China's high-tech future emerges in factory town Shenzhen

Divided from the former British colony of Hong Kong by a river, Shenzhen has been the preferred laboratory for experiments by China's communist leaders since reformist Deng Xiaoping designated the tranquil area as the country's first "special economic zone" in 1979.

Innovative new companies are drawn by Shenzhen's well-established manufacturing supply chains and transport links, proximity to Hong Kong's banking and financial expertise, and better traffic, milder weather and less air pollution than Beijing and Shanghai.

"Shenzhen is becoming the new frontier for technology because it has the infrastructure for whoever wants to turn their ideas into products," said Eric Pan, founder of Seeed Technology, a contract manufacturer for "makers" — tinkerers, hackers and inventors.

Emerging industries such as information technology, biotech, green energy and new materials now account for about 40 percent of Shenzhen's economic output, Mayor Xu Qin said last month, according to state media.

The three-year-old company scored a surprise hit with its first device, the OnePlus One, selling more than 1 million units in a marketing campaign that relied on social media buzz.

Christopher Balding, an economics professor at Peking University's Shenzhen-based graduate HSBC School of Business, says Shenzhen's business environment is more open to hardworking newcomers than those of other Chinese cities where state-owned industries dominate and vested interests mean that success often depends more on government connections, or "guanxi."

During a visit early last year, Premier Li Keqiang stopped in at China's first virtual bank and checked out a "maker space" for hobbyist inventors and entrepreneurs tinkering on prototypes, seeking to promote businesses relying on finance and innovation that Beijing is nurturing as the state-dominated economy matures.

Hoping to woo and nurture top talent, the city government earmarked 4.4 billion yu