China notes (2/3): Shenzhen

Another huge airport. Massive change in demographics. 100x younger. Again very few westerners. Humidity very different too 😅

Another flawless pickup (Trip really has this process nailed). Mid-range EV to my hotel is ~£15.

It’s been about twelve or maybe even fifteen years since I was in Shenzhen. I remember literally driving through construction sites. Today it’s hard to imagine any city in the world that feels more like an anime version of ‘the future’, far surpassing Singapore and Tokyo (probably several years ago). Although saying that, looking out of my hotel window, there is still construction going on everywhere.

Saturday

A better view from my elevated vantage point.

I know I said it earlier but for a city which has grown so quickly, it’s amazing how much construction is still going on here.

Grab the metro to visit Nantou Ancient City (SZ’s historical starting point). Surprisingly their ticket machines give me a billing error. First I’ve seen. By far the only westerner in the station and on train (which feels much less English-friendly than Beijing system-I guess Shenzhen isn’t a major destination for tourists).

Nantou Ancient City is fascinating for what it is and isn’t. It’s an attempt to maintain the city’s origins as a small trading town. But then they’ve turned the whole block into an integrated outdoor mall which combines boutique designer stores (albeit in a very Gen Z way), art galleries, lots of eating options and the usual mix of coffee and dessert spots. It walks the line between tacky and quality, often lurching wildly either side. Lots of younger teens, young families and a handful of somewhat confused tourists.

Definitely more Teslas in Shenzhen than Beijing. Fascinating how every major phone/telco company here also expanded into EVs.

It’s crazy to see the sheer number of Chinese EV brands. Quick research says 25! Down from 100 🤯

Curiously although there are rental bikes everywhere, it’s all regular pedal models, no e-bikes. Or scooters. Not sure if they skipped completely or just not in the cities I’m in.

I bounce across to Huaqianbei (HQB) to get a sense of the scale of electronics manufacturing in the region. Multiple buildings rammed full of electronics re-sellers (from components to full products) and many sales offices for manufacturing companies.

Interesting to see how quickly companies started shifting their marketing to Openclaw hardware.

Sunday

Not sure how localised this is to SZ but I’ve gone to another hybrid design/coffee park area (Oct-Loft). Think outdoor mall but with an emphasis on art galleries, design/brand consumer stuff, coffee spots (many) and a handful of restaurants. Partially an effort to see what Gen Z is doing here on a Sunday (would love to know how representative this spot is).

There’s a clear retail effort for highly aesthetically pleasing design to drive social action.

Also semi-anchored around various exhibitions:

It’s quite a good concept. Curious how long it’s been in existence. Vaguely similar to Meatpacking District or Soho vibes in NYC and Covent Garden in London although this is more a destination area than part of the core city.

So many photo shoots!

Dinner in Nanshan city. Probably the part of SZ which feels most like the future although absolutely helped by the brand new shopping mall complex which has been built out just six months ago (a lot of the surrounding buildings are owned by Pony Ma, Tencent founder).

Incredibly high end finish with Chinese brands (electronic, telco, fashion, drone) and major Western brands sitting side by side. And then some very boutique things like this specialist keyboard store which I need to come back to (I was on a pretty rushed tour).

Naturally you had drone food delivery happening, which almost felt predictable. This isn’t happening elsewhere in China, SZ is the testbed.

Dinner with a local investor who was educated in China:

• Geopolitics between US and China still makes a lot of business tricky but the jump in AI hardware investing in Silicon Valley has improved things as all that business is coming directly to SZ (via a lot of former Apple employees). US activity keeps pushing more countries to China

• Feels the US is now both too expensive and lacking innovation. I suggested China was 50% of London cost. He said probably lower and you could still live here for 10% of it if you really wanted to.

• Biggest difference he sees over the last decade: the Chinese have now found their identity and confidence. Still need to partner in areas internationally but 100x more sure of their capabilities than a decade prior.

• He counts 25-50 Chinese car brands as serious players but thinks Huawei are #1.

• Comparing SZ to Beijing, he said that it’s still true (as historically has been the case) that SZ is far away from the direct eyes of Beijing so they get more latitude on things

Monday

I read China’s latest 5yr plan this morning. It’s remarkable. Once you see a KPI for the number of patents to be registered, you begin to realise how seriously they take planning (and how engineering driven it is). Worth reading a summary. I suppose you can certainly eye-roll a bit at centrally planned capitalism etc. but on the other hand, I couldn’t imagine a single western government being capable of this.

It’s unclear quite what the vision is for SZ’s urban landscape but looking across the city from my hotel I see:

An AirPod monument (this is near the mall I was in last night):

An Eiffel Tower:

And, some pyramids:

Idk.

Later that morning I have a series of coffees in a square kilometre which houses some of the top engineering startups and AI researchers in China (and by extension, the planet). Apparently they all go to this one Starbucks (despite the abundant excellent coffee in China, somehow Starbucks retains a position of value). This is probably the first generation whose parents didn’t feel the need to send their kids to the US for university. A couple of examples:

• A 19yr old co-founder building a data capture hardware product for factory floors to train frontier models

  • Patiently educates me on the state of models for robots. Still in data constraint stage (versus software which is now compute constraint)

  • He’s focused on grabbing data from the tier 1 factories, selling it back plus process improvement to the factories and then selling data to frontier models

• A former Apple product person building assembly line robots

  • I pointed out the lack of westerners in SZ as well and it’s not my imagination. He thinks it’s crazy that more US and westerners aren’t coming here.

  • He talked about the difference in the factories now versus a decade ago. Today when he visits, their car parks are full. Combination of increasing salaries but also very cheap EVs (and govt subsidies for them).

I take a walk around another shopping mall (MixC, operated by the same developer as the one I was in last night).

Interesting to see a Korean brand called Gentle Monster which operates concepts around experiential retail and sunglasses. Similar to the style I saw in Oct-Loft park over the weekend.

It certainly generates a lot of earned media views.

Inside the mall is a similar high end mix of Chinese and western brands.

Head to the airport. £10 for a 30m luxury Didi ride. How can this be profitable? Maybe it’s just a giant data play?

SZ airport has a similar design to Beijing Daoxing. High end retail, vast amounts of space. I drop into China Southern’s business lounge but it’s surprisingly shit (I guess that particular budget sits with the airline).

China Southern itself is a delightfully old school airline. I’ve flown two legs in business (which is absurdly cheap, I’ve paid more for a one-way train ticket to Manchester) and it feels like the kind of service I’ve read about in pre-90s airlines. They insist on me wearing slippers, make a huge fuss about getting anything at all I want (I’m the only westerner on both legs but I genuinely don’t think that’s the reason), there’s a white cloth food service (even for this 90m leg!) and I think I’ve previously mentioned their champagne flutes.

Surprisingly they seem to squeak out a profit despite this kind of exuberance and I’m extremely pleased to discover this (curiously American Airlines is also a tiny shareholder). Somewhere here is a joke lurking about profitable airlines only existing in communist countries.

Next stop: Hangzhou.