[Innovative Companies Cheongdu 行] 55 Trillion Invested in 'China's Silicon Valley'... Innovation Companies Gather

Government Initiates Construction of Luxury Villa Complex and Innovation Valley
"Basic Infrastructure and Clear Investment Criteria Must Be Improved"

At the Chengdu High-tech Zone New Economic Vitality Center, an exhibition hall official is introducing the current status and plans related to investment in innovative companies in Chengdu and the development of the High-tech Zone. (Photo by Kim Hyunjung)

[Asia Economy Chengdu=Special Correspondent Kim Hyunjung] "I have been asked many times why Chengdu, not Beijing, Shanghai, or Shenzhen. Everyone knows how stressful life in those big cities can be. This place has achieved rapid development while offering a generous hukou system (residence registration system) and active corporate support, making it a gathering place for young talents who have now become my colleagues."

On the 12th, the 'Korean Innovative Companies Chengdu Visit' meeting was held at Gazelle Digital Culture Content Valley (Gazelle Valley) in Chengdu, Sichuan Province, China, hosted by the Korea Innovation Center (KIC China), the Torch Center of the Ministry of Science and Technology of China, the Chengdu High-tech Zone (Gao Xin Qu) Administrative Committee, and the Science and Technology Innovation Bureau. Wang Xue, General Manager of Chengdu Putao Teng (葡萄騰), a content platform and incubating company established as a joint venture between Korea's Kakao Entertainment and China's Tencent, confidently encouraged Korean entrepreneurs to invest and expand into Chengdu. He explained, "I can speak based on my experience in founding and operating a company," adding, "Although we are still in the early stages, we have grown without significant losses thanks to full government support in areas such as office space, interior design, and taxes."

A view inside Chengdu Gaoxin District (高新區·National High-Tech Industrial Development Zone) Gazelle Digital Cultural Content Valley (Gazelle Valley). "Gazelle" refers to rapidly growing small and medium-sized enterprises in China, and the government has built a villa complex resembling a luxury resort on a 240,000㎡ site for these companies.
(Photo by Kim Hyunjung)

Government Focused Support... "Commuting to a High-end Villa Community"

Chengdu Putao Teng first appeared in the industry as a project in August 2020, when the COVID-19 virus struck the world, but succeeded in establishing its headquarters in Chengdu by March 2021, about half a year later. While the proactive business drive of the stakeholders was important, Wang, the general manager, explained that government support and backing for innovative companies had a significant impact. Currently, the platform has about 6 million downloads, so the customer base is not large, but it leads the local market in terms of user monetization rate and average purchase amount per user.

The headquarters of Chengdu Putao Teng, which the reporter visited, is located in Gazelle Valley within Chengdu’s "Silicon Valley," the Gao Xin Qu. "Gazelle" refers to small and medium-sized enterprises experiencing rapid growth in China. The government has built a villa community resembling a luxury resort on a 240,000㎡ site for these companies. This community houses Tencent affiliates like Putao Teng, as well as cultural content companies in e-sports, digital music, drama, and animation. A representative from Chengdu Tianfu Software Park, which operates this area, explained, "The occupancy rate of the valley has reached 100%, and we receive support such as tax benefits from the government."

A view inside Chengdu Gaoxin District (高新區·National High-Tech Industrial Development Zone) Gazelle Digital Cultural Content Valley (Gazelle Valley). "Gazelle" refers to rapidly growing small and medium-sized enterprises in China, and the government has built a villa complex resembling a luxury resort on a 240,000㎡ site exclusively for these companies. (Photo by Kim Hyunjung)

55 Trillion Won Investment Flows In... Focused Nurturing of Innovative Companies

Chengdu Gao Xin Qu, where Gazelle Valley is located, plans to pour 300 billion yuan (approximately 55.539 trillion won) into industries such as information technology, biomedicine, new economy, and services over the next five years through fund formation. Following the news of large-scale investment, foreign companies are also entering rapidly. From January to August last year alone, 378 foreign-invested companies were newly established, and foreign direct investment (FDI) reached 2.063 billion dollars (about 2.5622 trillion won).

The city’s rapid growth has created a virtuous cycle that quickly attracts high-level talent. According to the Chinese Science and Technology Innovation Bureau, Chengdu’s regional gross domestic product was 312.4 billion dollars in 2021, an 8.6% increase from the previous year, ranking 7th among cities nationwide. Chengdu hosts 312 of the world’s top 500 companies, with nearly 700,000 related talents.

Despite the COVID-19 pandemic, the total import and export volume in 2021 was 822.2 billion yuan (about 152.2138 trillion won), a 14.8% increase from the previous year, and the total import and export volume for the first to third quarters of this year recorded 617.54 billion yuan, a 5.3% increase.

On the afternoon of the 11th, Lee Jin-su, the Science and Technology Communication Officer at the Embassy of the Republic of Korea in China, delivered a congratulatory video message at the meeting held at Jinglonghui, Gaoxin District, Chengdu, China. (Photo by Kim Hyun-jung)

"Calls for Infrastructure Improvement and More Transparent Investment"

However, on-site, chronic issues worthy of concern before entering China were mentioned, such as the need for basic infrastructure improvements and the presentation of transparent investment standards. At the meeting held on the 12th, a Korean company representative said, "Last year, there were some difficulties due to power shortages, which led to operational restrictions at some manufacturing sites," adding, "We hope these issues will be resolved this year so that companies can operate stably." Another Korean company participant told the reporter, "Although Chengdu Gao Xin Qu announced a fund investment of 55 trillion won, no transparent standards or specific plans were presented regarding the form, criteria, or method of investment," adding, "It is certainly an attractive place for investment, but trust-building through eliminating uncertainties is also necessary."

Some also said they glimpsed investment and expansion opportunities through this event. A representative of a Korean AI technology company with a branch in Beijing explained, "We are considering dispatching one person to Chengdu to conduct market research and maintain continuous exchanges with local stakeholders," adding, "We hope Chengdu will serve as a bridgehead for cooperation with other regions and companies."

Lee Jin-su, Science and Technology and Information Communication Officer at the Embassy of the Republic of Korea in China, said at the meeting during the event, "Chengdu is a city historically and culturally famous to Koreans, and in 2015, through a Memorandum of Understanding (MOU) with Korea, it was decided to make it a base for innovative startups," adding, "I hope the demands of Korean companies will be carefully considered." Zhao Jian, Deputy Director of the Asia-Africa Division of the International Cooperation Department at the Chinese Ministry of Science and Technology, also emphasized, "President Xi Jinping mentioned at his meeting with President Yoon Suk-yeol last November that the economies of the two countries are highly complementary, and that development strategies should be linked and cooperation deepened," adding, "We hope Chengdu will become one of the first destinations for Korean science and technology startups, and that a new history of cooperation will be written through success in China."