China's Silicon Valley Needs More Fund for SuccessOperators of the Zhongguancun Science Park, known as the Silicon Valley of China, are facing capital shortages and need to find new ways to buoy their financial situation, Chinadaily reported Saturday.Zhongguancun needs a capital inflow of roughly 200 billion yuan(about 24.15 billion U.S. dollars) in the next 10 years if it is to be successful, the paper quoted Lu Kequn, chairman of the Beijing Securities Co., Ltd. as saying. How to gather 20 billion yuan a year has become a hot topic in high-tech business circles. Local banks have been encouraged to increase loans to the area.But most of the money from such loans is likely to flow into infrastructure construction projects, rather than to the small and medium-sized companies which need capital input most. Because of this, experts say stock markets, including the soon-to-be-launched second board market, will probably have to provide the majority of capital for Zhongguancun's companies in the future.More of the companies located in the park should go public in coming years, Lu said. At present, eleven of the firms located in the Zhongguancun Science Park have been listed on domestic exchanges, while two have gone public in Hong Kong. Lu predicted that about 80 listed companies will emerge by 2005. Lu also said that the local government should encourage potential companies to go to the overseas stock markets. |
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