SOCIETY AND ECONOMY

SOCIETY AND ECONOMY

Established on the initiative of Mr.Deng Xiaoping in 1980, Shenzhen is the earliest and fastest-growing special economic zone in China. It enjoys the reputation as the window of China's opening to the outside world and the pilot field for the reform in china's economic system. Shenzhen was a small fishing village with a population of only 30,000 at the beginning of 1980,but now has become a modern city with a population over 5 million, sound infrastructures, complete urban functions, good ecological environment, standard government operations and rich human resources.

Enjoying an annual average growth rate of 28.5% from 1980 to 2002, which is a miracle to any city in the world, Shenzhen saw the GDP of USD 27.1 billion in 2002, ranked 4th among major mainland cities, while its per capita GDP ranked first. The proportion of the three industries was 0.8:55.2:44.0, and the total volume of import and export was USD 87.2 billion, including the export volume of USD 46.5 billion, ranked first for 10 consecutive years among major Chinese mainland cities. By the end of 2002, Shenzhen had actually absorbed foreign capital of USD 31.5 billion, including the investments by 86 of the world-top 500 enterprises. Complying with the rapid economic growth, social welfare of Shenzhen developed at the same pace. Shenzhen has won such titles as "city in garden", "top 500 cities with good environment", "national model in environmental protection" and "national excellent tourism city".

Due to its early opening to the outside world, Shenzhen's economic operation mechanism basically complies with the international practice. Shenzhen had taken the lead in establishing sound legislative system for protecting intellectual property rights, proper business operation, legal transaction and fair competition. A uniform, open, competitive and orderly modern market economy system has taken shape. Specialized markets for computers, communication, electronics, building and decorative materials, furniture, toys, textile & garments, watches and clocks and jewelry have been set up with brisk transactions and standard operation.

Shenzhen has become a city with the feature of high-tech economy. Given priority to the development of high-tech industries since 1990s, it has become one of mainland areas with the most advanced and concentrated high-tech industries. The proportion of the output value of high-tech products to the total industrial output value reached 46% in 2002. Shenzhen ranked first among major mainland cities in terms of this proportion. Especially, it has occupied leading position in the field of IT industry, with the output value of IT products accounting for 15% of the total in China. Its major products including computers, program-controlled exchanges and access network equipment also take a lion's share in Chinese market. Approved by Chinese government, China High-tech Fair is held in Shenzhen in October every year.

Shenzhen is also one of important regional financial centers in China. The density of financial institutions and quantity of foreign financial institutions in Shenzhen come off in front among major mainland cities. Shenzhen is in leading position in China in respect of the service quality, profitability level and the application of advanced technology of financial sector, ranking 4th among major mainland cities in terms of the balance of deposit and loan with domestic financial institutions. Shenzhen also owns one of two stock exchanges in china, Securities companies registered in Shenzhen represent one seventh of the total while fund management companies represent over one half of the total in China. The total amount of venture capital accounts for around one third of the total in China.

GEOGRAPHIC LOCATION AND INFRASTRUCTURES

Shenzhen is located in the coastal area in south China, ranging form 113º46´ to 114º37´ east longitude and form22º27´ to 22º52´ north latitude, with an area of 2020 square kilometers. Bordering on Hong Kong along the Shenzhen River, it takes only 45 minutes to drive form the center of Shenzhen to the Hong Kong island. Enjoying its coastline of 230 kilometers, Shenzhen has many fine harbors, serving as major gateway of China to the world market and being the only city in China with land port, sea port and airport.

Of the 17cross-border facilities, Luohu check-point is the largest passenger port while Huanggang is the largest vehicular link. Shenzhen Bao'an International Airport ranks fourth in China. As the sixth largest container seaport in the world, seaports in Shenzhen have opened over 70 routes with over 200 liners each month. The adjacent Hong Kong is the largest container seaport in the world, whose routes reaching out to all places in the world. In 2002, the container throughput of Shenzhen was 7.61million standard containers, the passenger throughput of Shenzhen Bao'an international Airport was 9.35 million people/times and the mail cargo throughput was 333,800 tons. The total volume of cross-border passengers was 128,654,200 while vehicles numbered 12,559,000.

