Home / Biz updates
Zhongguancun looks to market forces for commercialization and invention, Zhang Zhao reports.
Financial services are the most essential element in market-driven innovation and commercialization, said an official in the administration of China's innovation hub Zhongguancun in Beijing.
"True innovation is powered by capital," said He Cun, director of Zhongguancun's technical financing office. "With its functions in resource deployment, talent and technologies will flow to innovative companies and emerging industries."
"To a large extent, whether Zhongguancun will become a technical innovation center with global influence depends on whether it can become a national innovation center for technology financing," He said.
In today's Zhonggauncun, technology and financing rely on each other. In the future, financial services may be more important than innovation itself, He added.
Many financial service providers have realized the huge demand for tech financing and turned their attention to the area with increasing resources and manpower. The government traditionally focused more on startups and small companies and let go as they grew, but He said the key to supporting a company's innovation is a "dynamic mechanism" that provides services at every stage.
"A high-tech company must keep innovative no matter what size it grows to," He explained.
In Zhongguancun, companies of different sizes and development stages receive various types of support in policies and resources from administrators.
He said the area now has a "complete chain of policies for the financial business". It has China's first government foundation for startups, which was launched in 2000. It is also a national pilot in the credit system for small companies.
The system for financing will help with efficient matchmaking between capital and technology, said He.
"Policy support is not just about subsidies for companies," He said. "More importantly we hope to mobilize the power of the market, banks and guarantee agencies. The government effort is a supplement to the market, not a replacement."
The director called for more offices in Zhongguancun by financial service providers and agencies including law and accounting firms and asset appraisal institutions.
The local government has founded a financing institution, but it is not meant to be a money machine. Rather, it serves as a venue to attract partners in other agencies. Zhongguancun Sci-Tech Financing Guaranty Co Ltd has established partnerships with more than 500 sub bank branches and provided nearly 110 billion yuan ($18 billion) guarantees since 1999.
According to statistics from the China Banking Regulatory Commission, the density of banks in Zhongguancun is around 10 times the city's average.
More than 40 organizations have been established by 18 banks to provide loans to high-tech companies. But there are problems in exchange and communication between the banks and companies, said He, adding that authorities have been making efforts to help the two sides join hands "at a proper time and occasion".
Zhongguancun is also the most intensive area for angel investment in China, said He.
One-third of the nation's total investment in startups has gone to the area since 2006, along with nearly half of the projects in the high-tech sector.
The administration of the area also has partnerships with major stock exchanges in both China and overseas. There are currently 246 listed companies in the area, including 15 newly added this year.
"With a slowdown in domestic capital market this year, many local companies have started to attempt to go public overseas," said He.
In addition, He said that Zhongguancun has been the birthplace of many innovative business formats, and now has a goal to become a national innovation center for Internet financing.
The Z-Park Association of Internet Finance founded last year is China's first industry association in the business.
Also in 2013, a trade center for big data was launched in Zhongguancun.
The area's future development requires resource integration across multiple layers and departments of the government, He said, adding that the authority will also meet the challenges of seeking investment, international capital and the supervision of Internet financing.
Contact the writer at zhangzhao@chinadaily.com.cn
