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Shenzhen, China January 2
Shenzhen, China magnify

I have learned a few things over the past couple of days. On Jan 2, we rode the train from Hong Kong to Shenzhen, China, just 40 miles from downtown Hong Kong. Shenzhen is a new manufacturing city, established just 20 years ago. Everywhere you look for miles and miles are all kinds of factories and ocean containers packed for export through the booming nearby port.

The cost to produce things here is just a fraction (1/10 to 1/20) the cost to produce in the US. As a result, this area of China is experiencing exponential growth. The infrastructure is being built as fast as possible, (a subway system is under construction in Shenzhen), however electricity production cannot keep pace with demand. We were told that the manufacturing plants close 1 day per week in the summer because the use of air conditioning causes excess demand for overall power in Shenzhen.

We met with some business contacts, toured a plastics plant and had a very rare and privileged opportunity to tour some workers’ living quarters. The plastics plant was clean and efficient and although the production of precision plastics is not as labor-intensive as assembly work, the operation is still low-cost. This company is rapidly investing in new machine tools, has implemented SAP as their business system. They work hard to procure low-cost materials, but are also obsessively focused on quality standards because they know this strategy will help them retain long-term customers.

The managers had impressive credentials including MBAs from Shenzhen University. They all spoke English and were proud to explain their part of the operation. Workers at this company stay in the company dormitory Monday-Friday and go home on the weekends. Inside the dorm, they sleep 6 to a room, except for managers, who have private rooms. Workers have access to PC’s and the Internet, a TV room, exercise equipment, and a reading room. While Spartan by US standards, the dorm reminded me of my college days.
Each time we crossed the border (Hong Kong to Macau and return, Hong Kong to Shenzhen and return and Hong Kong to Beijing) we were required to prepare exit paperwork from the origin country and immigration paperwork for the destination country. Coming back from Shenzhen, we were also checked for our body temperature, I suppose to make sure we weren’t sick. One has to wonder what happens to all of those exit and immigration forms because the process also includes a passport scan and computerized check of your visa. It’s worth it though. Visiting for business and sightseeing in China is amazing!

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