Looking back, the economic transitions in Eastern Europe and Russia primarily focused on transferring ownership—privatizing state-owned enterprises and redistributing national assets. However, these changes failed to fundamentally alter market expectations.
Even though governments and some leaders painted ambitious visions of economic prosperity, investors and businesses remained unconvinced. They saw little incentive to take risks or invest in an uncertain future.
Shenzhen, on the other hand, did not set out to become China’s “Silicon Valley.” In fact, its leaders openly admitted that the entire economic transformation was a process of trial and error. Instead of imposing a rigid plan, the city’s approach was adaptive, evolving step by step based on real-world conditions.
At the same time, Shenzhen consistently reinforced two key messages:
- Commitment to continued reform and openness.
- The belief that economic growth should allow some people to become wealthy first.
For a traditional company or organization, Shenzhen’s strategy might have seemed unstructured or even inadequate. However, what appeared to be a loosely defined and pragmatic blueprint actually had a powerful strategic impact. It activated free market forces across the entire economic system, allowing innovation and investment to flourish.
Perhaps the most crucial element at play here was what John Maynard Keynes famously referred to as “animal spirits”—the confidence and willingness of entrepreneurs and investors to take economic risks.
Whether Hong Kong can ignite the same entrepreneurial spirit and overcome its current economic challenges remains an open question.
That will be the topic for next time.
