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Chengdu to forge itself into another ‘Silicon Valley’

Tianfu Software Park, startups in Chengdu

At first glance, the concrete skyscraper on the outskirts of Chengdu is just like the others in the city in China's western hinterland. But little details stand out — there is the artfully curated spray paint graffito, and an outdoor walkway is adorned with posters of Albert Einstein, Steve Jobs and Mark Zuckerberg. The offices themselves sport Silicon Valley-style kitsch — beanbag chairs, Nerf basketball hoops and electric guitars hanging from walls.

乍一看,成都郊外的这座钢筋水泥摩天大楼跟中国西部腹地这座城市的其他楼房没什么不同。但是小小的细节引人关注:墙上有喷漆涂鸦,室外过道挂着爱因斯坦、乔布斯、扎克伯格的贴画。办公室布置充满了硅谷风情——豆袋椅、内尔夫篮球筐,还有墙上的电吉他。

The building is home to 110 internet start-ups, projects that were lucky enough to be chosen for the "start-up incubator", as the Tianfu Software Park Lab is called. They enjoy free office space, free recruitment services for engineers, and support on everything right down to the "Idea" coffee house on the ground floor where a government-subsidised cappuccino costs $0.60, versus $5 at a Starbucks down the road.

大楼已经入驻了110家互联网初创企业,它们的项目很幸运地被选入"创业公司孵化器"——天府软件园。它们享有免费的办公空间、免费的工程师招聘服务以及其它种种支持,连楼下的Idea咖啡厅也得到政府补贴,一杯卡布奇诺咖啡在那儿只卖0.60美元,而在不远处的星巴克要花5美元。

Tianfu offers Rmb100m in total annual subsidies to early stage start-ups, and Rmb1bn in subsidies overall, according to its management.

据天府软件园的管理方透露,它们每年向早期初创企业提供了1亿元人民币的补贴,全部补贴总额为10亿元。

The project is the centrepiece of an effort by Chengdu's local government to challenge the notion that high-tech innovation in China is mainly game for coastal cities — Beijing, Shanghai and Shenzhen.

在中国,人们一般认为高科技创新专属于沿海城市——北京、上海和深圳,成都市政府力图挑战这一看法,核心项目就天府软件园。

In contrast, China's hinterland has long been seen as a low-cost manufacturing hub and a source of migrant workers. This reputation is something that the government is trying to change by spending freely to turn the city — better known for pandas and a spicy delicacy known as hot pot — into a new Silicon Valley.

长期以来,中国内陆地区被视为低端制造中心,同时也是外出务工人员的输出地。政府竭力改变这一现状,大力投资把以熊猫和麻辣火锅闻名的成都打造成新的硅谷。

Jonathan Woetzel of McKinsey, the consultancy, says the urge to innovate comes as many Chinese mega cities such as Chengdu push to move their economies up the value chain. Foreigners often see China as one undifferentiated mass, he says, "but the difference between Harbin and Hainan is like Helsinki and Athens. Each of these mega cities is starting to behave economically like little countries."

麦肯锡咨询公司的董事华强森说,创新动力来源于许多中国城市——比如成都——想将经济向价值链的上游推进。外国人往往觉得全中国一个样,但华强森说:"哈尔滨和海南的差别就像赫尔辛基和雅典迥异。这些大城市每个都开始在经济上宛如一个小国家。"

Given the scale and heterogeneity, "I don't see why in the future China wouldn't have 15-20 Silicon Valleys", he says.

由于规模庞大且差异明显,华强森认为,"中国未来出现15个到20个硅谷也不稀奇。"

The biggest draw for investors in Chengdu is its low wages. Chen Bing, deputy head of the Chengdu Investment Promotion Commission, says wages average two-thirds to half of those paid in coastal Chinese hubs.

成都对投资者的最大吸引力是工资低。成都贸促委副主任陈兵说,成都的平均工资只有沿海城市的三分之二到一半。

That has already attracted high-tech manufacturing. Chengdu's government claims that Apple contractor Foxconn makes one half of the world's iPads in Chengdu. The government also says that half of Intel's laptop computer chips are made there as well, thanks to relatively cheap wages. Intel would only say that "some good percentages" of its chips are made in Chengdu.

