The skyline across a wedge of this ancient city in the middle of China is pierced by a series of seemingly endless complexes of high-rise buildings, apartment towers, assembly plants, hotels and shops.
In some spots, it looks no different than downtown Raleigh or uptown Charlotte, but in many ways it’s bigger, broader. The focus here is on science and technology, on connecting and harnessing the research efforts of universities, regional industries and state-funded enterprises, including the Chinese military and space program.
The goal? To convert research and development in China into a range of technology applications and products at a place that has become a regional base for tech, biomedicine and advanced manufacturing.
The name given by the Chinese for this park, one of six like it in the country, is a mouthful: Xi’an Hi-tech Industries Development Zone.
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It is hard not to see or make comparisons to Research Triangle Park, a pillar of research and development efforts in the U.S. – and a model for the Chinese.
Except this: The sprawling RTP covers about 7,000 acres. This high-tech zone in Xi’an (SHEE-an) covers about 75,000, with about 15,000 acres already developed.
Begun in the 1990s as one of the first such tech parks in China, it is a symbol of the unbridled ambitions for innovation in the country, where research and technology efforts are accelerating.
It also represents a possible threat to the U.S., which has long supplied the brainpower, labs and research for innovations that continue to transform everyday life.
Founded in 1958 by a committee of business, university and government leaders, RTP has for nearly six decades been the economic engine of the Triangle. Since 2010, it has attracted $1 billion in capital investment and today is home to more than 200 companies and more than 46,000 full-time employees and contractors.
RTP’s proximity and close working relationship with the Triangle’s research universities have been crucial to its growth, as those schools have provided the park’s employers with a steady supply of engineers, researchers and scientists.
The success of RTP has spawned copycats across the U.S., too, and North Carolina leaders have been working to position the park – and the state – for continued growth. A state Department of Commerce report released last month ranked the state against others on more than three dozen innovation measures, concluding that North Carolina is 23rd nationally using the measures.
But take in a slice of the Chinese effort, and it’s a reminder that RTP and the state isn’t competing just with Boston, Silicon Valley and Austin, Texas, in producing advances and jobs. North Carolina is also in competition with China and South Korea, Japan and Germany.
Jim Breyer, a billionaire venture capitalist based in California, told Bloomberg that the creative energy necessary for growth in new products, medicines and services is blossoming worldwide.
“This is a magical time,” he said. “Innovation is happening in centers of excellence around the world faster than ever before.”
‘Fascination with RTP’
Bob Geolas, who leads the RTP Foundation and previously led efforts at N.C. State’s Centennial Campus, knows that the Chinese have paid close attention to RTP and its model of using research and technology to make lasting economic gains and progress.
For a long period, he said, Chinese delegations were visiting North Carolina at a pace of about once a month.
There is no question these parks are very large in scale, highly populous and have a lot of development. But I suspect very few are doing what we truly consider to be research.
Bob Geolas, head of RTP Foundation
“Of all the countries in the world who have come, it is the Chinese who have always held a real fascination with RTP,” Geolas said.
Geolas’ own interest in what was happening in China took him to Beijing and Shanghai two years ago.
“There is no question these parks are very large in scale, highly populous and have a lot of development,” Geolas said. “But I suspect very few are doing what we truly consider to be research. It’s more about manufacturing still or something lesser than what we have in our capabilities.”
Other experts also see limits in China on creativity and innovating. Freedoms in thinking, they say, are essential to the types of collaboration that produce a product such as the iPad or a groundbreaking medicine.
“There are limits on free speech in China, on intellectual property – there are market controls,” Geolas said. “These all hold back what we think of as research.”
Still, Geolas saw a level of striving in development, transportation and overall purpose that, he said, deserves U.S. attention.
Geolas recalled an exchange with a Chinese official as they discussed RTP’s success.
“He said to me, ‘You are the grandfather,’ ” Geolas said. “ ‘And China is the up-and-coming grandchild.’ ”
Education tied to innovation
It is difficult to describe the scale of what the Xi’an park looks like. Tall, glass buildings dot the skyline as far as the eye can see. Broad, signature boulevards are lined with trees and lush landscaping. Buses and taxis crisscross the area.
In other places, aging dormitories, near low-slung assembly plants, block views. They house thousands of workers who live in company-town settings. Wages for most assembly-type jobs are roughly equivalent to $10,000 annually.
Ask to look inside, and the officials decline. Ask to tour a plant, and they say it’s off limits.
Wang Menghao, a project manager in the zone’s foreign investment bureau, can rattle off a deep set of numbers, facts and promises about the future.
The zone employs nearly 350,000 people, he said. That seems possible, given that Xi’an is major regional city of more than 8 million people.
He said workers here have produced significant civilian and military applications and are working to develop more in energy, medicines and tech components. A series of displays at the zone’s headquarters show all sorts of products, from engines to missiles to pills, that officials say are made here or were developed in the zone.
Wang said research in the zone has produced about 8,500 patents.
All of it enjoys the backing of the Chinese government, which has provided substantial resources to build and expand the zone. The government is financing national engineering centers here and multiple national R&D testing centers, not unlike U.S. government facilities based in RTP.
