The Silicon Valley of the East?

One of the key mandates for China upon its accession to the WTO is to provide national treatment to other WTO member countries. The upside of this is the gradual phasing out of tariffs and other trade barriers. But the downside could be, at least in the short run, the abolishment of preferential policies given only to foreign investors, such as tax concessions. Interestingly, however, in the Zhangjiang Hi-Tech Park in Pudong, Shanghai (Zhangjiang or Park), the current preferential policies offered to enterprises by the local government do not appear to differentiate between the source of investment (i.e., domestic or foreign). Rather, they differ on the type of enterprise. In addition, in an effort to improve administrative efficiency to meet international standards, Zhangjiang has streamlined its business registration application process.

Zhangjiang

Zhangjiang was established in July 1992 as a national-level park designated for the development of new and high technology. Since then, some well-known names in the market, such as Shanghai Huahong, Semiconductor Manufacturing International Corp., Sony, GlaxoSmithKline and Roche, have established a presence. Some believe that it has the potential to become China's Silicon Valley, since two of the leading industries in the Park are information technology and biotechnology & pharmaceuticals. The Park is also attracting venture capitalists, both from home and abroad, who are keen to invest in its tech-oriented enterprises. Zhangjiang has at least two main attractions for investors: administrative efficiency and preferential policies.