Zhongguancun's exhibition area at a Beijing high-tech expo. The technology hub is home to nearly 20,000 tech-driven firms. Da Wei / For China Daily

Widely known as China's answer to Silicon Valley, Zhongguancun in Beijing has played a crucial role in supporting the local economy while providing the research that drives the nation's high-tech industries.

The area started as a street where vendors gathered to sell electronic devices in the early 1980s, but it is now a State-level demonstration base for innovation.

Zhongguancun covers a total area of 488 square kilometers, extending into 16 districts and counties in Beijing.

In the past five years, with the implementation of the "One plus Six" system, composed of one creativity center and six pilot policies, Zhongguancun has integrated resources and inspired innovation among its companies and research institutions.

Zhongguancun-based companies generated combined revenue totaling 2.4 trillion yuan ($386.2 billion) in 2012, with an average 20 percent increase for five consecutive years. And for some emerging industries, such as modern services, advanced manufacturing and biomedicine, the figure was more than 30 percent last year.

The area generated an industrial output value of 311 billion yuan in 2011, increasing 18.6 percent year on year, accounting for 19.1 percent of Beijing's GDP. But energy consumption per unit of GDP was only one-fifth of the city's average.

There are now more than 7,200 recognized high-tech companies in Beijing, accounting for around 20 percent of the number nationwide. The bulk of them - nearly 6,000 - are based in Zhongguancun.

Local companies, colleges and research institutes have made breakthroughs in a number of strategically important sectors, including next-generation mobile telecommunication, satellite navigation and railway control systems.

In 2011, researchers applied for 21,900 patents and were granted 12,600. And last year, the number of applications and granted patents both grew by about 30 percent.

Many of the latest achievements have been successfully commercialized. More than 100 of domestically developed technologies were put into service during the Beijing Olympic Games in 2008 and Shanghai World Expo in 2010.

Last year, the local authority invested 10 billion yuan to support the commercialization of 243 major high-tech projects. And in 2011, nearly 200 billion yuan worth of technology contracts were signed, up 21 percent compared with the previous year.

Nearly 1,500 local companies have benefited from preferential policies that have reduced taxes on technology transfers since 2011.

This year, the innovation zone's focuses will include mobile Internet appliances, biomedicine, environmental protection, renewable energy, new materials and railway transportation.

Financing technology

The city government, along with nine ministries last year unveiled guidelines to build a technology financing center inside Zhongguancun.

The financial institutions in the area provided local companies with loans, insurance and intellectual property mortgages that were altogether worth more than 47 billion yuan in 2012.

Eighteen banks have opened branches in the area offering specialized credit services to local high-tech companies. Together they have provided loan guarantees totaling 67.2 billion yuan and issued direct financial products valued at 2.8 billion yuan to 165 small and mid-sized companies.

In addition to traditional financing methods provided to large companies and startups, there is also an online financing service system that carries products on offer by lenders and is based on the needs of companies.

One of the Zhongguancun administration's focuses this year will be the management of the China Beijing Equity Exchange, a pioneer equity transaction institution providing comprehensive information with the help of a nationwide financing market service network.

Attracting talent

Home to nearly 20,000 high-tech companies, such as Lenovo and Baidu.com, Zhongguancun is one of the most talent-intensive areas in China and in the world.

There are more than 40 colleges, including two of the nation's top universities -Tsinghua University and Peking University - and 140 research organizations.

One-fourth of the national labs, key engineering research institutions and R&D centers of companies are based in the area.

Around 770 talented people have been introduced to Beijing via the "1,000-talent program", 80 percent of whom are working in Zhongguancun.

The program is a nationwide plan launched in 2008 that promises high salaries and attractive funding to top professionals who are working overseas and willing to come or return to China.

The local administration has also established overseas liaisons in Sydney, Brussels and Helsinki to attract talent.

Every year, around 4,000 new high-tech companies are founded by returned elites.

The most important R&D centers that are attracting talented professionals are the Zhongguancun Science Town and the Future Technology Town.

The science town, planned at the heart of the area, will focus on R&D in frontier aspects of biology, aeronautics, computer networking and new materials. Its companies are expected to generate more than 1 trillion yuan in annual revenue when the project is complete.

Last year 11 companies and organizations signed to join in the town.

While importing overseas talent, companies and labs into the zone, the local administration is also actively introducing leading homegrown technologies to the world market.

zhangzhao@chinadaily.com.cn

SMIC's integrated circuit production facility in Zhongguancun. Provided to China Daily

TusPark in the central area of Zhongguancun. Chen Xiaogen / For China Daily

(China Daily 03/15/2013 page19)