One other example of the support: The government recently set aside about $100 million in a special fund to incubate “emerging industries of strategic importance.”
Wang and others cite the importance of education in describing where the park is headed. Asked how many universities are connected to the park, he glanced at an aide. They could not provide a firm answer.
“It’s either 67 or 69 universities and colleges and technical colleges feeding in,” he said. “It’s a lot.”
An in-depth report in 2014 in Harvard Business Review noted that, in general, the Chinese have long been known as inventors – of gunpowder, the compass, paper money, distance banking and more – but now are seen more as “rule-bound rote learners.”
“Given the government’s enormous wealth and political will, China has the potential to set the kind of economic policies and build the kind of education and research institutions that propelled the U.S. to technological dominance,” wrote authors Regina Abrami of the University of Pennsylvania and William Kirby and F. Warren McFarlan of Harvard.
“But will that potential be realized?” they asked. “We see considerable challenges.”
They note that China has shown an ability to steal and copy advances made elsewhere – or, more recently, buy them. The Chinese have been acquiring a range of companies in the U.S. and elsewhere, gobbling up patents and processes along the way.
But universities are where future innovators are nurtured, Abrami, Kirby and McFarlan argue.
And there, they write, a heavy-handed government is suffocating progress. It’s an echo of what RTP’s Geolas saw.
“The problem, we think, is not the innovative or intellectual capacity of the Chinese people, which is boundless, but the political world in which their schools, universities, and businesses need to operate, which is very much bounded,” they write.
China is soon set to produce more Ph.Ds per year than any other country.
They suggest this could change, as China is soon set to produce more Ph.Ds per year than any other country.
The Chinese are also coming to the U.S. for higher education in increasing numbers, then returning home. In 2001, about 63,000 Chinese attended U.S. colleges. In the current academic year, that number is estimated to be about 270,000.
Major changes underway
The Chinese, with the world’s second-largest economy, say they are deliberately moving from a double-digit-growth economy rooted in manufacturing to one that is growing more slowly and will depend more on services and tech advances than on factory work.
The shift that is underway is apparent in many regions, where low-cost labor is moving from China to elsewhere in Southeast Asia.
(The Chinese today are) heavily committed to innovation as the new source of economic growth – heavily committed to the knowledge economy.
Denis Simon, executive vice chancellor at Duke Kunshan University
It was also seen last week as stock markets worldwide tumbled in response to repercussions and fallout from the changing Chinese economy.
Denis Simon is one of the world’s experts on Chinese innovation. He is also executive vice chancellor at Duke Kunshan University in the eastern part of China.
He said the Chinese today are “heavily committed to innovation as the new source of economic growth – heavily committed to the knowledge economy.”
“If you had asked me in the 1980s what’s wrong with the Chinese innovation system, I might have said to you, not enough money, not enough people, not enough equipment,” he said. “You know, very old, very poor infrastructure.”
None of those things are issues now, he said.
In 2000, China’s R&D spending was a fraction of what was spent in the U.S., Japan or European Union countries. China ramped up, then doubled its research spending from 2008 to 2012. Projections are that it will surpass the others by about 2020.
Foreign companies have set up 1,800 R&D centers in China, Simon said in an interview from his home in China.
Simon said that today in China “there is a much deeper, more profound understanding of innovation as a process” than ever. He sees major developments ahead in life sciences, supercomputing, advanced tech systems, especially as Chinese systems evolve to accept failure as a part of the process.
China has a “tremendous amount of brainpower,” Simon said.
“Tapping into that brainpower – there’s a sense that that’s the real source of China’s growth in the future,” he said.
China is ‘hungry’
For the U.S., he said, China’s emergence demands engagement – and the key period will be over the next five to 10 years.
Americans should recast how they think about China, Simon said. The idea is that there will not be a significant problem in the world that does not require China and the U.S. to work together to solve.
Isolation from China “will almost guarantee that the competitive relationship would develop into an adversarial relationship,” he said.
America can’t relax, he said. The Chinese are “very hungry.”
“While it is clear that money does not buy innovation,” he said. “The reality is that if you do put the resources into this, and you figure out how to make it work, then you will become a lean, mean, innovation machine. I think that’s where China is headed.
“To me, it’s not if – it is only when this is going to happen.”
In Xi’an, officials expressed a similar view, leaning toward a future built around computer chips in which Chinese innovators compete with those in places such as North Carolina.
At one point, Wang, the Xi’an project manager, flipped a switch in a large dark room the size of a basketball court.
It lit up a scale model of the zone, with blinking, colorful lights, like a toy village. A Hollywood-style movie cranked up and a deep voice extolled the ambitions in a 10-minute presentation.
“A new Xi’an in the world,” the narrator said. “A new world in Xi’an.”
About this report
J. Andrew Curliss traveled to China for 12 days last fall as a China 2015 Fellow with the East-West Center, a nonprofit that sponsors study, research and dialogue focused on the United States, Asia and the Pacific. The center sponsors public policy seminars and exchanges for journalists, policymakers, educators and others. In China, Curliss met with delegations of government, business, academic and citizen leaders in Beijing, Xi’an and Hong Kong. Curliss was a reporter and editor at The News & Observer from 1995 to 2015.