Inside China's biggest gadget market

Most of the world's consumer electronics are produced in the Chinese city of Shenzhen. CNN's Matt Rivers tours the bustling shopping district Huaqiangbei with hardware hacker Andrew 'Bunnie' Huang.

Posted: Nov 25, 2018 2:46 PM
Updated: Nov 25, 2018 3:17 PM

At the Huaqiangbei Market in Shenzhen, you can build a smartphone from scratch in a couple of hours.

Spread over several floors and covering hundreds of thousands of square feet, the market is home to vendors selling the parts that make up your standard phone — cameras, motherboards, frames, screens and so on. All you have to do is buy the right bits and know how to put them all together.

And it's not just smartphones. You can find the parts here for almost any consumer electronics device you can think of, like portable power banks and drones.

To be sure, there is copycatting going on here. The designs of Apple (AAPL) or Samsung devices are regularly ripped off. Intellectual property rights, one of the US government's biggest bugbears with China, are nonexistent. But there's invention at work, too. Some people are trying to use the parts to come up with new and improved versions of existing gadgets.

The whirling, chaotic market highlights how innovation sometimes works in China. Experts say viewing the country as just a vast manufacturing base for products designed by foreign companies is outdated and misguided.

"There's a ton of innovations at a huge scale that are happening in China," said Christian Grewell, a business professor at NYU Shanghai. "They are just happening very, very quickly and without the knowledge of the rest of us."

He pointed to how smartphone maker Xiaomi has updated its software based on user feedback, and China's rapid adoption of digital payments through Tencent's (TCEHY) WeChat app and Ant Financial's Alipay.

Hardware hub

Once a tiny fishing village in the shadow of nearby Hong Kong, Shenzhen is now a glittering metropolis of more than 12 million people.

Along with other cities spread across Southern China's Pearl River Delta, it rose to prominence in the 80s and 90s as the world's factory floor, pumping out boatloads of industrial and consumer products. But today it's also widely known as China's answer to Silicon Valley, the home of tech giants like Tencent and Huawei.

Shenzhen has become a magnet for ambitious young entrepreneurs seeking to take advantage of the city's position at the heart of global tech supply chains. It has produced startups like DJI, the world's top maker of non-military drones.

"If you have an idea, you can quickly evaluate this idea and find factories to manufacture the product for you," said Jasen Wang, CEO of tech education startup Makeblock.

The company produces kits that kids can use to build things like race cars and walking robots — and then program them. Makeblock's products and software are designed to teach children the language of computer programming in a fun way.

Shenzhen provides a ready supply of the hardware needed by his company, which was valued around $350 million in its last fundraising round. And it also has the human talent.

"There are so many big companies here, it's very easy to find hardware development engineers," Wang said. "You don't have that kind of advantage in Beijing or Shanghai."

Moving fast

Shenzhen also gets things done quickly.

"If you really want to develop products in a fast pace, I think you have to be in China — and practically have to be in Shenzhen," said Steven Yang, CEO of battery technology company Anker Innovations. "Anything you have to do in days or weeks elsewhere can be done in hours here."

Yang, a 36-year-old former Google (GOOGL) employee, has built Anker into one of the top makers of portable power banks for smartphones and other devices. It generated revenue of well of over $500 million last year, and its products sell on Amazon (AMZN) and at Walmart (WMT).

Ten years ago, Shenzhen was 90% about copycatting and 10% innovation, according to Yang. Now, it's 70% innovation and 30% copycatting, he suggests.

Foreign businesses agree that Chinese companies are upping their game.

In an annual survey by the European Union Chamber of Commerce in China, this was the first year that a majority of respondents said they view Chinese companies as "equally or more innovative than European firms."

Counterfeiting still rife

While genuine innovation is happening in Shenzhen, so are trademark infringement and intellectual property theft. The counterfeiting industry is still massive, with fake iPhones and Nike (NKE) sneakers prominently on sale.

Anker suffered from knockoffs in its early days, but authorities are gradually taking a tougher line on copycats, according to Yang.

