The Decline of Huaqiangbei: From Smuggling Hub to Empty Streets

Huaqiangbei doesn’t sell fakes—it sells “A-goods.” These are genuine branded products, but they enter China through unofficial channels.

Take the iPhones that are hugely popular in Huaqiangbei, for example. They are real, legitimate Apple products—just the U.S. version. Typically, they first enter Hong Kong before being smuggled into mainland China through “zou gui” (runners). These runners used to take advantage of multiple-entry permits, which allowed Shenzhen residents to cross the border countless times in a short period. What did they bring back? Mostly iPhones and other high-value electronics.

Why? Because in Hong Kong, these products are tax-free, making them cheaper. So, people would buy them there, carry them across the border, and resell them in Huaqiangbei for a profit. This cross-border gray market was one of the main reasons Shenzhen thrived as a trade hub. Back in its prime, Huaqiangbei’s commercial rent started at a million yuan per store—no big deal.

But now? Haha…

On one hand, China has cracked down on smuggling, and Hong Kong’s border trade has been declining for years. Many of these runners have moved elsewhere—Hainan is a popular new hotspot for carrying goods. On the other hand, the types of products they can smuggle have also dwindled. The U.S. version of the iPhone 14, for example, now uses eSIM instead of a physical SIM card. That makes it virtually useless in China, where physical SIM cards are the norm. In the past, 80% of iPhones smuggled into China were U.S. models. With this change, there’s simply less to bring in, and the smuggling trade has shrunk.

Naturally, Huaqiangbei has fallen into decline. Forget million-yuan rent—these days, landlords struggle to find tenants at all. The once-bustling tech marketplace is now eerily quiet.

This shift is a reflection of Shenzhen’s broader trajectory. The city largely built its prosperity on loopholes and gray-market industries that thrived in an era of regulatory gaps. But as China tightens regulations and closes these loopholes, such industries are losing ground.

It’s the same logic as Beijing’s Zhongguancun back in the day when pirated DVDs were everywhere—would that kind of business survive today? Of course not.

The same is happening to Shenzhen and Huaqiangbei. The city’s decline is now visible to the naked eye. Every industry is struggling, and not a single one seems to be thriving. Even the real estate market is collapsing.

The era when people made easy money through shady deals and bragged about it? That’s long gone.