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  • 4 Post By philosopherjohn
  • 1 Post By jimbo

Setting up an Engineering House - HK vs. Shenzhen?

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  1. #1

    Setting up an Engineering House - HK vs. Shenzhen?

    I'm a Canadian expat who has lived in HK for a few years. Looking at setting up a business, primary work would be mobile phone software development (Java/J2ME), website development (Adobe Flex/Actionscript), and IC development.

    I am contemplating an office in either Shenzhen or HK:

    HK Advantages
    - Less problematic employee turnover and security of IP
    - I want to remain in HK for as many days/week as possible (family lives here). HK office therefore fits better into my lifestyle.
    - Job market too hot in Shenzhen to find and retain quality people?

    Shenzhen Advantages
    - Much cheaper for office space + salaries. Can hire more people, presumably get things done faster + cheaper

    Some questions:
    - Is it practical / possible for a foreigner to set up an engineering office in Shen Zhen (not a problem for HK)? Advisable to hire a manager?
    - Cost of office space in Shen Zhen (ideally close to Lo Wu) vs. HK (in HK 6-10K/month gets you something decent)
    - Average salary for software engineer with 2-5 years experience in Shenzhen vs. HK? My guesstimate: 5K/month vs. 15K/month (factor of 3)? Maybe the difference is not as significant as it used to be due to the hot job market in Shen Zhen? If the difference is not substantial, it makes my decision to base in HK much easier (and practical).
    - Obviously 'theft' of company IP / source code from employees leaving is a risk for any company. However, is this as rampant as I understand it may be in Shenzhen? What about HK - I would think not as bad?
    - How to I track down good engineering talent in Shenzhen? Is the market too hot right now - too difficult to find good quality people and retain them?
    - What other major considerations am I missing?

    Thanks in advance


  2. #2

    I work for an American internet advertising company (datapop.com), and we've setup engineering teams in both Shenzhen and Hong Kong. Here's my experience and opinions:

    - Definitely practical to set up an office in SZ. Since I don't speak Mandarin, I depend entirely on a manager, a capable young guy that deals with office space, finding employees, and handling all communication with them (including interviews). Once you have this person, setting up a team and office is easy.

    - Finding engineers is easy, finding good ones that will stick with your company is hard. I went through a lot of early churn before settling on a good stable team.

    - I pay 4.5k RMB / month for a decent office in Futian that seats maybe up to 8 people. Definitely cheaper than in HK by half.

    - I'm paying my engineers much more than average -- 8k rmb/month min plus bonus for engineers with 3+ years experience, and 16k rmb/month for the manager. This helps with turnover. They are also good engineers and are well worth that cost.

    - Factor of 3 might be accurate for relative salaries between SZ/HK for relative experience levels. But a warning -- the rule of "you get what you pay for" still applies. In this global market, it's not
    a simple arbitrage. The type and quality of work you get in SZ is very different, and what they tend to be good at is different. It's probably not worth paying 1/3 the cost to a SZ engineer to develop new complex technology that requires business sense and creativity.

    - I've ended up having senior engineers in Hong Kong doing platform work, and Jr. engineers in Shenzhen doing operations and more routine (less creative) software dev. This works for me.

    - Definitely much more of a culture challenge working with Shenzhen engineers. Classic problem is lack of creativity, unwillingness to tell you what they think, saying one thing and doing another. But my team works hard and some are quite smart.

    - I never worried about theft of IP but maybe I should. Given what we do, I think it's very unlikely that the employees themselves could actually do anything with that IP.


  3. #3

    Join Date
    Mar 2006
    Posts
    4,043

    Philosopherjohn's post is one the clearest, most informative posts I have read about setting up in Sz.

    An acquaintance of mine - HK local - has his software developers in Zuhai as well as his call center. I need to ask him why there vs Sz which is closer. He operates with a philosophy like the above post in order to keep his people longer term.

    Last edited by Football16; 07-04-2010 at 11:19 AM.

  4. #4

    Join Date
    Apr 2010
    Posts
    1

    I am dealing with SZ electrical engineers and PhilosopherJohn's comments ring true. In fact I am now looking for a HK based electrical engineer to oversee the SZ guys (work involved is mainly pcb design). Would appreciate if anyone had suggestions as to the best place to look?


  5. #5

    Join Date
    Jul 2010
    Location
    shenzhen
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    2

    Thumbs up


    I think set up a office in Shenzhen is better, first office space is cheaper and lager, also you can use business centre which is more convenient and flexible, second now the IT people in china is more and more capable , this is also can help you save your cost.

    Maybe you can hire a HK manager to report to you, he take charge of all shenzhen Affairs, so that you can keep your lifestyle in hk


    If you need to find a good business centre,
    you can contact


    Lawrence
    Forsyth Business Centre:
    755-33305130
    [email protected]
    Last edited by Lawrenceyim; 21-07-2010 at 03:37 PM.

  6. #6

    Join Date
    Oct 2005
    Posts
    14,449

    4 years ago Lawrence you need to be a lot quicker than that if you want to tout for business.

    Ianto likes this.

  7. #7

    Join Date
    Jul 2010
    Location
    shenzhen
    Posts
    2
    Quote Originally Posted by jimbo:
    4 years ago Lawrence you need to be a lot quicker than that if you want to tout for business.
    I hope when others find this info, they could be helped

    just to share the resource with all in this community