Increasing Rents Pressurise City Outskirts

06/07/2018

Image：house.hinews.cn 　

urbanisationnews Social

Qinghu village in Shenzhen Image：Baidu maps

Children in urban village Image：sohu.com

Qinghu urban village Image：shenzhennoted.com

The increase of rental prices in the city outskirts is putting pressure on many companies and their work force. City margins used to be the low cost areas for running business, due to cheap living costs and provision of large land. Recently however, two cases in Shenzhen highlight this increasing problem.
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Renovation of Qinghu Village

Employees at Foxconn recently posted an "Open Letter" on their factory site, expressing workers' concerns over the renovation project of Qinghu Village in the north gate of the Longhua Plant and demanding for higher wages.

​The Qinghu village project which is launched by developer Vanke is planning to upgrade apartments in the urban village before renting them out. It is also a part of the comprehensive renovation plan of urban villages in Shenzhen, which is named as 'Wan Cun plan'. It is believed that there are more than 1000 urban villages in Shenzhen and they are the first footholds for many people who come to the city to pursue their dreams.

In fact current single room rent in Qinghu has reached 700-800 yuan/month, which accounts for one-third salary of Foxconn workers. Many of them expect that the rent in the village will be doubled 2-3 times after Vanke's transformation.

​As for Foxconn, a labour-intensive enterprise, increases in wages will undoubtedly raise the bottom line.

Enterprises affected by rising house rental are not only Foxconn.

Image：sohu.com

Map of Huawei's Songshanhu base. Image：sohu.com

Huawei's Relocation
In July  Huawei has started to relocate its research and development unit and some other departments to Dongguan Songshan Lake where is nearby Shenzhen. Accordingly about 2700 people moved from Shenzhen to Dongguan.

​Geographically, Dongguan Songshan Lake is very close to Shenzhen Bantian, and the driving time is only about 1 hour. Huawei's HQ in Shenzhen bantian also arranges daily shuttle buses to Dongguan .
​This relocation reflects various considerations, not only expanding the company’s development scale, but also avoiding the high property price and living cost. 

Some reports suggest that Huawei could provide 30,000 employee apartments in Dongguan, and all priced at 8500 yuan per square meter which is much lower than Shenzhen.

​Ren Zhengfei, the founder and president of Huawei has previously expressed his views on the soaring house rental prices in Shenzhen. He said enterprises will go to low-cost places as world becomes more decentralised, and high costs will eventually destroy the competitiveness of many enterprises. "Shenzhen has reached development capacity, and there is no large industrial land available anymore," he added.

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