Shenzhen’s high-tech economic activities have emerged as a bright spot amid China’s sluggish economy, with the southern Chinese city seeing strong growth in advanced industrial production and investment.

The value added of the city’s major manufacturers of computers, communications equipment and other electronic devices rose 16.5 percent year-on-year in the first seven months of 2024, exceeding the total industrial output of 11.5 percent, the Shenzhen Municipal Bureau of Statistics said on Wednesday.

The city, known as China’s Silicon Valley, saw more investment activity in high-tech, with financing for high-tech manufacturing rising 61.8 percent year-on-year, including a 76.5 percent increase in the electronics and communications sector.

Total industrial investment also increased by 45.1 percent year-on-year, with investment in manufacturing increasing by 51.2 percent.

“Shenzhen is a key beneficiary of China’s high-tech-oriented policies, which include growing domestic demand in the technology sector and increasing focus on the overseas market,” said Gary Ng, a senior economist at Natixis.

“The country is likely to achieve quite good economic growth this year, particularly because it has successfully attracted technical talent from the rest of China.”

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Shenzhen is a leader in low-altitude flight with new helicopter service at the train station

Shenzhen is a leader in low-altitude flight with new helicopter service at the train station

Shenzhen is part of the Greater Bay Area, a city cluster designated by the Chinese government to connect the cities of Hong Kong, Macau, Guangzhou, Shenzhen, Zhuhai, Foshan, Zhongshan, Dongguan, Huizhou, Jiangmen and Zhaoqing into an integrated economic and business center.

The city also serves as a model for other regions: Malaysia and Singapore are reportedly in talks to declare part of the southern Malaysian state of Johor a cross-border special economic zone modeled on the Shenzhen model by the end of the year, Bloomberg reported last week.

On Wednesday, UBS cut its growth forecast for China’s gross domestic product in 2024 from 4.9 percent to 4.6 percent due to a weak real estate market and sluggish domestic demand.

Shenzhen is home to more than 24,700 high-tech companies, including Huawei Technologies, DJI, BYD and Tencent. The company is experiencing faster growth as part of China’s efforts to become self-sufficient in technology and move up the global value chain.

Shenzhen’s advances in artificial intelligence, automaking, 3D printing and autonomous technology are integrating interconnected industries and enabling companies like BYD to build more advanced cars and compete in foreign markets, said Christopher Tang, a professor at the Anderson School of Management at the University of California, Los Angeles.

“The city has the potential to develop a technology ecosystem that can lead the world in cutting-edge technologies. And it remains very promising that Shenzhen will report significant economic growth figures this year,” Tang said.

Production of 3D printing equipment increased 91.4 percent from January to July compared to the same period last year, while production of service robots and electronic components increased 57.4 percent and 28.6 percent, respectively.

However, China is still under pressure from the USA: numerous companies are on the US government’s “Entity List” and are therefore no longer able to purchase goods from US suppliers.