An overview of Hainan Resort Software Community in Haikou, capital of South China's Hainan Province on Thursday. (Photo: Li Xuanmin/GT)
Island aims to lure companies, talent to move up industrial chain
The further opening-up of South China's Hainan Province has attracted dozens of technology, internet and services companies to the island over the past month, leading observers to speculate that Hainan may overcome its weak industrial base to become a second headquarters for many companies and perhaps a powerhouse for the technology sector.
"We registered a subsidiary in Hainan and will move our operating center to [the provincial capital] Haikou soon," Kong Xiangyi, vice president of Guangzhou Quwan Game Co, told the Global Times.
Kong said that she looked into setting up an office in Hainan a year ago, but shelved the plan because of a talent shortage in the province, whose college graduates have traditionally fled to first-tier cities for jobs.
"But now, we are seeing a consistent and stable policy as well as the local government's determination to attract talent, which bolstered my confidence in the province," she said.
On April 14, the central government announced a plan to develop the province into a free trade port by 2025. Under the plan, Hainan will focus on boosting the development of tourism, modern services and technology, instead of intermediate trade and manufacturing.
To facilitate the process, the provincial government unveiled a "1 million talent plan" on May 14 to attract top-level staff, with policies such as lower thresholds for hukou (household registration), rental subsidies and convenient housing purchase opportunities.
On Sunday, Hainan launched a 100-day campaign to attract business and investment in tourism, modern services and technology.
Kong explained that as it might take some time for the policies to bear fruit, her company would first move jobs that "require little experience and professional knowledge" such as its operating center to Hainan and take advantage of the island's low wages. As more high-end staff move to Hainan, Quwan may move some of its research and development projects to the island province.
In addition to Quwan, a number of technology giants such as Tencent, Huawei and Hikvision have considered shifting some of their operations to Hainan since mid-April.
On May 9, construction of three mega industrial projects with investment of 10 billion yuan ($1.57 billion) in total began in the Hainan Resort Software Community (HRSC). The projects involve a Tencent eco-village, a platform for development and trading of online games, and an intellectual sports industrial base, HRSC's general manager Yang Chunzhi, told the Global Times.
In line with the provincial government's plan to attract businesses, HRSC has opened a channel that allows companies to complete registration within three hours.
With regard to high-technology companies in particular, HRSC is also on the process of setting up a 10 billion yuan fund as their financing source, according to Yang.
He added that the prospects for the three projects are very "promising" and HSRC as a whole expected to generate 50 billion yuan in revenue by 2020.
Wang Shirui, founder and CEO of healthcare start-up Tencent DoctorWork, told the Global Times over the weekend that he expected that his company's business could be boosted as Hainan develops into a free trade port. The start-up registered an office in the software park at the start of this month.
"In a free trade zone, we can import advanced medical equipment and launch international cooperation without lengthy approval processes," he explained.
Kong hoped that her gaming company could enjoy fast-track overseas distribution channels via Hainan.
However, Zhao Nan, director of the port research office of the Shanghai International Shipping Institute, expressed concern over the island's weak infrastructure and industrial base, which may hinder its fast growth.
"Hainan has a typical island economy… It doesn't have any support industries, and starting from scratch would be extremely difficult," Zhao told the Global Times.
Kong suggested that to start, Hainan could adopt a strategy of luring companies to establish second offices and move some parts of their businesses to the island, "just like what my company did."
"As more technology leaders establish a presence, other companies in the upstream and downstream segments of supply chain will come in, and that will attract more talent," Kong noted.
Wang said he is keen on Hainan's prospects in the technology industry.
"Silicon Valley wasn't like it is now, when it was born... Who says Hainan can't become a global technology powerhouse?" Wang asked.