这已经吸引了高技术制造企业。市政府宣称,苹果公司承包商富士康在成都生产全球一半的iPad。政府还说,由于成都的工资相对较低,英特尔的一半手提电脑芯片在这里生产。英特尔则只是表示,公司的"相当大一部分"芯片在成都生产。

The existence of high-tech contractors such as Foxconn subsequently attracts inventors. Fan Yongjun, deputy general manager of Chengdu Raja New Energy Automobile, a company that aims to become "the Tesla of light trucks", said that among his motivations for basing in Chengdu — aside from generous perks offered to his business such as free rent — the company wanted to "be near the OEMs", he said, referring to the manufacturers of his company's products.

富士康等高技术承包商的存在进而吸引了投资者。成都雅骏新能源汽车的目标是成为轻型卡车中的特斯拉,公司副总经理范永军说,他们之所以选择落户成都,除了免房租费等优惠条件以外,公司的一个重要考虑是是"靠近OEM",也就是其公司产品的制造商。

But in spite of the perks, many are sceptical that government support alone can change the equation in China in favour of lower-income cities. "I think the key is still talent" said JP Gan of Qiming, a Shanghai-based venture capital group. "Most of the talent here is still in Shanghai, Beijing, and Shenzhen, and increasingly Hangzhou." Out of more than 100 companies he funds, only two or three are in Chengdu.

尽管能提供优厚的特殊待遇,但许多人怀疑单靠政府的支持未必能改变中国低收入城市的现状。上海风险投资机构启明创投的合伙人甘剑平认为:"我觉得关键还是人才,中国的大多数人才仍然在上海、北京和深圳,杭州的人才也在增多。"甘剑平投资的公司超过100家,其中只有两三家位于成都。

One of Tianfu Park's success stories is Camera 360, a selfie-taking smartphone app that continues to be based in Chengdu after taking the Chinese internet by storm last year. It is hugely popular — and controversial — in China for its "beautify" function that retouches selfies and portraits to make Asian eyes appear bigger and skin whiter.

天府软件园的一个成功案例是Camera 360,它是一款自拍智能手机APP,去年在中国互联网上风靡后仍留在成都。该软件在中国很流行——也引起争议——是因为它的"美颜"功能可修饰自拍照片,让亚洲人的眼睛看起来更大一些、皮肤更白一些。

But funding internet start-ups can be a risky business due to high failure rates. Mr Chen says that the main support they offer are subsidies on office space, in exchange for the promise that when they become profitable companies they remain in Chengdu.

但向互联网初创公司投资比较有风险,因为失败率很高。陈兵说,他们提供的支持主要是租房补贴,条件是公司一旦盈利要继续留在成都。

The wall of the Tianfu Software incubator lists six success stories of internet apps that have gone on to make it big, such as Camera 360. But that is out of hundreds of also-rans. Mr Chen says he cannot specify the failure rate. "We have to tolerate failures, because that is part of business. Some will fail," he says.

成都天府软件园的墙上列出了六个互联网APP成功创业案例,比如Camera 360,但它们是从几百家公司里脱颖而出的。陈兵表示,他无法说出具体的失败率,"我们必须容忍失败,因为它是商业的一部分。有些企业会失败。"

John Landers of Gobi Partners, another Shanghai-based venture firm, says the potential of low living costs to draw early-stage tech investors should not be underestimated. "Most seed-stage companies are going to be able to pay salaries of, at most, Rmb5,000 per month. In a place such as Chengdu you can actually live on that," he says.

上海另一家风险投资企业戈壁创投的合伙人约翰·兰德斯认为,低生活成本对初期科技投资者的吸引力不可低估,他说:"大多数种子阶段的公司最多能开出每月5000元的工资,在成都这样的地方,靠这点钱确实就可以生活了。"

That was what attracted Xianshen Liu, chief executive of Llama, an app aimed at bringing video editors and customers together online.

正是这点吸引了Llama的CEO刘贤深。Llama是一款APP,目标是桥接视频编辑和客户。

"It's so much cheaper," he says. "And for the internet, it doesn't really matter where you are."

刘贤深说:"这里要便宜得多,对互联网行业来说,地域并不重要。"

He is originally from Shandong province, worked for years in the US as an accountant, and returned to China to become an entrepreneur. "Beijing is too crazy for me," he said.

他本是山东汉子,在美国当了几年会计后回国创业。他表示:"对我来说北京太疯狂了。"

2016-06-22

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