, user experience, investment negotiation, cooperation transaction five-in-one, based in Shenzhen, serving the country, globally oriented international consumer electronics display trading platform and Shenzhen Electronics Information industry innovation highland.”

However, in the immediate future, Huaqiang North is clearly still moving from the low end to the high end.

At present, shops in Huaqiangbei are almost all owned factories in Baoan or Dongguan. The electronics industry is not only in front of the continued decline in transaction growth, but also relies on the pressure of manufacturing.

On the one hand, the manufacturing profits are compressed, the land price is increasing, and on the other hand, the housing prices are skyrocketing and the digital economy is booming.

At that time, those bosses who had obtained thousands of net worth after the one-meter counter in Huaqiang North were also buying large-scale properties instead of continuing to invest in production and operation.



(图源安居客)

Ten years ago, Huaqiang North was a paradise for young people. No matter the level of education, as long as you are willing to learn hard, you can find a successful method here.

But now, more and more people are turning off stores that have been in business for many years, and switching to clothing, food, or real estate industries that are easier to make money.

The transformation of Huaqiang North is also a difficult situation for Shenzhen’s industrial migration and upgrading. It is related to the young people staying in the industry and the industry staying in the city.

Perhaps, when Huaqiang North completed the upgrade and transformation, it would be able to get a satisfactory answer by staying in the industry around Shenzhen for many year