When Huawei was founded in Shenzhen in 1987, the city was still struggling to assert its place in the Chinese economy.

Shenzhen SEZ was overwhelmed not only by the Hong Kong SEZ, but also by other Chinese cities.

And fewer people predict that Huawei, the economic leader of Shenzhen today, has the potential to transform itself into a global giant in telecommunications equipment that the US sees as a security threat and challenge.

However, in the midst of Shenzhen celebrating its 40th anniversary as one of China's four SEZs, it is not clear whether this 13 million population city will continue to shine as the country enters a new era.

As the United States adopts a more decisive approach to China, the ability to easily connect with international capital, technology, and global markets, is crucial to the rise.

For Huawei, its fortunes are dwindling as Washington seeks to prevent them from participating in efforts to develop 5G telecommunications networks around the world, while restricting its access to components.

A new US government decree will prohibit Huawei and its affiliates from buying semiconductors overseas that are manufactured with US software and equipment starting September. Many analysts rate the regulation as similar.

The slowdown in Huawei's business, or more importantly their total collapse, not only dealt a blow to Shenzhen's economy, but also undermined confidence in economic and technological prowess.

Liu Kaiming, director of the Shenzhen Institute for Contemporary Observations, which monitors the health of Chinese manufacturers, said that the sanctions that weaken Huawei would have a negative effect on the entire power supply chain.

"No other company can replace Huawei to lead China's technology and globalization," Liu said.

For Shenzhen's economy, losing Huawei is devastating because the company is one of the brightest gems in the special zone's crown.

Huawei was the largest contributor to Shenzhen's gross domestic product (GDP) in 2016, generating about 7% of its economic output, according to the latest government data.

Huawei was the biggest investment in research and development in Shenzhen from 2014 to 2016, surpassing telecom giant Tencent Technologies, drone maker DJI and car maker.

Huawei's importance for Shenzhen continued to be shown in 2018, when the company decided to build a new operating facility in the neighboring city of Dongguan.

This move sparked controversy about what Shenzhen did to "its darling" to leave.

Huawei has made Shenzhen the top destination for Chinese programming and engineering talent.

Zhang Ji, 27, graduated with a PhD in artificial intelligence from China University of Science and Technology, was recruited by Huawei with a starting salary of 2.01 million yuan ($ 291,000) a year, much higher.

Huawei is also the largest recruiting company for graduates from top Chinese universities in 2019, including Tsinghua University, Peking University, Zhejiang University and Fudan University.

Of the company's 194,000 employees globally, more than half work in research and development.

Peng Peng, vice president of the Guangdong Systemic Reform Research Association, a policy institute affiliated with the government of Guangdong province, said the impact of US sanctions on Huawei would be felt across China.

"It is still difficult to predict the impact of the sanctions, but the global market will have a different attitude towards the manufacturing sector and China's rise," he said.

Liu Kaiming, a researcher in Shenzhen, agrees that Huawei's problems will have a far-reaching impact on the national economy, signaling the end of an era when Chinese companies are adopted.

The logic of such partnerships is broken and a split has already begun, Liu said.

"These foreign-invested electronics companies have a unique role to play in China's current export-oriented electronics manufacturing industry," Liu said.

Earlier this month, Taiwan-invested Catcher Technology, an Apple supplier, announced it would sell all stakes in its two units in China to Lens Technology for $ 1.43 billion.

In July, Wistron, another supplier to Apple based in Taiwan, announced it would sell two of its subsidiaries in eastern China to mainland company Luxshare Group.

"As in the early 2000s, when American customers asked their suppliers to move from Taiwan Island and South Korea to mainland China, now the same Americans are asking them to relocate from China.

However, the futures for Shenzhen and Huawei are not entirely bleak as China's huge domestic market remains a major source of growth, said the analyst.

Li Daokui, a professor at Tsinghua University, last month said in a television interview that China's domestic market with 1.4 billion consumers, along with other markets in the participating countries.

"Forget the European and American markets. It is difficult to rely on them in the future if they do not trust us. This will be the new era of globalization," Li stressed.