Shenzhen Becomes China’s Largest Industrial City as Shanghai Declines

China's megacity Shenzhen reopens following a COVID-19 lockdown on March 21, 2022. STR/AFP via Getty Images

For many years, China’s top three industrial cities were Shanghai, Shenzhen, and Suzhou, in that order. However, as Shanghai implemented Beijing’s draconian zero-COVID policy last year, the city’s GDP by industry fell, and Shenzhen overtook Shanghai to become the No. 1 industrial city in China.

According to China’s recently released 2022 GDP ranking of the top 10 industrial cities, Shenzhen took the lead with an industry value added of 1.13 trillion yuan (about $164 billion), surpassing Shanghai’s 1.08 trillion yuan (about $157 billion), with Suzhou ranking third. All of the top 10 cities—except for Chongqing in western China—are located in the coastal areas.

Guangdong Province and Jiangsu Province have the highest concentration of the top 10 cities, with four cities from Guangdong and two from Jiangsu making the list. Historically, China’s coastal cities have been more developed due to early trade with foreign countries.

According to the production and sales report released by Shenzhen-based car manufacturer BYD in 2022, BYD produced 1.87 million new energy vehicles (NEVs), an increase of 209.17 percent year on year, and sold over 1.86 million NEVs, an increase of 208.64 percent year on year. BYD has become one of the major contributors to Shenzhen’s economy.

Wang Lili (alias), an employee of a foreign trade enterprise in Shanghai, told The Epoch Times on March 27: “The situation is not good this year, mainly due to fewer orders and very low rates of reopening [after the Chinese New Year]. Many factories with large numbers of employees are quiet and no longer hiring new workers. The recruitment agencies are starting to charge brokerage fees, which means that the agencies are not doing well.

“The main cause was the CCP’s [Chinese Communist Party] strictly enforced zero-COVID policy last year in Shanghai. Businesses took a long break, and goods at the ports could not be shipped. No one is placing new orders. Who dares to place orders with you if you cannot guarantee the timely delivery of your products? Therefore, demand has dropped significantly this year.”

A worker, who guards the entrance to a neighborhood under COVID lockdown, receives food from a delivery man in Jing'an district, in Shanghai, on March 29, 2022. Hector Retamal/AFP via Getty Images

Gu Lin (alias), a freelance political commentator living in Guangzhou, told The Epoch Times on March 27 that since the death of former CCP leader Jiang Zemin, Shanghai has declined since it had been the powerhouse of the Jiang family for a while. Shanghai’s economic strength is deteriorating in all aspects, he said.

On the other hand, Chinese leader Xi Jinping’s father proposed Shenzhen for the first time to become a special economic zone, Gu said. Due to favorable economic policies, such as low-income tax rate, many private businesses have flourished in Shenzhen.

“Western economies are based on the free market model, while the CCP rules China’s economy. Therefore, when the Chinese regime prioritized developing the coastal economy, only the coastal areas were being developed, while the inland regions lagged significantly behind. Most industries in China are concentrated in the Pearl River Delta and Yangtze River Delta regions,” he said.

“However, in recent years, the CCP’s policies dealt a heavy blow to private businesses, and many entrepreneurs have left the country with their assets. As a result, the Chinese economy is in crisis.”