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China's future - a stroll in the tech park
Case study: A visit to what will be the California Technology Park - in Jiangsu province

By Dan Ilett

Published: Thursday 06 July 2006

Software parks are a key part of China's efforts to move forward as a tech powerhouse. Dan Ilett explains what you need to know about this phenomenon as he visits a future park outside Shanghai.

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 timescale people work to 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 half way between Shanghai and Nanjing, is complete.

Typical of the competitive environment between local governments, officials have started offering tax incentives to companies to set up shop in this park, in Jiangsu province's Changzhou.

Ross Curtin, international business director for California Technology Park, says: "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. They're divorced from the community - so we're bringing the American residential community model here."

An artist's impression of the California Technology Park

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 like many new developments, building the technology park has meant the families who have lived on the land for generations have been told to leave by the government.

Curtin says: "There are farmers being moved off. Some have gone - it's kind of mind boggling.

"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. At least in Jiangsu there's plenty of farm land for them to move to."

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

He says: "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.

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

The lake view in the centre of the village

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, 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.

He says: "Being Chinese, it's easier. 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] 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."

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 realised the cost-benefits of such a move. Communications equipment giant Huawei, for instance, is building an entirely new, 2km2 facility in Nanjing, which is an hour west of Changzhou and two hours west of Shanghai.

Mei says: "We previously did a lot of work in Shanghai because it was the number one place for foreign investors. 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 centre in China, maybe Asia. 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.