Much has been said and written (some of it by me) on the growth of the Chinese economy and the rise of China as an economic power, and of the growth of an immense manufacturing region on the sides (particularly the east side) of the estuary of the Pearl River between Hong Kong and Guangzhou (Canton). If there is a workshop of the world today the way there was in the north of England in the mid 19th century, then this is it. I have for a while wanted to go and look at it, but I have usually lacked either the time or the money. Ideally I would like to start in Hong Kong, work my way upstream through Shenzhen and Dongguan to Guangzhou, and then back down the other side of the estuary via Zhongshan and Zhuhai to Macau, on the opposite side of the estuary to Hong Kong.
But alas I have still not been able to do this. However, in March I arranged a trip to Australia to visit my family. And I was able to manage a stopover in Hong Kong for three days. Although I was not going to be able to do the trip up and down the estuary that I had hoped to do, I was at least able to spend one day doing something a little interesting, which was to cross the border from Hong Kong to Shenzhen in China proper.
Well, sort of in China proper.Shenzhen is a “Special Economic Zone”. China gave Shenzhen this status in 1980 . (The status was subsequently given to Zhuhai across the border from Macau, the port of Shantou north of Hong Kong, Xiamen in Fujian provice across the water from Taiwan, and the southern island province of Hainan). These areas were given more economic freedom that the rest of China, and more importantly were open to investment from and trade with the rest of the world. This was convenient with the people of Hong Kong, as at that time Hong Kong was undergoing the transition from poor to rich, and labour in Hong Kong was becoming too expensive for the traditional textiles and other low cost manufacturing base to survive in Hong Kong. What happened was that the manufacturing moved across the border to Shenzhen, a boom ensued, and people (to the extent that they were allowed to) flocked to Shenzhen from other regions of China. Since then, much the same thing has happened to Shenzhen as happened to Hong Kong,although Shenzhen remains a less sophisticated place.
A lot of trading and lower level services, including that with slightly more questionable business practices, has moved to Shenzhen. Labour has become too expensive in Shenzhen for a lot of the low cost manufacturing to take place there, so it has moved further upriver, particularly to Dongguan. (Capacity constraints are much more stretched on the east bank than the west, which is the impetus for a proposal for a huge bridge connecting Lantau island in Hong Kong with Macau and Zhuhai on the other side of the estuary, construction of which is scheduled to commence later this year).
In any event, on Sunday morning I got the train from Kowloon to Lo Wu and (after a few hassles with getting a visa at the border) crossed over into Shenzhen.
Initially it felt like sleazy border towns everywhere, but it ultimately turned out to be far more interesting that that. Compared to Hong Kong, the place was dirty. I was approached by a myriad number of people trying to sell me cheap counterfeit DVDs, a smaller but still significant number attempting to sell me cheap prostitutes, and one or two people offering to be my “guide” for the day.
The shopping malls nearest the border crossing were filled with with all kinds of cheap crap. Certain things were familiar, however.
A walk a couple of blocks further I found a nicer looking shopping mall filled with a mixture of genuine western medium to high brand name stores and a variety of other stores selling similar goods but with brand names and styles so close to the western ones that they would not be allowed in most western countries due to violating local trade mark law. There were relatively few customers. Most of who there were appeared to be Hong Kong Chinese looking to buy stuff for less than they could in Hong Kong.
Some of the advertising was good, though.
Disappointment so far. Where was this legendary city of economic vibrancy? At the bottom of the shopping mall was a subway station. The length of the lines and the number of stations made it obvious that Shenzhen consisted of a lot more than just the bit closest to the Lo Wu border crossing, so I decided that I would do something I do in many foreign cities, which is get on and off public transport almost randomly and see where it takes me.
