Pre-1978 Context: Shenzhen as a Border Agricultural County

On a humid July afternoon in 1978, a rickety wooden truck rumbled across the Luohu Bridge, the only formal crossing point between Bao’an County and British Hong Kong. On the Hong Kong side, neon signs advertised air-conditioned shopping malls and double-decker buses shuttled past high-rise apartment blocks; on the mainland side, the road dissolved into a rutted dirt track flanked by emerald rice paddies, where barefoot farmers balanced baskets of lychees on their shoulder poles. This stark 500-meter gap between two worlds, separated only by the narrow Shenzhen River, captured the fundamental paradox of Bao’an at the end of the Mao era: a region defined by its proximity to one of the world’s most dynamic capitalist economies, yet trapped in the stagnation of China’s planned agricultural economy. For the 310,000 residents of Bao’an County in 1978, the year that would mark the start of China’s reform and opening-up was still six months away, and their lives were shaped by decades of border policy, agricultural collectivization, and the constant pull of Hong Kong’s economic magnetism. This chapter establishes the baseline conditions for Shenzhen’s unprecedented rise, tracing the county’s administrative history, economic structure, social dynamics, and policy constraints from the Qing Dynasty to the eve of reform, to illuminate the starting line from which the global innovation metropolis would eventually launch.

Administrative and Geographic Foundations: Bao’an as a Border Outpost

To understand Shenzhen’s transformation, one must first understand the administrative and geographic logic that defined Bao’an County for most of its history. The region now known as Shenzhen has been inhabited for over 6,000 years, with archaeological evidence of Neolithic settlements along the Shenzhen River and in Dapeng Bay. It was first formally incorporated into the Chinese imperial administrative system in 1573, during the Ming Dynasty’s Wanli Emperor reign, when it was carved out of Dongguan County and named Bao’an County, a name meaning “precious peace” that referenced the region’s role as a coastal buffer against pirates and foreign incursions. Under Qing Dynasty rule, Bao’an was briefly merged into Xin’an County (modern-day Shenzhen and Hong Kong) in 1820, before being re-designated as a separate county in 1953, after the founding of the People’s Republic of China, when the central government reorganized southern Guangdong’s administrative boundaries to strengthen border control.

> 📌 Sidebar: The Bao’an-Hong Kong Border Legacy The modern border between Bao’an and Hong Kong was formalized in 1898, when the Qing Dynasty signed the Second Convention of Peking, leasing the New Territories to Britain for 99 years. The Shenzhen River was designated as the official boundary between the leased territory and mainland China, a line that remains in place today. For most of the 20th century, this border was porous, with families and traders moving freely across until the 1950s, when the newly established People’s Republic of China imposed strict border controls as part of its Cold War-era “encirclement and suppression” strategy against Western and capitalist influences.

In 1978, Bao’an County was a jurisdiction of Huiyang Prefecture, covering 2,053 square kilometers of low-lying coastal plains, rolling hills, and rocky coastline. Its northern border adjoined Dongguan County, its southern edge ran along the Shenzhen River and Mirs Bay (Dapeng Wan), and its western coast faced the Pearl River Estuary. The county seat was located in Shenzhen墟 (Shenzhen Market), a small market town of 20,000 residents in what is now the Luohu District of Shenzhen. The county was divided into 15 people’s communes, each centered on a small town or village, with a total registered population of 310,000, 82% of whom were classified as rural agricultural residents. Unlike most Chinese counties of the era, which were oriented toward internal domestic markets, Bao’an’s geographic position made it uniquely positioned for cross-border exchange with Hong Kong, even as central policy explicitly discouraged such exchange for most of the pre-reform period.

The Agricultural Economy: Subsistence and Border Trade in the Planned Era

The dominant feature of Bao’an’s economy in 1978 was its overwhelming reliance on agriculture, which accounted for 62% of the county’s total GDP of 1.96 billion RMB. Industrial output contributed just 18% of GDP, almost entirely from small-scale collective enterprises, while the remaining 20% came from border trade, transport, and small-scale services. This structure was typical of a poor rural Chinese county, but Bao’an’s agricultural economy had two unique features shaped by its border location: a specialized export-oriented agricultural sector focused on Hong Kong, and a vibrant informal cross-border trade network that operated outside the planned economy.

Agricultural production in Bao’an was organized under the people’s commune system, which had been implemented nationwide in the late 1950s. By 1978, the county’s 15 communes were divided into 217 production brigades and 1,892 production teams, with all land, tools, and livestock collectively owned. Farmers were paid in work points based on the number of days they labored on collective farms, rather than receiving income from individual landholdings, a system that eliminated private incentives for agricultural innovation and kept yields stagnant across much of rural China. Bao’an’s geographic conditions, however, gave its farmers a unique advantage: the region’s subtropical climate, abundant rainfall, and fertile alluvial soil allowed for three harvests of rice per year in most areas, along with high-value cash crops that were in high demand in Hong Kong.

> 📌 Sidebar: The “Three Treasures of Bao’an” For centuries, three agricultural products defined Bao’an’s reputation in southern China: lychee, banana, and oyster. The county’s lychees, particularly the guiwei and nuomici varieties, were prized for their sweetness and were a staple export to Hong Kong, with over 60% of the county’s 120,000 mu of lychee orchards dedicated to cross-border sales in 1978. Bananas grown in the county’s western plains were also exported to Hong Kong, while the oysters harvested from Dapeng Bay were considered some of the finest in South China, with over 80% of the annual 5,000-ton oyster catch sold to Hong Kong restaurants and markets. In addition to these cash crops, Bao’an was the primary vegetable supplier for Hong Kong, with 70% of Hong Kong’s fresh leafy greens coming from the county’s collective farms in 1978, a role that would later evolve into the formal “supply base for Hong Kong” policy after reform.

In addition to formal collective agricultural production, Bao’an’s border location fostered a large informal cross-border trade network centered on “shuike” (水客, literally “water guest”), a term for small-scale informal traders who carried goods across the border for profit. In 1978, an estimated 5,000 regular shuike operated in Bao’an, carrying quantities of watches, radios, fabric, and canned food from Hong Kong to the mainland, and fresh vegetables, fish, and fruit from the mainland to Hong Kong. While illegal under mainland law at the time, shuike activity created a rudimentary cross-border supply chain, with many traders earning 10-20 RMB per day, five to ten times the average daily income of a collective farm worker. This informal trade was not a marginal activity: official (though unpublicized) estimates suggest that shuike activity accounted for roughly 15% of Bao’an’s total economic output in 1978, a hidden economic base that would later be formalized into legal cross-border trade after 1979.

The Border as Both Barrier and Magnet: Cross-Border Mobility and Social Dynamics

For most of the pre-reform period, Bao’an’s border with Hong Kong was defined as much by restriction as by exchange. After the founding of the People’