Minister of Information Industry Wang Xudong announced on Tuesday that nine state-level electronic information industry bases will be established to give the electronic information industry a boost. The move is part of a strategy to build China into an international IT powerhouse.

“It is also an attempt by the government to further standardize and promote regional development,” said Wang.

The bases will allow successful enterprises to operate in close proximity, forming a complete industrial chain from research and development to delivery, with related services.

The bases will be located in Beijing, Tianjin, Qingdao, Shanghai, Suzhou, Hangzhou and Shenzhen cities; the Fuzhou-Xiamen coastal area; and the Pearl River Delta.

Combined revenue, industrial output, taxable profit and exports for the nine areas account for the lion’s share of the nation’s total.

These locations are also loci of foreign investment and state-owned R&D operations.

“Enhancing the competitiveness of these areas will be of paramount importance for us to realize our target of becoming an electronic information powerhouse,” said Wang Jianzhang, director of the Ministry of Information Industry’s Comprehensive Planning Department.

Last year, the industry’s sales reached 1.9 trillion yuan (US$226.5 billion), with industrial added value hitting 400 billion yuan (US$48.2 billion). It accounted for about 4 percent of the nation’s gross domestic product.

Exports, at US$142.1 billion, contributed 32.4 percent of the nation’s total in 2003.

Last year, eight enterprises in the industry recorded sales of more than 20 billion yuan (US$2.4 billion), and sales of one exceeded 70 billion yuan (US$8.4 billion).

“Nevertheless, our electronic information products are still low-end in the international market,” Wang said. “Lack of key technologies and weak competitiveness have become major hurdles for the development of the industry.”

Wang said the bases will be crucial for China to catch up with other developed countries, enabling the nation to improve technological innovation and interprovincial cooperation.

The ministry started to prepare for the bases in late 2001.

(China Daily September 29, 2004)