IT companies flock to Xi'an

The Xi'an high-tech zone is rated as a key 'software park' for the nation.

The high-tech zone has gathered nearly 40 percent of Xi'an's IT companies, including operations by such big names as Samsung, Applied Materials, Ericsson, GE, Huawei, Micron, NEC, Qualcomm, Walsin and ZTE.

Xi'an, capital of Shaanxi province, is home to the largest overseas investment project in western China now that Samsung Electronics has kicked off construction on its $7-billion chip plant in the city's high-tech industries development zone earlier this month.

The plant is expected to generate annual sales revenue of 66 billion yuan when it becomes fully operational by the end of 2013, according to the administrative committee of the Xi'an high-tech zone.

Wang Chao, vice-minister of commerce, said the project will take a lead in helping boost the IT and information industries in western China as a whole.

Samsung is the latest of more than 20 Fortune Global 500 companies that have invested in the zone since 2011.

However, attracting these companies was no easy task, local officials say.

Xi'an was not even on their list at the very beginning, said a senior leader of the South Korea-based consumer electronics maker.

Xi'an's success in beating rival cities and finally winning the favor of those industrial giants is because of a combination of reasons, said Zhao Hongzhuan, a senior official in the Xi'an city government and director of the high-tech zone.

Among them is the government's support for attracting enterprises, Zhao said.

The local government officials impressed Samsung with their great enthusiasm for the project, and that helped the company make its final decision, said a senior Samsung official.

"We are trying our best to benefit all enterprises," Zhao said.

One-stop services

As part of its effort to streamline administrative procedures, the zone has put together 25 departments so enterprises in the zone can enjoy one-stop services, Zhao said.

Since last April, the zone has also made more than 20 administrative services free of charge, including business registration, which has helped a number of new startups get off the ground.

On average, 16 companies have been registered in a regular working day since the introduction of the favorable measure, Zhao said.

The zone's sound industrial foundation, especially in the IT sector, also helps attract new companies, according to a senior leader of the zone.

Official statistics show that more than 1,000 of Xi'an's 2,600 enterprises engaged in the IT industry are located in the high-tech zone, including a number of world-famous enterprises, such as Applied Materials, Ericsson, GE, Huawei, Micron, NEC, Qualcomm, Semtech Electronics, Walsin and ZTE.

A report from the zone's administrative committee shows that these IT companies employed 60,000 people and generated combined sales revenue of 65 billion yuan in 2011. Sales revenue in the IT sector saw a year-on-year increase of 29 percent that year.

With Samsung's arrival, the zone is expected to see a more comprehensive industrial cluster, Zhao said, adding that the company will attract 160 companies in supporting industries and, together with them, provide at least 10,000 jobs.

Geographic center

Another factor that makes the city attractive to businesses is its location, said a senior city official.

Located in the geographic center of China, cargo and services from Xi'an are within reach of a consumer base that numbers 700 million, all of which lie within a 1,000 km radius.

So it is convenient for enterprises in the zone to bring raw materials into the zone and deliver finished products across the country, Zhao said.

Once the beginning of the ancient Silk Road, the city is now an important node of the Eurasian Land Bridge railway, which stretches from Lianyungang port in East China's Jiangsu province to Belgium, passing through more than 40 regions and countries.

Due to Xi'an's strategic location, the central and local governments have been hard at work to improve its infrastructure.

Official statistics show that as of 2011, the length of expressways in Shaanxi province was 3,800 km, the most in western China, and another 170 billion yuan will soon be invested to build more.

Another factor that helps attract enterprises is the city's rich human and scientific resources.

Xi'an has nearly 100 universities and colleges, a number that is close behind such metropolises as Beijing and Shanghai.

These institutions turn out more than 200,000 graduates every year, offering a steady and sufficient supply of human resources for local enterprises, said an official of the high-tech zone.

Fu Hui, managing director of Intel Mobile Communications Technology, a design firm for 3G-based band chips, said that without the huge talent pool in Xi'an, it was impossible for the company to increase the number of its engineers and technicians from 180 to 260 over the past year.

Xi'an also has a large number of science and technology research institutions, another source of benefits for local enterprises, said the official of the high-tech zone.

Since April 2011, the zone has carried out a campaign to encourage these institutions to share their research and testing equipment with local manufacturing companies, a move to help slash costs of local enterprises, he said.

Now enterprises have access to more than 2,500 pieces of large equipment across the city, he added.

lifusheng@chinadaily.com.cn

(China Daily 09/25/2012 page6)