E-Town emerges as China's leading hub of innovation

Beijing's development zone, home to State-level labs, incubators and 485 high-tech firms, is implementing a plan to expand emerging industries, Fu Chao reports.

The rise of Beijing Economic-Technological Development Area, or E-Town, over the past two decades, is the result of the central government's vision to focus on innovative and high-end growth as well as the local government's longterm planning and efforts. The country's emergence as a globally competitive hub for innovation, technology and high-end industries from its beginnings as the world's workshop has not been through magical efforts, though the pace of growth has been astonishing.

The story and ambition of Beijing E-Town mirror the transformation of China as the development area on the southeastern outskirts of the capital continues to make progress.

Standing on a busy street in E-Town, at first glance seeing the area's modern buildings, you might think the zone is another one of the capital's central business districts.

But after talking to the people who work there, to its entrepreneurs and the local government employees and after visiting its labs and workshops, you will see that E-Town is committed to making achievements that will lead to economic growth that can change people's lives.

Ideas to reality

According to E-Town's administrative committee, for every 10,000 residents in the zone, there are 240 patents; for every 10,000 engineers, there are 1,248 patents.

E-Town is home to 485 high-tech enterprises. Output from the high-tech sector accounts for more than 90 percent of the zone's total output over the past decade.

E-Town has the first engine-producing facility for Mercedes-Benz outside Germany that creates models tailored for the Chinese market. It is also home to the automaker's research and development centers.

Mercedes-Benz produces its C Class and E Class models in E-Town and has an eye toward rolling new models off its E-Town production line.

In the biomedical industry, companies in E-Town have accomplished an impressive list of groundbreaking achievements, such as the creation of the world's largest reorganized Protein Data Bank, the first genetic screening chip for the clinical diagnosis of deafness and China's first completely humanized antibodies.

Bayer, the German multinational chemical and pharmaceutical company, produces some of its key products, such as the acarbose medication to treat diabetes, in E-Town.

Corning Inc, the US maker of glass and ceramics, has a production center in E-Town to produce Gorilla Glass, a type of toughened glass used in a number of consumer products, including mobile phone screens.

Semiconductor Manufacturing International Corp, a semiconductor foundry with headquarters in Shanghai, built its first Chinese mainland production line for 12-inch chips in the E-Town zone for use in computers and mobile phones.

Innovation powerhouse

E-Town is globally appealing. The area is home to a number of multinational companies' research and development operations, which is in line with the local government's goal of transforming the zone from a manufacturing base to research and development hub.

The list of R&D centers in E-Town is impressive and include facilities for Mercedes-Benz, GE, France's atomic energy giant Areva, US healthcare equipment provider Zimmer Biomet, German pharmaceutical Merck Serono, US-based 3M, Nexteer Automotive and the Royal Dutch Shell Group.

Hosting the multinational R&D centers is part of E-Town's efforts to become a powerful innovation hub domestically and globally. It is also home to a number of State-level laboratories and startup incubators, demonstrating how effectively E-Town nurtures originality and independence for technological breakthroughs.

To further innovation, the local government has been presenting innovation and entrepreneurship competitions in the zone. A weeklong event promoting innovation and showcasing innovative enterprises by the National Development and Reform Commission kicks off today. The project will tour seven cities across the country and E-Town is one of the major venues in Beijing.

E-Town has also designed a plan to promote innovation in five key industries: integrated circuits, mobile display technology, biomedicine, the Internet industry and intelligent manufacturing.

The beneficiaries of the plan, the investors and multinational companies within the zone, speak glowingly of E-Town's cutting-edge industries.

"Since we first came to E-Town in 2002, we have been seeing changes almost on a daily basis," said Rena Xia a public relations executive at SMIC. "We enjoy the work environment and living conditions here. We have developed an attachment to it."

The leading integrated circuit wafer producer in China, SMIC makes state-of-the-art 28-nano node technology that ranks among the world's best in integrated circuit products.

In 2005, Germany's Mercedes-Benz agreed to build its Chinese manufacturing center in E-Town. In 2011, it located its only overseas engine plant in E-Town, a first for Mercedes-Benz in its 125-year history. This year, Mercedes China announced its revenue had increased eightfold during the past 10 years.

After the onset of the global financial crisis in 2008, an unnamed executive from domestic liquid crystal display maker BOE Technology Group said that due to the rising demand for smartphones and tablet computers, "We are growing like a currency printing press".

Today, BOE is the largest LCD manufacturer for smartphones and tablets, with 2 out of every 10 mobile phones and 3 out of every 10 tablet devices equipped with screens manufactured by BOE. In 2012, it ranked second worldwide for total patent applications.

With the mobile Internet industry growing, BOE has expanded its production facility in E-Town. Corning Display Technologies (China), a close partner of BOE and the Chinese arm of Corning Inc, also has a display production center in E-Town that is almost next door to BOE's most advanced site.

Corning has been an active participant in China's development for the last 35 years and provides LCD glass for BOE. It has invested more than $2 billion and employs about 3,000 on the Chinese mainland.

"Our strategy is to have our facility where our key customers are located," said Li Fang, Corning's president for Greater China. "Support from the local government is also a key criteria for us when we consider the location of our facilities."

E-Town is progressing through rapid industrial reshuffling and technological upgrading. Technologies have given E-Town a head start in the country's transition from an export-led, investment-dependent, energy-driven development model to a more sustainable one. The zone's new-generation enterprises are leading the nation in growth.

Edward Tian, a long-term Internet investor who has taken advantage of the growth potential in big data and cloud computing, said he "doesn't see a sign of a slowdown" in the research and application of new technologies.

"We don't see a drain of capital, either," he said. "Plus, there are various preferential programs ... from the central government's grants and tax incentives to local government's support on a physical level that we have received from E-Town."

Xingshulin, a mobile Internet platform enabling physicians to access patient files on smartphones, was developed with funding from Tian's CBC Capital and is partly based in E-Town's Cloud Valley, a cluster of cloud computing application firms. The platform has attracted more than a million registered users nationwide, he said.

Big data and data-based mobile applications are expected to drive E-Town's next stage of development.

E-Town is a main contributor to Beijing's development and manufacturing of integrated circuits in advanced sensors, the Internet of Things, display technology, e-diagnosis and e-medical services.

E-Town is also one of China's leading pharmaceutical manufacturing centers, garnering it the domestic nickname of "China's Medicine Valley".

The Youcare Pharmaceutical Group, based in E-Town, moved away from the economic powerhouses in the South China cities of Guangzhou and Zhuhai and is currently extending its reach to the US. Yu Weishi, president of Youcare, which was ranked as one of the Chinese companies with the greatest development potential by Forbes, said: "Our decision to move from South China and to set up headquarters in the E-Town has proven to be successful. Our 10 years of efforts here laid solid foundations for Youcare's international presence in some 40 countries and regions as well as four high-end production and research centers around China."

Yu, who visited the US with President Xi Jinping in 2013, said the company now has a research and development center in New York. He said seven of its products have been approved by the FDA and it has purchased a plant owned by US drugmaker Actavis in Los Angeles.

In 2010, US retailer Walmart opened its second Sam's Club, which targets high-end customers, in E-Town.

An Yuan, PR manager of Walmart China, said: "Walmart and Sam's Club are confident in E-Town's future growth and development potential. E-Town is fostering an international-level investment climate, offering companies with facilitated procedures and encouraging their innovations."