Beijing Etown: from farmland to futurist business model

Growing from a plot of sleepy farmland, the Beijing Economic-Technological Development Areal is now a major economic engine in the Chinese capital fueling growth with its combination of high technology and industrialization.

Also known as Beijing ETown, the area has companies making products "that every household uses every day" ranging from electronics such as cell phones and TV screens to medicine, textiles and even ink for the nation's banknotes, said Zhang Boxu, director of the area's administrating committee.

Home to more than 6,000 companies from around 30 countries and regions, Beijing ETown has been the recipient of more than $40 billion in investment.

Resident companies include international giants Mercedes-Benz, GE, Bayer, ABB, Sanyo, Panasonic Nokia and Schneider.

Over the past 20 years, Beijing ETown posted an average annual growth rate of 49 percent. More than 96 percent of the value has been contributed by the high-tech sector.

The four key industries in the area are IT, biomedicine, equipment manufacturing and auto production.

Most local companies have proprietary technologies and brands, said Zhang. They produced the nation's first cloud-computing server, the first domestically designed control system for subway trains and the world's largest LCD display.

One local biomedicine company has developed a vaccine worth 10 million times of the price of gold per gram.

"We seek an innovative model for industrial development to meet our social responsibilities to the capital city and the nation," Zhang said.

Beijing ETown has full industrial chain production model that increases efficiency, reduces logistics costs and saves the time when products are stored at customs. The products of one company become the material of another.

Zhang cited the local Nokia factory. "It receives orders from across the world at 6 o'clock in the morning.

In an hour, it sends lists of requirements to surrounding suppliers of components such as screens, shells, batteries and keypads.

"Those components are delivered to Nokia by an internal transportation system without even the need for packaging to save costs. The Nokia factory does not need to purchase components around the world.

"An industry cluster does not simply mean a number of companies built together," said Zhang. "They must work according to a unified plan. The government must also participate in the process to provide guidelines."

Before a company joins the area, the administration examines it carefully for technology, market potential, human resources and eco-friendliness.

If it is approved, the administration then provides customized services. "Some of our personnel are more like irregular secretaries for companies," said Zhang.

The local administration is shifting its focus from industry to community facilities that include schools, hospitals and shopping centers, part of the approach that will continue attracting top talent who "will bring advanced technologies and investment with them".

Beijing ETown now covers about 50 square kilometers, but it is expected to expand to 150 sq km in the near future.

Newly planned facilities will provide jobs to local residents who are mostly former farmers.

There will also be a new airport that will help the area "increase its global reach to become an internationalized new town", said the director.

zhangzhao@chinadaily.com.cn