Should You Live in Shanghai or Shenzhen?

This article is originally found here: https://www.globalfromasia.com/shanghaiorshenzhen/

So you’re thinking to move to China? Or maybe come to a visit – and 2 cities are sticking out for you – that is Shanghai and Shenzhen.

Which one should you choose?

It’s such a heated debate with expats over beers, I thought today I’d take a crack at writing it up a bit! Let’s just go through each factor and see who is the “winner”! Though the winner will depend on which of these points are more important for you!

Cost of Living

Shenzhen is cheaper than Shanghai. Costs have been skyrocketing across China, with rents doubling or tripling in the years I’ve been here. Yet I think for the same living standard and central location in Shenzhen, you’d pay much more in Shanghai.

Of course this main cost is rent. Let’s just say for a 2 bedroom in Shanghai the cost is about 10,000 CNY and that same place and location in Shenzhen would be 7,000 to 8,000. Of course this is going up and up as the economy gets hotter. Yet as a general rule of thumb from my experience housing is about 30% more in Shanghai.

Borders with China

For those entrepreneurs and other hustlers who come to China on a longer term stay and don’t have the proper work permit / residence visa, I feel your pain! You will need to leave China most likely every 30 days, or if you have a good visa, every 90 days.

This adds up quick in travel costs and travel time.

If you’re based in Shanghai, this will require a flight somewhere. Maybe you can come down to Hong Kong (or some come to Shenzhen for the cheaper flight then take a bus to Hong Kong), while others fly to Korea or Philippines, etc. Its up to you- but you need to take that exit stamp on your passport to not overstay your Chinese visa.

Overstay your China visa? Just a fine per day for each day you’re late, but then the second time it is more serious. Customs may ban you from entering China going forward, which I can say has happened to a few people I know. So don’t risk overstaying your visa, it can cost more than just fines.

So back to the comparison of SZ and SH. Shenzhen has over 7 border entry points to Hong Kong, and going across any of them counts as exiting China for your visa. I won’t get into the political reason of “but isn’t Hong Kong the same as China” argument – it is a different “region” (SAR). So this will count as exiting China.

A ton of expat entrepreneurs I know, myself included for a couple years, got by this way. Just crossing into hong Kong every 30 days. Not a bad thing at all, go shopping, maybe do some banking or other Hong Kong company related business. Maybe a customer too, can stay overnight. You can also file for a new China visa from Hong Kong, and do an express one that you can get back the next day.

Do You Like Snow or Sweating?

Here is a decision you need to make – what weather do you like? There is a ton of hot days in Shenzhen and it never snows, ever. I’m typing this up in December so it is a bit chilly today and I have a sweatshirt on – but you’ll never have snow or ice.

Shanghai doesn’t have a ton of snow, but it will get chilly and there will be snowfall in the wintertime. Not like a risk of an avalanche or blizzard but it will pile up a bit.

Yet here’s a plus for the cold times in Shanghai – apartments have heating systems installed! Shenzhen, none! So you will need a space heater for a couple months in the year here in SZ or extra thick blankets.

Both cities have pretty hot summers, well Shenzhen has EXTREMELY hot summers. And humid, you’ll be sweating and maybe changing your outfit once or twice a day.

So not sure which weather you prefer, some like the different seasons and then others like the warmer climate.

Selling Into China

Shanghai is the place to be if you want to do China market entry. Not exactly sure how that came to be, but it is known as the “cosmopolitan” center of China. Everything comes in there for marketing and design. Its full of creative marketers. They can help you do everything from creating the marketing campaign to customer service to e-commerce building and distribution.

Tons of people ask me if I know people in Shenzhen who can help them sell in China – but most of these full service agencies are up in Shanghai.

Maybe that means there is opportunity for Shenzhen. Shenzhen is more known for hardware and electronics. As well as export e-commerce, which we’ll hit in the next point.

Electronics + Export E-commerce (B2C)

Shenzhen is the king of electronics. Apple via Foxconn has been making iPhones here for years and there has become a complete front to back industry here. From marketplaces to manufacturers to prototyping, Shenzhen has it all. Anything is possible here in Shenzhen for your hardware project.

I meet a lot of Kickstarter campaign entrepreneurs coming here for their manufacturing. They will be coming here often. Some who take it to the next level even open their own office here.

On top of the electronics and hardware, there is the exporting via B2C (business to consumer) e-commerce. Because there is a ton of e-commerce via electronics, the hubs for e-commerce has now spawned into Shenzhen. When people buy iPhone cases and backup batteries, via eBay or wherever, a ton of the time they will ship it direct from Shenzhen. Right out of the electronics market, most likely Hua Qiang Bei.

Learning Chinese

I have to admit, my Chinese language skills aren’t too great. My excuse maybe is because I’ve been down in Shenzhen. Because this is a melting pot, there are tons of Chinese dialects, especially Cantonese. And a lot of immigrants that don’t know how to speak Mandarin well, or correct. I have had friends from north China come down and say how hard it is for them to communicate. Yes! Even though they speak decent mandarin, the taxi drivers or shop owners don’t hear it well and don’t speak it well.

