Race on to be China's Silicon Valley

By Mary Kwang, The Straits Times, 29 November 2000

Beijing, Shenzhen and Shanghai are the leading contenders to be the country's high-technology centre, each showing figures to back its claim.

BEIJING - The central government's drive to promote high technology to propel China into the new century has led many cities to scramble to be the country's Silicon Valley.

Although places such as Guangzhou, Wuhan and Hangzhou are contending to be high-technology centres, the closest fight is undeniably between Beijing, Shenzhen and Shanghai.

Beijing, in particular, appears to be the front-runner following a drive mounted last year to develop Zhongguancun in the northern part of the capital as the nation's centre for the knowledge economy.

Its ambition appears to be backed by a popular saying which goes: In the 80s, people looked at Shenzhen. In the 90s, they looked at Pudong in Shanghai, but in the 21st century, all eyes will be on Zhongguancun in Beijing.

Shenzhen, established in 1980, is China's first special economic zone where market reform experiments were set up.

In 1989, after the June 4 Tiananmen crisis, the central government decided to promote the development of Pudong in a big way.

Another viewpoint, though, gives different emphasis to the three cities. According to this view, Beijing is the country's innovation centre; Shanghai is the research and development centre while Shenzhen is the commercial centre.

According to official data, Shenzhen, closest to market-savvy Hongkong, is the nation's largest production base for information technology-related products.

Last year, its ouput for the sector totalled 97.2 billion yuan (S$20.5 billion) in value, far surpassing Shanghai's 59.8 billion yuan and Beijing's 56.7 billion yuan.

However, Beijing's pace of development was the fastest. Last year, the output of the capital's IT sector soared by 47 per cent, outstripping Shanghai's 39 per cent rate of increase and Shenzhen's 32 per cent.

On the other hand, Guangzhou, which was one of the first cities to tap China's economic reforms, pales by comparison. Value added in the Guangzhou IT sector last year totalled 15.8 billion yuan.

Singaporean Peter Low, who heads L&K Consultancy, an executive search firm which headhunts local talent out of offices in Shanghai and Guangzhou, said: Talent is now flowing north of the Pearl River Delta because the focus of development is now in Shanghai and in Beijing.

Shanghai started to hand out blue identity cards to non-Shanghai residents to induce talent to move to the metropolis. So, a graduate from a city such as Xian would rather go to Shanghai than go south as it is closer to home.

There is a lack of talent in Guangdong as the pool is relatively small compared with Beijing or Shanghai. The few universities in the city trail those of Beijing and Shanghai in terms of prestige and the ability to attract the cream of the country.

Shrugging off the competition, Guangdong Governor Lu Ruihua, said: The talent shortage is seen not only in China but around the world.

There is insufficient talent in Guangdong, but there is great potential to develop such talent. The question is how to enable available existing personnel to play a role.

Guangzhou seemed to have the answer when it announced plans recently to develop a Photon Valley for the opto-electronic sector, a bio-technology island and a software hub.

However, the competition is raising the spectre of wasteful duplication as was seen in the last decade when several cities vied to build car plants, television-assembly factories and development zones.