第127期

SPECIAL ISSUE

 

Beijing Research Centre to Stimulate Innovation

Current domestic and international conditions also require China to
promote research into innovation strategy and management, Xu said.

While about 90 per cent of the country's enterprises have embraced
the technological innovation drive, technological progress only
comprised 30 per cent of China's economic growth, far less than the
60 per cent to 70 per cent level in developed countries.

"This shows the enterprises must work harder on innovation strategy
and management," Xu said.

Increasing global economic and scientific competition requires
emphasis to be placed on research, Xu said.

As China continues to open up, tariffs will decrease while non-tariff
measures aimed at protecting domestic enterprises will be phased out,
Xu said.

As a result, more overseas enterprises, will enter China's markets,
according to Xu.

"If we do not use proper innovation strategy, we are unlikely to master
advanced technology, possibly at the cost of losing our markets," Xu said.

As part of the country's technological innovation programme, the
centre will promote China's research into and utilization of
innovation strategy and management, according to Wu Wufeng, president
of the centre.

The centre welcomes co-operation from research institutes,
universities and enterprises. Overseas scholars will be able to
access the centre's research too, Wu said.

The centre will strengthen co-operation with Canada, the United
States, the European Union and South Korea in the field of innovation
strategy research.

It will try to help establish a framework for a new innovation
mechanism and provide valuable proposals for the establishment of
such a mechanism, Wu said.

The centre will maintain close contacts with all ministries,
localities and large enterprises to jointly promote the technological
innovation programme, Wu said.

As the centre also plans to be a talent-training base, managerial
staff from all levels and entrepreneurs will undertake the centre's
training programmes to improve their understanding of innovation
strategy, Wu said.

The training programmes are part of the centre's innovation forum,
which will hold various seminars and formulate training plans, Wu
added.

Technological innovation is regarded as one of the major means of
raising the competency of China's industries in the world, according
to sources from Xu's commission.

Xu's commission and the State Economic and Trade Commission jointly
initiated the technological innovation programme in 1996, the
commission sources said.

The first agreement to introduce environmentally friendly technology
into China's small and medium industries was signed in Beijing On
July 15, 1997.

The Administrative Centre of China's Agenda 21 (ACCA 21) and the
Beijing No 1 Knitting Mill agreed to introduce environmentally
friendly technology into the mill.

The project marks the beginning of the joint government-industry
programme to bring environmentally Friendly production techniques to
industries across the nation, said Zhang Jiayuan, ACCA 21 vice-
director, at a press conference.

The knitting mill will improve production-line dyeing procedures and
install updated dyeing machines to conserve the use of water and to
limit waste discharges.

The project is one segment of the environmental protection programmes
begun by China's Centre for the Transfer of Environmentally friendly
Technology, which is supported by the Asian Development Bank.

Expanding environmentally sound technology is an important part of
China's sustainable development of its industries as listed in
China's Agenda 21, a policy for the 21st century approved by the
State Council in 1994 emphasizing economic development that is
compatible with the environment and the quality of life.

Small and medium enterprises have become a vital industrial force in
China. But these enterprises generally make inefficient use of raw
materials, leading to serious waste of resources and pollution, Zhang
said.

The problems are particularly serious in the manufacturing of
textiles, dyeing, paper-making, leather-goods production,
electroplating and food processing.

In the past few years, various government departments have closed
down, suspended or merged many firms suffering from low profit
margins and with serious pollution problems.

Yet these stop-gap measures do little to prevent or correct
industrial pollution over the long term, Zhang pointed out.

Increasingly, companies are coming to realize that cleaner production
technology is the key to sustaining compatible development between
the environment and industrial growth.

To equip manufacturers with advanced, clean technologies, ACCA 21 set
up the Centre for Transfer of Environmentally Friendly Technology
early this year, Zhang said.

The centre was designed to spread environmentally sound technologies
and exchange information between China and other developing countries
in the Asia-Pacific region.


INDUSTRIAL PARK NEWS

The Suzhou Industrial Park has endeavored to create a first-rate
investment environment for foreign and domestic businesses since its
founding in May 1994. It has quickly evolved into a new hot spot of
investment, attracting many transnational corporations by its quality
services and complete infrastructure facilities.

Supported by the Chinese and Singaporean governments, construction of
the industrial park has been proceeding smoothly, which is manifested
in the following six aspects:

1. Planning. The Chinese and Singaporean partners have jointly
completed the overall planning and partial specific plans for the
industrial park. The plans have absorbed international experiences in
city planning, with the goal of constructing a new community with
modern functions to international standard. Stress has been put on
the quality of environment, the creation of a sound investment
environment facilitating high-tech industries, the construction of
high-standard infrastructure facilities, and the coordinated
development of industry, communications, commerce, trade, population
and living standards. High-level planning and design have also been
made for commercial housing and public facilities.

2. Resettlement. The park has completed the resettlement of residents
in an 8-square-km area. Over the past three years, the park has built
350,000 square meters of housing for farmers and 200,000 square
meters of factory buildings. Proper arrangements have been made for
farmers, enterprises and institutions moved out from the area.
Meanwhile, efforts have been made to readjust the park's industrial
structure. The move has enabled the scattered and extensively
operated rural enterprises to develop in the direction of intensive
management.

