Thursday, October 9, 2008

Zhongguancun, China's Silicon Valley

Zhongguancun (Chinese: 中关村), or Zhong Guan Cun, is a technology hub in Haidian District, Beijing. It is known as "the Silicon Valley of China". Today is the twentieth anniversary of the beginning of Chinese high-tech industry started in Zhongguancun.

Zhongguancun has long existed since 1950's and only became a household name in the early 1980's. The first person who envisioned the future for Zhongguancun was Chen Chunxian, a member of the Chinese Academy of Sciences (CAS), who came up with the idea for a Silicon Valley in China after he visited the U.S. as part of a government-sponsored trip. The location of the Chinese Academy of Sciences within Zhongguancun reinforced, and perhaps was in part responsible for the technological growth in this area.

Throughout the 1980s and still today, Zhongguancun was known as "electronics avenue," because of its connections to information technology and the preponderance of stores along a central, crowded street.

Zhongguancun was officially recognized by the central government of China in 1988. It was given the wordy name "Beijing High-Technology Industry Development Experimental Zone."

The current designation Zhongguancun refers commonly to the original site. However, officially (as of 1999) Zhongguancun has become the "Zhongguancun Science & Technology Zone." It is a zone with seven parks, including Haidian Park, Fengtai Park, Changping Park, Electronics City (in Chaoyang), Yizhuang Park, Desheng Park, and Jianxiang Park.

The original Zhongguancun is now known as the Haidian Park of the Zhongguancun Zone. The area and environs, however, remain the same.

The most famous companies that grew up in Zhongguancun are Stone Group, Founder Group, and Lenovo Group. They were all founded in 1984-85. Stone was the first successful technology company to be operated by individuals outside the government in China. Founder is a technology company that spun-off Peking University. Lenovo Group spun-off from Chinese Academy of Sciences with Liu Chuanzhi, a hero of Zhongguancun and current Chairmain, eventually taking the helm. Lenovo purchased IBM's PC division with $1.75 billion in 2005, making it the world's third-largest PC maker. Both Founder and Lenovo Group maintain strong connections to their academic backers, who are significant shareholders.

Baidu and SINA Corporation are two companies known by China watchers in the West that were born and bred in Zhongguancun. They are both located in Lixiang Building.

According to the 2004 Beijing Statistical Yearbook, there are over 12,000 high-tech enterprises throughout Zhongguancun's seven parks, with 489,000 technicians employed.

Eastdawn Corporation is in the Sinosteel building.

Many world renowned technology companies built their Chinese headquarters and research centers in Zhongguancun Technology Park, such as Google, Intel, AMD, Oracle, Motorola, Sony, Ericsson...Microsoft is building its Chinese research headquarters in the park that costs $280 million. Once it is completed, it can accommodate 5000 employees.

Originally Posted: China Business Daily
Author: Angulo Fu