The number of newly registered companies in Shenzhen jumped 10.4% in the first six months of 2021 as the city kept its pole position in China for startups. From January to June, there were 258,449 newly registered commercial entities in the city. Based on the official resident population of 17.5601 million, the city has 208.6 commercial entities and 131.5 enterprises per thousand people, ranking number one in the country.

Newly registered commercial entities were concentrated in the services industry, accounting for more than 90% of the total. From January to May, the operating income of the city’s for-profit service industry increased by 26.1%, an average increase of 15.1% in the two years. Among strategic emerging industries, there were 17,074 registrations of “new generation information technology” companies, a year-on-year increase of 82.3%.

Shenzhen’s economy pushed back closer to its pre-pandemic growth in the first half of this year, despite a blip in June caused by a Covid-19 outbreak in Guangdong. With GDP rising 9.7% in the first half of 2020, that equated to a 4.8% rise on two-year comparison with the same period in 2019. It’s not yet the 6% mark that Shenzhen had been comfortable with pre-pandemic, but the bright spot appears to be the development of new strategic industries and the services sector.

According to the Shenzhen Municipal Bureau of Statistics, 20 strategic emerging industrial clusters grew 13% to generate output of RMB 563.086 billion (GDP 62.5 billion) in the first half, accounting for 39.3% of the city’s GDP. The star was high-end equipment manufacturing, up 44.1%, while the marine economy rose 30.9%. A broad category called “digital and fashion” rose 23.9%, while new materials was up 22.5%. There was also positive news on the green front, as low-carbon industries jumped by 19.9%.

Industrial robots had a good boost, up 79.5%, an average increase of 61.5% in two years; the output of new energy vehicles and charging piles increased by 3.28 times and 1.21 times, respectively, with an average increase of 30.4% and 66.8% in two years; the output of 3D printing equipment increased by 32.4%, an average increase of 1.38 times in the two years.

This post was originally published by our content partner Greater Bay Insight

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Can you tell me about your background?

I was born in Shenzhen, China in 1990 and when I was nine, I emigrated with my family to Vancouver, Canada. I speak English, Mandarin and Cantonese. I got a degree in Fine Art from the University of British Columbia, and spent one semester in Fudan University in Shanghai. After graduation, I worked in San Francisco for half a year doing branding and marketing in the non-profit sector. Then I moved to London and worked as a PR and brand manager for the cleantech firm Loowatt for three years, helping them raise 1 million RMB from the Guangdong Department of Science and Technology. In 2016, I started my own firm Kaitlin Zhang Branding, and we focus on cross-border branding and digital marketing services for the tech and financial services sectors.

Why did you decide to start your company?

My entire career experience has been in the branding and marketing field. I tested the market by running workshops for O2, teaching young people and start-ups about branding and marketing and won an O2 digital award for these workshops. So I set up my company alongside my full-time job at the time.

What was gap in the market that you saw?

Initially, I thought there was a gap in the branding and marketing support being offered to the UK’s technology sector. I was immersed in the start-up world through InnovationRCA, the Royal College of Art’s start-up support centre, and could see that it is not only important to help promote the corporate brand but that the personal brand of the start-up founders and core team is also critical. From my experiences of fundraising, I knew that investors care about the entrepreneurial team as much as the business idea.

Later on, I saw that I also had an opportunity to help UK tech firms establish their brands in China, and connect them with Chinese investors. This pivot in my company made the most of my multicultural background.

If VCs see a good deal on Friday, the contracts will be with the start-up founder by Monday morning

What do you think most companies entering the China market are doing wrong?

1. Chinese people understand intellectual property differently. China is first-filed first-served. UK brands should consult with professional law firms to register their trademarks asap. They also need to prioritise buying various versions of their .cn and .com.cn domain names. Tech firms should be especially vigilant in protecting their IP in China and have a plan in place to deal with copyright infringement and copycats.
2. China’s market opportunity is huge, but it’s not for everybody. Firms should make sure they are successful in their initial markets first because entering an overseas market costs more than you think. Sometimes Europe or USA could be better fit for market expansion.
3. Work with Chinese firms to understand the product market fit. Adequate market research is essential and it does require Chinese teams that fully understand the local business environment. For example, having a Chinese person on your side of the table in negotiations is essential.

Why has China – and Beijing specifically – become such a tech hub?

The majority of China’s venture capital firms are based in Beijing. One of our core businesses is helping Chinese venture capital firms promote their brands outside of China. Chinese VCs move at lightning speed. One firm we work with, if they see a good deal on Friday, the contracts will be with the start-up founder by Monday morning.

Another reason why Beijing is a major tech hub is its proximity to the central government and its support. China’s business environment is heavily influenced by policy. Beijing also has two of China’s top universities, Tsinghua and Peking.

Branding is a significant opportunity as Chinese firms and influencers are starting to realise the importance of their brands in the West

Is personal branding more important in China than in the UK and why?

Personal branding in China and in the UK are two completely different things. In the UK, we focus on online presence and media presence. People will Google you before meeting you. If you are not visible online, it’s difficult to get that first face to face meeting with anyone.

China is a more ‘guanxi’ network. The best way to improve your personal brand is by getting a recommendation from a credible person. If you are recommended by the right people, it is less important if you are visible online. So we focus on helping clients build their personal networks and understand how to use WeChat properly in a business context.

In the UK we focus on an online presence, China is a more guanxi network.

Do you think Chinese companies also need more training as to how best brand themselves in western markets?

Of course. I believe branding is a significant opportunity in China as Chinese firms and influencers are starting to realise the importance of their brands in the West. Previously, Chinese entrepreneurs were more focused on the short-term because of the uncertainty in government policies, and so weren’t as interested in building a long-term brand. Now many Chinese firms are looking to protect their corporate reputation long-term and so are investing in brand management globally. Some of the most successful examples of Chinese firms going global include Huawei, Tencent, Alibaba and Lenovo. Chinese business people are also now investing in their online reputation on Google and Western social media platforms.

Going forward, what will be the biggest growth industry between China and UK business?

According to a 2018 report by Tech Nation, in London, 33 percent of tech company customers are based outside the company’s own country, compared to 30 percent in Silicon Valley and 7 percent in Beijing. The UK has always been open and outward-looking.

I have seen a tremendous appetite for Chinese investors looking to help UK tech firms access the Chinese market, in particular where the government is investing: smart cities, infrastructure, education and health. According to Russ Shaw, the founder of Tech London Advocates, the UK’s tech sector – whether that is in Finance (Fintech), AI & Machine Learning, Software as a Service (SaaS), CreativeTech or other tech verticals – will be at the forefront in the growth of Sino-British trade and industry.

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