Why does China get a Shenzen and the US doesn't? What would it take to build a US-based electronics hub to rival Shenzen in, say, one of the Rust Belt states?
The US doesn't need a Shenzhen. It already has free enterprise, electronics suppliers and prototyping equipment. The problem is the barrier to entry, mostly living costs. There isn't really much you can do in Shenzhen that you can't do in the bay area. It will just cost you five times as much.
But of course it depends on what you mean by "a Shenzhen".
When the US was a manufacturing superpower for most of the 20th century, it provided a way for ordinary people to earn a good living. Workers and suppliers pumped money into a wide variety of local businesses.
Starting around the early '80s, the manufacturing started moving overseas, especially to China. The Rust Belt region (where I'm from) never really recovered economically, although there are a few bright spots if you know where to look.
What did we do wrong and China do right, that the economic prosperity left us and went to them instead? How can we learn from their formula for success and adapt it for ourselves?
It sure seems like having a piece of the growth industries of the 21st century located in your country is a big piece of the puzzle in terms of providing well-paying jobs to our citizens and promoting their quality of life. Which should help with some of the political problems we've been having recently. How do we make it happen?
It isn't for a lack of "a Shenzhen". Los Angeles, San Francisco, Seattle, New York etc. is the Shenzhen of the US. They are all home of massive growth industries. That this doesn't sustain or lead to (what could be summarized as) widespread prosperity is, well, the problem.
but is Shenzhen a place of prosperity for most people living and working there? or is mostly a small cadre of rich elites, and tonnes of poorer people working a living wage?
The parent comment is actually a good one. I think the spirit of shenzen is different or experimental. We have a lot of regulations in developed countries - many good but some to the point that the president criticizes them in the state of the union (point about the empire state building). It is an interesting idea to have a wild west type economic zone .. given that govts are really trying to boost innovation, maybe something good can come of it. I know this is hard to do .. earthquake regs seems pointless until u have an earthquake - i get that. But look at the shit transit in most of our cities ... I think high costs are because of complex regulations.
There are obviously differences. The point I am trying to make is that there is no one answer. It is not like the flaw happened to be that the US has 5% too high corporate tax and if you lower that somewhere will become Shenzhen.
Shenzhen is special because it was the first area in China to liberalize. The US have already have those features, including special economic zones in form of states.
So if Shenzhen is successful because it is special shouldn't the US make some areas special as well? It essentially already did in the form of e.g. the bay area.
But Shenzhen didn't stop growing. California has plenty of space in the Central Valley, but no infrastructure.
Shenzhen built ~200 subway stations in 15 years. The US is trying to build that rail line between SF and LA. (The line between HK and SZ is delayed because of HK though).
So there is no one answer. It is all there. Sure, you could say that the government should step in, tax the tech companies, build infrastructure and allocate land for these cities to expand. But that wouldn't be very popular with voters.
Or one could move to Wyoming (?) and pay little tax. But what makes that place special in comparison to other places and what is going to keep people there as living costs go up? And once the companies succeed and the state wants to invest in infrastructure why wouldn't the companies just leave?
The best I can come up with is to find some underutilized university and build an incubator where the state (or a company, probably a non-profit) invests in companies for equity while offering some cash, free living and office space. The profits are then used to execute a long term development plan of the area. But that is of course as hard to do as anything else.
The US didn’t make special economic areas, they just arose organically. There are big differences between a command and control economy (China) and a more liberal one where things just happen (or don’t).
China is still way behind on infrastructure if you divide it by the number of people to serve, they are still catching up. We are reminded of that in whenever it rains all he roads flood or freezing my butt off in southern china in winter because indoor heating is too luxurious.
> The US didn’t make special economic areas, they just arose organically.
True enough. I just don't think Shenzhen is special enough as an economic zone to make a difference in the US. Somewhere like Nevada is probably ahead of Shenzhen in terms of economic freedom. There is an even more special zone in Shenzhen called the Futian Free Trade Zone which might be special even in relation to the US. But I am not sure that it has much impact overall.
> There are big differences between a command and control economy (China) and a more liberal one where things just happen (or don’t).
Right. That is partly why I don't think Shenzhen, while certainly interesting in itself, offers that many lessons for the west. Unless you are happy with "wait until the rust belt is desperate, then expand Seattle by 10x with government backed capital, make workers live in dorms".
I guess one way to look at it is that Shenzhen is the rust belt. The big coastal cities in the US is more trade centers, like Hong Kong. Before the information age people had to be close to the factories. When manufacturing moved to China the rich became free to move to the coastal trade centers instead. Predictably those trade centers aren't developing much, because the workers aren't part of that migration.
> We are reminded of that in whenever it rains all he roads flood or freezing my butt off in southern china in winter because indoor heating is too luxurious.
That is true of Europe too though. Up north there is district heating and double glazed windows with argon in between, while down south they run the pipes on the outside of the buildings in some places. Paris flooded a few days ago. Granted that is an old city.
I do think there is something to be said about the standard of living in the US. As much as public infrastructure might be "not as good as the good parts of e.g. China", private infrastructure is certainly of a high economic standard. It might very well be that people in the US have to change the way they live, which seems to have been developed for good times, to be competitive.
I don't know. I have a hard time imagining Europe flooding with just a bit of rain as happened occasionally in Beijing for brand spanking new stuff they just built but...oops, forgot to add drainage underneath.
China has focused a lot of sexy infrastructure (gleamy sky scrapers, HSR, mega-bridges) but not enough at all on unsexy infrastructure (water-treatment plants, drainage, almost anything that isn't superficial).
I get what you mean. I definitely wouldn't say Shenzhen is a modern city as such, despite the skyscrapers and greenery. That is part of the charm though. It is, or used to be, an order of magnitude cheaper to live in SZ than HK. There is of course also absurd levels of inequality, which is less charming but reality.
> The US didn’t make special economic areas, they just arose organically.
What are/were “Enterprise zones”, “Empowerment Zones”, “Renewal Communities”, and “Enterprise Communities” in the US, then, if not government-created special economic areas?
There was a really interesting segment on last week's Vergecast ( https://www.theverge.com/2018/1/26/16935908/vergecast-podcas... ) about DJI and how business is different for them being a Chinese electronics company. Specifically, their products are state of the art because they are plugged into the components markets, but they also release new products very frequently because with the lack of intellectual property protections the competition is always right around the corner.
