July 6, 2006 11:42 AM PDT

China's future--a stroll in a tech park

Shanghai locals say skyscrapers are built at the rate of one floor a week. So in theory, that's about one year for every tall building that goes up--which roughly fits the time scale people aim for in China.

Technology parks take a little longer, but then again, they are much bigger. It will take about three years before the California Technology Park, which is on the Yangtze River Delta halfway between Shanghai and Nanjing, is complete.

In a move typical of the competitive environment between local governments, officials have started offering tax incentives for companies that set up shop in the park, in Jiangsu province's Changzhou.

Tech park in Changzhou, China
An artist's impression of the California
Technology Park.

Ross Curtin, the international business director for California Technology Park, said: "We're just starting construction on a Silicon Valley-style high-tech village. It has residential, commercial, R&D, manufacturing and logistics space."

"Most manufacturing places are just huge farms of miles and miles of buildings," he added. "They're divorced from the community. So we're bringing the American residential-community model here."

Human cost
Software parks are popping up all over China. There are hundreds at the moment, as the owners fight to bring in business from Chinese and international companies.

But, as with many new developments, the construction of the Changzhou technology park has meant that the families who have lived on the land for generations have been told to leave by the government. "There are farmers being moved off. Some have gone. It's kind of mind-boggling," Curtin said.

"There is a human cost, but that's just the way it is here. As long as they get compensated properly, then it's OK," he added. "At least in Jiangsu, there's plenty of farmland for them to move to."

And Curtin said local governments are moving people around in cities all over China to make way for developers.

Lake view of tech park
The lake view in the center of the village.

"One day, when we were going for noodles, the police had closed off a whole street. They were forcibly moving people out of an area. They wouldn't let us in. The next week, the whole block was demolished," he said.

"Apparently, people are getting some money, though," he noted. "We talked to the noodle shop owner, and she got reasonable compensation."

One of the biggest benefits that technology parks offer is they already have good government relations to fast-track some of the time-consuming administration and bureaucratic measures that can take months for newcomer companies to complete.

John Mei, the general manager for California Technology Park, was appointed to manage relations between the government and new companies. As a Chinese person who worked in Silicon Valley, he says it's important to maintain face and show officials the benefits of bringing in foreign business.

"Being Chinese, it's easier," he said. "But I have to say that lots of government officials have done a lot of education abroad in order to bring in foreign investors."

"To me, it's simple--knowing about (the government's) needs and working together. It's not really that difficult, but there are council officials (in other areas) that are not as well-situated as Jiangsu or other more well-developed places. When you go there, they have no idea what they want to do or what they need. That's a development process," he said.

There is currently a trend in China for companies in first-tier cities, such as Beijing and Shanghai, to move some operations to second-tier cities such as Changzhou. It would seem they have realized the cost benefits of such a move. Communications equipment giant Huawei, for instance, is building an entirely new facility in Nanjing, which is an hour west of Changzhou and two hours west of Shanghai.

"We previously did a lot of work in Shanghai, because it was the No. 1 place for foreign investors," Mei said. "But the Shanghai government is getting very used to these things. They are now only approaching big companies--the big names--and the investment amount has to reach a certain amount before the mayor will come and shake hands with you."

"But Shanghai city is trying to focus on the service industry over the next 10 years, as the major financial center in China--maybe Asia," he added. "The government is trying to spread out the factories into the suburbs. And they are almost close to Jiangsu."

Jiangsu province is hardly small. It has a population of 74 million. There are eight universities in surrounding areas, such as Suzhou and Nanjing, which Mei and Curtin hope will provide a healthy supply of workers.

Dan Ilett reported for London-based Silicon.com.

See more CNET content tagged:
China, government, manufacturing, Shanghai, city

2 comments

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China sounds like Connecticut
Throw out the residents so you can give their land to private "developers" who have the proper political connections.
Posted by Jackson Cracker (272 comments )
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China sounds like Connecticut
Throw out the residents so you can give their land to private "developers" who have the proper political connections.
Posted by Jackson Cracker (272 comments )
Reply Link Flag
 

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