By Kate Yuan

(JW Insights) May 11 -- Southern China’s Shenzhen posted the highest economic growth among top-tier Chinese cities in the first quarter, beating Shanghai and Beijing, even faced with the tech restrictions from the US, South China Morning Post reported on May 10.

Driven by stronger-than-expected growth in the electric vehicle sector, the home city of BYD reported year-on-year economic growth of 6.5% in the first quarter. It also pulled further ahead of neighbouring Hong Kong, after the gap between the economic size of the two cities had already widened the economic size to around RMB800 billion ($115.4 billion) last year.

Its strong performance offers China’s tech industry hope that it can withstand the relentless pressure from Washington, with the Shenzhen-based Huawei Technologies at the centre of the curbs.

Dozens of Shenzhen-based companies are now included on the US entity list, which denies their access to American parts, technology and markets without a licence.

Shenzhen’s strong recovery after China ended its strict coronavirus control measures, putting Shenzhen in a strong position to lead the integration of the Greater Bay Area, which Beijing sees as an important engine to drive the nationwide economic upgrading, said the South China Morning Post report.

The Greater Bay Area is the Chinese government’s scheme to link the cities of Hong Kong, Macau, Guangzhou, Shenzhen, Zhuhai, Foshan, Zhongshan, Dongguan, Huizhou, Jiangmen and Zhaoqing into an integrated economic and business hub.

Peng Peng, the executive chairman at the Guangdong Society of Reform, said Shenzhen has the advantage of being situated in the Pearl River Delta manufacturing hub next to a global city like Hong Kong, but still cautioned that external challenges remain.

“Trade and technology wars will bring along a series of other issues that make Shenzhen’s independent development difficult. The suppression of the US and the West could lead to the disruption of supply chains. And there is not enough fundamental research on chips and mask aligner,” he said.

Shenzhen aims to feature integration of production, education and research with enterprises as “the main body”, Hong Kong Trade and Development Council said, by pointing to the likes of Huawei Technologies, BYD, Tencent and DJI that have established their headquarters in Shenzhen.

Yuan Chenjie, the principal representative at private equity firm SAIF Partners, said,“Shenzhen is working hard to pull in top universities, such as Sun Yat-sen University, Harbin Institute of Technology, Xi’an Jiaotong University. At the same time, Shenzhen can collaborate with Hong Kong’s universities to develop technological research, which is a unique advantage.”

According to a survey released by economist Ren Zeping on the attractiveness of Chinese cities for talent in 2022, Shenzhen ranked second after Beijing due to its advanced technology industry, while it ranked first in terms of innovation with the highest number of patents granted per 10,000 people, SCMP reported.