BREAKINGVIEWS-Shenzhen APEC pick is both symbolic and strategic

By Ka Sing Chan

HONG KONG, Nov 7 (Reuters Breakingviews) - Shenzhen is getting more special for Xi Jinping. The president of the People's Republic has chosen the city that opened up China’s economy to host the leaders’ summit of the Asia-Pacific Economic Cooperation (APEC) forum next November. It's also the metropolis he picked in 2012 for his first public trip after becoming the country’s leader. But the event is not just full of symbolism: it will be an occasion to push regional trade amid a volatile tariff war with the United States.

The southern Chinese city was one of the four special economic zones in 1980 to engage with foreign investors. Its economy has since grown at an average annual rate of 18.8% to 3.68 trillion yuan ($516 billion) last year. By 2017, its output was bigger than the GDP of Hong Kong, which had hoped to hold APEC 2026 and become the third Chinese city after Shanghai and Beijing to do so.

Much of Shenzhen’s growth has been driven by the tech industry, with giants including BYD 002594.SZ, Tencent 0700.HK and Huawei based there. Strategic new industries such as electric vehicles and robots account for some 42% of GDP per official data. Last month the local government outlined a plan that encourages M&A and aims to have 20 listed firms valued over 100 billion yuan by 2027. Even struggling property developers such as China Vanke 000002.SZ will cheer for the upcoming APEC summit, as authorities are set to direct more investment to give the city a facelift.

George W. Bush and Barack Obama each attended previous APEC summits hosted by China when they were president. That means, ideally, that a state visit by current White House incumbent Donald Trump could coincide with the Shenzhen gathering. It would also be intriguingly timed: it's when the one-year trade truce expires that he and Xi agreed on the sidelines of the APEC meeting in South Korea’s Gyeongju last month .

Granted, by then, China-US relations could be either very good or very bad. Either way, APEC provides an opportunity for Xi to show off China's economic might, technological prowess and regional trading dominance.

CONTEXT NEWS

Chinese President Xi Jinping announced on November 1 that Shenzhen will host the Asia-Pacific Economic Cooperation (APEC) Economic Leaders' Meeting in November 2026.