Where is China's Silicon Valley

Pearl River Delta: The new Silicon Valley is emerging in China

In the business world, clich├ęs about the great economic areas in the world have developed over decades. These say, for example, that the Americans invent and innovate, the Chinese copy and imitate, and the Europeans regulate and regulate.

The balance of power in the world has shifted

While the EU may have made the latter even more accurate than it was before, the situation in America and China has changed somewhat. The Chinese have stopped copying for a long time, but instead bring innovative products onto the market for their part. This means that the USA is no longer the only innovative economic engine in the world. The great advantage of China is that the most populous country in the world can produce particularly cheaply. Examples of recent breakthroughs by the Chinese include 5G, supersonic missiles, human genetic engineering, artificial intelligence and quantum satellites.

China's economic rise has led to a competition for resources. Important locations are African countries such as the Congo, South Africa and Nigeria as well as the Luzon Sea and even the Arctic, where huge oil and gas deposits as well as precious metals, metals, minerals and rare earths are stored under the ice, which is sometimes kilometers thick. China's rise, and the related relative decline of the US, helped bring a president to power with the campaign slogan, "Make America Great Again".

China at the forefront of key technologies

In some cases, these breakthroughs in technology have already become a political issue. This is most evident with 5G, but AI is also seen as a key technology in many areas. The Chinese have long since grown beyond copying. In many cases the motto is instead: do better. This also applies to Silicon Valley, the world's innovation engine. In China, the government has been promoting structures for more than a decade that are intended to encourage the emergence of a Chinese Silicon Valley.

Contrary to what one might initially assume, the Chinese Silicon Valley is not simply being built out of the ground. Instead, the region has risen to become a rapidly growing region of its own accord. It is the Pearl River Delta, which, like the American model, is located by the sea. Around 70 million people live here, roughly ten times the population of the Greater Bay Area. Eleven larger cities belong to the region, including particularly important: Hong Kong, Macau and Shenzhen.

The Pearl River Delta is already an economically strong region

The region offers ports that are conveniently located for international trade. Both Hong Kong and Macau are historically known for their trade. To this day, the location on the water has benefited the economy, whose resources are preferably delivered by ship. Cities are still important for the economy today. Hong Kong is the region's financial engine, while Macau is known as a haven for gambling. The financial capital is therefore close enough to promote one's own economy.

Shenzhen, which is located north of Hong Kong, also plays an important role. It benefited from the establishment of a special economic zone under Deng Xiao Ping in the 1980s. The city continues to grow rapidly to this day. Companies like Huawei, Tencent, DJI and ZTE are at home here. The region also has plenty of universities to offer:

  • Southern University of Science and Technology
  • Shenzhen University (strong emphasis on technology and science)
  • Chinese University of Hong Kong
  • The Harbin Institute of Technology
  • MSU / BIT Shenzhen University (Moscow State University / Beijing Institute of Technology)

In addition, there are ten other universities in Hong Kong alone, which can provide the necessary brainpower for the nearby companies. The region's infrastructure is also being greatly expanded. The Hong Kong-Zhuhai-Macau Bridge was completed in 2016 and has been the longest overseas bridge in the world ever since. In the future, the individual cities in the region will increasingly be connected by high-speed trains.

Lack of civil rights - ideal for big data

A strong contributing factor to the success of the Pearl River Delta as the world's new innovation workbench is the low level of awareness of civil rights and data protection. Google, Facebook & Co. have long benefited from a lack of data protection standards, which is only now gradually changing.

But there are also strong disadvantages, which are particularly evident in the contrast with Silicon Valley. The opposition to politics from Beijing is strongest in Hong Kong. The city has long benefited from its special status under the British protectorate. The city still enjoys special rights, which are now being restricted more and more.

The Communist Party - a Long Term Problem?

It is questionable whether Hong Kong's opposition to the communist leadership can survive or even prevail over the long term. On the other hand, it is also very possible that with increasing prosperity in the region and an academic free spirit, the need for civil rights, democratic conditions and participation will increase.

There is no question that the Pearl River Delta provides the best conditions to catch up with Silicon Valley - if not to surpass it. The communist leadership of the country, which supports and expands the region through investments of billions, could in the long run itself become a problem for the progress of the region and the country.