This experimental megacity rose out of farmland in 1979. A few decades and 20 million residents later, is Shenzhen a success?
Shenzhen rose out of farmland and fishing enclaves in 1979, the first of China’s self-designated “special economic zones” designed to catapult an isolated nation into the 20th century. A proving ground for China’s grand experiment in market capitalism and its first city to allow foreign investment, Shenzhen became the nucleus of the country’s almighty manufacturing sector.
GOOD sent me to track the city’s remarkable growth back in 2008. Now, with the emergence of a middle class and government efforts to kickstart an innovation economy, the city is once again a bellwether for China’s lofty ambitions. But the past and present are colliding, a housing crisis is brewing, developers are pushing subway lines into once-remote villages, and Shenzhen is searching for a new identity.
If you want to understand the biggest challenges—and opportunities—facing the most important country of the next 10 years, Shenzhen is the key. I recently returned to check in on the latest developments and found five key subway stops that best symbolize the past, present, and future of this emblematic megacity.
The growing middle
In a far northern suburb of Shenzhen, there is a cluster of 12 highrises that serveS as a monument to China’s economic ascent. The complex, called Shenzhen King Metropolis, promises convenience, location, and lifestyle to its middle-class occupants. From 20 stories up, residents can watch the elevated metro glide south to the Hong Kong border. It’s a 10-minute walk to Shenzhen’s North Railway Station, where bullet trains shoot off for destinations across China. But Metropolis residents don’t really need to leave this affluent bubble. Inside the verdant campus, kids giddily ride Segways past giant goldfish ponds. Every day, the latest BMW, Audi, and Mercedes-Benz models roll out of the subterranean parking garage. A two-story outdoor shopping plaza rings the complex and several of Shenzhen’s leading real estate companies have offices here. Every morning, as residents breach the subway turnstiles demarcating the beige towers from the rest of the neighborhood, a dozen or so real estate agents start their day with a team-affirming group cheer. They deliver the same message through a series of cold calls, assuring prospective buyers that Shenzhen’s real estate market will continue rising forever.
Workers at an awards ceremony inside a Foxconn complex.
The city’s developers, including the company China Vanke Co., which built Metropolis, certainly think so. Over the last few years, the local government has transferred much of the land in this part of the city to a handful of politically connected developers who are now throwing up Le Corbusier-inspired apartments at a blistering rate. A few minutes away from Metropolis, a mostly finished development built by Shenzhen’s shopping mall king, Huang Chulong, promises prospective residents “the life of a CEO” from one of its billboards. The ground floor will include a retail area where CEOs-in-residence can get their morning Starbucks. It all seems like proof of China’s three-and-a-half-decade economic miracle and its transition away from manufacturing.
Or so a passing glance might lead one to believe. The reality is more complicated and a whole lot messier. Four large Apple suppliers are located just down the street, creating a patchwork of industrial factories and gated residential compounds. An army of unseen migrant workers lives in massive dormitories, part of China’s two-tiered society that has left millions without access to healthcare or education. And there’s growing skepticism that the city’s development boom is actually sustainable. A three-bedroom in Metropolis is valued at more than $1 million, yet it rents for only $1,100. Just across the street, in one of Shenzhen’s countless urban villages, the price drops by two-thirds.
A woman walks behind an advertisement for a development in Shenzhen.
“For the last 20 years, it’s been kind of a no-brainer that house prices will go up,” says Gillem Tulloch, an analyst at Hong Kong-based GMT Research. “The government has forced interest rates to be artificially low.” That has led to lots of investment, as rich people sink their money into condos and leave them dormant. Now there are signs that the city’s real estate market is unstable. In March, Vanke’s stock price plunged 24 percent. The Chinese government responded with more intervention, suspending trading of the stock. Analysts like Tulloch predict a massive crash is imminent, endangering this latest chapter in China’s charmed story.
Success by design
(Qiaocheng East Station)
Two hours and a subway transfer after leaving the suburban splendor of Metropolis, I stroll along tree-lined paths that follow Venetian-inspired canals before stopping for espresso at an Italian joint called the Portofino. This neighborhood is known as Overseas Chinese Town and it hugs the sheltered waterfront of Shenzhen Bay. It was developed by an eponymous state-owned company that specializes in theme parks. I squint across the man-made lake for a glimpse of Rio’s iconic Jesus statue. In a single afternoon, it’s possible to enjoy a condensed tour of UNESCO World Heritage Sites. A monorail offers aerial views of the Eiffel Tower, Mount Rushmore, and the Egyptian pyramids. Nearby, a special train takes riders past Angkor Wat and the Sydney Opera House. China is known for its high-quality fakes, and these landmarks don’t disappoint.
