Chengdu business park

Chengdu's draw is more than just skilled workers

Pinguo Technology, the company behind (above) Camera 360 - one of the world's most popular camera applications with more than 500 million users - began as a project in the Tianfu Software Park business incubator in Chengdu.
Pinguo Technology, the company behind (above) Camera 360 - one of the world's most popular camera applications with more than 500 million users - began as a project in the Tianfu Software Park business incubator in Chengdu. ST PHOTO: CHONG KOH PING
Pinguo Technology, the company behind (top) Camera 360 - one of the world's most popular camera applications with more than 500 million users - began as a project in the Tianfu Software Park business incubator in Chengdu. The business incubator has a
The business incubator has approved about 700 ventures since it was set up in 2007. It provides free office space to budding entrepreneurs (above), as well as other support such as matchmaking companies with venture capitalists.ST PHOTO: CHONG KOH PING

Having lived in several large cities such as Beijing and Chicago, robotics expert Peng Bei still finds his home town of Chengdu to be the most liveable.

The city famous for its pandas and spicy hot Sichuan cuisine has not only a milder climate than other inland cities in China, but also an unhurried pace of life.

PLENTY OF TALENT

But more importantly, it is where Dr Peng could find the talent he needed to build his robotics company.

He returned to Chengdu, the provincial capital of Sichuan in southwestern China, in 2008 after spending 13 years away - five studying at Tsinghua University and eight at Northwestern University in Chicago.

He joined the University of Electronic Science and Technology of China, one of the country's top universities for electronics and information technology, as a professor. He specialises in research and development at its Centre for Robotics.

It was at the centre that he found three like-minded researchers to start Sichuan Artigent Robotics Equipment in 2010.

The company specialises in making service robots, which help humans do work that is dull, dirty, dangerous or repetitive.

They can be found in industrial settings and households doing chores like sweeping and mopping the floor. Service robots are also made for special purposes such as in the military or for scientific research in the deep sea.

"Our research and development has reached a mature stage, and the next step is for us to bring the robots to the market," said Dr Peng, who is also the chairman of Artigent.

Artigent has sold industrial robots used for automating checks and maintenance to about 100 electric substations in China.

The company is moving into making household robots next, in particular a type of "intelligent robotic security guard" for use in residential estates.

"This robot can replace security guards, deliver mail and goods and even pick up cigarette butts from the ground," said Dr Peng.

While running the company, Dr Peng continues to teach at the Centre for Robotics, which he says has a rigorous military-style training programme that has produced high-quality researchers.

This also provided him with a pipeline of much-needed robotics talent to grow the company.

"We aim to be one of the top three robotics companies in China," he said.

ATTRACTIVE TO BUSINESSES

Other than a good living environment and the availability of skilled workers, Chengdu's well-developed industrial ecosystem and service-oriented government also prove a draw for companies.

Chengdu Raja New Energy Automobile Technology, a company that designs and sells electric light trucks, is one.

Deputy general manager Fan Yongjun said the firm operates on a model where it cooperates with third-party automakers to produce trucks.

It made Chengdu its headquarters as its first original equipment manufacturer is in the city.

Chengdu's thriving auto industry, electronics and information technology clusters and aviation and aerospace firms are the key drivers of its one trillion yuan (S$218 billion) economy.

Global carmakers like Volkswagen and Volvo and Chinese brand names such as Dongfeng Motors and Geely have operations in the city, producing around one million cars a year.

Chengdu Raja was also attracted to the city by the government initiatives.

"Tianfu New Area, where we are registered, is the latest state-level new zone in Chengdu," said Mr Fan, adding that "it offers the most attractive policies for us".

The local government provided the company with land to bring offices spread over four locations under one roof. The government also waived rent for several years.

"The government has also been proactively informing us about new policies. This is a very service-oriented government, which is very different from the typical style (elsewhere)," said Mr Fan.

FOCUS ON START-UPS

Chengdu city officials told visiting media in October that promoting entrepreneurship was the main focus of their investment promotions last year.

Every one of its 20 districts and counties has rolled out different programmes to encourage start-ups.

Typically, these programmes provide free land or offices for the first couple of years and rentals at a huge discount in subsequent years, said an official from the Investment Promotion Commission.

There are also numerous incubators hosted by the various industrial parks for budding entrepreneurs to develop their ideas and business plans.

"These are not just for local businesses; foreign start-ups are more than welcome to set up shop in Chengdu," said Mr Chen Bing, deputy director of the investment commission.

By supporting start-ups, the Chengdu government hopes to nurture and develop the next Alibaba, the Chinese e-commerce giant.

The entrepreneurship drive is also seen as a way to provide jobs. Each year, China produces about seven million graduates, out of which 200,000 are from the 52 universities and colleges in Chengdu.

Chengdu is a magnet for global electronics and IT giants like Foxconn, Intel and Texas Instruments as well as home-grown big names such as Alibaba and Tencent, so it is no surprise that its start-up scene is dominated by technology companies.

Camera 360, one of the world's most popular camera apps with more than 500 million users, is one shining example that grew out of this technology ecosystem.

Pinguo Technology, the company behind Camera 360, began as a project in the Tianfu Software Park business incubator in 2010.

The company has now received more than US$23 million (S$37 million) in investment, employs 200 people and operates in Chengdu, Beijing and Tokyo.

"The incubator gave us space and access to talents and funding, which provided a huge boost for our success," said Pinguo chief executive and founder Xu Hao.

While the incubator does not provide direct funding, it helped matchmake the company with venture capitalists in Beijing.

The government is not the only one placing its bets on start-ups in Chengdu. The entrepreneurship boom saw the number of incubators in the city grow from 84 in 2014 to more than 200 last year, said Mr Wang Yujia of Shifen Kafei, a private-sector incubator which, among other things, runs cafes and a 50-million-yuan angel fund for tech start-ups.

While Chengdu has been successful in attracting leading multinationals, including more than 260 Fortune 500 companies, it is also taking pains to grow home-grown companies as part of a two-pronged approach to fulfil its ambition of becoming a world-class IT city.

Chengdu city officials reiterated that apart from its mild climate and good food, the city with a population of 15 million has a tremendous appetite for consumption, and yet is very affordable.

According to the Investment Promotion Commission, wages in Chengdu are two-thirds of those in the coastal cities and property prices are barely one-fifth of those in Shanghai.

That is why Mr Liu Xianshen, a 20-something returnee from the United States and a Shangdong native, chose Chengdu over Beijing when he decided to go home to start his mobile app business.

"Beijing is too crazy. I can't live in a fancy apartment and there's no high-quality engineers (at affordable wages)," he said.

A version of this article appeared in the print edition of The Straits Times on January 02, 2016, with the headline 'Chengdu's draw is more than just skilled workers'. Print Edition | Subscribe