Now, Shenzhen is physically an odd city. Rather than being densest in its centre and having less dense suburbs around that centre, the city is a long and narrow line of towers that essentially follows the border with Hong Kong. And when you look at the subway map, you see this. It consists of one long thin line with other shorter lines crossing that one at right angles. After buying a subway ticket and noting that a place where there is a staff member standing at each ticket machine to assist customers is one where labour is still cheap, I got on a train, observing my fellow passengers and what they were doing and carrying, and looking at the advertisements on the statiions on the walls of the tunnels
After about three stops, I reached a station where (a) there was a surge of people onto the train and (b) that one person who was getting on the train was clutching a box containing a computer keyboard and that another was carring something that looked about the size of an ATX tower. These struck me as good signs that I was near somewhere interesting, paritcularly if I was looking for stuff related to great centres of electronics manufacturing, so I jumped off the train and walked up into the street. Bingo. Large, modern looking shops, mainly devoted to electronics, disappearing into the distance in either direction. Great.
The closest building to the railway station was something described as an “Electronic World”. I walked in, and my eyes, used to the British retail scene, were immediately blown away. This building had five floors, each of them about the size of a floor of a large department store.
While I was immediately impressed by the scale of this, the products for sale on the lower two floors were a little too low level for me. Integrated curcuits, cables, detached earphones, more integrated circuits, LEDs, magnetic tape, antennas, capacitors, all sorts of other things that are no doubt fun if you are an electronic engineer, but which I don’t know how to put together.
However, ascending a couple of floors, I found the sorts of computer components I could do something useful with: motherboards, hard drives, optical drives, CPUs, graphics cards, DIMMs, cases, power supplies. It was really PC builder’s heaven. And the scale of the place was just glorious. It was so enormous. THere was so much to choose from.
None the less, it was still clear that I was in a place poorer than London, or Hong Kong itself. Most of the CPUs on sale were actually Pentium 3s . While I would like to believe that the meaning of this was that the people of CHina had evaluated more recent options carefully, had concluded that the Pentium 4 Prescott core was an unspeakable abomination, and had thus descided not to upgrade for reasons of good taste, in reality this was not likely to be it. A lot of the components on sale were made locally, and these were really cheap compared to what I would pay in England. However, CPUs are sufficiently high up the food chain that they have to be bought from American companies, and they thus cost much the same in China as they do in America. And even in Shenzhen, incomes are not that high by western standards. (One the other hand, it could have been that the people of Shenzhen just wanted to be able to run Windows XP starter edition, but that I really, really doubt).
Still, though, I absolutely loved this place. I wandered around for a couple of hours, marvelling at the choices available to me, although not so much at the prices, because I did not know the prices. (This was largely a wholesale market, and prices were not generally marked and people did not speak English. Clearly if I had wanted to buy something intensive haggling would have been in order, and I wasn’t properly equpped).
Eventually, though, I wandered out into the street. There was another, similarly enormous electronics market across the road. Rather than go into that one, I wandered up the street. After a quick refueling stop in which I discovered that this was the sort of place where girls take their motherboards to McDonald’s with them, I discovered that this street did far bigger retail business than wholesale, regardless of the size of the wholesale markets.
There were malls and malls and malls and shops and shops and shops selling all kinds of electronic goods. These were much the same sorts of goods one finds in the west, except in larger numbers. HDTV appears to be in the process of arriving in China, which is more than can be said in Europe. Televisions, DVD players, sound systems, photographic equipment, mobile phones. All were profusely available.
Judging by the number of people looking at them in shops, and at the prominence of the displays, it is clearly the case that the iPod is at least as much an item of techno-lust in Shenzhen as anywhere else, but once again the lower income factor does come into play. Whereas in London every second passenger on the Underground has an iPod, in Shenzhen I don’t think I saw a single person walking down the street with the telltale white earphones.
But whereas iPods may be a little too expensive, mobile phones are everywhere, seemingly having the same level of penetration as in any western country. (I have heard the factoid that there are more mobile phone subscribers in China now than in the United States. I’m have no actual facts to tell me whether this is true or not, but I suspect it likely is).
Mobile phone marketing was everywhere, and probably more aggressive than most other advertising. And I think I have to nominate being required to stand on a pedestal in the middle of a shop holding up a mobile phone while being dressed in orange as coming in absolutely at number one on the list of jobs that I am glad are not mine.
