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The Changing Face of Shenzhen, the World's Gadget Factory

Inside the megacity where 90 percent of the world's gadgets are made.

Mention Shenzhen to most people, and they'll probably think of the vast Foxconn manufacturing plant that churns out high-end phones, tablets, laptops, and gaming consoles for the likes of Apple, Microsoft, Dell, and Sony. The size of a small city —with an estimated half a million employees—Foxconn's Shenzhen plant gets media attention not just because of its vast scale and brand-name clients, but also because of the numerous reports of atrocious working conditions it has engendered, and the stories of employee suicides, protests, and even riots within the campus walls.

It might be the biggest and best-known, but Foxconn is only one of several hundred factories in and around Shenzhen. In fact, the megacity is responsible for producing an estimated 90 percent of the world's consumer electronics, the vast majority of which are far less glamorous than iPhones and PlayStations.

"It's where all the electrical crap we buy comes from," Kate Davies, an academic and architect who studies extreme places, tells me as we walk through Shenzen's LED-lit streets. "[T]he cheap toys, that box of chargers and adapters that you have, that you've no idea what they're for anymore, the cemetery of old phones in your kitchen drawer… Shenzhen is one of those points on the planet where the world condenses in high density into one place, it's an artifact of the contemporary global supply network that weaves matter and displaces earth across the planet." And we're standing on ground zero as she speaks.

Davies focuses much of her work on how Western cities increasingly depend on vast global networks to survive, and she's a regular here—over the years she has gained a unique insight into what makes the city tick. Along with fellow 'speculative architect' Liam Young, she runs Unknown Fields, the infamous nomadic design studio that explores the hidden zones of production and distribution that keep the world running. Now, she's brought a small group of journalists and researchers—I'm one of them—to Shenzhen as part of an expedition to ride the global supply chain backwards to its source. We arrived here by container ship, and after two weeks of travelling we'll end up at rare earth mines and refineries in Inner Mongolia, to see firsthand how all that electronic crap is dug out of the ground.

In many ways, Shenzhen is the birthplace of this vast, high-tech silk road. As China's pioneering Special Economic Zone (SEZ) it was the experiment that gave the nation its first economic miracle. It proved that foreign investment and outsourced manufacturing could be attracted on vast scales if the taxes and labor costs were low enough, that an undemocratic Communist state could contain and control zones of hyper-capitalism within its own borders, and that whole cities could be built from scratch to fill a gap in the global manufacturing market.

Photo: Liam Young/Unknown Fields Division

Shenzhen was recently declared China's third largest city, after Shanghai and Beijing. But before it was given SEZ status in 1979 Shenzhen was a fishing port with a population of 300,000. Now it's home to over 15 million—almost twice the population of NYC—and it continues to swell, constantly drawing workers from China's countryside: the children of subsistence farmers hoping to carve out a better life for themselves in the city.

If they're lucky, they end up somewhere like TCL LCD Industrial Park, one of the world's biggest television manufacturing plants. It takes about an hour to get here from Shenzhen's financial center; the drive a glaring reminder that its futuristic, skyscraper-studded skyline doesn't represent the city as a whole. Neon-lit towers, high-end electronics stores, and designer label-filled shopping malls give way to a seemingly endless sprawl of brutalist housing blocks and generic, low-rise industrial units. Out here in the manufacturing suburbs, you're more likely to see signs for faceless factories than the familiar global brands, with laundry strewn balconies and retrofitted air conditioners replacing the better-known sleek glass building facades.

TCL LCD Industrial Park is a fraction of the size of Foxconn, but it's still industrial manufacturing on a scale that has become alien to most of us in the West. This one facility has an incredible 10,000 employees, with 3,000 of them living in onsite dormitories. TCL is perhaps best known in the US as the manufacturer of the popular Roku streaming media players, but the company also makes 18 million TVs a year, as well as refrigerators, washers, dryers, air conditioners, and Blu-ray players, all labeled under a number of different brands.

Here at LCD Industrial Park, they mainly assemble TVs, at a rate of 160 an hour, from components made in other Shenzhen factories—such as their $4 billion China Star LCD panel manufacturing plant, which theirUS website proudly boasts "costs 75 times more than Brangelina's 35 bedroom castle in France."

Photo: Liam Young/Unknown Fields Division

From the The LCD Industrial Park visitors center—one of the only locations on site we're permitted to go—mainly consists of a Kubrick-white, blue neon-lit museum dedicated to the history of televisions. "In 2004 TCL bought Thompson," our Chinese TCL spokesperson who goes only by Katherine, explains proudly, as she guides us around the glass cases full of antique TVs, "and Thompson owned the USA's first TV company, RCA. Thus, TCL now owns the history of television."

