Shanghai district Yangpu unveils ¥12b of start-up backing to transform from ‘rust belt’ to innovation hub
Municipal officials in a district of Shanghai known for heavy industry have taken an activist approach to rebooting its economy, establishing a financing mechanism to help young technology companies in what they hope will transform the area into a bustling high-tech hub.
Yangpu, one of 16 districts in the municipality of Shanghai, has launched two multi-billion-yuan investment funds in an effort to create an innovation belt.
The government will inject 10 billion yuan (US$1.45 billion) into a fund designed to focus on technology transfers, and an additional 2 billion yuan into a fund of funds led by venture capital firms that will focus on start-ups.
“The globalisation drive and innovative spirit will be the two engines to help the rusted industrial belt reach new heights,” said Xie Jiangang, mayor of Yangpu. “The new innovation belt will become an ecosystem in which technology and a comfortable living environment play a central role.”
Additional funding will go towards a large-scale redevelopment of a waterfront area along the Huangpu River that stretches for 5.5 kilometres.
Xie said that 3 million square metres of commercial property will be built along the waterfront area to attract investors, entrepreneurs and professional service firms from around the world.
Shanghai has been striving to create its own information technology giants for the past decade amid a slowing local economy.
The 2 billion yuan fund of funds will be channelled to venture capital groups investing in early-stage tech companies.
The municipal government has also rolled out an incentive to encourage entrepreneurship, according to Miao Rongbin, head of the district’s statistics bureau. These include cash awards for technology companies that successfully list on public equity exchanges.
The tech transfer fund, backed by the Ministry of Science and Technology, is designed to identify scientific research with potential commercial application, and to facilitate the business development process.
Both Shanghai city government and Yangpu district government have invested in the two funds.
Yangpu officials are striving to create synergies with the education resources around the Wujiaochang area where several key national universities, such as Fudan and Tongji, are located.
Yangpu has 20 technology parks that are home to 6,700 start-ups.
Yangpu, which ranks as one of the underdeveloped zones in the greater Shanghai area, has sought to find a new growth engine in an economy undergoing rapid transformation.
Miao said the district’s high-tech zones would be distinct from areas such as the Zhangjiang hi-tech park in Pudong, with a focus on incubating tech start-ups.
Unlike other high tech zones, which offer tax and land concessions as incentives to young companies, Yangpu plans to go a step further.
In late 2016 officials from Yangpu said they would compensate investors in local start-ups if they were to incur losses.
Qualified foreign professionals working for technology companies in the Yangpu district would be eligible for permanent residency, according to an earlier statement by officials.
Yangpu, with a population of 1.3 million, reported an 8.1 per cent growth in economic output last year, outpacing Shanghai’s gross domestic product growth of 6.8 per cent.