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How China’s Most Innovative Cities Are Taking on Silicon Valley

The next big thing in tech innovation? It’s likely to come from one of these Chinese megacities

An early hotbed of innovation, China was responsible for the discoveries of gunpowder, paper, printing, the compass and even the umbrella. Now China is building on that ancient legacy as it pushes its way to the front of the global innovation race in modern fields like artificial intelligence, smart manufacturing, electric vehicles and e-commerce.

Beijing is leading the charge, thanks partially to its status as one of four cities – along with Shanghai, Tianjin and Chongqing – under direct administration from the central government, which is committed to funding innovation.

Close behind is Shenzhen, the country’s first special economic zone and now a strategic hub within the Greater Bay Area (GBA). Consider that in 2018, Shenzhen built more skyscrapers than any country worldwide, mainly for tech manufacturers.

It’s just one of the mind-boggling stats that illustrate how China is harnessing its might to reshape how we’ll live and work for years to come. Here are the nine megacities where breakthroughs are happening.

Beijing: population 21.5 million

China’s capital is on a mission to become the world’s most innovative city. Much of its recent success can be attributed to Zhongguancun, a government-backed incubation district that has become known as China’s Silicon Valley. Among its 9,000 resident tech companies, you’ll find nearly half of China’s unicorn start-ups (companies that are valued at over US$1 billion) as well as heavyweights like search engine giant Baidu; Sina Corp, which operates the microblogging site Weibo; and ride-hailing app Didi Chuxing. With China’s two best universities close by, Beijing offers a deep talent pool. Plus, it’s China’s artificial intelligence heartland, hosting about a dozen advanced AI labs and a thousand companies engaged in AI.

Shenzhen: population 12.5 million

In four decades, Shenzhen has risen from the marshy Pearl River Delta into China’s undisputed tech manufacturing powerhouse. It’s the headquarters of Tencent (of WeChat fame); Huawei, the world’s second-largest smartphone manufacturer; and BYD, expected to be the number-two electric car brand by 2020. Thanks to a vast cottage industry of tech centred around electronics district Huaqiangbei, prototyping is rapid and cheap, while the lack of intellectual property rights leads to more collaboration and faster development. Afraid of missing the next big thing, international tech giants like Google have begun opening offices in Shenzhen.

Shanghai: population 26.3 million

A leading centre for finance both historically and today, Shanghai has also emerged as a fintech powerhouse. The Shanghai Stock Exchange is ranked fourth in the world by market capitalisation, and more than three million people are locally employed in finance and business services. Shanghai also counts more than a dozen unicorns and thousands of entrepreneurs, nurtured by government investment and private incubators. E-commerce, lifestyle, VR, biometrics, big data and blockchain are all going strong. In a further boost, President Xi announced in 2018 the launching of a Nasdaq-style innovation board to be established by the Shanghai Stock Exchange.

Guangzhou: population 14.9 million

An important cog in the GBA machine, Guangzhou, historically China’s foremost city for global trade, is being repositioned as hub for IT, AI, biomedical science and robotics. The government has set ambitious targets to develop 8,000 high-tech companies and 200,000 science and tech enterprises by 2020. Guangzhou’s new Pazhou Internet Innovation Cluster is a vast IT zone in the suburbs, while the ambitious GE Biotechnology Park, a biopharmaceutical project that will cover 3.8 million square feet, broke ground in 2017. Also in the works is the Sino-Singapore Guangzhou Knowledge City, which aims to foster industrial clusters in IT, AI, biotech and clean energy.

Tianjin: population 15.6 million

Half an hour from Beijing by high-speed train, the former treaty port of Tianjin features one of the world’s busiest shipping centres and a thriving aviation industry – hosting Chinese companies plus international players like Airbus and Bombardier. Tianjin’s prospects are set to soar higher thanks to government plans to integrate Beijing, Tianjin and Hebei as the Jing-Jin-Ji urbanised region. As of 2018, more than 850 firms from Beijing and Hebei had already established offices in Tianjin. Billions are currently being spent on 1,100 kilometres of new rail lines, including an intercity network to be completed by 2030. Read more>

Chengdu: population 14.4 million

In China’s once-isolated west, Chengdu has emerged as a force for innovation. Named one of the top 10 entrepreneurial cities in China by Fortune magazine, Chengdu has been busy pumping cash into R&D and handing out grants to tech innovators that start businesses here. By 2020, the local government has set the bold target of hosting 200,000 scientific and technological entrepreneurs. Currently, its 80-plus incubators include Tianfu Software Park, where start-ups get free office space for a year and access to an RMB100 million (HK$110 million) angel fund. E-commerce giant Alibaba has established a local base of its Baichuan division dedicated to mobile app development, joining Baidu, iPhone manufacturer Foxconn and Tencent. Read more>

Suzhou: population 10.7 million

Renowned for its ornamental gardens, Suzhou has emerged as a tech centre thanks largely to the Suzhou Industrial Park (SIP), a sprawling 288-square-kilometre zone established in 1994. Recent park upgrades involve it becoming a pilot zone for innovation, with incentives offered to companies engaged in nanotechnology, biotechnology and cloud computing. In 2017, start-up incubation centre Block71 opened its doors in the SIP, and work started on a new RMB100 million (HK$110 million) centre for AI research. In addition to launching a raft of app-enabled services for residents, Suzhou is making strides towards becoming another of Alibaba’s cashless cities, in which mobile payment is available for almost every financial transaction. Read more>

Hangzhou: population 9.8 million

The eastern city of Hangzhou, in Zhejiang province, is home turf for Jack Ma’s e-commerce behemoth Alibaba, Asia’s most valuable public company. Tech hopefuls flock to Dream Town, a start-up hub near Alibaba’s headquarters offering successful applicants free office space, cash subsidies and training. Already home to hundreds of small businesses, the incubator hopes to eventually attract 10,000 university graduate entrepreneurs. Wahaha, China’s largest beverage manufacturer, has its headquarters in Hangzhou, as does Geely, which bought out Volvo in 2010.  According to the Hurun Research Institute, the province has produced no less than 72 billionaires. Read more>

Chongqing: population 30.5 million

If you want to go big, go to Chongqing. China’s largest administrative municipality sprawls over a south-central area that’s the size of Austria – and rivals Tokyo for largest in the world. Chongqing is also the engine room of China’s auto industry. Locally based car brands include Changan, which plans to sell 4.5 million cars by 2020, and Lifan, which started out as a motorcycle repair shop and now exports its affordable cars and bikes. The driverless cars sector is booming, as is the Internet of Things (IoT). China Mobile established its IoT centre here in 2012 and Acer Cloud Technology followed suit. Robotics, electric components (40 per cent of the world’s laptops are produced in Chongqing) and Big Data are also growth areas identified by the government for funding and support, via projects like Tianan Cyber Park, Liangjiang New Area and Xiantao Big Data Valley.

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