We get a glimpse of the factory floor as we walk past the windows looking down on one of the production lines. Photography is strictly prohibited. "If you get caught taking photos, maybe I will get punished," Katherine tells us. It's hard to really understand what's going on, but the production line appears semi-automated; there's a dozen or so young workers wearing t-shirts with QR codes on their backs interacting with various machinery.

Futuristic vertical conveyor belts lift TV panels from some unseen space beneath the floor. It's clean, well lit, and the ceilings are high. The workers here are given at least two months training before they start, depending on where they're placed. They work a minimum of one eight hour shift a day, but can do a second if they want—Katherine assures us this is optional—for six days a week. In return, they get paid, on average, about 3,000 yuan, or roughly $484, a month.

"If production line employees work hard enough," Katherine tells us, "then they can be promoted to work higher up in the company."

"Is that how you started here?" asks Davies, "On the production line?"

Katherine turns on a white leather stiletto that perfectly matches the jacket she wears over her pink lycra dress. Addressing her namesake with what seems initially to be disgusted surprise, a wry smile breaks across her face.

"No," she laughs. "Of course not."

***

Wages have gone up recently, we're told, in order to encourage workers to stay in Shenzhen, or to return from visits to their families in the country. It seems concerns about food shortages have increased wages for agricultural workers in order to discourage them from leaving for the cities. It's notoriously hard to get ahold of reliable figures in China, but according to a 2014 report from the Overseas Development Institute, a UK think tank, average earnings for male rural workers more than doubled between 1997 and 2007, rising from $3.02 to over $7 a day—numbers still shockingly low compared to wages in the US and Europe. Nonetheless, it's an important reminder that rural areas are just as vital as cities, and that China's industrial explosion is a complex balancing act between the two; these astronomical levels of growth are fuelled just as much by food as they are foreign investment and cheap labour.

We see more proof of this as we're invited to have lunch in one the factory's three canteens: a huge three-level food court complex. Each canteen serves 3,000 workers a day. Watched over by CCTV cameras, hordes of teenage employees in short sleeved uniforms—color-coded depending on which line they work—sit at fast-food restaurant style tables, eating meat and rice and drinking garishly artificial looking fruit juices. Everyone is over 16; many appear in their early 20s, but it's hard not to think of a busy high-school cafeteria as they talk, laugh, and gossip. But this isn't a school—most of these kids will have had basic, minimal educations before they arrive—this is the powerhouse behind China's economic boom, the workforce that keeps the world's factory floor running.

And, increasingly, that factory floor is expanding outside of China itself. Just as the government struggles to maintain the balance between the city and the country, it also has to balance aspirations and profits. The promise of a better quality of life is what draws workers to Shenzhen, but the the price is a rise in the once-low cost of labor that first gave the city its competitive edge.

Many companies like TCL are now in fact outsourcing their manufacturing to other nations. As we leave the visitors center, Katharine shows us a bank of TV screens that display feeds from their other production lines around China and Asia and, to my surprise, their new factory in Poland. As an EU citizen, I was shocked to learn a Chinese TV manufacturer is outsourcing labor to a Eurozone country, but TCL is not the only one. Poland has an astonishing 14 SEZs, many of which house Chinese manufacturing.

Reports claim that workers earn as little as €350 a month, far less than the average EU income of €1,916 a month. And it's not just Poland. Belarus has a huge SEZ, called the China-Belarus Industrial Park, and, recently, German industrial leaders suggested that Greece should open China-friendly SEZs in order to ease its ongoing financial crisis.

***

Just as not all factories in Shenzhen are like Foxconn, neither are they all like TCL. For every plant on the scale of LCD Industrial, there are dozens of smaller operations in Shenzhen, grimy little startup factories tucked away in run-down warehouses or suburban trading estates. Shenzhen Yuwei Information and Technology Development Co., Ltd is one of these, a small factory with less than 200 workers that specializes in making GPS tracking devices for motor vehicles.

Its main products are modules the size of car stereos that fit into bus dashboards. By combining feeds from CCTV cameras and sensors with GPS data, they can be used to retrofit existing public transport vehicles for the glorious new smart city era. I know all this because I sat through the company's lengthy presentations and promotional videos, which were chock full of predictably dull explosions of lens-flare-drenched CGI cityscapes and contextless graphs charting skyward growth.

It's little surprise that the factory floor itself doesn't quite reflect those pristine computer generated futures. It's incredibly hot on the Yuwei production line, despite the efforts of the industrial scale AC units to fill the room with cold, mildew scented air. It's dark too, compared to TCL.

