As Shenzhen's dominant traditional industry, handicrafts comprise souvenirs and gifts, and art products. The former are mainly manufactured by assembly lines while the latter are mostly handmade in workshops. So far, a well-structured export-oriented cultural industry has taken shape in Shenzhen, which is leading on the mainland in terms of production scale, output value, equipment and manufacturing technique. The city is home to China's largest art product manufacturing base and has applied to be awarded "China's Industrial Base for Souvenirs and Gifts."

Statistics showed that by the end of 2006, Shenzhen had more than 4,000 handicraft manufacturers, with a total of 50 billion yuan in annual sales volume, which accounted for 70 percent of the country's total. Their total output value in the year contributed 7 percent to the city's GDP and earned US$4 billion in export.

The industry's development benefits from design innovation, which started from learning from foreign design and led to homegrown design. Designers intend to integrate imperial art into modern art and borrow ideas from tourism, auto, religion, furniture and timepiece products in designing hanging decorations. Dimensional computerizing technique is adopted in molding and processing art, and various materials such as metal with crystal, glazed titles, jade and porcelain are used in one piece of work. By the end of 2006, more than 1,200 designs were patented, of which nearly 1,000 were for exterior design.

Shenzhen has invested 500 million yuan in the Shenzhen Century Handicraft Culture Plaza, the biggest in South China, which functions as a place for trade, expos, logistics and exchanges, bringing together more than 300 top-notch designers. The move was aimed at building the city into a Capital of Gifts Innovation worldwide.