Overall, the resettlement work is making rapid headway.

3. The construction of infrastructure facilities in an 8-square-km
area is advancing at a fast pace. With the 3-square-km starting area,
water, electricity, gas, heating, roads, post and telecommunications
systems have been basically completed. In addition, an area of 2
square km has been leveled. All the projects in the park are
conducted strictly according to plan. Conditions are ripe for the
operation of waterworks, sewage treatment plant, gas works and heat-
supply factory built for the park.

4. Progress has been achieved in attracting foreign investment. The
Suzhou Industrial Park focuses on importing high-tech projects
conforming to state industrial policies. It has thus far signed
contracts with more than 100 foreign businesses, of which more than
70 have registered with the local industrial and commercial
administration, 21 are under construction, and 12 have gone into
production. Negotiated foreign investment has totaled US $2.42
billion, with US$1.86 billion actually utilized and US$300 million on
account. The average investment in foreign-funded projects is US $31
million, with that in 20 projects exceeding US$30 million each, and
that in seven other projects surpassing US$100 million each. Some
world-known transnational companies, such as Harris of the United
States, Hitachi and Sumitomo of Japan and Samsung of the Republic of
Korea, have moved in.

Samsung Group, which has invested more than US$500 million in the
park, regards its Suzhou-based firm as a pillar for the group's total
investment in China. RJR Nabisco Inc. of the United States favors the
investment environment in Suzhou and its Singapore-style management
system, taking the industrial park as an ideal place for investment.
It has considerably expanded its investment in the park, increasing
the number of its production lines to four and annual output of
biscuits to 45,000 tons.

5. New development mechanisms have been established. The Sino-
Singapore Industrial Park Development Co. Ltd., founded in line with
a modern enterprise system, is composed of consortia of both sides,
with the Chinese side holding 35 percent of the shares and the
Singaporean side the remaining 65 percent. The Singaporean side is
composed of a batch of government holding companies with strong
economic might, while the Chinese side, a new consortium, founded in
May 12, 1996, is composed of nine state-class companies--the china
National Cereals, Oils and Foodstuffs Import and Export Corp., China
Ocean Shipping (Group) Corp., China Chemical Industrial Import and
Export Corp., China Huaneng (Group) Corps., China National Technical
Import and Export Corp., China Great wall Industry Corp., China
Energy Saving Investment Corp., China Central TV Station (CCTV), and
the Trust Consultative Co. of the Bank of China--and other local
companies such as the Jiangsu Investment Co. and the Suzhou
Industrial Park Economic Development Co. At present, the consortium's
US$72 million of capital stocks have already been in place.

6. A new management mechanism has been established. The industrial
park has established a new management mechanism in line with the
requirement of a socialist market economic structure characterized by
streamlined organization, unified planning and high efficiency. The
number of the management committee's staff is limited to within 100
and they are publicly recruited nationwide. The industrial park
provides investors with quality services, with all necessary
procedures handled via the committee.

Providing wholehearted service is one of the characteristics of the
"soft environment" in the industrial park. The management committee
provides revises ranging from project registration, industrial and
commercial registration, construction examination and approval, labor
service and project construction. The management committee also makes
public all requirements and regulations on the application of
projects. Investors are informed of what procedures the managerial
committee can handle and the time needed. The committee has cleared
up and merged several hundred kinds of administrative fees into 27,
and declared that investors have the right to refuse to pay
unauthorized administrative fees. In addition, the committee stresses
high efficiency, with seven offices under it operating in a well-
coordinated manner.

Harris Semiconductor of the United States faxed its draft feasibility
study report and articles of association to the management committee.
Only two days later, the two thick copies of carefully revised
manuscripts were returned to the US company's Beijing office, leaving
executives breathless with admiration. Before long, Harris
Semiconductor decided to considerably increase its investment in the
park.

Proceeding from its actual needs for investment and construction and
China's national conditions, the management committee actively
absorbs useful Singaporean experience, focusing on city planning,
construction and management, land development, environmental
protection, architectural design, the allocation of production
factors such as funds, materials, energy and professionals, the
establishment of investment information system, and professional
training. Guided by relevant central and provincial authorities, the
industrial park has worked out and put into practice a series of new
management methods related to the park's planning, environmental
protection and other fields.

The Suzhou industrial park has already seen a good beginning,
becoming a new hot spot of investment. As a component of the State
Council's strategy on the development of the Yangtze River Valley,
the industrial park has played a positive role in extending the
economic radiation of Shanghai and promoting the internationalization
of Suzhou and Jiangsu Province as a whole. The construction of
industrial park has also enhanced the friendly relations and
cooperation between China and Singapore, exerting positive influence
on Southeast Asia.

The Chinese government has attached high importance to the Suzhou
Industrial Park, regarding it as an important project in the opening
drive in the 1990s and granting it special policy support. Meanwhile,
the Singaporean partner has also pooled tremendous efforts on its
development by sending more experts to join the development and
adopting a series of major readjustment policies. The Sino-Singapore
Suzhou Industrial Park Development Co. Ltd. has decided to increase
investment from US$150 million to US$300 million.

At the end of 1997, development in an 8-square-km area will be
basically completed, initially forming a first-rate investment
environment in line with international economic development. The
development of the industrial part will be further accelerated on the
basis of a high quality.