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High-tech firms reap benefits of policy support in Guangzhou

By Qiu Quanlin in Guangzhou | China Daily | Updated: 2017-12-06 07:29

Chinese drone manufacturer Ehang Inc, a company based in Guangzhou, the capital of Guangdong province, has benefited a lot from the city's preferential policies to support the development of new and high-tech industries over the past few years.

For example, the company's taxable income, which was deducted from the expenses for research and development, totaled more than 20 million yuan ($3.02 million) in the past two years.

"The preferential tax policies has helped reduce the financial burden. We could invest more in technology research and development, which in turn has helped make our products more competitive in the global market," said Liu Jian, deputy financial executive director with Ehang.

The company's investment in technology research and development will reach 43 million yuan this year, a year-on-year increase of 25 percent, according to Liu.

Increased investment in technology research has also helped boost Ehang's business at home and abroad. The Guangzhou-based drone maker announced early this year a partnership with the Dubai government for the use of its Ehang 184 passenger drone in the city's smart transportation system.

"An open economic mechanism and the city's strategy of developing high and new technology industries is a major factor behind the company's rapid business expansion," said Liu.

Ehang, which was established in 2014, is not alone.

In the past few years, an increased number of high and new technology businesses have been introduced in Guangzhou, thanks to the city's efforts to boost new emerging industries.

Statistics indicated that Guangzhou's total output of high-tech industries increased by 11.6 percent year-on-year to 436.1 billion yuan in the first half of 2017, accounting for 46.4 percent of the city's total industrial output.

"Guangzhou is becoming one of the best places for the fourth industrial revolution," said Klaus Schwab, founder and executive chairman of the World Economic Forum, in late July in Dalian, Liaoning province.

Guangzhou has introduced a strategy to develop its IAB industries-the next generation of information technology, artificial intelligence and biological medicine-as well as the new energy industry and new material industry.

"In the new technology era, the IAB and emerging industries will help develop a new engine for the city's economic growth and build a high-end and high-quality modern industry system and open economic mechanism" said Feng Shengping, chief researcher of the Guangdong Provincial Situation Research Center, which is affiliated with the Guangdong Academy of Social Sciences.

Global companies including Canada-based IT and networking solutions provider Cisco, the United States-based research institute Cold Spring Harbor Laboratory, the New York-listed laboratory equipment provider Thermo Fisher Scientific Inc as well as domestic technology giants Huawei Technologies Co and Tencent Holdings Ltd have all launched business projects in Guangzhou.

In the latest development, the construction of a $800 million-General Electric biocampus, planned to become a leading biopharmaceutical and healthcare industrial park, began at Sino-Singapore Guangzhou Knowledge City, a flagship cooperation project between China and Singapore in Guangzhou.

The project attracted immuno-oncology drugs producer BeiGene to sign an investment agreement worth of 2.2 billion yuan with Guangzhou Development District.

"The settlement of these projects helps highlight Guangzhou's new strategy of industrial development, which is focusing on the construction of industrial parks production integration, living and good ecology and development of an emerging industrial cluster," said Feng.

The open economic mechanism has also helped encourage an increased number of local companies to invest overseas. For example, Guangzhou Automobile Group Co, a major automaker in South China, plans to invest millions of dollars to build a research and development center in Silicon Valley, in the US state of California, which is of great importance for the company to develop advanced technology and introducing its homegrown vehicles to the North American market.

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