The road to rebalancing
Updated: 2012-08-24 17:54
By Andrew Moody and Hu Haiyan(chinadaily.com.cn)
|
|||||||||||
The other major investor in the $350 million (280 million euros) venture is Guiyang Industry Investment Group, a local government investment body.
The company produces high-tech sapphire crystal that has a number of applications, including mobile phone screens and medical equipment.
Ji believes there is huge potential to develop the company, which was formed in 2010, beyond its current size.
It now has 200 employees but he believes this could soar to an extraordinary 200,000 within three years.
"We will certainly grow to 4,000 people, but depending on discussions we are having with one particular client this could be 200,000. We would obviously have to bring a lot of the workforce from outside since the local population cannot provide these numbers."
Ji says the advantages of locating the business in Guiyang is a plentiful local supply of raw materials such as aluminum oxide and also cheap electricity, but says the real impetus comes from the local government to create a cluster in this industry.
"It wouldn't be possible to start a semiconductor business here in the same way because you would be competing against established industries elsewhere. When you start a new industry everyone is on the same level," he says.
But he admits that it would still be easier to start the business in one of the coastal regions where the local workforce would be more skilled.
"We are having to make major e orts to train people, even starting courses in optoelectronics at the local college," he says.
He points out the local government is keen to bring in companies in the same fi eld from the US and elsewhere to build up a supply chain.
“We are having discussions with the chief executive of a US company in this sector about setting up operations here,” he says. Sui of Standard Chartered says in Changsha one of her tasks is to help local businesses develop operations overseas.
The city has a number of heavy-machinery makers such as Zoomlion and Sany that are looking to become major international players.
"In Changsha there are many construction machinery companies that want to go abroad and invest in places like Africa. We have a strong network there and we can provide a lot of specialist services," she says.
She says the local government is also keen for Standard Chartered to act as a catalyst to bring in investment from some of its existing clients.
"When we met with Zhou (Party Secretary of the Hunan provincial government) he asked us for help to introduce some of our clients from Africa, Hong Kong and Macao to invest in Changsha, and I think Standard Chartered can be a good agent for that," she says.
For Lan at Earlex, there remain advantages of being located in the coastal regions, and the company will open a new o ce in Guangzhou next month, although keeping a base in Changsha.
"To some extent Guangdong might still be an easier place to do business because it is more developed and slightly more convenient. However we will operate from the two bases," he says.
Contact the writers at andrewmoody@chinadaily.com.cn and huhaiyan@chinadaily.com.cn