Shenzhen, which is also named “the Silicon Valley of China”, has now a higher GDP than its neighbor, the financial hub of Hong Kong.
Hong Kong’s GDP grew 3.8 percent last year and reached 340 billion USD. This marks its fastest growth since 2011, but this is still not half as much as the growth of Shenzhen, which amounted to 8.8 percent and gave the city a total GDP of 355 billion USD.
40 years ago, Shenzhen was only a small fishing village, but being the first special economic zone created by Deng Xiaoping, it was able to transform itself into a highly innovative tech center that is now the home of companies such as the internet giant Tencent or the smartphone maker Huawei.
Hong Kong in contrast was once one of the “Four Asian Tigers”. When it returned to China, it’s economy was equivalent to one-fifth of the mainland China economy, now it’s less than 3 percent.
Hong Kong’s problem could be that its economy is not diversified enough and relies too much on the financial industry, property development and international trade. In order to achieve a long-term growth, it should focus more in innovation and technology. Hong Kong’s new government seems to be aware of this and plans to invest 50 billion HKD into the sector (during fiscal year 2018-2019), which is five times the amount it invested before.
