The Chinese city of Shenzhen will apply a preferential visa policy for highly qualified foreign personnel, in addition to providing benefits to technology companies. The Chinese authorities are betting on this city as the main center of innovative development.
In just 40 years, Shenzhen has grown from a small fishing village to the largest metropolis in China and home to many tech giants, including Huawei.
The city’s GDP grew at a rapid rate, reaching 2.69 trillion yuan (about $ 400 billion) in 2019. Shenzhen ranked third in China, behind only Beijing and Shanghai, according to this indicator, and overtook neighboring Hong Kong. And in terms of GDP per capita, Shenzhen ranks first with about $ 30,000.
The Chinese authorities intend to turn Shenzhen into a new global financial and technology center that, thanks to its unique location, can also become a new Silicon Valley and an Asian Wall Street.
A new five-year development plan for the megalopolis, published by the Central Committee Office of the Communist Party of China and the State Council of China, gives Shenzhen significant autonomy to allocate land to production centers and housing.
In addition, Shenzhen is expected to lead the process of internationalization of the yuan and increase the openness of the financial sector.
Beijing also expects Shenzhen to provide innovative solutions to commercialize science and technology and distribute resources in the market. Currently, R&D funds are distributed centrally by the Government or by local authorities. In Shenzhen, it is planned to delegate this function, at least partially, to the market, including private investors. This will help improve efficiency in resource management and stimulate R&D performance. Silicon Valley is believed to have achieved its success through market-based resource allocation mechanisms.
Finally, to attract the world’s best scientists, Shenzhen will simplify visa and residence permit procedures, according to a senior researcher at the Chongyang Institute of Finance of the People’s University of China, Zhou Rong.
“I believe that Shenzhen has more advantages than Hong Kong to attract talent in the future. Salaries in Shenzhen are of the same level, and housing is more affordable. In addition, efforts will be made to attract foreign companies to relocate their headquarters to Shenzhen and make the city the headquarters of the 500 largest companies in Asia Pacific,” said Zhou Rong.
In addition, the analyst considered it appropriate to create new joint venture brands to take advantage of mutual advantages and develop new multifactorial brands.
Shenzhen will also be a test site for a wide circulation of China’s national digital currency. The city authorities recently announced that they would distribute 10 million yuan (200 yuan for each person) in digital coupons to residents of one of the districts. The money will be available for use in stores that cooperate with the digital yuan project.
According to Zhou Rong, in the future, Shenzhen will be the most attractive for international business because, among other things, it can benefit from its geographic location in the Great Bay. And at the same time, it is free of shocks and has a much more stable society compared to Hong Kong.
Of course, there are several external risks, such as sanctions imposed on Huawei and several other technology companies. However, foreign investors still see the positive potential in the Chinese market.
According to the IMF, China will be the only major country whose economy will show positive dynamics this year. Thanks to this, Beijing can maintain a moderate monetary policy, creating favorable conditions for investment.