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Industrial success demands careful mix of conditions

Updated: 2013-03-28 07:40
By Shi Jing ( China Daily)

Take Shao Shaoqing, the heir-apparent to his father's soy sauce empire.

After returning from studying in England with a double degree in human resources management and psychology, Shao revamped his family business by branching off into an entirely new field of bio-technology.

The company now produces a number of drugs under the brand name Haikang.

Established in 1998, Haikang was one of the first companies to move into the Wenzhou High-tech Industrial Development Zone, which is located right next to Wenzhou Financial Reform Plaza.

While soy sauce continues to be the big money spinner, "we are testing new grounds that have the potential of widening our profit margin", added Shao.

His company has also started producing precision equipment, including biometric identification systems for use in government departments, the military and the banking industry.

While many other Wenzhou entrepreneurs have seen no need to take advantage of the incentives offered by the high-tech zone, the local government is optimistic that its efforts will yield results.

"We aim at building the zone into a demonstration of economic restructuring for private Chinese companies," said Zheng Deshi, deputy director of the zone's technology industry development department.

"With the financial reforms, we hope that the annual revenue of the zone will reach 95 billion yuan by the end of this year, and 112.5 billion yuan by the end of 2015."

The industrial development zone will focus on strategic, emerging industries such as laser photoelectrics, new energy, and biopharmaceutical companies.

On offer to attract businesses are a number of favorable conditions such as a 100-percent fiscal subsidy in the first year, and 10-million-yuan, one-off awards to technology-related financial organizations with a registered capital of 1 billion yuan.

Baoyi Group, which has been producing valves for the past 30 years, sensed the urgent need of an industrial update and restructuring by establishing a subsidiary in 2010, Zhejiang Eifesun Energy Technology Co Ltd, to manufacture photovoltaic grid-connected inverters, a power system to harness solar energy.

"It was impossible to seek growth in the group by sticking to our traditional products," said Zhang Xiaodong, the new offshoot's general manager.

Eifesun quickly grew into the only company specializing in the manufacture of PV grid-connected inverters in Wenzhou.

The move by Baoyi was typical of what the government has been hoping for, after calling for an entire industrial transformation.

The photovoltaic market was just at its infancy in China around 2009 and with lower thresholds, and Zhang made up his mind to embark on the brand-new industry.

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