One Chinese City Has Figured Out the Future

China's Xi Jinping recently declared that he wants China to rank as one of the world's most innovative countries by 2020 and to top the list by mid-century. Going by past practice, this probably means a lot more money being poured into dodgy startups and ill-conceived high-tech schemes. There's a better model to be found, however, one that's surprisingly close to home: the southern boomtown of Shenzhen.

The city's Nanshan district, home to a huge High-Tech Industrial Park, is now China's richest, with a higher per capita GDP than even capitalist Hong Kong, just across the border. Indeed, Shenzhen's rapid success could well be more remarkable than the latter's: Little more than a fishing village in 1979, when Deng Xiaoping decided to launch China's reforms in a special-economic zone there, Shenzhen has since grown into a megacity of more than 11 million people with a GDP five times Macau's. At an average of $727 per square foot, real estate prices are higher than anywhere in the U.S.; the city will soon be home to the world’s fourth-largest skyscraper. It's little wonder that in 1992, when support for his reform agenda was flagging, Deng returned to the city to remind Chinese of the virtues of entrepreneurship and private enterprise.