Silicon-Valley Enterprises Eager to Make Money in China

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Last updated at: (Beijing Time) Monday, July 01, 2002

Silicon-Valley Enterprises Eager to Make Money in China

China's entry into the World Trade Organization (WTO) and Beijing's win in its bid for hosting the 2008 Olympic Games have brought enormous imaginative power for Silicon Valley entrepreneurs.

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In a short span of several years, previous Chinese craze for Silicon Valley has turned into today's China heat of Silicon Valley. A depression implies the imminent release of accumulated strength.

Generally speaking, a depression often implies the advent of an entrepreneurial peak of starting up undertakings. During this period, they can learn a lesson entailed by rapid expansion, and then make a sober analysis of the question regarding things a company needs to do if it wants to charge to the next peak from the slump. In a word, this is a stage for the release of accumulated strength. In this round of preparation for Silicon Valley, the most conspicuous thing is "Chinese characteristics".

China's entry into the World Trade Organization (WTO) and Beijing's win in its bid for hosting the 2008 Olympic Games have brought enormous imaginative power for Silicon Valley entrepreneurs. The predictions, such as "China has become the world's largest handset user", "China will soon become the largest consumer of personal computers in the Asia-Pacific region", "China will soon become the world's largest telecom country", have aroused the interest of Silicon Valley entrepreneurs.

Taking Aim at Large-scale Development of West China

Proxim, a well-known radio communication equipment company, had China's Taiwan as its largest client in the Asia-Pacific region last year, but the company has thus far not yet established a Taiwan office, but it has set up the headquarters of the Great China Circle in Beijing.

A senior official, the company's vice-president in charge of international business, told this correspondent: We estimate the Chinese mainland will become our largest international client. Among Proxim's business volume last year, 20-22 percent came from overseas markets, the proportion will jump to 35-40 percent this year, and the figure will exceed 50 percent next year.

In the opinion of the company, China's market will be the place for its strongest growth of profits. The price of our wireless Internet equipment at present has been much cheaper than before. The use of our products, needless to say, makes it possible for regions, far apart and in lack of a fixed line, to quickly get connected with each other.

This official said, as far as China with a vast expanse of territory, especially for its northwestern regions currently under priority development is concerned, this is really a very good choice.

Proxim recently signed a non-compulsory agreement with Eastcom. According to the accord, Eastcom, as the leading supplier of China Telecom service provider and mobile telephone operator, has planned to buy Proxim's fixed radio communication equipment worth US$8 million this year, these pieces of equipment can safely, quickly and economically link up the networks between stations 40 miles away from each other.

Many More Firms Or Organizations Ready to Enter China

Aside from Proxim, there are still many Silicon Valley companies or organizations ready to come to China. For example, the Silicon Valley Semi-conductor Manufacturers' Association has planned to set up a branch in China; technology and client promotion meetings held in China by Oracle and other firms are becoming ever-greater in scale; Tibco specially organized a large-scale itinerant seminar on the Chinese market.

Certain companies already in the Chinese market have moved their Asia-Pacific headquarters to China for further development. Companies planning to do so include Polycom, provider of internationally leading inter-dynamic phonetics, video frequency and data integration communication plan.

Many of Polycom's products occupy the first position in global market share, the Asia-Pacific market is the place which sees the fastest growth in the company's business. In the first quarter of this year, the company's turnover in the Asia-Pacific region reached US$21.9 million, a 46 year-on-year percent increase.

Vice-president of Polycom and concurrently the Asia-Pacific region general manager appointed this March has paid a visit to China almost every month over the past few years, he has communication with Chinese clients once a week through videophones.

He told this correspondent: Although the company's business volume in the Chinese mainland currently accounts for only one-fourth of the company's Asia-Pacific total business volume, the Chinese mainland market, without doubt, enjoys boundless potential. Given this, the company considers shifting its Asia-Pacific headquarters from Hong Kong to the Chinese mainland.

The vice-president maintains that advanced technology enjoys a vast market space in China, because China can achieve leaping growth by avoiding the use of technologies soon to become outdated and directly adopting the most sophisticated technologies.

Furthermore, China needs to adopt advanced technology under the present national conditions. He analyses that China's State-owned enterprises need to become more flexible so as to raise efficiency and productive forces; secondly, the development of the knowledge economy has sharply increased enterprises' demand for skilled workers; after China's accession to the WTO, domestic and international competitions will become more intense, all this has made it necessary for the use of advanced technology.

It is vitally important for us to quickly enter the market. The vice-president continued: If we enter the Chinese market three months late, we will lose three most profitable months, from what this official said, we can see the Silicon Valley company's eagerness to enter the Chinese market.

By People's Daily Online

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