Mini Shenzhen SEZ

by+Gong+Haiying

The Shenzhen River divides two villages both named Luofang， one in the Luohu District of Shenzhen and the other， also known as Hank Lao， in the New Territories of Hong Kong.

Back in 1979， the annual average per capita income of villagers in Shenzhens Luofang was 134 yuan while workers on the other side of the river averaged 13，000 Hong Kong dollars. Considering the exchange rate， one side earned 100 times more than the other.

Over 30 years have passed since China implemented reform and opening-up policies， bringing dramatic changes to life in Shenzhen. No one predicted how Luofang Village would look today： It has become a shareholding limited company with total assets of over 100 million yuan. Villagers no longer subsist by farming； they operate a real estate business.

Luofangs journey has been hailed a capsule version of the 35-year miracle created during the development of the Shenzhen SEZ， and Chinas economic reform and opening to the outside world.

Why？

Hong Kongs Luofang Village was established by Luofang villagers after they migrated across the Shenzhen River. Few maintain a clearer recollection of the story than 66-year-old Chen Tianle， a resident of Luofang， Shenzhen.

“Before the founding of New China in 1949， people could travel between Shenzhen and Hong Kong without any restrictions，”explains Chen. “Every day， villagers could go to Hong Kong to farm， and parents accompanied their children to school there. Both kids and parents went back home for lunch and a nap.”

For various reasons， from the 1950s to the 70s， villagers were prohibited from farming in Hong Kong. In 1969， tall wire netting was installed along the river to block residents from crossing it. Then， some villagers from Shenzhen just didnt return home from farming， and others snuck into Hong Kong at night by swimming across the Shenzhen River.

Octogenarian Yao once ventured to Hong Kong to farm and later worked there. “There was an access point， the port at Man Kam To，” Yao recalls. For some time， he farmed in Hong Kong during the day and returned to Shenzhen at night. One afternoon in 1957， while leading a cow to sell， he put eggs in each of the cows ears， passed through a port adjacent to Luohu Bridge and never returned.

From 1950 to 1969， more than 600 villagers from Luofang relocated across the river—nearly two thirds of the total population of the village at that time.

Cross-Border Farming

In 1976， villagers of Luofang， Shenzhen， were once again granted access to Hong Kong to farm， transport goods， and fish for oysters in Lau Fau Shan. The farming permits were issued at the end of 1980， when China and Hong Kong authorities signed an agreement on the legalization of cross-border farming. Six ports were established along the border between Shenzhen and Hong Kong. Every household in 30 natural villages along the border was granted one permit.

In 1980， along with the founding of the SEZ， new policies were implemented in rural Shenzhen， where farmland was contracted to farmers， enabling them to sell vegetables across the river in Hong Kong. At that point， villagers in Luofang who formerly grew rice began to plant vegetables.

At around 6 a.m.， villagers would transport vegetables with tractors to Hong Kong. It usually took three hours. The steeper selling prices in Hong Kong multiplied their earnings exponentially， bringing the average monthly income to over 10，000 yuan.

A few years ago， Chen Tianle was tasked with recording the names of those selling vegetables every morning at the port and checking who returned at night. The job turned out easy because everyone returned. Eventually， he stopped recording names altogether.

Farmers to Stockholders

On June 18， 1992， the farmers of Luofang Village formally became citizens of Shenzhen City thanks to the implementation of temporary provisions on urbanization of the SEZ.

The village began to blaze a new path to prosperity. Its former collective economy has been transformed into a shareholding system， making every villager part owner. After discussions， the board of directors decided to distribute part of the 3 million yuan as land requisition compensation from the government to the villagers.

Great changes soon took place in Luofang： Blocks of buildings and factories rose one after another. Workshops quickly covered a total area of 20，000 square meters. Total assets grew at breakneck speed to over 100 million yuan， attracting more than 10，000 workers from outside the village.

At the same time， Shenzhen SEZ saw its first round of urbanization， attracting a massive stream of outsiders seeking opportunity in the city as well as Luofang. Demand for residential rentals skyrocketed， and many villagers became landlords.

By the end of 2012， Luofang was home to 280 villagers—in addition to over 10，000 residents from other parts of the country. At the end of each year， the company splits the villages profits amongst the villagers.

The ports facilitating cross-border farming are now silent. Every day， only 20 to 80 people pass through six such ports. “Those who pass are not necessarily trying to make a living，” illustrates Chen. “Villagers are leading better lives at home. Some are merely visiting relatives to enjoy morning tea. Fewer travel across the border to farm.”