IT companies: working together in Beijing’s premier hi-tech location

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Beijing ETOWN is home to some of China’s most progressive new IT companies. Their growth over the past decade has been a result of an unusual level of cooperation between different companies and with the local government in the hi-tech zone.

Information technology (IT) is China’s business frontier for the new millennium. No other industry better demonstrates the country’s determination to shift from labour-intensive manufacturing to hi-tech, high-end industry and innovation.

Beijing ETOWN is at the forefront of this transformation. In the past decade, it has hosted and championed the development of more than 400 hi-tech companies whose fortunes have flourished thanks to the infrastructure and government support of ETOWN.

Today, the electronic information sector at Beijing ETOWN – which focuses on the development of integrated circuits, mobile communications, digital TV and cloud computing – accounts for more than half the total output value of the industry in Beijing.

Pioneering business

One of the ground-breaking Chinese companies to do business in ETOWN is Semiconductor Manufacturing International Corporation (SMIC) which moved there in 2002 and in 2004 began operations at the most advanced semiconductor foundry in China at the Beijing site.

The state-of-the-art 300mm mega-fab foundry in ETOWN was a milestone in the country’s computer technology and helped trigger the rapid development both of SMIC and the IT sector at ETOWN as a whole.

From just a couple of hundred employees in 2004, the workforce at its Beijing ETOWN site has grown to 2,000 and the company today produces chips, cell phones, cameras and other electrical appliances for major companies around the world.

Rena Xia, SMIC’s director of public affairs, says there is a spirit of cooperation among companies in the zone that is helped by a strongly supportive local government that has made doing business much easier.


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"We have an efficient government service and there isn’t a long process between the lower-level government and the higher-level government here," she says. "Compared with other places, ETOWN as an economic zone offers a great deal of convenience.

"The companies here have a good working relationship with government officials, so it makes business easier. The ETOWN administration has supported many programmes for companies in the zone. In particular, it encourages cooperation between companies in ETOWN."

Teamwork pays

For example, Xia says, a company directly opposite SMIC generates a lot of heat through its manufacturing processes while SMIC needs hot water for its production process. So a scheme was set up whereby hot water was pumped from the neighbouring company to SMIC.

"This was supported by the local government," she says. "They actively promote such cooperation. In another example, a department of the government built a connection between our company and a nearby water-handling company. They knew the technology of handling dirty water."

Government involvement in the zone is hands-on and visible, Xia says, promoting a strong sense of community and cooperation among the different companies. At the same time, there is a continual improvement of facilities for people living and working in ETOWN.

"When there is a new school or shopping mall or a new development in the zone, the government lets us know," she says. "I represented SMIC at an educational communication meeting and reported back to my colleagues on it. They introduced the educational facilities to us and lots of the principals from the schools were there to give presentations."

Innovation pioneer

The principle behind the government-business cooperation pact in Beijing ETOWN is summed up in the expression: "The government offers services, the companies achieve treasures." That understanding underscores the relationship.

Companies bring their spirit of innovation to the zone while the government provides them with the tools to do the job and supporting institutions such as the Alliance for Research of Technology, which trains technicians and provides an infrastructure to attract more talented professionals.

Businesses such as integrated circuit chip producer SMIC that make full use of the cooperation with other companies and the government benefit greatly. SMIC has successfully promoted its techniques for carving a line thinner than one-thousandth of a hair on a nail-sized chip.

The IT zone is a hotbed of innovation. A dancing red robot created in ETOWN made a big impression in an electronics exhibition last year. The robot was made using FPGA chips from Capital Microelectronics Co, the only company in the world outside Silicon Valley capable of making such chips.

Future plans

Cooperation with neighbouring companies and the local government has been hugely beneficial for every party involved as Beijing ETOWN continues to enjoy stellar growth rates in an IT sector that is constantly breaking new ground.

"This is a new industry for China and the development of the industry has happened in the space of the last 15 years," says Xia, whose company is now the largest in its field in China. "Our initial target was to be an international corporation and we have exceeded that target in every respect," she says. "Here in Beijing ETOWN, we are growing together. One company grows and another grows in a comparable way. That way, the whole industry develops and ETOWN as a whole becomes more prosperous. We are all winners."