The article by Mr. Dinh Hong Ky was published in the Perspective section of VnExpress on April 9, 2025.
China’s leading electric vehicle manufacturer BYD has just shocked the world by announcing the development of a next-generation fast-charging system that allows a car to travel more than 400 km after only 5 minutes of charging.
In 2024, BYD’s revenue reached $107 billion, surpassing Tesla by $10 billion to become the world’s largest electric vehicle maker.
Back in 1995, in a tiny battery workshop in Shenzhen, Wang Chuanfu—a young engineer newly graduated from a research institute—faced bankruptcy as BYD’s battery products couldn’t compete with Japanese brands.
However, this fledgling company survived and thrived thanks to a favorable business environment and the Shenzhen government’s special management policies—open in control, flexible in application, and tolerant of initial mistakes. Shenzhen leased industrial land to BYD at zero cost for five years, waived corporate income tax, and most importantly, allowed trial production of electric vehicles despite incomplete legal conditions. BYD revealed reports showing it received a total of $2.6 billion in government support from 2008 to 2022, excluding other policies such as ensuring local taxi companies only purchased BYD electric cars, according to the New York Times.
An analysis published by the Indian Express highlighted four key reasons behind BYD’s miraculous success, emphasizing government support alongside objective contexts and the company’s strong internal capabilities. The article cited a different figure from BYD’s own announcement: Rhodium Group, an independent research organization, estimated BYD received around $4.3 billion in state support from 2015 to 2020. Gregor Sebastian, senior analyst at Rhodium, said, “The company benefited from capital subsidies and below-market loans, enabling expansion of production and research and development activities.”
BYD’s story is just one vivid example among many of Shenzhen’s successful model. Huawei—starting as a small phone assembly company—was given favorable land leases in Longgang by the city government to build an R&D center when newly established. Tencent was allowed to launch its QQ messaging service in 1998 despite unclear Internet regulatory frameworks. DJI, a young drone startup, received venture capital from a city-backed fund before having any commercial products.
All these successes stem from Shenzhen’s philosophy, which I call the “three no’s”: no rushing to ban new things, no rigid enforcement of regulations, no harsh punishment for initial mistakes.
In practice, this measured tolerance has yielded results far beyond expectations. After 20 years, BYD has overtaken Tesla to become the largest electric vehicle maker globally. Huawei evolved from assembling cheap phones to becoming a global telecommunications giant with over 100,000 patents. Tencent grew from a simple messaging service into a tech conglomerate worth over $500 billion, rivaling Facebook and X. Shenzhen’s policies helped these companies overcome initial legal barriers.
BYD, Huawei, and Tencent’s stories prove that the “open-flexible-tolerant” policy is not lax governance but a smart approach to foster innovation.
The lesson is clear: to build world-class companies, you first need a legal environment that is “open” enough to encourage innovation, “flexible” enough to adapt to new technologies, and “tolerant” enough to accept early failures.
Shenzhen accomplished this by allowing businesses to operate within controlled “legal gray zones” while providing essential financial and infrastructure support.
Vietnam in 2025 faces a similar challenge: how to make the private sector a true engine of growth? The answer might lie in adopting Shenzhen’s “smart and measured tolerance.”
Today, a tech startup in Ho Chi Minh City may take at least seven days to complete business registration, while in Shenzhen, this process has taken just hours since 2018.
What sets Shenzhen apart is its “buffer system” between the state and businesses. Instead of requiring startups to comply fully with all regulations immediately, Shenzhen creates time-limited “sandbox” zones. A fintech company can operate for 24 months without a full license but must commit to data transparency and periodic supervision. Authorities don’t interfere in business decisions but are ready to “rescue” companies with flexible financial support packages when necessary.
Another lesson comes from Shenzhen’s approach to violations. While many places impose heavy fines even for minor errors, Shenzhen follows a “warning first, sanction later” principle.
In 2005, Tencent’s QQ was found to have a serious security flaw. Rather than shutting down the service, regulators demanded rapid fixes and a public apology. This approach gave the company a chance to correct issues without being “killed” by penalties.
Vietnam could adopt a similar model by establishing “soft legal zones” in strong startup ecosystems like Ho Chi Minh City, Da Nang, or Bac Ninh. Instead of forcing immediate full compliance, companies could operate under flexible legal frameworks during their first 2-3 years.
The state acts as a “godparent,” providing capital via public-private venture funds while implementing real-time risk monitoring instead of rigid periodic inspections.
Perhaps the most important shift must come from management mindset. When a company violates rules, instead of immediate license revocation, ask: “Is this error fixable?” When a startup wants to test a new business model, instead of saying “there’s no regulation,” propose: “Try it on a small scale first.”
Shenzhen has shown that controlled tolerance can be the strongest catalyst for innovation.
In 2025, as the global economy faces many uncertainties, Vietnam needs strong private enterprises to drive growth. Shenzhen’s story reminds us that to have tech “unicorns,” you must first dare to loosen invisible shackles.
Sometimes what businesses need most isn’t strict control or overprotection but enough space to experiment and fail.
