Business / Economy

China's rust belt edges near startup boom, after decades of decline

By Fan Feifei and Zhou Huiying (China Daily) Updated: 2016-03-25 08:55

The northeastern provinces of Heilongjiang, Jilin and Liaoning are on the cusp of an entrepreneurship boom.

The region was the country's main industrial hub in the 1970s before declining in the following decade, when it encountered difficulties in adapting to the structural reforms of the new market economy.

Low GDP growth, overcapacity of traditional industries and unprofitable companies were blamed for the decline.

The situation has now improved as more and more graduates and youths have been encouraged by local governments to start businesses to spearhead an industrial boom.

The Harbin Institute of Technology's student incubator park, which was launched last year, covers an area of 3,700 square meters and boasts 38 startups. A total of 228 people, including 112 graduates, are working there.

By the end of 2015, the park had received 16.5 million yuan ($2.53 million) in venture investment, with total revenue reaching 14 million yuan.

The Heilongjiang provincial government has provided 50 million yuan in specific financial funds to the startups and the rental, water, electricity, property and Internet fees are exempted for three years.

Harbin World Wide Welding Co Ltd, which is engaged in welding equipment and technology, is a typical startup born in the park.

Wan Long, 25, a first-year PhD student in welding technology and engineering from the institute, launched the company last year.

"Having received a number of technology innovation awards and invention patents, I came up with an idea of transforming technology into products and starting a business," said Wan.

"We make efforts to develop friction stir welding machine with an independent intellectual property right, which could be applied into aerospace, automobile, ship, electronics and high-end equipment manufacturing industry."

The company has sold welding equipment to enterprises including French electric automation company Schneider Electric SA, and provides original equipment manufacturing service. Its turnover reached 1.5 million yuan last year.

Heilongjiang is not alone.

Liaoning has created 41 different measures across 10 different sectors to promote innovation and entrepreneurship.

Small and micro enterprises there can enjoy tax cuts and capital support, as well as having technology and innovation projects fast-tracked for approval.

In the provincial capital Shenyang, its famous Sanhao Street-traditionally home to its computer community-officials have created more than 10,000 square meters of what is being called "makers' space", dedicated solely to entrepreneurs.

Nearly 40 new startups have opened up there, attracting investment around 150 million yuan.

The investors include 28-year-old Ke Dongyue, who quited a stable job as a pediatrician to start his own business-an online healthcare platform, which has gathered more than 100 veteran doctors to provide medical services to patients.

"The 'makers' space' offers me free office accommodation, equipment and big-data services. I can also find investors here," said Ke.

And in Jilin province, its industrialization process has been helped considerably by a series of policies aimed at scientific and technical sectors, especially new energy and materials, optoelectronics and other strategic emerging industries.

So far there are 300 technological innovation-based enterprises with output surpassing 30 million yuan in the capital city Changchun-a vital engine now in its overall economic growth and industrial upgrading, according to Jilin officials.

Liu Ce in Shenyang and Liu Mingtai in Changchun contributed to this story.

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