Huawei Abandons Plan to Move to the Dongguan City

Are technology giants moved out of the first tier Chinese cities?

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Local Chinese media reported last week that the country’s telecommunications and smartphone manufacturer giant Huawei is planning to relocate its facilities and key staff from the commercial hub of Shenzhen to the nearby city of Dongguan. The report cited that the skyrocket housing prices was the motive behind the move.

Hexun.com reports that 2,700 employees of Huawei R&D and other departments officially moved to Songshan Lake in Dongguan on 2nd July. The report further stated further 3000 and 8000 staff set to relocate at the end of July and the end of August respectively.

Although Huawei clearly stated that they would not leave Shenzhen headquarters, many domestic observers described the company has fled to Dongguan city due to the high cost of housing price and real estate.

However, the company has finally released the statement and stated that it will not relocate. According to Huawei’s statement, “the company had an understanding with the Shenzhen People’s Government on April 4th this year, and they both signed a cooperation agreement to ensure that Huawei will be deeply rooted in Shenzhen.”

Ren Zhengfei, president of Huawei, met with the media after the meeting. He bluntly said that this is not a matter of existence. “The business environment in Shenzhen is already very good. We never thought about moving outside. Our headquarters is always in Shenzhen.”

Huawei has an establishment in Zhongduan (Dongguan) with the construction of facilities in the Songshanhu district in 2014.

As per figures from Creprice.cn, Shenzhen’s pre-owned housing prices currently stand at 56,000 yuan per square meter (approx. USD$8,451.80) with a year-on-year rise of 6.82%, while commercial levels hit 78.35 yuan/month/square meter.

In Dongguan, the pre-owned housing prices just hit 16,100 yuan per square meter, while rent stands at 28.51 yuan/month/square meter. Dongguan city is situated only 50 KM away from Shenzhen.

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