Xi’an Software Park Chose by More Multinational Enterprises

Xi-an.biz.  Many multinational enterprises, consider tightening their belts and, particularly, under the impressions of the cold spell caused by the global economic crisis, are closing down workshops in some countries or, as a minimum, trim their staff. Costal areas of our country, likewise, experience this situation. Plenty of JV-companies went even bankrupt.  Xian Region and, especially Xian HTDZ, experience an inverse situation, however. More than 10 foreign enterprises are currently preparing to move into Xian. On Feb. 26th, the Asia investigation group of American Cooper Industry inspected their new construction workshops of Xian, which were set up on schedule, although it was snowing heavily. This plantIt is the first factory of American Cooper Industry in Xian. After establishment of the first workshop, they will move part of their production lines of American, British, Denmark, Mexico areas to Xian. Total invested amount will be US$ 20 bn. Mr. Wen Jun-ming ( GM of Cooper Xian Fusegear Co.,Ltd ) said cost were the most important issue under pressure of the crisis, and regarding cost concerned, Xian as a production location is much more advantageous than European and American areas. On March 10th, workers were busy for the gas sensor production lines in the workshop of Xian System Sensor Electronics Co. Ltd. This production line was being moved to Xian from their British workshop. Annual production value will increase by about US$ 50 mn. It is estimated that all System Sensors production lines in U.K. will be moved into Xian before 2010. American System Sensor Co. decided to move their British workshops to Xian when the crisis was looming large. They become active and moved one of their production lines to Xian for trial production. But as there were no redundant workshops in Xi,an area available at that time, HTDZ supplied the ground for System Sensor to assist them to build the new workshop here, and selected the technical employees for them with preferential policies. The production line was officially taken into operation last Oct. Mr. Zhang Xiong-fei (Vice-GM of Xi’an System Sensor Electronic Co. Ltd) said lower cost are one important aspect for foreign companies to choose Xi’an area, another reason is the availability of technical talents. With American Cooper Co. Ltd., productivity rate was, more or less, 75%, when they were in the U.K workshops; it is now up to 95% in Xi’an area after technical innovations. At present, the company is considering exchange of their all British production workshops against workshops in Xi��an. They will also move their Australian and Canadian production lines to Xi’an. Further on, it was reported that American NOWHere has moved one production line to Xi’an from Italy since last Aug. They are, moreover, planning to move another 2 production lines here in 2009. Vishay moved 6 production lines from Mexico to Xi’an HTDZ last year and prepares to move another production line here in 2009. The investor of Huatian Telecomnic stopped production in America and Japan and decided to move the main production lines to Xi’an HTDZ. At present, more than 20 foreign enterprises are discussing with HTDZ removals from their European and American production locations to Xi’an HTDZ. Nearly all multinational enterprises which were affected by the Crisis in 2008 are concentrating their investment. Under the adding tensed economic situation many fortune 500 enterprises, such as a. m. American Cooper Industry, Dezhou Instruments, Royal Dutch/Shell Group, Finnish Nokia, German Siemens, also Pingan Insurance of China are investing and seting up their branches or workshops in Xi’an area. About 60 foreign companies were approved for investment. Why do so many foreign companies venture into Xi’an, particularly, into Xi’an HTDZ during the hardship period? Against the background of the global economic crisis analyses of experts have it that on the one hand, it becomes much tougher for foreign companies to draw loans from the banks for their regular operations. In addition, market shrinkage and an increase of operating cost forces them to react. On the other hand, the crisis shows much less effects on the domestic market than on markets abroad and, within China, less effects in the centre, western and north-western provinces than in those at the coast. Among the advantageous areas within the country, again, Xi’an area is favoured, owing to its a. m. special conveniences. The way to Xi/an, by moving production lines here, is consequently the best choice to alleviate consequences of the crisis and to avoid additional losses. In addition, abundant human resources, high-quality labours and low-cost are at easy reach for investors. Inversely, investment by these multinational enterprises will be bound to boost development of local industries. In order to procure more investment opportunities, HTDZ is establishing new policies to attract these multinational enterprises for removal of their advanced manufacturing industries here. Such preferences include: 1. To abate certain cost for applying multinational enterprises, and allow a certain subsidies for rent fees 2. To provide certain subsidies for the movement, transportation and installation of the equipment, for instance. 3. To provide certain housing subsidies for talents, if they are prepared to work in Xi��an for a certain period; more preferential policies and subsidies are foreseen for their Children at school age. 4. To provide certain discounts for loans, if foreign company employees or talents moved equipments are up to certain value to Xi’an. 5. To extend the number of international schools to provide for an educational environment for foreigners, if required.  Source: Xi’an High Tech Development Zone.