China’s biggest photoelectron information industry base, known as Optical Valley, is located in the city of Wuhan, central China’s Hubei Province. In the twentieth century, Silicon Valley in the United States brought great development to the global IT sector. Industry experts predict the biggest industry in the 21st century will be photoelectron information, with a production volume worth 500 billion US dollars by 2010. The United States, Germany and Japan all have plans to develop optical related industries. And in China, the Ministry of Science and Technology has officially approved the development of an optical production center in Wuhan this March. Compared with other countries, Wuhan is not the first place for this kind of development, but still offers many opportunities for both domestic and foreign companies.
Sixty-eight-year-old Xu Qizhen is a member of the legislative advisory body, the Chinese People’s Political Consultative Committee, or CPPCC. A senior engineer in information technology, he put forward a motion to the CPPCC in March 2000, to develop China’s first optical production center in Wuhan.
Xu QiZhen, State Expert, said: “Actually, Wuhan established photoelectron laboratories and engineering centers ten years ago. This is why I put forward the motion. We have to meet the needs of international development and use Wuhan’s advantage. Setting up an optical production center will establish a photoelectron information base, like what is being done in developed countries.”
Located in central China, the city of Wuhan is one of the earliest areas in China to develop the photoelectron information industry. It has 143 factories and research institutes related to photoelectrons.
The Wuhan Research Institute of Post and Telecommunications, or WRI, is the research and development base for national fiber communications technologies. WRI is the only comprehensive organization in China that undertakes research development and production in the three kinds of strategic optical communication technologies, including optical communication systems, optical fiber and cable products, as well as photoelectron devices. For years, WRI has made over 450 achievements in research, more than 90% of which have already been put into use. Their annual sales have reached 2 billion renminbi.
Wuhan NEC Fiber Optic Communication Industry Corporation , a joint venture with NEC, is one of the earliest major producers of fiber digital communication equipment in China. Its products have covered 29 provinces, cities and autonomous regions. Wuhan’s central location will help it develop further.
Fumiaki Yamada , First Deputy GM of Wuhan NEC Fiber Optic Communications Industry Co. Ltd.
Said::“Compared with Beijing, Shanghai, and Guangzhou, Wuhan is the geographic center of China. Its advantage is that we can fly from here to anywhere.”
The Yangtze Optical Fibre & Cable Company, or YOFC, is another high-tech joint venture enterprise in Optical Valley. Jointly founded by the Chinese government and the Dutch company Philips, YOFC specializes in manufacturing and selling optical fibre and cable products for telecommunications. Since regular production began in 1992 , YOFC has successfully undergone numerous expansions in both optical fibre and cable products, and is ranked number one in that field in China in terms of output and turnover.
Wu Zhiqiang , Deputy GM of Yangtze Optical Fiber & Cable Co. Ltd.,said: “In the long term, fiber cables will be our main business. We’re expanding; we’ll finish our sixth expansion by the end of this year. When our fiber production doubles, we’ll start our seventh expansion. By the end of the seventh expansion, our production capacity will be doubled again. In addition, we’ll expand our cable production and establish factories in other parts of the country, as well as abroad.”
Huagong Laser, working with the national laser key laboratory, is building the Laser Processing National Engineering Research Center. It will produce high-powered laser devices and complete sets of laser processing system equipments. It has the highest level of laser technology to be found in China. Huagong Image is China's biggest production base for comprehensive laser anti-counterfeit serial products. It was designated as an anti-counterfeit products manufacturer by the Ministry of Foreign Affairs, General Administration of Customs, State Tobacco Monopoly Bureau and the Ministry of Public Security.
In addition to the solid industrial base, another advantage of Optical Valley is its rich human resources. There are 18 universities and institutes, 56 state level research organizations and over 150,000 high-technology experts in the area. About one third of the experts work in the photoelectron information industry. They are the key to the establishment and development of Optical Valley.
Huang Dexiu, Professor of Huazhong University of Science & Technology,said: “The concept of Optical Valley has made people realize the importance of photoelectrons in the development of the national economy. Both the government and the people know this. Now everyone in Wuhan knows about Optical Valley, which has attracted the investment of many international photoelectron companies.”
After years of construction, Optical Valley in Wuhan has registered 4000 businesses. About one fourth of them are high-tech-related. By the end of last year, the total revenue of the center reached 84 billion RMB, or about 10 billion US dollars. What is their long-term strategy? And what’s the real potential there for foreign companies in the coming years?
On May 8, to celebrate the one year anniversary of the founding of Optical Valley, an on-line investment invitational meeting was held. Overseas investors from the United States, Germany, Japan, Hong Kong SAR and Taiwan participated in it, and tens of thousands of people visited the website. Optical Valley was introduced, questions were answered, and contracts were signed.
The construction of Optical Valley has also attracted domestic bankers. In July 2000, five major domestic banks provided 18 billion RMB, or 2.3 billion US dollars, of credit over the next five years. They are also ready to provide a full range of financial services to the businesses involved in the project.
In May 2001, the Optical Valley Technology Stock Exchange was established in Wuhan. It was the first optical technology exchange center in China. After less than one month’s operation, more than 200 projects were released and around 30 members had joined.
Ye Xianyong, President of Wuhan Optical Valley Technology Stock Exchange, said: “The establishment of the Technology Stock Exchange was due to new experiments in the system. Our main goal is to accelerate the construction of Optical Valley, and the industrialization of high-technology. The Exchange can also help the industry and financial sector work together. And finally, it can help the construction of a capital platform.”
Optical valley has good environmental conditions, like sufficient water, electricity, and telecommunications. The infrastructure investment is over 1 billion renminbi, or 120 million US dollars. Some famous universities are building hi-tech parks there.
Wuhan also plans to absorb 1 billion US dollars of foreign funds and venture investment within 5 years. Nokia, Siemens, Ericsson and other well-known international companies have also shown strong interest in the construction of investment projects in China.
In the coming five years, 30 billion yuan, or 3.7 billion US dollars, will be invested in the building of a 50 sq. kilometers photoelectron electronics information industry belt. By the end of 2005, the yearly output value will exceed 100 billion yuan, or about 12 billion US dollars.
Tang Liangzhi, Deputy Director of Wuhan Optical Valley Administrative Committee, said: “Firstly, we hope there will be an international exchange center of photoelectron technology, and a market center for related products. We welcome partners to join us. Secondly, we hope people to establish factories here, especially ones related to fiber communication and medical fiber applications, and the software-related industries. There are no restrictions for the scale of the companies. We especially welcome overseas students to come back and set up small high-tech companies.”
Optical Valley has a bright future in China. Wuhan isn’t the only place. An Optical Valley is to be established in south China’s Guangdong Province with the cooperation of the US company Lucent Technology. And Changchun, the capital of northeast China's Jilin Province, and Shanghai Pudong New Area have plans for the construction of an Optical Valley and photoelectron industry park of their own. These places will bring huge business opportunities in China for both domestic and overseas businesses.
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