Shenzhen

"I came to this view as a Canadian who has spent almost equal amounts of time living in the United States and China. To me, these two countries are thrilling, maddening, and, most of all, deeply bizarre. Canada is tidy. I sometimes find myself relaxing as soon as I cross into its borders. Drive around America and China, on the other hand, and you’ll see people and places that are utterly deranged. That’s not a reproach. These two countries are messy in part because they are both engines for global change. Europeans have a sense of optimism only about the past, stuck in their mausoleum economy because they are too sniffy to embrace American or Chinese practices. And the rest of the world is either too mature or too young to match the impact of these two superpowers. It is Americans and Chinese—Silicon Valley, Shenzhen, Wall Street, and Beijing—that will determine what people everywhere will think and what they will buy."

"Over the past four decades, China has grown richer, more technologically capable, and more diplomatically assertive abroad. China learned so well from the United States that it started to beat America at its own game: capitalism, industry, and harnessing its people’s restless ambitions. If you want to appreciate what Detroit felt like at its peak, it’s probably better to experience that in Shenzhen than anywhere in the United States."

"Process knowledge is hard to measure because it exists mostly in people’s heads and the pattern of their relationships to other technical workers. We tend to refer to these intangibles as know-how, institutional memory, or tacit knowledge. They are embodied by an experienced workforce like Shenzhen’s. There, someone might work at an iPhone plant one year, for a rival phone maker the next, and then start a drone company. If an engineer in Shenzhen has an idea for a new product, it’s easy to tap into an eager network of investors. Shenzhen is a community of engineering practice where factory owners, skilled engineers, entrepreneurs, investors, and researchers mix with the world’s most experienced workforce at producing high-end electronics."

"We are still not appreciating the communities of engineering practice like Shenzhen, and at no point has there been real curiosity about how China’s technological capabilities have developed."

"Low-wage ecosystems like Shenzhen became a giant magnet for US process knowledge. Beijing made a deliberate decision not to be like Japan, which kept its market limited to American companies; rather, China mostly welcomed foreign manufacturers to train its workers. It is some sign of China’s economic openness that so much of its exports are driven by Apple and Tesla, while Japanese exports have been driven almost entirely by its own companies. After it built up a critical mass of process knowledge, however, Shenzhen became as much an innovator of new electronics as an implementer of American ideas."

"Shenzhen was China’s greatest boomtown and, therefore, the world’s. [Its population soared](private://read/01k3jwt46q240aq6fe12mqkyr0/16_Notes.xhtml#_idTextAnchor344) from three hundred thousand in 1980 to seven million in 2000 and eighteen million in 2020. For many Chinese, who are intently judged on the region they’re from, Shenzhen was a land of opportunity where no one was a local. One of the city’s slogans, still occasionally found on billboards, reads, “You’re a Shenzhen local the moment you’re here.” It’s a poke at Beijing and Shanghai, cities where older families maintain a certain exclusivity (as they might in Paris or London)."

"It’s easy to get lost in factory zones because so many of the buildings look the same. The iPhone turbocharged factory complexes to enormous scale: Foxconn’s manufacturing campus in the north of Shenzhen occupies five hundred acres. The site has factories, of course, and dormitories. It also has grocery stores, cafés, a fire brigade, a hospital, cinemas, swimming pools, and vendor-operated restaurants. The factory is the size of a city. The population peaks in early fall as production ramps up to meet demand for the Christmas season. Dormitories fill up then, with up to six men or women crammed into one room. Assembly lines operate for three eight-hour shifts a day; there is never a minute that factories aren’t producing iPhones. At the peak times, three hundred thousand people work at Foxconn’s Shenzhen campus, about as many as live in Pittsburgh or St. Louis. [A Chinese report from 2009](private://read/01k3jwt46q240aq6fe12mqkyr0/16_Notes.xhtml#_idTextAnchor345) estimated that the campus each day consumed forty tons of rice, twenty tons of pork, ten tons of flour, and five hundred barrels of cooking oil."

"In 1980, when Deng Xiaoping christened Shenzhen a “special economic zone,” the city had little to recommend it other than its location directly abutting British-ruled Hong Kong. Deng wagered that success in Shenzhen could tear down the socialist strictures on China’s economy that the rest of the leadership had been hesitating to dismantle. He lavished the city with supportive policies and penned editorials to beckon the ambitious to move there."

"Process knowledge is hard to measure because it exists mostly in people’s heads and the pattern of their relationships to other technical workers. We tend to refer to these intangibles as know-how, institutional memory, or tacit knowledge. They are embodied by an experienced workforce like Shenzhen’s. There, someone might work at an iPhone plant one year, for a rival phone maker the next, and then start a drone company. If an engineer in Shenzhen has an idea for a new product, it’s easy to tap into an eager network of investors. Shenzhen is a community of engineering practice where factory owners, skilled engineers, entrepreneurs, investors, and researchers mix with the world’s most experienced workforce at producing high-end electronics."

"BYD Automotive has built a first-class R&D center in Shanghai, with an automotive R&D team of over 3,000 people, obtaining more than 500 national R&D patents each year. To date, BYD has established four major automotive industry bases in Xi’an, Beijing, Shenzhen, and Shanghai, reaching an international leading level in aspects such as vehicle manufacturing, mold R&D, and vehicle model development. The ultimate goal of BYD’s development is to utilize its unique global technological advantages to find the best solution for human society entering the "automobile society," addressing issues like energy shortage, clean environment, and convenient living."

"Blevins couldn’t be at every meeting, so he taught his subordinates the values he’d picked up working at a used-car lot as a teenager. When the procurement team would meet in Hong Kong or Shenzhen, each would be given the same amount of currency, then sent off to the local market for a set time. Whoever came back with the most silk ties was the winner. This game would be played over and over again, inculcating a sense of intense competition."

"In 1980, Shenzhen was a fishing village of fewer than 70,000 people. But as a special economic zone just across the harbor from Hong Kong, Shenzhen and the area around it underwent a metamorphosis. “By the late 1980s, the entire 104-mile route from Hong Kong to Guangzhou was lined on both sides with factories,” according to the late Ezra Vogel, a Harvard scholar and the biographer of Deng Xiaoping. By 1990 the city of Shenzhen had a population of 1.7 million; in the early 2000s, it had grown to around 7 million. In just twenty-five years, Shenzhen’s population grew a hundredfold."