A modern transportation network is in place with highways, expressways and railways reaching out in all direction. The express highway network covers the whole Zhujiang River Delta. Two major railway lines, Beijing-Canton railway and Beijing-Kowloon Railway, converge in Shenzhen. With telecom network covering the whole city, a high-speed communication network mainly composed of optical cables integrating digital transmission and program-controlled exchange has taken shape. Information application system has covered main social and economic fields. The popularization rate of fixed telephone and mobile phone is around 60% and 90% respectively, which has reaches the level of developed countries.

Stretching around 21 kilometers and started at the end of 1999, the first phase of Shenzhen Subway with a total investment of USD 1.28 billion is expected to go into operation in 2004.

MANUFACTURING CAPACITY

Shenzhen is located in pearl River Delta, a base of manufacturing industry in China. As a mature economic area with a population of over 30 million, pearl River Delta laid the industrial foundation with labor-intensive light processing industries. The output value of its industries of electronics, medicines and building materials ranks first in China and that of its textile industry ranks second. Industries of household electrical appliance, plastics and food also occupy important position. Shenzhen is the largest production base of glasses, clocks and watches in the world. Over 60% of the famous-brand garments in the world are produced within a radius of 300 kilometers of Shenzhen. The output of color TVs, household refrigerators and household washing machines accounts for around one half, one third and one seventh of the total of China respectively. The output of household electrical appliances including TVs, refrigerators, microwave ovens and water heaters within a radius of 300 kilometers of Shenzhen accounts for one third to two thirds of China's total export volume of such products.

Shenzhen is an important world production base of mot only traditional products such as clocks, watches, garments, toys, shoes and caps but also computer and parts, communication equipment and audio-video products. At present, around 3500factories are producing supporting products of computers in Shenzhen and surrounding areas, which have the annual production capacity of 40 million complete computers. 99% of computer parts can be directly purchased in Shenzhen. Vice president of Asian Region of IBM made a figure of speech, "if there is a traffic jam in the expressway form Dongguan Shenzhen, 70% of computer products will be out of stock in the world."

In view of strong production and processing capability of Shenzhen and its surround areas, transnational companies including Wal-mart, Carrefour, IBM and Sony have set up their headquarters of purchase centers in Shenzhen. The amount of commodities purchased by Wal-mart in China each year exceeds USD 10 billion. 95% of the commodities in which its branch company in China deals come form Shenzhen.

Table 1 The Output of Important Industrial Products in Shenzhen in 2002

FOREIGN TRADE

The total export volume of Shenzhen has ranked first among major mainland cities for 10 consecutive years, accounting for 14.3% of the total export volume of China.

OVERVIEW

In 2002, the total volume of import and export of Shenzhen was USD 87.23 billion, an increase of 27.18% over the previous year. The export volume and import volume were USD 46.56 billion and USD 40.67 billion respectively, increased by 24.32% and 30.62% over the previous year. The total export volume of Shenzhen has ranked first among major mainland cities for 10 consecutive years. It accounts for 14.3% of the total export volume of China.

Tendency Graph of Import & Export Volume of Shenzhen form 1979 to 2002

(unit: USD million)

TRADE PARTNERS

Hong Kong, USA., European Union, Japan, Southeast Asia Union, Taiwan, Australia, Canada, South Korea, United Arab Emirates are the ten largest export markets of Shenzhen in 2002. The volume of export to Hong Kong, U.S.A., European Union, Japan, Southeast Asia Union, Taiwan, Australia, Canada, South Korea, United Arab Emirates was USD 18.29 billion, USD 11.29 billion, USD 5.46 billion, USD 3.69 billion, USD 2.85 billion, USD 0.94 billion, USD 0.43 billion, USD 0.37 billion, USD 0.32 billion, and USD 0.28 billion respectively, which accounted for 39.3%,27.2%,11.7%,7.9%,6.1%,2.0%,0.9%,0.8%,0.7%, and 0.6% of the total export volume. The situation of export of Shenzhen products to developing countries has been good in recent years. The export to Latin America, Middle East, Africa, CIS and Europe enjoyed a rapid growth.