This is China! BLOG

Ascendas and Them There Zhejiang People

Sasha Ge, Marketing Manager over at Ascendas, the Singapore-based commercial real estate company, and her colleague Erin Li, a Senior Executive in the same department, invited me recently to their office at Ascendas Plaza in Shanghai to tell me more of what they’ve been up to in the company’s development of Science and Technology parks around China. They were particularly excited about the latest agreement Ascendas made with the Hangzhou Economic Development Area (HEDA). I first visited HEDA nearly five years ago, when it was already a well-developed investment area, and then again late 2007. It was clear to me during my latest visit that HEDA had certainly taken a strategic turn in the kind of investment it was courting.

In July of 2007 Ascendas signed on to develop more than 750,000 sq meters of office space, R&D centers, leisure facilities, and residential space. The campus, when it is completed in five to eight years, will house between 30,000 and 50,000 people. The total investment amount of the new Singapore-Hangzhou Science and Technology Park will be nearly US$50 million. The Park will host R&D projects, IT Outsourcing and Business Process Outsourcing (BPO) activities.

It was Sasha who last year keyed me into the revelation that Hangzhou has been positioning itself for the last two to three years as a back-office to Shanghai. Indeed, “It was Zhejiang entrepreneurs who first saw that the cost of processing financials in Shanghai was becoming prohibitively expensive,” she said. My thought on the subject is that since a great many Zhejiang people – especially from Ningbo and Wenzhou – helped to build the Shanghai business community from very early on in Shanghai’s history, they would be amongst the first ones who would see the cost of their back office operations rising in relation to their income. Also, local Chinese business is far more sensitive to costs – especially if they are not relating directly to profits – than multi-nationals like a Proctor and Gamble (PG) or a Philips Electronics (PGH). “Zhejiang people – especially Wenzhou people – are very good at sensing business trends. And they know how to hire people smarter than them to build and run businesses.” she added. It seems natural, then, they would be amongst the first in China to begin outsourcing operations from Chinese companies.

Sasha continued, “The Zhejiang government is strongly encouraging Zhejiang SMEs to begin automating, standardizing their computer operations, and even going to ERP systems. The government wants to create business for the Hangzhou ITO companies.” And since the Central Government is intent on the development of national IT-/BPO sectors, lavishing hundreds of millions of RMB on local governments, the city that shows the brightest promise gets the most attention, I considered, both politically and financially.

Companies that launch their businesses from the Ascendas Park in Hangzhou will have the advantage of the nearly 135,000 graduates stepping out of nearby Zhejiang University. “Ascendas is building relationships with the University to facilitate employment at the companies when they open in the Park,” Sasha told me. I pointed out to Sasha that Ascendas seemed more intent on building a total environment than in just constructing a bunch of buildings and then stepping aside. She agreed.

Ascendas has a great deal of experience building these kind of environments, both in India and in China, with R&D and IT-/BPO projects in Bangalore, Chennai, Hyderabad, Shenzhen, Xi’an, Suzhou and Nanjing. Indeed, Sasha said near the end of our conversation, “One of Ascendas’s goals is to help bridge India and China.”

Now there, I thought, was a great quote.

Bill Dodson
SUZHOU, China

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Life is Gooood in Hangzhou
Nanjing Jiangning: A Healthy Investment Environment
Hangzhou: Not Just a Pretty Face