Shenzhen: The Silicon Valley of China

Bob Bluetooth Baggage Tracking 's manufacturing partners are in Shenzhen, a very special place in mainland China often referred to as the Silicon Valley of China. This week, I spent some time with our partners as we sourced the latest technology for our Bluetooth baggage-tracking solutions.

From fishing village to technological powerhouse

In 1978, Shenzhen was just a small fishing town with no more than 30,000 residents. Today, it has a population of over 12,000,000. Its GDP increased from $196 million to $400,000 billion by 2023, which represents 2,040 times growth!

What happened in Shenzhen to experience this high growth?

Let’s take a look at its history. In 1927, a Civil War broke out between Nationalist China and the Communist Party, lasting for two decades.

During this period, Japan also invaded China, but China managed to defeat them. In 1949, the Communists emerged victorious, and the Nationalist Party retreated to Taiwan (noteworthy side fact: Taiwan now produces 60% of the world's semiconductors!).

The Communist Party then went on to establish the People's Republic of China (PRC).

Following the war, there was widespread food scarcity and hunger among the population. Mao Zedong passed away in 1976.

Meanwhile, other Western countries such as the European Union (EU) and the United States were experiencing growth and development, while China lagged behind.

How Shenzhen became ‘the factory of the world’

In 1978, Deng Xiaoping came to power.

He was more open than Mao and sought economic growth through various means, including the utilization of capitalist principles.

He established three key pillars for his reforms: privatization, free market economy, and openness to foreign trade and investment.

During this time, China selected Shenzhen as the testing ground for this new economic model and allowed foreign companies to participate in a free market.

Shenzhen was designated as a Special Economic Zone (SEZ), and following its success, additional SEZs were established.

This marked the period when China transformed into the world's factory, achieving remarkable growth. Over 600 million people were lifted out of poverty, leading to significant rural-to-urban migration in search of a better life.

Deng Xiaoping completed his term in 1989, and visible changes continued to occur.

The two subsequent leaders after Mao were Yan Ceming and Hu Jintao, who further refined and optimized the economic model.

China's constant strive to stay ahead of the curve

By the end of Hu Jintao's tenure, China had successfully developed its middle class. However, this economic transformation also brought forth a new set of challenges.

As competition among factories in China intensified, a scenario emerged where manufacturing products in India, Vietnam, and other countries became more cost-effective options for companies, posing a significant challenge to China's dominance in manufacturing. In response, China embarked on a strategic reevaluation to safeguard and enhance its competitive advantage.

China set its sights on advancing in the fields of technology and science as a response. Notable examples of this strategy where China's pioneering role in the development of 5G technology or electric vehicles.

In 2012, Xi Jinping assumed leadership, spearheading China's ongoing evolution. Under his guidance, China shifted from primarily exporting low-value goods to becoming a global leader in the production of advanced products, including robotics, electronic equipment, technology, and more.

My experience in Shenzen: exploring innovation

During my trip to Shenzhen, I made a two-day stopover in Hong Kong to attend the Global Sources exhibition, a massive hardware event where they offer a wide range of products to B2B importation companies. This exhibition covers an area equivalent to 220 football pitches and accommodates 9,000 booths. It serves as a meeting place for Asian exporters and global importers!

I found it a great source of inspiration. I listened to visionaries and top voices in the hardware industry, discovered new products, learned about new technologies, and made valuable connections.

After my stop in Hong Kong, I travelled to Shenzhen to spend time with our partners and collaborate. We engaged in brainstorming sessions, discussed future designs and prototypes, strategized firmware updates, and delved into quality control and testing processes. However, what was most significant for me was spending time with them, envisioning the future, and integrating them into our vision to transform airports worldwide.

Revolutionizing baggage tracking with smart Bluetooth solutions

Bob Bluetooth Baggage Tracking is the first company in the world to mix Bluetooth, GPS, and LTE (cellular connection) technologies in a small, wearable device carried by airport staff to locate baggage embedded with sensors.

We want to disrupt the aviation industry and eventually replace barcode scanning at airports: a slow, costly, and inefficient process. Every year, more than 4,000 billion bags cross the skies, resulting in 4,000 billion bag tags being printed and thrown in the trash.

Being in our partner's factories is very exciting. You can follow the entire process and understand how hardware is built, from designs and prototypes to Printed Circuit Board Assembly (PCBA) manufacturing, firmware downloads, DIP (device in package) integration, quality control, and testing.

As a result of their ongoing evolution, Chinese factories have made significant investments in automation and the recruitment of top-tier R&D talent. These strategic moves have enabled them to streamline their workforce, enhance productivity, and optimize efficiency, all in an effort to maintain their competitive edge.

Moreover, their leadership exhibits a remarkable level of boldness, and their C-level executives boast impressive educational backgrounds from some of the world's leading universities.

Our hardware partnerships are firmly grounded in mutual trust and collaboration. They bring to the table their robust hardware manufacturing capabilities, tailored to our precise specifications and unique use cases. We leverage our expertise in software solutions and industry insights to complement their offerings seamlessly.

Together, we are at the forefront of pioneering the Internet of Bags (IoB), revolutionizing how bags and related products integrate with the digital world.

China’s future: balancing innovation, geopolitics, and economic challenges

It was once said that what's conceived in the US becomes reality in Shenzhen, but this statement is not entirely accurate. Shenzhen is now developing its own products. Moreover, there are instances where they use US products as a foundation, refining them to create even better versions.

China should not longer be perceived as a low-value-added manufacturing hub; instead, it has emerged as a nation with a high capacity for producing top-quality hardware.

Chinese leadership is actively promoting technological independence, leading to tensions with other nations, particularly the United States. Apple has already moved part of its iPhone production to India.

China's economic growth has stagnated since the onset of the COVID-19 pandemic. Infrastructure development, which was once a key driver of growth, is unlikely to provide significant support. The recent real estate crisis, highlighted by the bankruptcy of China's largest real estate developer, Evergrande, has further worsened the economic situation.

I leave you with some personal questions about China's future:

1. How will China compete with neighbouring countries like India or Vietnam?
2. How will the US-China relationship evolve? We are moving from offshoring to friendshoring.
3. Will middle-class internal consumption replace infrastructure development as the driving force behind economic growth?
4. How will China address the challenges of an ageing population? How will they take care of their elderly?

The next decade will undeniably be pivotal for China, and as for Bob Bluetooth Baggage Tracking , we remain committed to adapting to market dynamics. We will persist in building a robust software product and hardware ecosystem that stands at the forefront of innovation, ensuring our continued relevance in an ever-evolving landscape.