INQ listens in to IT city Shenzhen's future plans

SHENZHEN IS ONE of the hottest technology spots in China. Many of the "big names" from the West have offices, manufacturing facilities, or shipping centres located here.

Shenzhen is often called the gateway to Guandong, the main technology manufacturing area in China, and is usually mentioned in the same breath as Hong Kong.

The big technology players here include Hitachi, IBM, Intel, Lenovo, Motorola, ZTE, and literally thousands more that produce branded components for well-known companies. It's safe to say that almost anything hi-tech in China has a connection to Shenzhen.

Even though some don't seem to care for the term, Shenzhen is a suburb of Hong Kong. Or maybe it is the other way around and HK is becoming a suburb of Shenzhen. Many large firms have moved both front and back office operations to Shenzhen from HK. Stroll down the streets of Shenzhen and every fifth car you see in some areas has both HK and Shenzhen tags. Many HK residents have bought homes in Shenzhen because they get more for thier money, avoiding the inflated HK property prices. Crossing from Shenzhen to HK and back is becoming routine and straightforward for everyone.

Today was the start of the Fourth Shenzhen Municipal People's Congress. What you might call "A Big Deal" because it is the planning session that determines the direction the city will follow for the next 12 months. In many ways the direction of this city will shape the direction of much of the technology sector, and certainly have a direct impact on IT. Normally, you might hear a little bit about this meeting long after it is over, and then likely in passing. This year there is a difference: you are inside.

Very few Chinese citizens of Shenzhen are invited to observe these planning meetings. A few foreign diplomats are usually invited, and everyone else there has an official role in the government or the party. As part of Shenzhen governments efforts to make the planning process more open, there were about 20 foreigners invited this year.

The Consuls General of Thailand, Finland and The Netherlands; President of the Egypt-China Business Council; Chief Representative of The Republic of Rwanda and Chief of the Economic and Political Section for the United States were there in diplomatic roles. The Greater China President of Hitachi was there, and a handful of others. Diplomats and captains of industry. And me.

Shenzhen mayor Xu Zongheng delivered the goods in a well-prepared, albeit very Chinese-style speech that lasted the whole morning. The complete text was provided, in both Chinese and English. The English translation is very good. The whole speech was televised live.

The Shenzhen economy grew by about 15 per cent in 2006. Most of the growth was in the technology sector. Foreign trade volume increased nearly 30 per cent to 237.4 billion USD. Unemployment dropped to about 2.3 per cent, and air and water quality improved. Shenzhen is now the number one city in China for per-capita GDP, and is now rated the number one city in China for infrastructure and opportunity.

Shenzhen's harbour and shipping facilities are now the fourth largest in China in terms of volume, and the airport also ranks fourth for shipping volume. These growth and improvement trends are expected to continue or increase in 2007.

The Shenzhen city government is moving quickly to become China's best example of "digital government" and many services are available online. The trend is expected to continue this year. Local ISPs are increasing in number, and reliability is improving.

The mayor talked about many other improvements and gains, but here's a twist. In the televised speech, he apologised for, among other things, traffic problems in the city. Then he explained how these problems were being solved. He told the people of Shenzhen that he was the go-to guy, and held his staff to be responsible and accountable. This is not only political rhetoric: the government here is actually moving towards accountability and transparency. Perhaps not for any altruistic reason, but rather because it makes economic sense to run things that way.

OK, so what does all this have to do with IT, technology, and you?

Loads. There is a good chance that most, if not all of the system you are using to read this report passed through Shenzhen. The Shenzhen High-Technology Fair (which we plan to cover this year), even though in its third year, is the biggest technology showcase in China, soon to rank amongst the world's biggest. More international technology firms are in the process of moving both front and back office operations here.

And the forecast? Things look good for Shenzhen in the next few years. If you are a high-tech watcher, this is the place to keep an eye on. µ