SEVERE WX : Flood Warning View Alerts

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 4:05 PM
Updated: Nov 25, 2018 4:17 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 Experts say viewing the country as just a vast manufacturing base for products designed by foreign companies is outdated and misguided.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."

Lafayette
Clear
38° wxIcon
Hi: 45° Lo: 22°
Feels Like: 38°
Kokomo
Partly Cloudy
34° wxIcon
Hi: 41° Lo: 21°
Feels Like: 27°
Rensselaer
Clear
34° wxIcon
Hi: 42° Lo: 20°
Feels Like: 25°
Lafayette
Clear
38° wxIcon
Hi: 43° Lo: 21°
Feels Like: 38°
Danville
Clear
35° wxIcon
Hi: 44° Lo: 23°
Feels Like: 28°
Frankfort
Clear
34° wxIcon
Hi: 43° Lo: 23°
Feels Like: 26°
Frankfort
Partly Cloudy
34° wxIcon
Hi: 41° Lo: 22°
Feels Like: 26°
Monticello
Clear
33° wxIcon
Hi: 43° Lo: 20°
Feels Like: 25°
Monticello
Clear
33° wxIcon
Hi: 44° Lo: 20°
Feels Like: 25°
Logansport
Clear
32° wxIcon
Hi: 41° Lo: 20°
Feels Like: 24°
Nice, mild weather....more active by late next week.
WLFI Radar
WLFI Temps
WLFI Planner

Indiana Coronavirus Cases

Data is updated nightly.

Cases: 662213

Reported Deaths: 12595
CountyCasesDeaths
Marion907061645
Lake48425878
Allen35861636
Hamilton32099397
St. Joseph29996512
Elkhart25386415
Vanderburgh21247378
Tippecanoe20024201
Johnson16349360
Porter15975270
Hendricks15825300
Clark11965181
Madison11746318
Vigo11612229
Monroe10333161
Delaware9838179
LaPorte9772196
Howard9056197
Kosciusko8562110
Bartholomew7456147
Warrick7416151
Hancock7409131
Floyd7207169
Wayne6633191
Grant6427157
Morgan6092125
Boone609088
Dubois5910111
Dearborn547467
Cass544499
Marshall5425104
Henry542393
Noble509378
Jackson464767
Shelby460690
Lawrence4184112
Gibson401281
Harrison399864
Clinton395853
Montgomery387083
DeKalb385278
Knox357485
Miami357463
Whitley349436
Huntington344476
Steuben338355
Wabash331476
Putnam330559
Ripley327161
Adams323549
Jasper316143
White297352
Jefferson294973
Daviess285396
Fayette271956
Decatur270888
Greene261280
Posey260931
Wells258275
Scott250350
Clay241444
LaGrange240870
Randolph225576
Spencer217330
Jennings215244
Washington211227
Sullivan203439
Fountain201542
Starke188151
Owen182153
Fulton178237
Jay177828
Carroll176518
Perry173235
Orange171250
Rush164822
Vermillion160542
Franklin159435
Tipton146441
Parke139316
Pike127632
Blackford120627
Pulaski106444
Newton96531
Brown95039
Benton92013
Crawford90713
Martin80114
Warren75814
Switzerland7548
Union67110
Ohio53711
Unassigned0433

COVID-19 Important links and resources

As the spread of COVID-19, or as it's more commonly known as the coronavirus continues, this page will serve as your one-stop for the resources you need to stay informed and to keep you and your family safe. CLICK HERE

Closings related to the prevention of the COVID-19 can be found on our Closings page.

Community Events