A hyper-realistic theme park is an appropriate metaphor for a city that was dreamed up and willed into existence just a few decades ago. In the late 1970s, Communist Party reformer Deng Xiaoping envisioned Shenzhen as a laboratory for his market-based reforms. Though people have lived in Shenzhen since at least 5000 B.C., it was cut off from the rest of the world during Mao’s reign. But two important factors made it the ideal location to become the world’s great manufacturing hub: natural deep-water harbors and access to Hong Kong. In 1979, as Deng began implementing his plan, the area was a patchwork of Maoist-era fishing and farming villages. A master plan for the city in 1982 envisioned a population of about 800,000 by the year 2000. But migrants kept coming and by the dawn of the millennium, Shenzhen had seven million residents. Today, the population is estimated to be 20 million.
Clockwise from top: Luxury villas in Overseas Chinese Town; The Cliff at East Resort; A patron admires art in an OCT gallery.
Tucked amid the hokey salute to our world’s great monuments, Overseas Chinese Town’s buzzing Loft District is a haunt for the creative class. From my perch in a hostel’s tranquil community garden, I gaze out on three-story concrete buildings. They were once home to light manufacturers and now house a mix of retail and offices, including a tattoo parlor, a makerspace, and the Chinese headquarters of Skullcandy. Young people from across China come for the weekend to hang out and it’s one of the few areas considered safe for gay people.
But the neighborhood is far from a creative paradise. It’s maddeningly difficult to browse the internet. The “Great Firewall” is particularly strong in an area where young creatives gather and a visitor who wants to access Facebook can waste the better part of a day switching VPN servers from Singapore to Korea to Japan to find a path online. “The authorities are trying to encourage innovation, especially in technology, and at the same time prioritize the political imperative to maintain control,” says Sharon Hom, who heads New York-based NGO Human Rights in China. It’s a contradiction on full display. The next great economic boom likely won’t come from China’s army of laborers, but from the intellectual capacity of its young people. Yet while the government has aspirations to diversify its manufacturing-based economy by tapping into that brain power, it seems committed to controlling the information its citizens receive.
The vibrant chaos of a street scene in Baishizhou.
If Overseas Chinese Town’s verdant, heavily manicured walkways are Shenzhen’s lungs, then Baishizhou, just next door, is the city’s beating heart. It's a haphazard place—so-called handshake buildings that house the city’s migrant population seem stitched together by tangles of electrical connections, and claustrophobic alleys wind between shops before ending abruptly.
While most of the city was developed under the watchful eye of the state, Baishizhou was set aside for incoming migrants and left to develop organically. “You have a city with large-scale urban planning subsuming and growing around these villages, like Baishizhou,” explains Brandon Zatt, a journalist who lived in Shenzhen for more than a decade before moving to Hong Kong. “In many cases, the villages are the only low-income housing available.”
Because of the mix of cultures, Baishizhou is also a smorgasbord of delicious culinary options. One evening in March, my Airbnb host Xiwei “Nakuyi” Liu bounds up the stairs of the subway station and lands on the hectic main boulevard. She’s wearing a summery dress and smiles as she decodes the signs on nearby restaurants. If a façade features Mao, the food is from Hunan province; if there are chilies on the sign, the owners are likely from Sichuan; green signs with Arabic lettering belong to Muslim hand-pulled noodle makers from either Xinjiang or Lanzhou.
Nakuyi tries to drag all her guests to Baishizhou. “I feel comfortable here,” she explains. “Tasty food. So many secret places.” Because of the culinary diversity and laid-back vibe, Baishizhou has become popular with expats and Chinese 20-somethings who’d rather not overpay in neighboring Overseas Chinese Town. Unlike that planned neighborhood, buildings in this unregulated expanse went up piecemeal, without conforming to a standard set of building regulations. Today, an estimated 1 in 77 of Baishizhou’s 140,000 residents owns a home, according to the city information site Shenzhen Noted. Because many residents are paid under the table and much of that income goes unreported, Baishizhou remains a cash economy and still lacks the essential services of the city’s more official neighborhoods. The area’s social safety net is as deficient as its electrical grid. Migrants often can’t access schools, social insurance, or health care.
