IT Start-up Sees Vast Opportunities in China

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Last updated at: (Beijing Time) Friday, November 23, 2001

IT Start-up Sees Vast Opportunities in China

The vast Chinese mobile market provides exciting business opportunities for IT companies to expand business there, executives of an IT start-up said Wednesday in Hong Kong.

The vast Chinese mobile market provides exciting business opportunities for IT companies to expand business there, executives of an IT start-up said Wednesday in Hong Kong.

Solute Group, a network of IT companies providing services, technology, and solutions for next generation network operators inChina, Wednesday announced the opening of its Hong Kong office andoutlined expansion plans for China.

"The Chinese mobile market is extremely exciting considering its high annual economic growth, big population and vast subscribers pool," said Peter Zhang, co-founder of Solute Group.

Quoting a BAD data report, Zhang said China now has 135 millionmobile subscribers and the number is expected to reach 370 millionby 2005.

The 1.5 billion SMS messages by mobile subscribers also prove there is a sound foundation for companies to tap into the lucrative short message services market, Zhang said.

Wireless Market Poised to Explode

"China's wireless market is poised to explode," said Clifford Lee, founder and CEO of Solute Group.

Yankee Group released a report in August that estimated that the wireless data services market in China will swell to 5.68 billion U.S. dollars by the end of 2005 from the 2.72 million in 1999.

"With China entering the WTO, the changes in the competition landscape for network operators is going to be a catalyst taking them to offer more time-to-market customized services through third party vendor.

Solute Group, which combines local talents and multinational experience, is well positioned to grow business with the next generation operators, said Lee.

'Gold Rush' for West China

Although some of overseas business people have only a very small amount output value, the high-tech industries in the western region have really caught the attention of many overseas investors.

The recently-closed China Chongqing High-tech Trade Fair attracted 32 overseas enterprises including those from the United States, the European Union, the Republic of Korea and Hong Kong.

Those taking part have brought to the trade fair high technologies involving bio-medicine, new materials, environmental protection, electronic science and technology.

Statistics show that at present 13 of the world's top 500 enterprises have invested in the high-tech zone of Chengdu, capital of Sichuan Province, alone.

Hakan Gustafsson, general manager of the Ericsson (Chongqing) Telecommunications Co. Ltd., said that Ericsson is seeking new cooperative partners in west China and plans to include the western region into its global purchase network.

Early Birds

There have been successful examples of foreign businessmen investing in west China's high-tech industries.

The world's third largest petroleum giant Britain's BP AMOCO isproducing acetic acid in Chongqing and made a profit of 3 million U.S. dollars in the first year of operation.

BP AMOCO plans to make an extra investment of 128 million U.S. dollars before 2004 to develop new products and expand production,according to company sources.

David A. Henley, vice-president with BP AMOCO (China) Company, says that rich natural sources and human resources are the advantages luring foreign business people to invest in the high-tech field.

Some investors say that they are encouraged by the efforts of the Chinese government to improve the investment environment in the western region, citing huge funds earmarked for improving local traffic facilities and telecommunications infrastructure.

Provinces and cities in western region have worked out a seriesof preferential policies to lure overseas investors in the high-tech field.

Chongqing, one of China's four municipalities, has policies that permit foreign-funded high-tech enterprises, with foreign funds accounting for more than 60 percent of their total investment, to draw a certain amount for a risk compensation fund in the first three profit-making years before paying tax.

As part of the effort to facilitate the development of high-tech industries in the western region, education has been given the top priority in the city.

More children are continuing studies in universities and colleges with the help of relevant projects which aims to help more children in western region to finish schooling.

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