Model Cities


Background of Beijing:


Beijing is the capital of China. Beijing is located in the northeastern corner of China. The city limits of Beijing extend some 80km (50mi), including the urban and the suburban areas and the nine counties under its administration - in other words, it's huge. Though it may not appear so in the shambles of arrival, Beijing is a place of very orderly design. Long, straight boulevards and avenues are crisscrossed by a network of lanes. Places of interest are either very easy to find if they're on the avenues, or impossible to find if they're buried down the hutongs (narrow alleys).

The vast Chinese economy has developed in fits and starts since the founding of the People's Republic in 1949. Its basic structure is mostly that of a developing country, with the majority of the population employed on the land. However, there is a significant industrial base and expanding pockets of advanced manufacturing and technological enterprises, including a space programme.

Beijing is the center of political, economic, cultural and educational, and even international communication in China. After entering the neo-economy, Beijing has had a full play of its advantages and launched China's Silicon Valley- Zhong Guancun Scientific and Technological Park. In order to develop economy, Beijing has established Central Business District (CBD), where over 20 multi-national corporations gathered there. Beijing has become a pivotal hub for China's neo-economy development.

In 2007, Beijing turned to be one of the outsourcing base cities under the authorization of Ministry of Commerce. Beijing boasts pre-emptory advantage in software export to Japan, because Beijing embraces abundant medium and high-level talent reserve, well-developed communication networks and efficient transportation conditions, which are in need for outsourcing services. All in all, Beijing holds a competitive advantage in the global outsourcing market.

Economic Background:

Beijing as the capital of China is the first group of cities extends service outsourcing industry. There are two reasons. One is geographic reason, Beijing is coastal city. The other reason is service outsourcing industry depends on the well-development of economy. Here we have brief introduce Beijing's economic environment.

Primary industry saw steady development while the status of agriculture as the basis of development has been further bolstered. An added value of 8.2 billion yuan was achieved in the year, which represented a 3.8% increase and accounted for 5.9 % of the municipal GDP.

Secondary industry achieved an added value of 64.42 billion yuan, an increase of 10.1 % as against the previous year. Of the total, the added value of industry amounted to 49.32 billion yuan, up 12.8 %; the added value of construction industry amounted to 15.1 billion yuan, up 14.5 %. The added value earned by the secondary industry accounted for 46.5 % of the municipal GDP. The industrial production and sales reached 98.11% in 1995 as enterprises strengthened their capabilities to function in the market-oriented economy. The self-contained economic entities at or above the township level materialized a revenue of 15.87 billion yuan in terms of profits and taxes.

Tertiary industry saw continued development with an added value of 65.89 billion yuan, up 15.6% compared with a year ago in terms of constant price. It accounted for 47.6 % of the municipal GDP. Service industry became mature as finance, tourism, real estate and information industries developed rapidly in the past year.

Figure 1: Annual GDP of Beijing

Source: National Bureau of Statistic of China

Figure 2: Development of Information Transmission, Computer Service and Software Industries (ITSCSI) in Beijing

Source: Beijing Statistical Information Net

Figure 3: Annual Software Export in Beijing

Source: Beijing Statistical Information Net

Beijing Service Outsourcing Industry Development:


Beijing aims at propelling the development of modern service industry. It puts international offshore outsourcing and improving competitiveness of outsourcing enterprises at the core and gives priority to the high value-added outsourcing services. It is dedicated to developing offshore outsourcing market, exploring European, American and Japanese markets and creating offshoring transaction center, with software and information service outsourcing, financial service outsourcing, technological R&D outsourcing, business service outsourcing, logistics outsourcing, biological medicine outsourcing, design outsourcing and financial management outsourcing and HR outsourcing as the main development stream.

Beijing is striving to reach the goals below at the end of the eleventh Five-Year Plan period:

First: the service industry will occupy 72% of Beijing's total GDP, absorb 70% of working labors, and keep an annual growth rate of 10%.

Second: the total value of Beijing's service outsourcing industry will reach RMB 30 billion.

Third: there will be 200,000 people working in service outsourcing industry in Beijing in 2010.

Fourth: in 2010 about 50,000 graduates will find jobs in Beijing; more than 50,000 outsourcing talents will get trained and 100,000 more job opportunities will be created.

Fifth: Attract 500 domestic or foreign companies to establish outsourcing enterprise in Beijing and 150 of them should have CMMI 3 / CMM3 certificate or above, and 30 of them should have CMMI5/ CMM5 certificate.

Sixth: cultivate one or two large-scale outsourcing enterprises with over 10,000 employees and 30-50 medium-sized enterprises with one thousand employees.

Political Support:

Beijing has established the system of service outsourcing joint conference, drew up industry planning, set up development goal and implemented preferential policy, so as to promote the development of service outsourcing industry.

According to the demand of "The Notice on the Talents Training of 'Thousand, Hundred and Ten Project'", the local government allocates special funds for the training of servicing outsourcing talents.

This year's graduates and unemployed graduates can enjoy a 15% refund of their training fee from the local government if they are employed by outsourcing enterprises after examination.

Those who meet the requirement in "the Regulation on the Introduction and Rewarding of High-positioning Talents" can enjoy certain reward

Give support to service outsourcing enterprises to get international authentication. According to the demand of "the Notice on the Authentication and Market Exploration of the Enterprises in 'Thousand, Hundred and Ten Project'", the local government should allocate "special fund for small and meduum-sized enterprises in international exploration" with an amount of not less than two times of that required by Ministry of Commerce.

In order to expand export, Beijing Municipal Bureau of Commerce grants the software enterprises with registered capital of over RMB 500,000 the rights of self-managed import and export.

Beijing is the first one to open the "Geen Channel" for enterprises' financing. The "Green Channel" not only provides an efficient and convenient financing guarantee, but also reimburses the guarantee fee and loan interest.

According to the regulations of "the Management of Beijing's Special Fund for Foreign Trade (Trial Implementation)", since the year 2003, on the basis of a 0.02 Yuan subsidy for every one dollar of software export, a more 0.02 Yuan will be added and this subsidy will be implemented on a quarterly basis.

Beijing has set up a CMM evaluation plan which lasts for two years, and formulated the "Measures for the Promotion of CMM Authentication in Beijing's Software Industrial Base" and "Regulations on Subsidizing Enterprises with CMM Certification and on Rewarding Individuals" so as to promote CMM evaluation in an all-round way.

Devott Publications
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