(Dan Tri) – Observers say that US sanctions targeting Chinese technology companies will seriously affect the technology `capital` of Shenzhen.

Shenzhen City (Photo: Getty)

When Mr. Ren Zhengfei, a former Chinese military official, founded the Huawei technology company in the Shenzhen special economic zone in 1987, the port city was still trying to assert its position in the economic picture.

Few people could have imagined that after 40 years, what was once a fishing village would rapidly develop into a high-tech capital, China’s `Silicon Valley`.

However, as Shenzhen celebrates its 40th anniversary of becoming one of China’s four special economic zones, it is unclear whether the city of 13 million people can maintain its `aura` as China is moving towards

When the US is imposing a series of sanctions on China, Shenzhen is considered to be in a `struggling` situation.

The US has continuously made efforts to prevent Huawei from participating in 5G networks around the world, while also limiting this company’s access to important US technologies.

The US government has issued an executive order to block Huawei and its affiliates from purchasing semiconductors manufactured with US equipment or software since September. According to observers, the US move could affect the supply chain.

This decline is expected to cause a chain reaction as it will cause Shenzhen’s economy to be strongly affected.

Expert Liu Kaiming, director of the Contemporary Observatory Institute in Shenzhen, said that US sanctions will have an impact on China’s entire electronics supply chain.

“There is no company in China that can replace Huawei to lead the country’s technology and globalization wave.

With Shenzhen’s economy, Huawei plays a huge role.

Huawei also invests heavily in research and development in Shenzhen.

Peng Peng, Vice President of the Guangdong System Reform Research Association, said US sanctions will have an impact on all of China.

“It’s difficult to predict the extent of the impact.

Expert Liu said that US sanctions will have a huge impact on the Chinese economy, and could mark the end of a period in which Chinese companies were considered `key factors`.

Mr. Liu warned that some Chinese companies with foreign investment, including many in Shenzhen, will leave in this context.

However, observers say that the future of Shenzhen and Huawei is not bleak, because China’s huge domestic market is still considered one of the sources of development.