Shenzhen Huaqiangbei is a world-class electronic information hardware distribution center formed due to demographic dividend, market dividend, policy dividend, geographic advantage and other economic factors when mainland China undertook the world's third major industrial transfer. Huaqiangbei Museum defines Huaqiangbei as "No.1 Electronic Street in China; the Land of Global Technology & Fashion". Huaqiangbei is a business center with many people, money, companies, goods, information, resources, opportunities and efficiency, and is the symbol of the achievements of China's reform and opening-up and Shenzhen's economic development.

Slkor Shiqiang Song on Huaqiangbei’s Next Decade

But the price increases hurt some of small terminal manufacturers. A factory specializing in R&D and production of photovoltaic energy storage inverters owned by one of my fellows from Sichuan located in Bao'an District Fuyong Sub-district, went to bankruptcy due to this wave of price increases. It also caused damage to the industrial ecology, shaking the customer base which the small businesses at Huaqiangbei rely on. After all, “With the skin gone,to what can the hair attach itself?”

After more than three decades of rapid development, the business model at Huaqiangbei made not much progress, but China's economic development model and social patterns have quietly changed significantly. During rapid economic growth, we have no sense of crisis. Huaqiangbei has low barriers to entry, no pricing power, no competitive barriers, low efficiency, no bargaining power in upstream and downstream, bosses usually make ends meet and wait for opportunity for speculation to make quick money. The opportunity for speculation is over, they encountered ever low tide this year, the goods hoarded by huge investment in the past several years now can only be sold by luck. Bosses are thinking about changing jobs, frictional unemployment occurs. Some bosses have been out of the game completely, and structural unemployment occurs. The bosses showing off their luxury cars, houses and watches in the past two years went to Singapore for sunshine because their companies have no business. Some other bosses, who used to work at daytime to make money and take training courses at night to learn, went to the Hongfa Temple to pray for blessings because of the depressed market.

Desolate Huaqiangbei at 8:00 pm on 8 August, 2023

So Huaqiangbei still have a future? Where should Huaqiangbei go from here? I think that as long as the SMEs at Huaqiangbei think diligently, analyze rationally, and keep pace with the historical development trend and comply with the laws of economics, they still have chance.

1. The industry still in the ascendant

Huaqiangbei is a distribution center for electronic components and intelligent hardware, with annual sales of more than RMB 240 billion. With the support of the huge domestic market, and the geographical advantages thanks to Hong Kong and Southeast Asia, there is a lot of room for survival and transformation adjustment time. Huaqiangbei also has resources accumulated for many years. Professor Akita from Kanazawa University is my friend. He came to Huaqiangbei every time when he came to China to understand the industry trends and to have a look at the new products. He rented a house at Guanlong Village, Xili because there is a direct bus to Huaqiangbei!

Huaqiangbei Museum positioning Huaqiangbei as "No.1 Electronic Street in China; the Land of Global Technology & Fashion"

To be continued...