"I think it's getting better year over year," he said.

The Trump administration remains unconvinced. It has cited Chinese theft of American intellectual property as one of the main reasons for the trade war between the two giant economies.

Experts say the Chinese government needs to do more if it wants to become a global tech powerhouse.

"China does want to see a few of their local firms take on world markets. And they are making lot of bets in various places" such as electric vehicles and artificial intelligence, NYU Shanghai's Grewell said.

"For China to go send its innovations overseas," he added, "I think it's got to fully join the international community in protecting some of that intellectual property."

Mississippi Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 92432

Reported Deaths: 2792
CountyConfirmedDeaths
Hinds6931154
DeSoto535455
Harrison370771
Jackson335867
Madison319086
Rankin316174
Lee256166
Jones237678
Forrest231769
Washington216371
Lafayette205039
Lauderdale1990124
Bolivar177565
Oktibbeha174149
Lamar157733
Neshoba1529103
Panola142426
Sunflower139643
Lowndes138957
Warren137250
Leflore135380
Pontotoc121216
Pike120448
Monroe118265
Scott115925
Copiah115733
Coahoma111227
Holmes108558
Marshall107115
Grenada105035
Lincoln104953
Yazoo103529
Simpson100742
Union97724
Tate95037
Leake93735
Adams90936
Wayne87121
Pearl River85150
Marion83633
Prentiss80317
Covington79622
Alcorn76311
Newton75022
Itawamba74621
Tallahatchie74518
George74013
Winston72019
Tishomingo65336
Chickasaw64124
Attala64025
Tippah63716
Walthall59025
Clay56516
Hancock55720
Noxubee54015
Jasper53815
Clarke53138
Smith51814
Calhoun50612
Tunica47613
Montgomery45320
Claiborne45116
Lawrence42312
Yalobusha41514
Perry39417
Humphreys37215
Quitman3725
Stone34811
Greene33817
Webster32813
Jefferson Davis32311
Amite31110
Carroll31012
Wilkinson30117
Kemper28615
Sharkey26212
Jefferson2379
Benton2181
Franklin1873
Choctaw1775
Issaquena1033
Unassigned00

Alabama Coronavirus Cases

Confirmed Cases: 128818

Reported Deaths: 2284
CountyConfirmedDeaths
Jefferson18772333
Mobile12975289
Montgomery8598173
Madison742275
Tuscaloosa7081114
Lee560359
Shelby557250
Baldwin503348
Marshall378442
Etowah330645
Calhoun324939
Morgan314226
Houston264422
Elmore249747
DeKalb232619
St. Clair219835
Walker219180
Talladega203426
Limestone194219
Cullman180817
Franklin173428
Dallas173226
Russell16922
Autauga166424
Lauderdale161633
Colbert158126
Escambia155424
Blount152714
Jackson148511
Chilton146327
Covington130327
Dale130043
Coffee12488
Pike11359
Tallapoosa112983
Chambers111742
Clarke104617
Marion92128
Butler90638
Barbour8247
Marengo69619
Winston68712
Lowndes64527
Pickens62814
Bibb61910
Hale61028
Randolph59112
Bullock58514
Lawrence57820
Monroe5738
Geneva5564
Cherokee54816
Washington54513
Perry5366
Clay5317
Wilcox53011
Crenshaw51931
Conecuh51711
Macon46720
Henry4594
Sumter41719
Fayette4159
Choctaw34412
Lamar3372
Cleburne3166
Greene30015
Coosa1603
Out of AL00
Unassigned00
Tupelo
Few Clouds
63° wxIcon
Hi: 75° Lo: 61°
Feels Like: 63°
Columbus
Clear
66° wxIcon
Hi: 77° Lo: 61°
Feels Like: 66°
Oxford
Scattered Clouds
63° wxIcon
Hi: 76° Lo: 58°
Feels Like: 63°
Starkville
Clear
64° wxIcon
Hi: 72° Lo: 57°
Feels Like: 64°
WTVA Radar
WTVA Temperatures
WTVA Severe Weather