The Digital Silk Road Universities In China’s Key Western Cities

From Hot Desk Technologies To Digital Currencies, R&D Opportunities In China Abound. But Where?

Op/Ed by Chris Devonshire-Ellis 

The global outbreak of Covid-19 does have a benefit in that it is forcing corporations and governments to move the adaption of technologies ahead a lot faster than would have been the case. It is ushering in a new wave of employment, where employers are more accepting of staff working from home. Office spaces can be downsized, as a result, and I predict a lot of commercial landlords will be feeling the pinch when rental contracts, a large part of any corporations operating costs, come up for renewal. It may also mean that staff may ask their employers to re-imburse them for using some of their home space, a new concept for HR.

We are hearing a lot more talk about Contextual Work Spacing and Hot Desks, and newer and more secure protocols enable staff to work remotely. It also means a re-evaluation of measuring staff performance – 9-5 is going out, and evaluating productivity is coming in. If my employees are on the beach from 3pm every afternoon, why should I care as long as their expected productivity targets are met?

All this requires increasingly sophisticated methodology and IT in terms of having businesses and their staff adapt to a more digitized and flexible working structure, while being able to maintain mutual disciplines and parameters.

There are other issues too: why have physical money – upon which all manner of germs can remain – when we can have a safer, card or online based payment system? China has just been trialing its’ new Sovereign Digital Currency in Shenzhen, Suzhou, Xiongan and Chengdu. Known as “Digital Currency Electronic Payment (DCEP), trial runs are being piloted by a small range of banks and end users, eventually spreading to a wider range amid improvements in the technology and system.

There are three main differences between DCEP and existing cryptocurrencies such as bitcoin.  Firstly, Bitcoin is mined, meaning the source is decentralised and controlled by an algorithm, DCEP is government sanctioned and centralized. Secondly, the underlying technology is different. The blockchain ledger is controlled by the government and not distributed across the system. Third, it will operate like a normal currency and be integrated throughout the commercial system. There are critics, both democractic and governmental. As China also has a Social Credit System, individuals could find themselves auto-punished, having funds removed or even their accounts locked down should the Government wish. To be fair, that also exists elsewhere in Western societies, but perhaps not in such a draconian manner. Secondly, it challenges the authority of the US$ as a global currency. China holds a significant amount of US debt, and changes to the balance of play here – which the US wishes to keep in position but China does not, could manifest itself should China’s DCEP prove viable, as the money supply is not controlled by Washington.

China’s Currently Trialing DCEP Wallet On A Users Smartphone

Changes are obviously not that far ahead, both in terms of how, when and where we work, and how, when and where we pay for transactions. Many have titled this “The Digital Silk Road”.

But how to get involved?

Foreign investors in this field may already be aware of China’s decision to incentivise foreign investment into the Western Regions – and by proxy part of the Belt & Road Initiative – by reducing profits taxes for investors in China’s West to 15%, against the standard 25%.

There are qualifying criteria, and we examined those in some detail, and included the qualifying requirements in the article 15% Reduced Profits Tax Rates And Preferential Policies Announced For Foreign Investors To Support China’s Belt & Road Initiative. It therefore makes sense to look at the incentives. In fact, many of them specifically cater for foreign investment into R&D in the Digital and IT industries. But where do these align with China’s own research institutes?

In fact, many of these are based in exactly the same regions that China has announced tax incentives. All are able to discuss joint ventures or cooperation with foreign investors.

Let’s take a look at some of these:

Kunming University Of Science & Technology, Yunnan 
KUST has a large array of faculties in the R&D sciences, engineering and IT, and has developed into an important provincial training base for advanced technical personnel, a research base for applied fundamental research and hi-tech research, an industrialization base for hi-tech, and a research and consulting center for national social and economic development. The Yunnan University Science Park is sited next door, and was established as an experimental site in 1999 and was awarded the status of national university science park in May 2001. The park is supported by KUST as well as Yunnan University. Foreign investors looking to get involved with research from KUST are able to establish operations in the Science Park.

Guangxi University Of Science & Technology, Guangxi 
GUST is based in Luizhou, and has a strong medical R&D faculty (it merged with the Luizhou Medical College in 2013). It is instrumental in developing and researching new medicines and bio-engineering.

Xi’an Jiaotong University, Shaanxi 
Xi’an has a long history in engineering research, and is affiliated with Dukes and the Massachusetts Institute of Technology, in addition to academic institutions in Japan and Africa. It has a long history in medicine, engineering and chemical research.

SouthWest Jiaotong University, Sichuan 
Chengdu’s SouthWest Jiaotong University is a well known centre for engineering excellence and especially with infrastructure developments and transportation technologies. It has affiliations with Universities in Illinois, Milan, Leeds and Russia and a long association with railway development.

Chongqing University, Sichuan
This is one of China’s “Ivy League” academic institutions and has a long background in Built Environments, Technology, IT, Computer Sciences and Engineering.

Inner Mongolia University Of Science & Technology, Inner Mongolia
IMUST is based in Baotao, one of the two main cities in the Province, and has a background in mining as well as agriculture, architecture, environment and computer sciences. It partners with Universities in the United States, Australia, and Canada as well as Japan and UK.

Xinjiang University, Xinjiang
XJU is based in Urumqi, Central Asia’s largest city. It specializes in agriculture, arid ecology, central asian culture, electrical engineering, and life sciences.

Foreign collaboration with, or commercial partnering with Universities in China is a common way for R&D based business to both participate in and learn from new technologies and new markets such as those along the Belt & Road Initiative.

Our firm, Dezan Shira & Associates has a long track record in assisting foreign partners develop relationships with Universities in China. Please contact us at silkroad@dezshira.com for assistance.

Related Reading

• How China’s Education Modernization Policy Impacts Foreign Investors
• Where to Invest in China: A Primer on its Economic Development Zones
• Business Guide to West China