Chengdu, China: city of spicy food, leisurely teahouses and … software parks

Reporting from Chengdu, China —  If you want to experience China’s innovation boom, a good place to start would seem to be the Hi-tech Development Zone in Chengdu, a city known for spicy cuisine, riverside tea houses and panda bears. The zone, a 32-square-mile swath of gleaming office buildings on the city’s outskirts, is home to more than 31,000 companies, according to its website.

Yet, on a recent weekday afternoon, many of the zone’s buildings appeared to be collecting dust, and its perfectly straight roads were empty to the vanishing point.

China’s growth has slowed to its lowest rate in more than two decades, and the Communist Party is attempting to boost innovation and entrepreneurship as part of a vast transition to keep the economy afloat. China no longer wants to be known for imitation and piracy — it wants to be the leader of the pack.

Earlier this month, top party officials unveiled new guidelines projecting that China will rank among the “front-runner countries in innovation” by 2030, according to the state-run New China News Agency. Lavishly funded software parks, incubators, science universities and innovation conferences are springing up across the country, far from established tech hubs in Beijing and Shanghai.

Chinese state media have held up Chengdu, the capital of Sichuan province, as a model of innovation in the country’s rapidly developing southwest. On the surface, it’s an unlikely match. The city, home to more than 10 million people, prides itself on laziness — its inhabitants are famously more inclined to spend their days sipping tea in parks than grinding away in offices.

Yet, in recent years the city has developed both upward and outward, its population swelling and its quiet, leafy streets giving way to forests of glass-and-steel skyscrapers. Innovation is part of the master plan. The Chengdu government, backed by private funding, has set up seven “start-up focused funds” flush with more than $100 million, Bloomberg reported in mid-April. In November, the city hosted the 2015 Global Innovation and Entrepreneurship Fair, which drew delegations from “dozens of countries,” according to state media.

For all that, its software parks are mostly empty, its start-ups share no spirit of collaboration and, as the Chinese economy falters, many entrepreneurs are struggling to attract capital.

“Chengdu has a Silicon Valley dream, but the dream is now faced with a bottleneck problem,” said a late-April report on Startup-Partner.com, a Chinese news website focused on venture capital. “As a city full of entrepreneurs and investors, Chengdu hasn’t yet had a real ‘unicorn’ company,” a start-up valued at over $1 billion. (Link in Chinese)

The Hi-tech Development Zone’s success — and the reasons for its apparent emptiness — are difficult to gauge. Phone numbers on its official site went through to disconnected lines, and emails to representatives went unanswered.

Charlie Moseley, 34, the American founder of the local lifestyle website Chengdu Living and creative director of Tap4Fun, a gaming company, said that Chengdu is a good place to live, with temperate weather and friendly, laid-back people.

But, he said, “I get the impression that game companies in Chengdu are really struggling — we’re meeting hard economic times right now.”

“I know that a lot of people are looking for jobs; I know that salaries are not going up; I know that employers have a huge amount of leverage while hiring,” he continued. “Tap4Fun is a good example of that. We have the craziest hiring process of all time — everyone who applies here has to read a book [“Insanely Simple: The Obsession That Drives Apple’s Success” by Ken Segall] and then undergo a series of tests.

“The hoops that you can make prospective employees jump through are not like anything I’ve ever seen.”

Not that Chengdu is devoid of dynamism. Its start-ups range from Camera 360, a popular camera app, to AllTech, a medical imaging company.

Chen Qinqin, 28, moved to Chengdu from Beijing last fall and founded a health food delivery service, a relative rarity in a city whose cuisine consists primarily of infernally spicy fare. Two months ago, she got two or three orders a day; now she gets 20 to 30. “Chengdu has a big market for everybody; they’re very open, they take to new things very quickly,” she said.

Chengdu’s greatest strength is its ready supply of well-educated workers — some local, others from elsewhere in China — who can enjoy a laid-back, cosmopolitan city with a much lower cost of living than Beijing or Shanghai, said Duncan Clark, chairman of the Beijing-based consulting firm BDA China.

“I would say these factors are more important than specific government initiatives,” he said in an email. “The government at best can create the conditions for innovation to emerge.”

Yet critics say that China’s innovation initiatives are weighed down by a rigid education system and strict government controls on information, and that when it comes to entrepreneurship, a country can’t simply spend its way to the top.

James Kang, chief executive officer of Sichuan Revotek, a Chengdu-based company that has developed technology for the 3-D printing of blood vessels, said that the city’s laid-back attitude has helped him build a team of young, intelligent employees who are not desperate to break off and start their own ventures. He added that they often need more guidance than many American start-up workers.

Kang, a Chinese-born academic at the University of Louisville, explained that blood vessels 3-D-printed with “bio-ink” could mark a breakthrough in regenerative medicine — a way to deliver stem cells to the heart, liver and brain to “rejuvenate” their own self-repair mechanisms. “Right now we cannot make a heart, but we can make blood vessels,” he said. “The idea is we will create a small environment to make stem cells grow and differentiate the way we want.”

The company has 62 employees. Its technology is still in a testing phase.

China’s start-up scene is “not like the U.S.,” he said. “U.S. culture encourages originality, it encourages creativity. But Chinese culture, basically the way young people are educated, is to follow, not to create. This is a cultural problem.”

“The government — in terms of the political environment now in China, and all of the policy — strongly encourages, even forces people to be innovative,” he said. “But innovation doesn’t come from the outside, it comes from the inside. I’m sure in the long run it will definitely be successful, but it will take a long time.”

Yingzhi Yang in the Times’ Beijing bureau contributed to this report

Follow @JRKaiman on Twitter for news from Asia

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