Tale of Two Silicon Valleys

Where does Beijing's Zhongguancun high-tech park fall short of the US Silicon Valley?

This was the question a group of 30 Chinese researchers, entrepreneurs, investors and engineers from Silicon Valley California, domestic information technology (IT) experts and government officials were pondering on New Year's Eve.

The discussion was sponsored by the China Computer Federation (CCF), and Young Computer Scientists and Engineers Forum.

In June 1999, the central government approved a 10-year construction plan for Zhongguancun park, which it called "a base for chasing the world's science and technology trends."

In the vicinity of Tsinghua University and Peking University -- the two leading seats of learning in China -- and the Chinese Academy of Sciences, and housing over 4,000 high-tech enterprises, Zhongguancun has been dubbed "the Silicon Valley of China."

Both silicon valleys are home to famous universities, institutions and well-known high-tech businesses, and both continue to attract a galaxy of talent.

But there remains a huge gulf between the two.

By the end of 1998 there were over 8,000 enterprises in the US Silicon Valley, sharing a turnover of US$200 billion.

In Zhongguancun, the annual revenue from more than 4,000 enterprises together totalled just 40 billion yuan (US$4.8 billion).

Gaps also exist in financial support, services and business culture, the experts said.

One of the reasons for Silicon Valley's success is the close interaction between technology and capital. This is what Zhongguancun lacks, the experts said.

Every year, Silicon Valley absorbs US$15 billion of venture capital. About 90 per cent of that is private investment, which accounts for a low percentage in Zhongguancun.

Since the government alone cannot satisfy the park's huge capital demands, private investment must be encouraged, the Beijing Youth Daily quoted Duan Yongji, general manager of the Zhongguancun Science and Technology Development Corp, as saying.

The park also lacks the support of accounting companies, law firms and investment banks.

Besides this, traditional Chinese culture encourages uniformity among individuals, holding back the entrepreneurial spirit. Many Chinese enterprises lack the atmosphere for gifted people to work together harmoniously, said Feng Yulin, managing director of the CCF.

Source: China Daily

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