Xi'an tech zone gains edge over the competition

Many across China are asking whether local administrations can genuinely expect to continue developing during what has become a time of political reshuffling and economic uncertainty.

Indeed, some government systems at the city and even provincial levels have been effectively rendered temporarily functionless by the nation's unprecedented anti-graft campaign.

"But we're fine," insisted Yang Renhua, deputy director of the Xi'an Hi-Tech Zone, one of the largest and most mature investment areas in northwestern China.

Xi'an is a historic city in Shaanxi province that hosts the largest group of privately run colleges in the Chinese mainland. The zone itself was created a decade ago, built on land previously used for arguably China's most traditional industry－rice paddies.

"The clean-government campaign (the Chinese name for the anti-graft campaign) has not only made our public services more efficient, but also improved our ability at attracting more capital investment," said Yang.

XHTZ has also become widely recognized for its enviable mix of industries and technologies, especially at a time of pain elsewhere in a national economy which has seen some local economies struggle to redefine their future directions.

"We've gained a solid foothold over the past year in the next-generation IT and IT equipment industries," Yang said. "Those are now our strategic focus."

Since South Korea's Samsung Electronics Co Ltd first agreed to a $7 billion investment in a memory chip project in the city in 2012, a number of other large IT firms have either built production facilities or moved research teams into the XHTZ.

The Samsung factory became operational in late 2013, and the latest hi-tech name to arrive in the zone is US-based chip-maker Micron Technology, which first invested in Xi'an in 2005.

In a joint venture with a Taiwan company, Micron made its fourth investment in the zone last year worth $250 million, bringing its total commitment at the site to more than $1 billion, according to the administrative commission.

The investment that has pleased officials most, however, is one made in the zone by ZTE Corp, the Chinese smartphone giant that now ranks among the world's 10 largest, which is building a manufacturing facility capable of making 15 million mobile handsets per year. Its factory is due to start operation this year, Yang said, with a second phase to follow soon.

"We are now living in a smartphone economy. A few years ago, we missed the boat in signing up notebook computer makers in the city, as Chongqing (a business center in Southwest China) did－but we learned a serious lesson from that and this time round we are not going to let another opportunity slip from our grasp."

Yang said officials at the XHTZ are confident they can attract more topnotch technology investors.

"We are still being approached by companies and expect to clinch a few more large deals in the near future because we have already built up a strong base of just the types of company we value most."

Over the past year, he said, "a value chain" has taken shape in which IT companies can easily find collaboration partners within the XHTZ.

The administrative commission said it saw a 15 percent rise in capital investment by international companies last year, with much of that from outside the city's traditional manufacturing sectors. The zone now provides employment for up to 250,000 people, and Xi'an is considered one of the three most important new industrial cities in western China, along with Chongqing and Chengdu.

Many of those jobs are sustained by not only large international companies but also a large population of small enterprises working across various technology disciplines.