What Was Not Done Is Often Just as Important as What Was Done
For a company or organization, Shenzhen’s blueprint at the time might not have been considered sufficiently rigorous or well-defined. However, when it came to activating the free-market forces within an entire economic system, Shenzhen’s seemingly vague yet pragmatic blueprint — pragmatic and expedient, yet also somewhat strategic — may have produced many remarkable effects.
Author: GUDORDI | 2025-03-04
在很多情況下，若我們做出一些帶有不少樂觀預期的決定，而它們的後果又要好一段時間才能浮現，我們很多時都只能將有關決定歸究於「動物精神」所起的作用。
Most, probably, of our decisions to do something positive, the full consequences of which will be drawn out over many days to come, can only be taken as a result of animal spirits……
──凱恩斯（John M. Keynes）
In the previous article, the author discussed the preconditions necessary for market forces to function effectively, as well as the lessons that can be drawn from Shenzhen’s experience.
It is worth noting that although Shenzhen is today unquestionably one of China’s major technology hubs, very few people in the early 1990s would have expected this outcome. At that time, government economic planners also had no intention of integrating Shenzhen into the country’s broader national technology development strategy.
Shenzhen’s Transformation into a Chinese Technology Hub Contained a Significant Element of Surprise
In fact, in the early 1990s, if people had tried to predict where China’s future technology center would emerge, most would probably have pointed to Zhongguancun in Beijing. There were many reasons supporting this view. At the time, leading Chinese technology companies such as Founder Group and Lenovo had their headquarters in Beijing. The city also possessed China’s top universities and scientific talent, alongside strong government policy support. Moreover, Zhongguancun had already begun to take shape as a major center of technological innovation.
Yet several decades later, what was the actual outcome?
This offers an important lesson: creating a genuine social phenomenon is extremely difficult. Throughout history, there have been many failed examples, and numerous cases that once appeared highly promising ultimately failed to stand the test of time.
The scholar who discussed this issue most extensively was probably Friedrich Hayek, winner of the 1974 Nobel Prize in Economics. Hayek repeatedly emphasized that social phenomena are essentially forms of “spontaneous order” — things that cannot simply be artificially constructed through planning.
Why is this the case? Hayek did not seem to provide a single detailed explanation directly. However, when his broader ideas are considered together, one important reason may be that the creation and continuation of social phenomena involve millions, even tens of millions, of individuals and organizations. No single institution can possess all the necessary information, because the world is constantly changing and continuously interacting.
Undoubtedly, government promotion and support can produce certain effects. But for something to truly succeed and endure, it ultimately cannot escape the constraints imposed by deeper natural and social forces.
How Can the Invisible Hand and the Visible Hand Establish a Virtuous Cycle of Interaction?
This leads us to an even more important question: do the forces of nature themselves operate according to certain laws and principles? One of Adam Smith’s greatest contributions to the history of human thought was his discovery and deep analysis of what he called the “free market.” Smith clearly believed that the free market was the cradle of human wealth, and when Yan Fu translated Smith’s masterpiece into Chinese as Yuan Fu Lun (“The Origins of Wealth”), the translation captured its spirit remarkably well.
It is worth noting that the full English title of An Inquiry into the Nature and Causes of the Wealth of Nations begins with the words “An Inquiry.” Smith regarded his work as an exploration rather than a declaration that the free market was all-powerful.
What is regrettable is that over the past two centuries, economics as a discipline did not continue deepening Smith’s astonishing exploration into the workings of the free market and the principles of wealth creation. Instead, much of economics turned toward mathematizing — and at times even mythologizing — the concept of the market.
In any case, Smith merely described the free market as an “invisible hand.” If an economy is to develop, natural forces alone are not sufficient. In the real world, “visible hands” are everywhere.
How, then, can the market’s invisible hand establish a virtuous cycle of interaction with corporations, governments, and other institutions? This is a profoundly complex question.
As the author pointed out earlier, the ability of market participants to form hopes and expectations about the future is a key factor in activating market forces. This may also help explain why Shenzhen’s economic performance since the 1990s has differed so dramatically from that of Eastern Europe and Russia.
The Shenzhen Experience and “Animal Spirits”
Looking back, what Eastern Europe and Russia did at the time was largely to change the ownership structure of many state-owned enterprises and national assets. However, this alone was not enough to fundamentally change the market’s expectations about the future.
Although governments and certain individuals attempted to paint grand and attractive visions, market participants still did not believe the future was promising enough to justify taking major investment risks.
On the other hand, Shenzhen never explicitly set out a vision of becoming “China’s Silicon Valley.” In fact, it openly admitted that its development strategy involved “crossing the river by feeling the stones” — adapting pragmatically, responding flexibly to circumstances, and continually emphasizing reform, opening-up, and allowing some people to become wealthy first.
For a corporation or formal organization, Shenzhen’s blueprint at the time might have been considered inadequate or insufficiently defined. Yet when it came to activating the free-market forces within the broader economic system, this seemingly vague but pragmatic approach — pragmatic and flexible, yet still strategically directed — may have produced remarkable effects.
Perhaps the most important of these effects was what John Maynard Keynes described as “animal spirits.” Whether this spirit can be ignited may also become one of the key factors determining whether the economy of Hong Kong can overcome its current challenges. The author will discuss this further in the next article.