So if you’re looking to study Chinese, sure you can study down here in Shenzhen. You will most likely enroll at Shenzhen University, but I’d recommend going up north. So Shanghai could be a good place, there are tons of chinese learning centers there.

Another side note, for whatever reason, Chinese in Shenzhen have been shy to try to speak Chinese to me. They immediately think I don’t speak Chinese and speak in English. Or they just don’t even make any attempt at all – without me even opening my mouth. When I am in Shanghai or other north china cities, the “general public” speaks Chinese with me straight away.

Why?

I’m thinking because more foreigners speak Chinese there. Maybe here in South China because people do a lot of manufacturing here. Foreigners just come for short trips to visit factories. So over and over again the Chinese public sees the foreigner can’t speak any Chinese. So they become accustomed to just making that assumption.

Pretty frustrating for me who is trying to learn Chinese,so take that into account when deciding which city to live in.

Shanghai is a City Your Friends Back Home Know

Even though Shenzhen is a city with around 17 million people, my friends back home don’t know the city when I tell them. I have to say it’s across the border from Hong Kong. Then they get it.

Shanghai is so famous around the world. And it has that big city image. People know it is a hustle and bustle city with tons of opportunities.

Maybe this is something you could care less about – but Shanghai definitely has more “sexy appeal”. When telling people where you live and work, they seem to show more awe and interest.

Fashion Center is Shanghai

If you’re doing fashion or design, you deal with Shanghai. There are all kinds of events with models and designers on a regular basis there. Not a bad gig right? Shanghai has been building that reputation up for generations. It is well established as a global fashion center.

It is also known as a pretty classy place. Even foreigners there can’t get away with being in tshirt and jeans at bars and clubs. I always notice the difference when traveling. In Shenzhen everyone seems more casual attire and in Shanghai people dress to impress, from morning till night.

Not sure which one is more appealing to you – but image is important in Shanghai when you go to business meetings.

Shanghai Closer to Beijing + Rest of china

Shenzhen is down south. South China is just, how do you say, different from the rest of china. It was Canton, it has Cantonese. There is Hong Kong, and Southeast Asia nearby.

You’re just not in the center of action. Just like an earlier point about selling into China – a lot of that you will do in Shanghai. The distribution is more engrained there.

Plus in Shanghai you can take a fast train up to Beijing no problem, so if you have a meeting there the next day – it’s possible. Whereas in Shenzhen, sure you can get to Hong Kong or Guangzhou quick but it’s more for product based business. The real action for domestic Chinese business is up in Shanghai and Beijing.

My wife moved down to Shenzhen for example, and she still had to always go up to Shanghai and Beijing for business trips. You do things face to face in China, and if you’re selling local -you then need to do a decent amount of travel.

More Expensive, But More Money

While shanghai may be more expensive, you can also earn more money. Salaries are higher, and consulting projects have bigger budgets.

So while the costs are higher, the chances to make more money, local is where it’s at.

Compare that with Shenzhen, and you make most of the money from the export market. So that means a lot of e-commerce, online B2B directories. You won’t get as much sales as an agency or consultant in Shenzhen.

But, Hong Kong is just across the border, and there are a lot of chances to get bigger contracts there.

Less “Guanxi” Requirements in Shenzhen

Was a thing I liked a lot about Shenzhen when I came here. My Chinese friend Huck said it too. He said, there isn’t this “relationship” requirements like in other Chinese cities. It is a melting pot in Shenzhen, and everyone is new – the city is only 30 years old.

So you don’t have these multiple generation family business conglomerates. “Normal class people” need to dig through every time to get some bigger project done. But in Shenzhen, no one knows anyone else. So they have to put down these traditions and get back into finding genuine business relationships based on price and the ability to deliver.

A bit of a stretch here and hard for me to explain, but does that make sense? Sure, it isn’t everywhere in Shanghai or other established cities, but of course there is more “roots” from being there for so long.

Shanghai Nightlife is World Class

Shanghai has the most amazing clubs and bars in the world. It was Lady Gaga who said she loved that city when she visited, and it is a center of party mayhem.

Shenzhen is catching up, with more and more clubs and bars, for the most part in Coco Park area. But Shanghai has them everywhere, every district, you can find amazing clubs and bars.

Not just nightlife, there is more culture too. More history for being around through so many different phases of Chinese history and culture.

Shenzhen being so new doesn’t have this nightlife built up nor the long history and places to visit. They are working hard at it though.

Thoughts? Which City Do you Prefer – Shenzhen or Shanghai?

Have you been to one or the other, or both? What do you think?

I’d love to see your comment below! It can also help give some other readers some perspectives besides mine alone!

Was I too biased on one side or the other? I have no real interest in swaying you on either side, so I didn’t mean to – both have their good and bad, just like anything in life! But if you think I was out of line, please let me know by also commenting below! Cheers!

Published by

Mike Michelini

Global From Asia (GFA) is about the current shift in the world as Asia as the center for doing international business – more specifically called cross border business.