Transnationals Locate More R&D Centers in China

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Last updated at: (Beijing Time) Wednesday, March 19, 2003

Transnationals Locate More R&D Centers in China

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In a renewed effort to increase investment in the fast growing China market, Motorola Global Software Group has poured 10 million US dollars into expanding its software center in Nanjing, capital of east China's Jiangsu Province.

The Nanjing center, founded five years ago, is the group's fastest growing research and development (R&D) base with over 200 employees. After the expansion, it is expected to employ more researchers and engineers, particularly local professionals, and generate more state-of-the-art technologies and software products.

Motorola's software arm is not the only one to set up an R&D center in the Chinese mainland. As one of the largest overseas investors in China, Motorola Inc. has set up 18 regional or global R&D centers on the mainland, and another seven are under construction.

Earlier this year, Honeywell (Tianjin) Limited, a high-tech transnational firm that registers 24 billion US dollars in annual sales, moved its global R&D center from northern Europe to Tianjin,a port city close to Beijing.

"The new center aims to develop new products tailored to China's market demands," said Liu Yongze, head of the center located in the Tianjin Development Zone.

At least ten transnational firms have located their R&D centers in the Tianjin Development Zone, including Motorola's cellphone arm, Tianjin Matsushita Electronic Components Co. Ltd., Tianjin Fujitsu Ten Electronics Co. Ltd and Tianjin Samsung Electro-Mechanics Co. Ltd.

The municipal government of Tianjin has offered preferential policies to these transnationals and helped them attract professionals from across the country.

Many other Chinese cities have also welcomed multinational R&D bases in recent years.

Microsoft, for example, has invested 130 million US dollars into setting up regional R&D centers in Beijing, Shanghai and Suzhou and the world's leading mobile phone producer, Nokia, has stationed its global R&D centers in Beijing and Hangzhou.

General Electric's R&D center in Shanghai is one of the company's three largest research bases around the globe.

By locating their research and development centers in China, most transnational firms also aim to draw elite local professionals who will contribute tremendously to their business development.

A recent survey has found that most big-name companies, including Microsoft, Motorola and Nokia, had employed local staff in 80 percent of the engineering and managerial positions at their China R&D centers.

Motorola's new integrated circuit center in Suzhou, a scenic city in the eastern Jiangsu Province, has netted over 70 senior semiconductor professionals from across China, 80 percent of whom have received a master's or doctorate degrees.

Insiders say these transnational R&D bases have fostered local technological advancement as well as the manufacturing sector.

Suzhou, home to 67 transnational R&D centers, has become a leading production base for computer peripherals, electronic products, visual and audio equipment and various communication devices.

The city produced 75 percent of the mice, 40 percent of the liquid-crystal displays and 10 percent of the computer mainboards sold around the globe, said Wang Fukang, an official based in Suzhou New District.

Observers here say the boom in transnational R&D centers will bring about new rounds of investment as well as offer immense potentials for China's manufacturing industries and will continue to improve the country's scientific research capacity.

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