G60 techtopia trail
more on Beijing’s scitech high road...
Warm welcome all…
The just concluded Two Sessions put big bets on science and education ‘invigorating China’. The annual budgets in these sectors are set to rise faster than any other sector of the economy in 2024.
Continuing our theme of ‘Beijing’s scitech high road’—here is the literal manifestation in the G60 Highway. It’s a repost of an earlier CHINA POLICY brief—you can tell by the very smart map.
Happy reading
Philippa
Beacon of PRC self-reliance, a ‘G60 scitech innovation corridor’ links Shanghai with high-tech hubs in the Yangtze Delta (Jiangsu, Zhejiang and Anhui). Localities are now 'guided' to smile on regions that integrate and collaborate. Zero-sum competing projects, hallmark of old regional silos, are out. This is a policy pivot.
world-class cluster
Taking its name from the ‘G60 Shanghai-Kunming expressway’, the corridor spans nine Yangtze Delta cities (see map)—a vital region of scitech-heavy investment.
Integrated development—reducing admin barriers between cities, easing resource flow and exchange, integrating scitech and finance for tech innovation—is ever more to the fore, believes Liu Duo 刘多 Shanghai vice mayor. Liu co-leads the G60 corridor working group with Wu Zhaohui 吴朝晖 MoST vice minister.
‘Start in the Delta, light up the nation, go global’ is Wu’s prescription. Making Shanghai a global centre for scitech innovation is the name of the game, with lesser centres taking their cut as stakeholders. The promised glittering prize is a ‘world-class industrial cluster’ of the ‘6+X’ industries: artificial intelligence, bio-pharmaceuticals, integrated circuits, new materials, new energy, smart security, satellite internet, information technology application innovation, and ‘X’ —more future technologies to come.
hallmarks of ‘G60’ cities
Shanghai, leading the cluster, is renowned for its international openness and legal infrastructure, with rich scitech, financial, and human resources. Yet land costs and lack of industrial space cramp its advantage
Suzhou has a solid, diverse manufacturing base
Hangzhou, home of Alibaba, is an internet hub
Hefei, site of a leading scitech campus, and with lower land prices, is primed for tech innovation
lesser hubs Xuancheng, Wuhu, Huzhou, Jiangxing and Jinhua boast industrial specialties, cheaper land and labour
Semiconductors, unsurprisingly, are a burgeoning focus for the division of labour across the region. Building on Shanghai’s advanced integrated circuit industry
Zhejiang adds capacity in semiconductor material and design
Jiangsu adds robust manufacturing capacity with an industry chain in semiconductor sealing and testing
Yangtze Delta G60 scitech corridor (version 3.0)
supporting firms left, right and centre
Better allocation and flow of resources is imperative. As a start, a Yangtze Delta online platform was set up in 2018, easing access to state service platforms for Shanghai, Jiangsu, Anhui, and Zhejiang. The platform boasts 150 services, such as health insurance, business licensing, policy updates, etc. A dedicated G60 service window is now online in several cities, offering skilled professionals healthcare, food, housing and transport.
Innovation vouchers, granting SMEs free access to certain tech tools and research services, are now on a shared platform to ensure mutual recognition across the G60. Vouchers used to be restricted to the city in which they were issued.
To channel funds to firms in the corridor, the G60 joint conference office set up an all-round ‘financial service ecosystem’, the Yangtze Delta G60 Financial Services Alliance in Songjiang (December 2019). Embracing 498 financial institutions—banks, brokers, funds, insurances, accounting firms, law firms, etc.—it provides services such as listing guidance, credit consulting, guarantee, accounting, legal, IP, HR and investments.
new industrial parks and business ecosystem
All the above are in play, coordinating and supporting the industrial parks, now linked in a G60 ‘1+7+N’ industrial (park) alliance system. ‘1’ denotes the overall alliance, chaired by Suzhou Industrial Park, ‘7’ refers to several key industry alliances across semiconductors, AI, biomedicine, high-end equipment, new energy, new materials, and NEVs, while ‘N’ refers to several sub-alliances.
Starting with 74 industrial park members within the nine cities, 14 industrial alliances and 11 cooperation demo parks have joined. By 2020, the alliance totalled 1,470 leading firms with an annual output value of over CN¥3.2 tn.
The G60 reached an R&D investment intensity of 3.25 percent in 2022, ahead of its 3 percent target and the national average of 2.5 percent.
G60 fund
Jointly funded by the nine cities and Haitong Securities, the fund targets the seven ‘new industries’ (circuits, biomedicine, artificial intelligence, high-end equipment, new materials, new energy and NEVs), leveraging finance and private capital.
