China IP Watch: World-class High-Tech Zone Rising in the West

Source: China Daily

World-class High-Tech Zone Rising in the West

By Li Fusheng (China Daily)

Since its establishment in 1991, the Xi'an High-Tech Industries Development Zone in Northwest China's Shaanxi province has made big strides toward its goal of becoming a world-class zone in the sector.

Official statistics show that the 307 square kilometer zone is now home to 16,800 enterprises that generated 328.36 billion yuan ($52.2 billion) in revenues in the first seven months of 2012, 30 percent more than the same period last year.

"Another big stride has been made with the arrival of Samsung Electronics," said Zhao Hongzhuan, director of the zone.

The South Korean consumer electronics maker began construction on its $7 billion flash memory chip plant earlier this month, just five months after the contract was signed.

The project, the largest foreign investment in the information and electronics industry China has ever received, is already attracting others to follow suit.

A US-based chemical engineering company, which once refused the invitation to invest in Xi'an, has decided to build a $2 billion project in the zone after Samsung's arrival, Zhao said.

In addition to luring companies with the help of giants like Samsung, the zone has long been attracting them through its own advantages.

"We have good infrastructure and we are spending to improve it," Zhao said, noting that the zone invested 22.47 billion yuan in infrastructure from January to July alone.

The zone now 17 national-level industrial parks for opto-electronics, software and integrated circuits, as well as 23 business startup parks.

With a combined area of more than 1 million square meters, the startup parks have now produced more than 1,200 companies, according to a report from the high-tech zone.

The zone's administrative committee also encourages engineers and college graduates to start businesses by offering free administrative services.

"This means that combined they can save around 20 million yuan per year," said Zhao, adding that the measure is expected to help add around 3,000 new companies each year her established in the zone.

"We will try to help around 10,000 new startups in five years so that they can ensure the zone's sustainable development," Zhao said.

As part of the campaign to drive growth in new companies, the zone authorities also help facilitate access to loans.

The local Chang'an Bank has set up a branch to offer financial support to small and medium-sized technology enterprises.

Others including Bank of Xi'an, China Merchants Bank and China Construction Bank, are expected to soon follow, according to Zhao.

Since many new companies have few hard assets - a frequent prerequisite for banks to lend money - the zone has negotiated with Standard Chartered Bank's local branch to offer small, unsecured loans to micro and small enterprises.

"Such loans, usually ranging from 300,000 to 1.5 million yuan, can provide them with the funds they require to go ahead," Zhao said.

In addition, the high-tech zone itself has earmarked 1 billion yuan per year to boost development of some industries including IT and electronics, according to reports in Xi'an Daily.

Official statistics from 2011 show that 13 companies had revenues of more than 10 billion yuan each, 64 generated 1 billion yuan and 265 had 100 million yuan.

The zone is now home to 50 listed companies, 60 percent of all publicly traded companies in Shaanxi province. The figure is expected to reach 100 by 2015, Zhao said.

lifusheng@chinadaily.com.cn

(China Daily 09/25/2012 page 6)