Over the past few years, the city has begun demolishing its urban villages, and Baishizhou is now in the governmental crosshairs. A movement has emerged to celebrate these unofficial communities and to recognize the essential, if complicated, role they play in housing Shenzhen’s huge migrant population. Zatt would like to see these spaces preserved, but he knows that progress isn’t subtle in China and the state is not likely to be deterred. “They will get knocked down eventually,” he says. “It’s just a matter of time.” And more highrises and shopping malls, or perhaps a theme park, will take Baishizhou’s place.
Made in China
(Yantian Station, coming 2020)
Amid an economic slowdown—China’s gross domestic product grew just 1.1 percent in the first quarter of 2016, the lowest rate in five years—China is looking beyond manufacturing. But factories are still the lifeblood of the economy and Shenzhen is the center of China’s manufacturing. If the Pearl River Delta—which includes Shenzhen, neighboring Hong Kong, and a dense network of cities and prefectures—were a country, it would be the world’s fourth-largest export economy. Far east of the city center, a bustling shipping port in Yantian District connects Shenzhen’s factories to customers and suppliers around the world. To get here, cargo trucks take Shenzhen’s Eastern Coast Expressway, which hugs the cobalt blue coastline of Mirs Bay and cuts through enormous coastal mountains. The metro doesn’t reach this far out, at least not yet—a new line is planned for 2020. At the confluence of a crisscross of massive highways, multicolored containers rise in towering stacks. On the dock, machines pick up several at a time, moving them into position so a row of dinosaur-like cranes on the port’s edge can place them onto Panamax vessels, ships so large that they can barely squeeze through the Panama Canal.
A massive container ship leaves Yantian Port at sunset.
Yantian is one of 10 shipping terminals that collectively make Shenzhen the world’s third-largest port by volume of cargo. Shenzhen’s terminals handle about four times as much cargo as the ports of New York and New Jersey, and the city is just one piece of the Pearl River Delta’s well-oiled export machine, which delivers clothes, electronics, and hardware around the world. China makes 80 percent of the world’s air conditioners, 90 percent of personal computers, and 63 percent of all shoes—most of it in and around Shenzhen. Dock workers here live in nearby urban villages or ride a 40-minute bus from central Shenzhen.
Although manufacturing is still going strong in China, a change is underway. Simple knit garments were the first products to be mass produced in Shenzhen and they became the base of the region’s economy. But the garment industry has mostly left the area. Today, more of the world’s t-shirts come from Bangladesh, where labor is cheaper, than from the Pearl River Delta. China’s government sees this as a harbinger of bigger shifts to come as developing countries open factories and take China’s market share. Between 2006 and 2015, China’s average yearly wage rose from roughly $3,100 to $9,200—which is good news for workers, but spells trouble for an economy based on cheap labor. In February, authorities in Guangdong province froze all wages for the next two years.
Innovating the future
(Kuichong Town, proposed station)
As I travel away from the Yantian port to the farthest reaches of the city, the multicolored shipping containers dwindle and give way to fishing villages and small beach communities that recall Shenzhen’s roots. I pull off the highway and am greeted by local fishermen waiting in parking lots with the day’s catch. A little farther on I reach Kuichong Town, a nucleus of cheap noodle shops, markets, and hair salons. There are pool tables in the streets, which are lined with four-story handshake buildings. People here stare long and hard at me—not many tourists get out this way, which is a shame given the beauty of the local beaches.
Young people on a beach far east of central Shenzhen.
Even this far from the city center, signs of Shenzhen’s growth are easy to spot. On a rainy winter day in January, the only people out are workers in the blue one-piece uniforms of one of the world’s largest electric car battery manufacturers, BYD, a homegrown success story.
BYD has helped push an electric bike revolution on Shenzhen’s eastern periphery. It’s a 10-minute motorized bike ride from the center of Kuichong Town up a hilly road to a business park called Industrial Design Town, which bills itself as “the Art District Between the Mountains and the Sea.” The neighborhood is far removed from the center of Shenzhen, which is 35 miles away and takes hours to get to by public transportation.
A creative space in Industrial Design Town.
Yet the city’s outward crush has arrived here, too. The new loft and living space is housed in a defunct garment dyeing plant, which closed more than a decade ago when the contracts moved on. During the day, hipsters float in and out of a sleek coffee shop in one of ID Town’s post-industrial pods. Down the street is an art museum with soaring ceilings, and live-work spaces with polished concrete floors stretch in the other direction. The development was erected to house dozens of creative startups. A few have arrived: industrial and graphic designers, a photo lab, an office of four young landscape architects. If enough entrepreneurs and creative professionals emerge, the development will be a massive success. Like the rest of China, the developers here are holding their breath.