Zhongguancun – The Silicon Valley of China

I’ve travelled to Hong Kong many times over the past few months.  As you cross one of the main bridges to Hong Kong, you notice the vast ports shipping goods out of China.  What about technology?  Will China surpass the US?

According to Zhang Zhao of the China Daily Hong Hong Kong, Silicon Valley will be overtaken by Zhongguancun. His article is as follows:

http://www2.chinadaily.com.cn/cndy/2010-09/15/content_11303547.htm

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Known to many as China’s Silicon Valley, Beijing’s Zhongguancun grew from an electronics market 20 years ago to a concentration of influential high-tech companies today.

“But the nickname echoing California’s software center does not now accurately describe Zhongguancun,” said Sun Lei, manufacturing president of AutekBio Inc.

A biotech and bio-pharmaceutical company headquartered in the San Francisco Bay area of the US, AutekBio has a wholly owned division in Zhongguancun’s Biomedical Park.

“Silicon Valley in the US basically reminds you of its electronics and IT industries,” said Sun, “While the concept of Zhongguancun is much more than that.”

“The origins of the Haidian Science Park (HSP) are similar to Silicon Valley, but it has expanded to cover more emerging sectors such as biotech and education,” he said. “And it will grow even bigger in the future.”

A biotechnical professional with a PhD degree from the University of Minnesota and postdoctoral training at the Harvard Medical School, Sun was “imported” from abroad by the “Haiju Program” that attracts excellent overseas Chinese talent back to Beijing.

Given the award for the Leading Figure of Top Industries in Zhongguancun, Sun praises the HSP business incubator model.

Started just three years ago, AutekBio’s Beijing operation is one of the many emerging businesses in the HSP that have benefited from the technical support of the park, including public facilities and laboratories that save initial investment.

“Incubator is the appropriate word,” he said, “I know there are similar scientific parks in Europe where companies offer jobs to local residents and get preferential policies from the local government. But unlike what’s going on in Zhongguancun, those companies work as independent units, without financial funding or support from the authority.”

“The idea of sharing resources is of great help to newly established small companies like us. This model is unique to China, and is a successful innovation,” he added.

Beside the incubator model, there are other factors that make HSP attractive to AutekBio. The park sits in Beijing’s Haidian, home to many nationally renowned colleges and research institutes.

And HSP has been highlighting its high-tech sectors, which meets the orientation of many new companies. “Biotech was not the mainstream at the beginning, but it has received great attention in recent years as more and more bio-pharmaceutical and bio-engineering enterprises have settled in the HSP,” sad Sun.

Development of bio-medicine and its manufacturing, the core businesses of AutekBio, lags in China due to the complexity of the technology.

Sun compares bio-pharmacy to building an F-16 fighter while the traditional chemical-based pharmacy is like assembling a bicycle.

“Maybe you can make something that can fly, but whether it can fight and win is another matter,” he explained.

“You can see ‘made in China’ labels on almost all kinds of products in the US except medicine. That is largely because of technical difficulty and quality concerns,” said Sun.

By establishing industrialized manufacturing lines, AutekBio is set to ease the two bottlenecks and promote China’s bio-medicine to the global market.

After introducing China’s first large-scale mammalian cell culture system, AutekBio enjoyed the largest productivity last year among all companies of its kind in the nation.

But “being first last year doesn’t mean you will be the first forever as there are so many others doing the same thing, and the industry is filled with severe competition”, said Sun, who believes the progress of those competing companies is also an achievement of the HSP.

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About Cameron Ackbury, CPA

Founding Director at DaggerFoil Group
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