According to economist Steven Cheung Ng-sheung, the southern Chinese city of Shenzhen is the mainland city to watch out for in the coming century, as it will surpass not only Shanghai but Silicon Valley on its march to becoming a global economic center.
In a forum held in Shenzhen on the future of Greater Bay Area and Shenzhen, the famous micro-economist and long-time China observer said the southern city will overtake Hong Kong as China’s premier economic powerhouse.
“Thirty years ago, I predicted Shanghai will surpass Hong Kong. Today I would say Shenzhen will surpass Shanghai,” said the 83 year-old economist.
His logic is simple: every major economic center is backed by a bay area. The latest Beijing initiative to promote the Greater Bay Area for innovation and technology reinforced the leadership of Shenzhen, rather than Hong Kong, over the southern powerhouse that integrates nine mainland cities together with Hong Kong and Macau that is designed to rival San Francisco and Tokyo.
Underlying the success of Shenzhen was Dongguan, a globally-renowned manufacturing center that can produce almost anything, both quickly and with a high degree of quality. This despite the fact that labor costs in Shenzhen, after more than two decades of success, are now higher than in other developing economies, though still considerably cheaper than those in developed economies.
Last year, Shenzhen recorded a GDP of 2.4 trillion yuan (US$352.71 billion), up 7.5%, nearly surpassing Hong Kong, which is about to report a 3.2% rise in GDP to HK$2.86 trillion (US$364.6 billion).
Led by Shenzhen and Hong Kong, the Greater Bay Area is expected to triple its GDP to US$4.62 trillion by 2030 from the current US$1.5 trillion.
Cheung graduated from the Department of Economics in the University of Chicago, an institution famous for its free market approach that groomed Nobel economics winners such as Cheung’s friends Milton Friedman and Ronald Coase.
The economist was accused of tax evasion by the United States government, which seized US$10 million of his assets in 2003. Following this, Cheung chose to stay in Shenzhen, not Hong Kong, from where he could be extradited under the bilateral agreement between Hong Kong and United States.