China’s ‘fake Silicon Valley’: Once exhorted to attract 1,000 high-tech companies, now it has turned into a ‘ghost town’, almost no multinational corporations appear

Tram Ho

China laid the groundwork for new projects worth billions of dollars in Lingang to promote the development of cross-border data technology, according to Sixth Tone. This 120-square-kilometer free trade zone in the southeast of Shanghai kicked off 72 production projects worth 153 billion yuan, or $22.26 billion, on August 22, 2022. as part of efforts to diversify regional development.

It will play an important role in the global digital economy and support the development of internationally recognized data standards ,” said Li Jing, general manager of Shanghai Lingang New Area Cross. -Border Data Technology, said.

Lingang, as China’s next new ‘Silicon Valley’, is striving to become the top choice for domestic high-tech enterprises. Ocean Innovation Park, one of the six major industrial clusters, is home to a number of research centers run by top universities, including Peking University, Shanghai Jiaotong University and Fudan.

Lingang not only supports corporate policy, but also helps us follow the general direction of the industry ,” said Sun Xiaotian, deputy general manager of Shanghai Xiongcheng Offshore Engineering.

It is known that Shanghai has set an ambitious goal of making Lingang the headquarters of more than 1,000 high-tech companies, 100 research & development institutions and 8 internationally competitive laboratories by 2025. The chip industry value will then exceed 100 billion yuan ($14 billion), a tenfold increase from 2021.

However, ambition comes with challenges, especially when China’s economic growth is slowing.

'Thung lũng Silicon nhái' ở Trung Quốc: Từng hô hào thu hút 1.000 công ty công nghệ cao giờ biến thành 'thị trấn ma', gần như không tập đoàn đa quốc gia nào xuất hiện - Ảnh 1.

Despite attracting more investment capital in the past 3 years, Lingang’s future is said to be quite uncertain

The number of sophisticated technology companies is not increasing. The overall environment is much more important ,” said Andy Xie, an independent economist based in Shanghai. “ Shanghai is betting big on Lingang. It will take a long time to resolve the issue .”

In addition, despite attracting more investment capital in the past 3 years, Lingang’s future is said to be quite uncertain. In the context of slow economic growth, coupled with geopolitical tensions that are negatively impacting China’s technology sector, Lingang may face difficulties in attracting private capital and investment. talent.

According to Bloomberg, as of September 2022, Lingang has attracted $62 billion in investment for 300 border industry projects such as chip manufacturing and electric vehicles thanks to tax incentives and loosening policies. The location near the world’s largest container port is considered a great advantage of Lingang.

However, except for Tesla – a foreign electric car company that built a new super factory in 2019, Lingang mainly only attracts domestic investors, such as SMIC, AI Sense Time Group or technology companies. Amperex. Multinational corporations are almost completely absent.

Currently, most of Lingang is still considered a ‘ghost town’ that is difficult to recruit talent because basic infrastructure and amenities, such as apartments, schools and public transport, are not guaranteed. tell. Human resources working in Lingang are mainly factory workers and local managers, living nearby or in neighboring districts.

Lingang’s biggest advantage is that it offers great industry opportunities, ” said Li Jian, a senior research fellow at the Shanghai Academy of Social Sciences. “ However, this requires a better living environment and working conditions. In this respect, there are still some gaps for Lingang to fill .”

Still, some experts are optimistic about Lingang’s future. The impetus comes from the fact that Shanghai has a lot of experience in turning remote areas into booming business hubs. Pudong, the area to the east of the city, is a prime example. Originating from arid rice fields, Pudong has become a famous financial center in China after only 3 decades of development.

'Thung lũng Silicon nhái' ở Trung Quốc: Từng hô hào thu hút 1.000 công ty công nghệ cao giờ biến thành 'thị trấn ma', gần như không tập đoàn đa quốc gia nào xuất hiện - Ảnh 2.

China lays the groundwork for new multi-billion dollar projects in Lingang to promote the development of cross-border data technology

According to Bloomberg, the Chinese government is prioritizing the construction of many utility apartments serving about 800,000 residents by 2025. Nearly 2 million square meters of land is set aside for urban development this year, or a quarter of the total resources. supply new land for private housing in Shanghai by 2022.

In addition, to attract talent, Chinese authorities also lowered the threshold to buy real estate last month and issued residence permits to elite students who graduated from top prestigious universities.

In addition, the city government also pledged to expand the public transport network to the suburbs, including Lingang. A 26km railway connecting the suburb with Pudong International Airport is also planned.

Lingang has the potential to become a technology hub in the long run. However, this will be a very difficult task ,” said Pan Jiang, general manager of hedge fund Kandao Asset Management Co. based in Shanghai, said.

It is known that the city of Shenzhen with 17 million people is also known as the “Silicon Valley of China” with the headquarters of many famous technology companies such as Tencent or Huawei. The region contributes most of the output to industries such as technology and engineering, which in turn plays an important role in stabilizing global supply chains. In addition, the government also aims to make Shenzhen one of the leading cities in the world in terms of economic strength and quality of development by 2025. The result, from a small agricultural town, Shenzhen Quyen has become one of China’s megacities and is home to more than 100 billionaires.

Shenzhen wants to be a hub for financial hubs, blockchain and digital industries. These premium services will play a large role in the growth and wealth of the city ,” the report said.

Via: Sixth Tone, Bloomberg

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Source : Genk