Rows of young workers— most of them look like teenagers—sit in rows along slowly moving conveyor belts. They all wear matching blue shirts, their faces pale and washed out by the fluorescent strip lighting that hangs above their workstations. They mainly seem to be testing components and products, silently taking the electronics from the belt as they pass by and plugging them into equipment on their desk to make sure their connections work. Functioning units go back to the belt to be tested again further up the line, and faulty ones are put in plastic crates on the floor. The work looks monotonous, the atmosphere feels oppressive, the air thick with the smell of sweat and solder. Here too workers log one or two eight hour shifts a day, but the pay here is even lower; most make just 2,000 yuan ($323) a month.

Yuwei is one of those factories—and Shenzhen is full of them—that specializes in components rather than finished consumer products. Last year the MIT Media Lab's Joi Ito visited Shenzhen and and sent back a glowing report about what he saw, and how it was making the US' startup and maker culture possible. Having visited Yuwei, it's hard not to think Ito might have been given more of the red carpet treatment than we received—what we saw was not quite as cheerful. There's a certain belief within the international maker community that its homebrew, DIY approach to electronics offers a more ethical alternative to the large manufacturers such as Apple or Samsung, but the uncomfortable truth is that the real cost of the cheap components they rely upon is noticeably worse working conditions—not to mention lower pay—than in big brand factories.

Photo: Kate Davies/Unknown Fields Division

At 5 PM a bell sounds, and the conveyor belts grind to a halt. Dinner break. The workers form orderly, single-file lines, waiting for managers to tell each team they can leave. As they exit, they each pass through metal detectors, pausing to have their faces scanned by a facial recognition system mounted next to the door. Only when it beeps its approval can they leave.

We follow them out, walking between the backs of the towering warehouse buildings studded with industrial piping and exhaust vents. The canteen here is a far cry from TCL's multi-level facilities. It's another dingy space filled with wooden tables and benches, paint peeling from the walls.

Just two minutes' walk from the factory floor is where the majority of Yuwei's workers live, in four-story concrete housing blocks reminiscent of brutalist municipal projects in the US or Europe. Inside, the rooms are largely featureless apart from basic, metal frame bunk beds. Even Davies, who's visited multiple factories in Shenzhen, is surprised by the conditions.

"For all the things they are manufacturing to be shipped to our homes," she says, "bulging as they are with the things we all complain we have nowhere to put, the starkness of these dorms is sobering…[there's] nothing in there but a poster, a pair of shoes, a water bottle, a plastic chair, and a bunk bed with no mattress."

As we leave the dorms, the workers have finished their meal, and are lining up against a long, low trough to wash out their bowls with water from green and bronze taps, grains of rice flowing into outside drains. Seeing the young workers behaving in such a disciplined manner, and given their age and their uniforms, it's hard not to be reminded of a school.

Photo: Kate Davies/Unknown Fields Division

Perhaps that's part of why it's jarring; we are so unused to seeing manufacturing in the West that the sight of this kind of sweatshop-style production, which was common in every major city less than two generations ago, seems horrific and alien to us. It's impossible to shake the sense that the young workers here lack not just a sense of control and self determination, but also a certain carefree innocence many of their Western counterparts take for granted.

And perhaps that's one way to describe Shenzhen: as China's loss of innocence. This birthplace of an accelerated industrial revolution has also given birth to a new urban class that—as is apparent when you walk its shopping malls and nighttime electronics markets—is demanding the same technological trinkets it exports to the rest of the world. It's a loss of innocence that demands a rise in living standards, challenging the city's cheap labor standards that have been its economic bedrock for decades. But Davies nonetheless believes Shenzhen will endure.

"I expect the factories will move on as property prices rise in the city, and the millions of migrant workers will move inland to new manufacturing. And Shenzhen will move into slightly different territory, a direction it is already starting to go." For her, the city's future lies more in the flexibility given by the small companies like Yuwei than the TCLs and Foxconns, the ones that are giving power to a new economic culture of startups, where every working day 100 new companies are registered.

There's no sign of the global desire for consumer electronics to slow anytime soon—especially with China's investment push into Africa and South Asia opening up new markets—but the challenge for Shenzhen is changing. It's becoming less about cheap manufacturing and more about technological innovation, about striving to become a global megacity rather than a sprawl of sweatshops, and about raising its population's living standards while still retaining its flexibility.

Shenzhen's future "is entrepreneurial," Davies says. "It sprung up parasitically because the manufacturing is here, but it's becoming something more. Its a wild west of tech innovation, and it epitomizes the power of the many, the small, and the agile."