My wallet was wounded in the trade war

[Bloomberg] [Fully Charged]( From [Bloomberg](   [FOLLOW US [Facebook Share]]( [Twitter Share]( [SUBSCRIBE [Subscribe]](  Hi, it's [Mark Bergen](mailto:mbergen10@bloomberg.net). Last week, I flew out of Beijing and managed to leave my laptop behind. Luckily, I landed in Shenzhen, China's electronics capital, the "Hollywood of Makers" as it's known. I immediately went to the Huaqiangbei electronics market, an unending maze of stalls selling every computing device and component imaginable. I settled on a small, sturdy Asus laptop as a replacement PC. But I had to fork over an unexpected sum -- around $290, nearly $70 more than a price I saw listed on Google in Hong Kong. Manufacturers like Asustek Computer Inc. are being squeezed from both sides in the trade war, paying more for imports from the U.S., like semiconductors, then more again to ship products from factories in China. The Intel chip inside the Asus laptop may explain the dent in my wallet. Or maybe I fell for a common fallacy about China. Tech isn't drawn to Shenzhen for the cheap production but for the hardware know-how, said Duncan Turner, managing director of HAX, an investment firm with a major presence in Huaqiangbei. "We're not here for cost. We're here for speed," he told me outside his office. "Does this look like somewhere where you make things cheap?" Shenzhen morphed from a Hong Kong outpost into a big, brash metropolis in under three decades. The city, filled with skyscrapers and designer boutiques, does not look cheap. Shenzhen is home to a huge plant run by Foxconn, the iPhone assembler, and the headquarters of Huawei Technologies Co. and Tencent Holdings Ltd. DJI, the hometown drone-maker, proved a Chinese hardware firm could innovate. HAX expects more successful tech companies to emerge from here because they can tinker with different designs with all the parts right in their backyard. Vigo Technologies Inc., a HAX-backed startup that makes smart glasses, shifted operations from San Francisco to Shenzhen for this reason. Each pair has more than 130 tiny electronic parts that require constant testing, refining and ordering. Proximity to suppliers means Vigo can tweak designs much faster than in California, said co-founder Jason Gui. Companies often search for items on Taobao, Alibaba's online mega mall, and get them delivered that day. Vigo found a 3-D printer supplier in the building next door. On Jan. 1, a new round of U.S. tariffs on Chinese goods will hit, raising Vigo's export bill by 25 percent. The startup wants to sell its Vue glasses in the U.S. and is racing to ship them overseas before the new year. They aren't alone. Vigo's vendors are running out of storage space as other firms also try to stash their products in the U.S. before 2019, said Tiantian Zhang, another co-founder. Despite this trade hurdle, a falling Chinese currency will make any U.S. dollar revenue more valuable. "It's a balance," she said. (Vue is not selling in China yet, Zhang added, because that would spark knockoffs undercutting them on price.) Most of the young Shenzhen "makers" have flown under the radar of the trade war so far. Many don't order enough parts to face tariffs. Some manage crafty workarounds, like importing components through Hong Kong, said James Sung, founder of Zocus Strategic Marketing in Shenzhen. Still, he said real pain could come with President Donald Trump's [plan to end]( discounted shipping from China, which many companies use to sell in the U.S. As for my new Asus, I made out okay in the end. I shaved 500 Chinese yuan off the listed price via customary haggling and another 100 for not taking a mouse. Later, I searched for the device on Taobao, where it was listed for 499 more yuan than I paid.  And here’s what you need to know in global technology news: China's grand vision for the internet is starting to [ring hollow](.  Bored of rectangular smartphone screens? Samsung may have a [new phone]( for you next year.  Intel's former CEO is [back]( running a company. Brian Krzanich was [ousted]( earlier this year after the chipmaker learned he had a consensual relationship with an employee.  Amazon's top picks for its new office locations are [blank slates]( that the e-commerce giant can revive relatively easily.  Qualcomm gave a weak sales forecast after [losing](bbg://news/stories/PHUFVU6TTDS1) iPhone chip orders.   Sponsored Content by BSI Effective cybersecurity must be rooted in a data governance framework that includes the proper policies, procedures and controls that can prevent unauthorized access and data breaches. BSI wrote the first standard for information security and continues to be at forefront of innovation and [information resilience]([.](   You received this message because you are subscribed to the Bloomberg Technology newsletter Fully Charged. You can tell your friends to [sign up here](.  [Unsubscribe]( | [Bloomberg.com]( | [Contact Us]( Bloomberg L.P. 731 Lexington, New York, NY, 10022