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Region's rapid transformation is worth noting

Updated: Dec 1, 2017 By Mike Bastin China Daily Africa Print
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Europe should be aware that high-tech business opportunities are now flourishing across more of China's inland provinces and cities

Many are well aware of the picturesque, green peaks of Southwest China's Guizhou province, a magnet for tourists from around the world, and its capital city, Guiyang, which nestles delicately amid this surrounding serenity. Many also associate Guizhou province, and even its capital, with poverty. In fact, this is the Chinese province with the largest number of people living in poverty.

But many outside China might be surprised to witness the rapid transformation now underway of Guizhou's capital, from relative poverty to a technology hub attracting thousands of tech-savvy entrepreneurs.

Guiyang, along with many other less-developed provincial capitals, is playing a pivotal role in China's overall economic transition and the central government's Made in China 2025 strategy.

Such is the speed with which Guiyang's transition to technology hub is taking place that has been nicknamed "China's Big Data Valley".

Until recently, China's first-tier cities and eastern coastal provinces remained unrivaled in economic growth. But last year, Guizhou registered the third-fastest provincial economic growth across the Chinese mainland.

Guiyang is definitely one of the technology hubs driving the Made in China 2025 strategy, but such is the size of this development that the heart of this hub can be found about one hour away from the city center in Guian New Area. An area of 1,797 square kilometers has been designated as the epicenter of this high-tech hub.

Of course, central government-led tax incentives, lower costs and many other forms of state support are helping to attract outside investment. Foxconn recently opened a new plant here, bringing with it hordes of young high-tech entrepreneurs. Hot on Foxconn's heels have been the likes of Microsoft, Qualcomm, Huawei, Hyundai and other international giants of the technology sector.

In addition to an increasing number of multinational corporations taking more than a serious interest in investment in Guiyang, an entire data park consisting of more than 30 companies is set for development as part of a Sino-UK alliance in the health technology sector.

Furthermore, the establishment of a Professional College of Electronics has also been agreed upon in partnership with India's National Institute of Technology, based near the city of Tiruchirappalli in Tamil Nadu state.

Several leading British universities are also keen to enter into Guiyang-based educational alliances.

As a result of this high-tech hub, the provincial government of Guizhou has forecast an 11 percent increase in investment in Guian this year, with investment levels predicted to reach $3.34 billion (2.8 billion euros; 2.5 billion) and job creation levels estimated at 30,000 by the end of this year.

European investors need to wise up quickly to this change in the pattern of investment and economic growth in China. Double-digit growth rates enjoyed in the first-tier cities of Beijing, Shanghai, Guangzhou and Shenzhen over many years have been achieved at a cost, with soaring population increases and living costs. The relative affordability of western China is, therefore, increasingly appealing.

In fact, large parts of western China have been identified by the Chinese central government as pivotal to the success of Made in China 2025. For example, Chengdu, the capital of Southwest China's Sichuan province, is seen as the high-tech gateway between China and central Asia and Europe. Massive investment and infrastructure sums are flowing into a number of other cities in western China as well, such as Chongqing and Xi'an.

Of course, the central government's Belt and Road Initiative is also making China's hinterland more attractive economically. Trading routes over land from China all the way through to Western Europe will soon become far more appealing, and it is mainly the poorer provinces and cities of western and central China that will reap the most benefit.

Far too much European investment and market penetration remains focused on China's first-tier cities. A major rethink is now needed, and Chinese government-led initiatives Made in China 2025 and Belt and Road are very quickly leading to a sizeable increase in the market attractiveness of many poorer provinces and their capital cities, especially those in western China, with its geographical proximity to international trading routes across Asia to Europe.

European businesses need also to accept the changing nature of business opportunities in poorer Chinese cities and provinces. No longer is this simply built on low cost, but instead a wealth of high-tech business opportunities are now flourishing across more inland provinces and cities.

High quality, technologically advanced production and premium brand building are central to the new business culture being established in many of the lesser-known Chinese provinces and cities. European companies, please note.

The author is a visiting professor at the University of International Business and Economics in Beijing and a senior lecturer at Southampton University. The views do not necessarily reflect those of China Daily.

(China Daily Africa Weekly 12/01/2017 page9)

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