[Video] Shenzhen is not just China’s factory. It wants to be its innovation engine

(Edited and refined by Grace Chong, with the assistance of AI translation.)

Step into the lifts at Shenzhen InnoX Academy and there is barely a blank spot on the walls. Recruitment notices from startups, introductions to artificial intelligence (AI) courses, announcements for technology and innovation summer camps — one notice after another covers the lift from top to bottom.

In Pingshan, eastern Shenzhen, the exhibition hall at BYD’s headquarters is bustling with visitors. A crowd gathers around a low-temperature test chamber, watching through the glass as staff simulate conditions of minus 30°C to test vehicle charging and operation.

Even after night falls, Shenzhen does not slow down. In Nanshan district, where technology companies are concentrated, many office buildings are still lit up at 10pm, while nearby restaurants are filled with young people still wearing their employee badges.

These scenes, scattered across different corners of Shenzhen, point to the same pursuit: new technologies, new products and new opportunities. The southern Chinese city that rose to prominence through reform and opening up is now turning its attention to a new wave of technological development.

I recently visited Shenzhen as part of an Asia-Pacific media delegation organised by Xinhua News Agency, visiting Shenzhen InnoX Academy, technology companies and innovation parks to get a close-up look at the development of the city’s technology industry.

Inside the tech hub of Shenzhen

Shenzhen is home to some of China’s most prominent technology companies, including Huawei, Tencent, DJI and BYD. It also has the highest concentration of national-level high-tech enterprises of any Chinese city. According to the Shenzhen Special Zone Daily, the number of national high-tech enterprises in Shenzhen exceeded 25,000 in 2024, an average of 12 companies per square kilometre.

Behind this is Shenzhen’s sustained investment in innovation over many years. The city’s total research and development (R&D) expenditure rose from 151.08 billion RMB (US$22.5 billion) in 2020 to 245.31 billion RMB in 2024, representing average annual growth of 12.9%. Corporate R&D expenditure has accounted for more than 93% of total R&D spending, with the overall amount remaining the highest among Chinese cities.

(English closed captions are available for the above video.)

In recent years, the local government has also identified key technology industries for the next phase of development, accelerating the growth of emerging sectors such as AI and the low-altitude economy. This year, it issued an implementation plan to accelerate the development of new quality productive forces and further cultivate and strengthen strategic emerging industry clusters and future industries. The plan sets a target for the added value of strategic emerging industries to reach 2.3 trillion RMB by 2030, accounting for 45% of the city’s GDP.

Young innovators, big ideas

Shenzhen’s investment in innovation extends to talent development and startup incubation, with Shenzhen InnoX Academy being one example. Founded in 2021 by Li Zexiang, known as the “godfather of innovation and entrepreneurship”, the institute incubates technology startups while also nurturing young innovators through programmes such as innovation camps. Li was previously involved in nurturing technology companies including Chinese drone maker DJI.

Every summer holiday, students from across China gather here for innovation camps, working out how to turn far-fetched ideas into tangible, functioning creations.

At a time when technology is permeating every aspect of daily life, while AI and robotics are rapidly reshaping the division of labour, a place at an innovation camp represents an investment in the future for many parents and students. Competition is fierce, with applicants required to pass an interview first. Around 1,000 people are understood to apply for each summer innovation camp, but only 40 to 50 are ultimately accepted.

Dong Xinye, deputy director of the youth innovation centre at Shenzhen InnoX Academy, said in an interview that campers learn through project-based programmes. Under the guidance of mentors, they work through the entire process, from coming up with an idea and designing a solution to building a prototype and presenting it in a roadshow.

A 14-year-old student surnamed Zhang from Zhengzhou, Henan, was attending an innovation camp in Shenzhen for the first time. Previously, he had mostly worked with semi-finished products such as remote-controlled cars, which required him to assemble components according to an existing design. At the innovation camp, he had to choose his own project and complete the design and construction process step by step.

“Here, you start a project from scratch. It’s extremely difficult,” he said.

Another camper, a 17-year-old surnamed Yu, is studying in Guangzhou. Together with her teammates, she is developing smart clothing for use at music festivals and concerts. She said the garment would be fitted with flexible LED displays capable of showing different patterns and words depending on the setting.

The low-altitude economy takes flight

While the secondary school students at the innovation camp are still learning how to turn ideas into physical products, entrepreneurs at the Qianhai-Shekou Low-Altitude Economy Pilot Zone, about a 40-minute drive from the institute, are already thinking about supply chains and production. The zone is home to ZEROG Aircraft Industry, as well as numerous companies across the low-altitude economy industrial chain.

