When bricks and mortar meet hi-tech: Evergrande’s US$15.9 billion fare on the technology bandwagon
China Evergrande Group, one of China’s largest developers, announced a 100 billion yuan (US$15.9 billion) foray into the country’s hi-tech industry, echoing President Xi Jinping’s call to make China a global tech powerhouse.
The company said it would invest over 10 years in biotech, aeronautics and astronautics, integrated circuit, quantum technology and artificial intelligence. The announcement was made on Monday during an event in Huairou, a county of Beijing, in cooperation with the Chinese Academy of Sciences (CAS).
Evergrande chairman Hui Ka-yan said during the ceremony that his company will team up with CAS to build three bases for advanced sciences and technology involving research, incubation and applications.
“The three bases will provide world-class facilities and support for scientists and we will make them world-class innovation centres, a hub for global top scientists,” said Hui.
Earlier this year Hui told his staff that the company would explore more non-property businesses such as hi-tech. In a March annual results briefing in Hong Kong, he said he had not developed a clear plan for the foray into the hi-tech sector, adding that he will “try any opportunities”.
Evergrande said the specific location of the science and technology hubs has not been finalised, nor had the terms of its cooperation with CAS.
“Evergrande could be the builder and operator of the scientific bases, like other developers who tap into the industrial property sector. Or it could be a financial investor to the hi-tech start-ups in the bases,” said Liu Feifan, a property analyst at Guotai Junan International Holdings. “This investment is in line with state policy priority.”
President Xi has stated that China strives to become a manufacturing and internet powerhouse, driven by state-backed initiatives including “Made in China 2025” and “Internet plus”.
Hui is known for showing fealty to the party and its policy agendas. In a recent speech he recalled his humble childhood and said without state aid, he wouldn’t have be able to finish his post secondary studies.
“Everything Evergrande has today, it owes to the party and state. I say this from deep within my heart,” Hui said last year, while announcing an 11 billion yuan commitment to helping reduce poverty.