Shenzhen is typical Chinese boomtown

Net Results Karlin LillingtonThere is an enormous, sky-blue billboard in downtown Shenzhen, a mainland Chinese city that is home to much of the vast country's electronics industry.

"Empty talk endangers the nation, practical work brings prosperity," it warns.

Seeing such exhortations to the comrades (curiously, in English and Chinese) is a reminder that while you stand in a modern, bustling city full of high rises, you are not in Japan or Singapore, and, especially, you are not in nearby Hong Kong, a one-hour ferry commute away.

Despite Hong Kong's reversion to the People's Republic a few years ago, the city and its environs remain a dizzying blend of East and West, soaked in money and eager to flaunt it. Hong Kong is urban Asian bling. Its people have the gritty exuberance and street smarts of Manhattanites.

The Hong Kong residents I spoke to said that as far as their work and personal lives are concerned, little has altered since the handover.

Shenzhen, by contrast, is Hong Kong's New Jersey, a cheaper residential, manufacturing and industrial zone next to the wealthy financial and business centre nearby.

Since it was established as the nation's first "special economic zone" by the Chinese government in 1980 - not subject to the large tariffs normally slapped on imported components and exported products - it has expanded at a blistering rate as both western and eastern companies based manufacturing sites there.

Its growth is staggering, and certainly puts the Celtic Tiger into perspective. In 1980, Shenzhen was a small seaside fishing town at the mouth of the Pearl River delta (a legacy that visitors notice as soon as they alight from the ferry, as the first small shop right outside the ferry building entrance offers fishing tackle and bait for sale). Its population in 1980? Only 10,000 villagers.

In 25 years, on the strength of an economic designation that enabled what we in the west would consider just normal trade, the village has grown to 10 million people. You read that right. Imagine Ballina, similar in size to 1980s Shenzhen, ballooning to hold more than two times the population of the entire Republic, and filled with skyscrapers. It is truly mind-boggling.

What is clear is that Shenzhen embodies a yearning in the Chinese business sector to grow and expand and compete in the global marketplace, a desire and drive that existed well before the recent more open climate, as the city's rapid growth since 1980 indicates.

While special economic zones were originally conceived by the government to pose a manufacturing and economic counter to the free market might of Hong Kong, they have ironically pulled China closer to capitalistic free trade, helped open up the economy, and enabled the development of a special relationship with Hong Kong, rather than a prickly stand-off. Out of such things the economic boom was made.

Of Shenzhen, one can truly say they built it, and they did indeed come, from all over China and the East - and from the West, too. For example, any IBM ThinkPad you might have purchased in the past six years was built by Chinese workers in Shenzhen. Drive around the industrial area, and you'll see Silicon Valley names dotting the buildings.

Shenzhen also embodies what scares Western companies most about China - the formidably cheap workforce. The average skilled electronics worker in Shenzhen earns $800-$1,200 (€680-€1,020) a year, not even enough to buy that ThinkPad that a good worker can throw together in under five minutes.

That annual Chinese salary is also around what a US or Irish electronics worker earns per week. It is easy to see why employers around the world are outsourcing manufacturing to China.

A worker's life can seem a grim one. Food and lodging is often included in their contracts, with many of them housed in giant communal company dormitories - not a lifestyle that would appeal to most western workers. Even so, the workers are not the ones hitting Shenzhen's considerable nightlife, said one Chinese observer. They earn so little that even with their basics catered for, they do not have the spare income to foot a night on the town in the nightclubs and bars that draw tourists and businesspeople as well as the city's growing middle class.

The life of an electronics worker is one that really only suits the young, and those I saw on the assembly lines were all about college age. In some companies, there are special employee activities and morale building exercises similar to what you'd see on a visit to a Dell or Apple plant - notice boards with employee pictures, employee of the week or month competitions, team productivity competitions, celebrations of birthdays.

Such jobs are snapped up in a country filled with deep pockets of poverty. Hundreds, even thousands might apply for a single opening, I was told.

All this will gradually change. Already, the country is the third largest trading nation in the world, after the United States and Germany, and last year, it accounted for 10 per cent of the world's economic growth.

China's middle class, now only about 20 per cent of its population, is set to expand to 40 per cent in the next decade and a half.

Such shifts are posing enormous challenges not just for China's own government, but for the governments and businesses of countries all over the globe.

The Chinese need to figure out a way to keep such growth contained and stable, but also to deal with the rapid cultural and economic transformation under way as the country catapults into the 21st century. And the rest of the world has to accept that the dragon has, at last, arrived - and it isn't an entirely tame one.

 klillington@irish-times.ie

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