Qianhai Shekou Value Factory was once a glass factory. Today, it is filled with drones and aircraft.

Jia Siyuan, 46, co-founder of ZEROG Aircraft Industry, said in an interview that when the company was established in 2021, it saw strong potential in the electrification of aviation and chose Shenzhen as the base for its R&D and manufacturing operations.

ZEROG Aircraft Industry focuses on developing electric conventional take-off and landing (eCTOL) and electric vertical take-off and landing (eVTOL) aircraft. Their applications include flight training, tourism and sightseeing, and low-altitude transport.

Jia said the Guangdong-Hong Kong-Macau Greater Bay Area brings together the traditional aviation industrial chain and suppliers of key components for new types of aircraft, meaning the company generally does not need to source supplies from other provinces.

Shenzhen also has a strong pool of technology talent and a relatively complete aviation industrial chain, providing a foundation for the company to expand production capacity while controlling costs. At present, all of the aircraft produced by the company are manufactured entirely in China.

Amid intensifying China-US technological competition, China has continued in recent years to promote self-reliance and controllability in key core technologies, while identifying AI, robotics and the low-altitude economy as priority emerging sectors. The outline of the 15th Five-Year Plan (2026-2030), released this year, calls for accelerating the development of strategic emerging industries such as robotics, promoting the healthy and orderly development of the low-altitude economy, and further deepening and expanding the “AI+” initiative.

Shenzhen vs Hangzhou

Strong government policy support, coupled with accelerating capital investment, is turning the technology sector into an important engine of economic growth in some parts of China, while also widening the divergence between regions.

Citing data from Nomura Holdings, Bloomberg reported that the seven cities Nomura classifies as “smart” — Beijing, Shanghai, Shenzhen, Hangzhou, Suzhou, Hefei and Wuhan — recorded weighted average GDP growth of 5.6% in the first half of this year, collectively accounting for about one-fifth of China’s growth. By comparison, economic growth in the rest of China slowed to 4.5%.

As two of China’s more developed technology hubs, Shenzhen and Hangzhou have frequently been compared in recent years.

Fu Fangjian, an associate professor of finance at Singapore Management University’s Lee Kong Chian School of Business, said the two cities have followed different development paths. Hangzhou has leveraged the advantages in data, algorithms and talent accumulated by its internet companies, giving it a strong position in AI. Shenzhen, by contrast, has leaned more towards manufacturing and supply chain-driven innovation in hard technology.

The two cities are not engaged in a zero-sum competition. Rather, they have developed their respective strengths on the basis of different industrial foundations.

In Fu’s view, Shenzhen’s innovation ecosystem did not emerge overnight. It is the result of decades of development since China’s reform and opening up. Successful companies continually attract talent, who in turn go on to start new businesses and attract more resources, creating a self-reinforcing cycle of innovation, he said.

Whether this ecosystem can continue to produce globally competitive companies amid an evolving global technology landscape will not only determine the momentum of Shenzhen’s future development, but also bear on whether China can gain the upper hand in technological competition with the US.

Unwilling to be mediocre

Behind the competition between nations are also a large number of startups and imaginative young people unwilling to accept mediocrity, quietly shaping the direction of this contest.

Cai Jiaqi, 27, who heads overseas markets at technology company RheoFit (云望创新), told me that she commutes every day to Nanshan district, where the robotics industry is concentrated, and often sees nearby startups testing different types of robots.

“When you see all these new ideas and experiments constantly emerging, you realise that a lot of the innovation has already gone beyond what we originally imagined,” she said.

In Shenzhen, she said, once an idea emerges, someone will quickly try to turn it into reality. In many cases, it becomes a product within a few months and may even give rise to a new company.

Liu Zhengzheng, 26, co-founder of Pavo (适境创新), a company that develops Pilates exercise equipment, also said the rapid development of AI technology in recent years has given rise to an increasing number of new teams and products, while opening up new directions for entrepreneurs to explore.

“Whether it’s the entrepreneurial atmosphere around us, the evolution of Chinese technology or this current wave of AI, all of these things are giving companies of all sizes new opportunities to break through,” Liu said. “I can feel that people don’t want to be constrained by the times, and they don’t want to be held back by the economic cycle. Everyone is trying to find a path of their own.”

This article was first published in Lianhe Zaobao as “改革开放蓄力 中国科技浪潮深圳涌动”.

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