Startups typically struggle with funding. In conventional banking, they are deemed short of assets and inherently risky. In 2022, PBoC, MoST and other ministries issued a plan for innovation and finance reform pilot zones in Shanghai, Nanjing, Hangzhou, Hefei and Jiaxing, following up a Yangtze Delta regional integration development plan outline and guidelines for national innovation-driven development. Targeting the five cities, the plan aims to
reconfigure financial institutions to support innovation
utilise capital markets, raise money via the stock and bond markets and investment funds, and new financial products
promote cooperative platforms, IP services, information sharing and financial standard-setting
credit to Hefei
Following its designation as a pilot, Anhui province issued a tech innovation and financing plan on 26 April 2023, paving the way for Hefei to become a leader in moving money to support scitech. In 2023, the city set up workstations to assess tech companies and match them with appropriate finance. Since Hefei became part of the innovation and finance pilot, scitech loans grew 25.3 percent in the city, and the scale of scitech financing guarantee business was about C¥15 bn, accounting for about 40 percent of the city's policy financing guarantee business, according to data from November 2023.
too good to be true?
So far, so much hype, and few gainsayers. Hao Shenyong 郝身永 Shanghai Party School is careful to include some caveats. Local protectionism, he warns, conspires with regional to generate merely ‘skin-deep’ collaboration. Cities struggle to divide labour, he argues.
Silo administrations continue to constrain the region, despite the corridor boasting nearly 29,000 high-tech firms. On examination, the nine hubs typically retain stand-alone innovation networks.
corridor to the future
Despite a probably patchy record, the corridor is already heralded as a success. By January 2024, the total GDP of the ‘three provinces plus one city’ (Jiangsu, Zhejiang, parts of Anhui, and Shanghai) in the Delta had topped C¥30 trillion, the corridor turning in some 7 percent of national GDP.
As the PRC woos global partners, the G60 scitech corridor could, claims Wang Zhan 王战 Shanghai Federation of Social Science Associations, compete globally, becoming an international beacon of excellence—a G60 4.0.
profiles
Cheng Xiangmin 程向民 | Shanghai Songjiang District Party secretary
‘Science and innovation, humanity, and ecology’ are key themes for future development, comments Cheng. In sync with the tech innovation imperative, Xi’s ‘two mountains’ (‘clear water and green mountains are equal to mountains of gold and silver’) are cardinal for this district. The Corridor’s future, pledges Cheng, will be guided by the Ministry of Ecology and Environment, achieving high-quality development with a green foundation.
Visiting China Railway, Cheng urged building Songjiang into an international ‘duo transport hub’ (freight and passenger transport) to assist the district’s pivotal role positioned at the intersection of Shanghai scitech innovation hub, integrated development of the Yangtze River Delta, and the BRI.
Party Secretary of Songjiang District in Shanghai’s southwest since 2016, Cheng has had a stake in the G60 corridor from the outset. Qualified in Chinese Literature and Business Administration, he took a PhD in management at Tongji University.
Hao Shenyong 郝身永 | Shanghai Party School deputy professor
Challenges remain for the Corridor despite support measures, finds Hao. Admin barriers should be further reduced, and cross-regional financial services for SMEs should be added. Some industries in intermediate hubs remain subject to spill-over effects from the central ones. Solutions include better dispersal of innovation resources based on geographical advantages, setting appropriate standards for MNCs, data sharing among the hubs, and better industrial division of labour and regional cooperation.
A Nankai University graduate, Hao taught economics at the Shanghai Party School. His main research interests are the Delta’s integrated development and creation of the Shanghai Pilot FTZ, with a new port area. The experience and improvement of the G60 corridor are a recent focus.
G60 joint conference office | G60科创走廊联席会议办公室
The G60 scitech innovation corridor joint conference office is located in Songjiang. It is the PRC’s first integrated urban development coordination body with substantive operation at the prefecture level. The establishment of the office in itself is viewed as a form of institutional innovation to assist cross-regional collaboration. It houses 30 experienced bureaucrats from the nine cities across five divisions, including for
administration
industrial policy research and drafting
scitech platform and R&D support
business attraction
communication
Some notable policies the G60 scitech innovation office issued include support for large scitech equipment sharing and talent acquisition across the nine cities. It is in charge of the cross-regional online platform一网通办, the PRC’s first cross-administrative regional licence-issuing platform to reduce additional travel for cross-regional investment.
timeline
April 2021: plan for Yangtze Delta Region G60 Scitech Innovation Corridor issued by MoST et al.
13 May 2019: G60 working small group set up by MoST
5 November 2018: integrated development of Yangtze Delta region promoted to national strategy
1 June 2018: G60 3.0 set up, connecting nine cities on the Shanghai-Suzhou-Hubei high-speed railway
12 July 2017: G60 2.0 with Shanghai’s Songjiang, Zhejiang’s Hangzhou and Jiaxing
24 May 2016: Songjiang proposed G60 scitech innovation corridor 1.0