Beijing E-Town in the vanguard of innovation

After years of transformation, the industrial zone has become a leader in high-tech innovation, Yang Cheng and Wang Sujuan report.

Over the last two decades the Chinese economy has witnessed rapid transformation, Beijing Economic-Technological Development Area, or E-Town, has been in the vanguard of this transition, playing a leading role in the country's high-tech industries, attracting foreign investment and fostering overseas expansion. E-town has more or less achieved the initial goal of the Beijing municipal government to drive economic development.

Now it is accelerating its transformation into a scientific and technological innovation center by further developing its role as an innovation leader through the strengthening of its independent research and development capabilities, and attracting talented professionals and services to the enterprises in the zone.

During the past decade, about 80 percent of the research achievements at the E-Town have been commercialized and they in turn have started generating returns. Today the zone is home to 485 high-tech enterprises and about 300 research institutes, of which 180 are at the national and city-level.

There are also 10 key national research laboratories in the zone and 24 public service stations that focus on technology.

Statistics show that for every 10,000 residents in the E-Town there are 240 patents, ranking the E-Town top of all national-level development zones in this respect.

Companies with internationally competitive advantages are evolving in the E-Town and 104 have been approved by the municipal government as "little giants", an award given to fast-growing high-tech firms.

To date, 12 companies in the E-Town have been honored as models for patent application and ownership and 266 companies have been recognized for their efforts in applying technological patents.

Many local researchers have been selected as part of the country's campaign to lure back overseas Chinese.

Among them 50 are from the national-level "1,000-talent" project, which aims at attract 1,000 leading overseas returnees to the country to benefit its technological advancement. A further 90 are from Beijing's "Haiju project," which aims to attract overseas Chinese back to the capital.

Investors' confidence

Large investors, including Semiconductor Manufacturing International Corporation, which is listed in New York and Hong Kong, and domestic liquid crystal display maker BOE Technology Group, have built production and control facilities in the E-Town.

"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."

As the leading integrated circuit wafer producer in China, SMIC takes pride in its state-of-the-art 28-nano technology, which has enabled China's IC products to be in the world's top rank.

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

After the global financial crisis in 2008, a BOE executive boasted that, due to the rising demand for smartphones and tablet computers, "we are growing like a currency printing press".

Today, BOE is already the largest LCD manufacturer for smartphones and tablets; two out of every 10 phones have a screen manufactured by BOE, and three out of every 10 tablet screens. In 2012, it ranked second worldwide for the number of patent applications, which showed its independent innovation capabilities.

To prepare for the rise in mobile Internet, BOE has expanded its production facility in E-Town. As one of BOE's close partners, the Chinese arm of US-headquartered Corning Inc, a specialist in display technologies, has also built a production center in E-Town, 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 people on the Chinese mainland.

"Our strategy is to have our facility where our key customers are located," said Li Fang, Corning's president for the Greater China region. "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. The zone has gathered not only a competitive cluster of companies from abroad and from other places in China, but also talented people.

According to the administrative committee, a number of high-level professionals trained overseas are working for various companies in E-Town. SMIC, for example, has 50 international employees.

"They (the employees) all belong to the backbone of the company," said Xia. The employees help manage and operate one-third of SMIC's entire capacity, and have delivered an unprecedented lift in product quality and sales in the first two quarters of the year.

Technologies have also 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 rest of 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, like what we 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 1 million registered users nationwide, he said.

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

The Beijing municipal government recognized E-Town as a main contributor to the city's progress in the development and manufacturing of integrated circuits in advanced sensing, energy efficiency, the Internet of Things, display technology, e-diagnosis and e-medical services.

In another development, E-Town is one of China's leading pharmaceutical manufacturing centers and gained a nickname of "China's Medicine Valley."

The Youcare Pharmaceutical Group, based in E-Town, moved from the economic powerhouses in the South China cities of Guangzhou and Zhuhai and has now extended its reach to the US.

Yu Weishi, president of Youcare, which was ranked as one of the Chinese companies with great development potential but the US magazine 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 Chinese President Xi Jinping in 2013, said the company now has a research and development center in New York, seven of its products were approved the FDA and it has purchased a plant owned by US drugmaker Actavis in Los Angeles.

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

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

An also praised the efforts made by the area's government authorities, including industrial and commercial administrations, food and drug quality supervision and quarantine bureaus as well as fire prevention departments.