On reforms anniversary, Xi outlines innovation push President warns of ‘unprecedented’ global challenges

Ananth Krishnan

China on Wednesday marked the 40th anniversary of the establishment of its first special economic zone (SEZ) in Shenzhen, outlining plans to boost its innovation capabilities and global technological influence, even as it grapples with a bruising trade and technology war with the U.S.

President Xi Jinping, who travelled to Shenzhen and Guangdong province to mark the anniversary — a key step on China’s economic reforms and opening up process — in a close to hour-long speech warned of “unprecedented” global challenges and a “turbulent” world facing China, but did not mention relations with the U.S. specifically.

Mr. Xi’s visit to Guangdong province for the anniversary had been billed as a key political event in China for 2020, coinciding with the Communist Party’s plans to mark the year as when it would eliminate extreme poverty and build what it calls a “moderately prosperous society”.

This will be followed by another major anniversary next year, when the Communist Party of China turns 100.

The planned events were overshadowed by the COVID-19 pandemic, which did not, however, derail Mr. Xi’s visit, with China broadly tackling the spread of the outbreak at home for now.

New engines

“We need to unswervingly implement an innovation-driven development strategy to foster new engines and new trends, so as to build a technological and industrial innovation high-ground with global influence,” Mr. Xi said in a speech to a hall packed with mask-wearing dignitaries, describing Shenzhen’s SEZ and the reforms that propelled China’s economy to become the world’s second-largest as “a miracle in the world development history”.

Since the setting up of the SEZ in 1980, Shenzhen’s GDP had grown 20% annually, he said, to $400 billion. The GDP of Shenzhen, which is a key tech hub for China and home to some of its corporate giants such as Huawei and Tencent, surpassed Hong Kong’s in 2018.

Mr. Xi also outlined plans to take forward the integration of Guangdong province with Hong Kong and Macau as part of the Greater Bay Area plan, which looks to leverage Hong Kong’s status as an international financial centre.

The push towards integration with the mainland has been backed by Hong Kong’s business houses but also viewed warily by some in the Special Administrative Region, who are concerned both by the city's waning influence and the dilution of the “one country, two systems” model.