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The area – home to some of China’s biggest names in technology, including social media giant Tencent, telecoms maker ZTE and drone giant DJI – is often called China’s Silicon Valley.
Now, a joke that went viral online has put Yue Hai on the map amid the escalating US-China tech war.
“Rather than China, it seems the US government has started a tech war with Yue Hai. It is the district officer who should attend the negotiations with US President Donald Trump,” said the post, referring to the local government official in charge of administrative affairs in Yue Hai.
Streets and buildings in Yue Hai are tech-themed: Tencent’s original headquarters is located on Science and Research Road, while DJI is on High Tech Road, about half an hour’s walking distance away.
About a 30-minute drive from Yue Hai is the corporate headquarters of Huawei Technologies, the Chinese telecoms giant at the epicentre of the latest escalation in the tech war after Trump banned it from buying US technology without Washington’s approval.
DJI, which is building a new headquarters designed by the architectural firm behind Apple Park in Silicon Valley, provides nearly 80 per cent of the drones used in the US and Canada. Without naming DJI, the US Department of Homeland Security recently warned American companies about the security risks posed by Chinese-made drones.
One Yue Hai district company that has so far avoided the heat in the tech war is Tencent, operator of social media platform WeChat, whose CEO Pony Ma Huateng brought up the viral joke in remarks at a Shenzhen tech summit over the weekend. “It was widely circulated on the internet,” Ma noted.
In the span of four decades, Shenzhen, which became China’s first special economic zone after it was opened up to capitalism and foreign investment in 1979, has grown from a fishing village of 30,000 people to a sprawling manufacturing and innovation megacity of more than 13 million.
As well as big names like ZTE, DJI and Tencent, Yue Hai is home to dozens of China’s national hi-tech and research centres as well as nationally known tech companies such as Shenzhen Dazu Laser Technology and the Kingdee Software Group.
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Now Shenzhen has been caught in the crossfire of a tech war because China’s most advanced technologies, from artificial intelligence to drones and robotics, are being developed in the area. “The [Yue Hai] hi-tech area has a very special position, playing a key role in Shenzhen’s pursuit of tech innovation,” Tencent’s Ma said over the weekend.
During lunch hour in Yue Hai earlier this week, the South China Morning Post spoke with young scientists, engineers and programmers to get their take on the tech war. Those who agreed to speak did so on the condition their names and companies would not be used as they were not authorised to speak to media.
“It will be a no-win situation for the US and China,” an engineer said. “Huawei and China’s high-tech manufacturing will be heavily hit if the tech war continues. I don’t think the US has prepared well for a break with China. The conflict has come about from China’s ambitions of having its own technologies and that makes the US feel threatened.”
A programmer said that while Huawei and some tech hardware makers were at the centre of the storm, everyone would feel the negative impact if it continued. “There are no lay-offs in my company so far, but marketing strategies have changed and sales of some products have been hit,” he said.
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To ease the impact on the local tech economy, which accounts for 40 per cent of the city’s GDP, the Shenzhen government said it would cut individual annual income tax from as high as 45 per cent to 15 per cent for certain top overseas and local talent as it seeks to maintain its edge in innovation. Deputy mayor Wang Lixin said on Sunday the city would use its own operating income to make up for the shortfall in tax revenue.
After a US tech ban on ZTE in 2017, which was lifted after it paid a US$1.4 billion fine and agreed to US compliance on Iran sanctions, Chinese President Xi Jinping urged China to go all-in on scientific self-reliance. Those calls have grown louder since Huawei met a similar fate in being denied access to US technology.
“I think the US government’s behaviour is barbarous,” a programmer said. “I don’t think what Trump is doing is farsighted. The trend of globalisation cannot be reversed.”
Others were more sanguine. “Complaining or being angry cannot solve any problem,” a scientist said. “What we can do is develop our own technology. If not, China’s tech development will be restrained by the US forever.”
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