And there were a number of malls filled with the sorts of little cubicle based independent retail computer shops that you find throughout the world and which are invariably run by little Chinese guys. (In China they are run by little Chinese guys). What was remarkable was not so much the contents of the stores but the size of them.
I bought a little computer detritus for myself and other members of my family – a flash drive, a Bluetooth dongle, and a wireless mouse for my laptop. These cost practically nothing. I could have browsed and haggled all day. Whenever I was out in the street (or even in the shops) lots of people approached me, wanting to sell me ludicrously cheap copies of Windows, Office, and Pagemaker. Once upon a time a place called the Golden Computer Arcade in Sham Sui Po in Hong Kong was the global capital of pirated software, but this is no longer so. Hong Kong has cleaned up its act in this regard. But the market for that kind of thing is nearby for those that want it.
But I was tired and jetlagged. I sat down in a Starbucks and ordered a giant latte to try to help with these things. I pulled my laptop out of my backpack and switched it on. Impressively, there was free WiFi, which I think was wafting in from somewhere else nearby rather than being provided by Starbucks,, so I quickly downloaded my e-mail, checked the news, sent a few quick “Hey, I am on my laptop in a Starbucks in China. Isn’t this cool?” messages to those of my friends who happened to be online, and contemplated the general coolness of the modern world. I had no trouble reading (and even posting to) Samizdata, but my own blog was inaccessible. Apparently blogspot is blocked by the great firewall of China.
But the day was nearly over. I wanted to look at a little more of Shenzhen before I was done, and I wandered away from the computer markets into a nearby entertainment district. This seemed a pretty respectable neighbourhood, full of restaurants, amusement arcades, ice cream parlours, fashion stores, and even bookshops.
I had a brief meal in a Chinese cafetera, but mainly just wandered around. It was interesting, but didn’t do quite as much for me as the computer markets had. This part of Shenzhen did not feel like a border town, just a place where people might go for a meal on a saturday evening. Most of the people were not Hong Kong but mainland Chinese people.
Rather than getting the underground back to the border crossing, I chose to walk. This gave me a better picture of the size and nature of Shenzhen. It is a big city. I don’t think anyone is quite sure how big, but it is at least four million. (Add this to seven or eight million in Hong Kong, and it becomes clear that this metropolis is big. I walked along a round parallel with the Hong Kong border but maybe a kilometer from it back towards Lo Wu. Running off this main road were various other streets full of restaurants and shops.
But as I walked the couple of miles to the border crossing, the city I was in slowly evolved back from being a rich mainland Chinese city to being Hong Kong’s border town. The number of fast food joints, barber shops, slightly seedy looking bars, and the like increased. People once again started approaching me about pirate DVDs and strip clubs rather than pirate software.
Eventually I found my way back to the border crossing and railway station. By the time I got there there was an enormous stream of people crossing the border and getting on the trains back to Kowloon. If one crosses the (always busy) Lo Wu border crossing at 9pm on a Sunday evening, half of the population of Hong Kong crosses it with you.
I had to stand for the first portion of the train journey, but I got a seat soon enough. (Next time I might pay extra for first class and a seat all the way, however). Most of the people of Hong Kong live in the New Territories, and these people were not going into Kowloon but were getting off to go home or to change to other lines much sooner. None the less, I was glad to get back to the guest house where I was staying (run by Ghanians – Hong Kong is a true international city) and get to bed.
As a final addendum to this, I did actually go to the once notorious Golden Computer Arcade in Sham Sui Po the next day. It was full of higher end stuff than most of the stuff in Shenzhen. Not that many Pentium 4s here either, but in this case for the entirely sensible reason that the system builders of Hong Kong prefer the Athlon 64, as indeed all sensible people do. But this place was perfectly respectable. It was about as exciting as a branch of Dixons.
No, that is too harsh. Maybe about as exciting as a Media Markt, meaning that it is filled with good stuff (and at substantially better prices than you get in Europe or America). But it’s hardly the wild west any more