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China’s Silicon Valley—‘Houchang village’ brings prosperity, along with anxiety
China's Silicon Valley  Photo: image.baidu.com
 
‘Houchang village’, also known officially as the Zhongguancun Software Park, is hailed as China’s Silicon Valley with its record-high economic output. The area covering 2.6 square kilometers in Beijing’s northwestern corner reminds people of technology giants, top university graduates, and incredibly highly paid young programmers.

But the abundance of innovation, brain power and money just present the beautiful side of the hi-tech area. On the other side, Chinese media reported, it has long been plagued by persistent traffic jam and a lack of commercial facilities. Houchang village seems like an isolated island in the affluent capital city, so, many young people working here call themselves Houchang villagers in a self-mocking way, reported the 21st Century Business Herald.

“It’s like the fifth ring road has erected a long wall, alienating employees of Internet companies from the capital city’s prosperous world. No matter (you) earn 8,000 yuan or 50,000 yuan a month, you need to hang out in the ‘desolate and bustling’ place,” a Netease News article depicted Houchang village. Houchang literally means the ‘factory in the back’ in Chinese.

Many Internet giants including Baidu, Didi, Lenovo, Netease and Tencent have moved their headquarters here on the southern side of the ‘Houchang village road’, which is the only arterial highway that connects the software park with Xierqi in Beijing’s Haidian district where commuters could take subway.

Every ‘Houchang villager’ must take the 4-kilometer road on their way to and from work in the software park. With over 100,000 visitors daily, the average speed on the road has stayed below 20km/h for years.

“Improvement is underway,” the 21st Century Business Herald cited local authorities as saying. They explained the top-speed development of the area had gone beyond what was originally planned two decades ago, and they’re now “proactively improving the services and means of transportation.”

According to a source familiar with the design of the Zhongguanchun Software Park, only 50 percent of the planned transportation facilities have been completed so far.

Before 2000, the now ‘Houchang village’ was still countryside, around 9 km away from Wudaokou, in northwestern Beijing where the country’s top universities like Peking University and Tsinghua University are located.

Stepping into the 21st century, information technology swept across the globe, with growth of software and integrated circuit industries gained momentum in many countries. At the time, the State Council, China’s cabinet and Beijing’s municipal government decided to build the Zhongguancun Software Park. In December 2000, the first-stage of the project was launched and in July 2011, the second-stage construction was kicked off.

In 18 years, Houchang village was transformed into ‘China’s Silicon Valley’. By the end of 2017, the park is home to 28 major software companies, research headquarters of seven multinationals, and 59 listed companies, with a total of 73,000 software engineers working here.

With its output value surpassing 200 billion yuan in 2017, the output per square kilometer was 80.54 billion yuan. By comparison, Shenzhen’s GDP per square kilometer stood at 0.97 billion yuan in 2016, ranking first among Chinese cities.

“If the national Internet connection got paralyzed, the reason must be a huge traffic jam on the Houchang village road,” goes a widely circulated joke on Chinese social media.

People working here usually have mixed feelings toward China’s Silicon Valley.

At peak hours in Xierqi, there are always huge crowds of young people who’re on their way to and from Houchang village. Most of them are young men, wearing T-shirt, jeans and sneakers, different from the exquisite dressing style featuring Beijing’s CBD district. The young people here are ridiculed by online punsters as those who earn over 50,000 yuan a month but look like those who live on a 5,000 yuan monthly wage.

There is no commercial complex inside the software park. During working hours, the streets outside the office buildings are mostly desolate.

“Here all we have is work, and it’s easy to hop to another company because all the big technology enterprises are situated here,” a young employee with Sina.com said, while admitting most corporate buildings are well-equipped with dining halls, convenience stores, gyms and coffee shops.

Like their peers in other parts of the city, the highly paid young people here are also burdened by surging home prices and lack of hukou, also known as ‘registered permanent residence’. Local hukou holders have access to health, education and social services locally.

Based on an official report released by the Beijing municipal government, 73.2 percent of employees in the software park do not get hukou in Beijing.

More than one executive in the park’s technology companies told the 21st Century Business Herald there is no way to help new employees gain Beijing hukou or give them a salary that could easily pay for the current surging home prices.

On March 21, the Human Resources and Social Security Bureau released a ‘trial implementation’, regulating that those who take major positions in high-tech, innovative, and research entities could be granted Beijing hukou under talent introduction programs if their taxable income is certain times of the capital city’s average wage for clerks over the most recent three years.

In 2017, it’s known the average annual income for employees in Beijing reached 101,599 yuan. With the figure, some media predicted those with annual pay exceeding 800,000 yuan would get to settle in Beijing. Some technology companies boasting highly paid programmer’s positions told the 21st Century Business Herald they’re not sure how the specific regulations will be executed.

When asked if enterprises will move out of the software park due to excessive housing prices, Su Ning, a vice director with the Shanghai Academy of Social Sciences, was quoted as saying, “Companies will involuntarily choose areas that will facilitate their development. So, generally, metropolitan cities will form where big companies gather. Then a rise in housing prices and rents would have crowding-out effect, leading to the survival of the fittest.

Lao Fang (alias), 30, told the 21st Century Business Herald that when he just joined Baidu, China’s biggest search engine, he seldom left office before 9 pm in the first half year. He joked there was no big difference between him and assembly line workers because he also deemed himself a small screw in a huge machine, while the only thing that was different was his annual pay of 700,000 yuan.

And the good pay brings him the ‘maximum return’. Several years ago, Lao Fang purchased a small apartment in Xierqi for 2.1 million yuan, now the market price for the 50-square-meter flat has surged to 4.6 million yuan. 

 


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