The establishment last month of an industrial park dedicated to mobile phone technology has laid the foundations for Hangzhou to become a major player in that field of industry.

Within the next five years, a large-scale zone dedicated to the telecommunications industry will be operating in this capital city of East China's Zhejiang Province, with Hangzhou Modern Tele-Industrial Park at its core.

Industry pundits predict that the four-square-kilometre park concentrating on the mobile telephone industry is set to develop into one of the most important mobile phone manufacturing bases in the is already being dubbed "Hangzhou Mobile Valley,'' by the park's operators.

Samuel Sun, general manager of the park said the valley expects to absorb large levels of investment during the next five years.

It is estimated, by those behind the park, that the total mobile phone businesses in the valley in the next five years will reach 500 million, with an output value expected to be around 10 billion yuan (US$1.2 billion), and exports worth around 2 billion yuan (US$241.8 million).

Furthermore, it is estimated that around ten product research and development firms will base themselves in the park.

"One eighth of the world's mobile phones will be produced here in the future,'' predicted the manager.

More than ten foreign mobile phone companies from the United States, South Korea and Japan, have set up operations in the park involving a total investment of over US$1 billion, said Sun.

"Making full use of the professional advantage of the park, we will strengthen our co-operation with more world famous tele-communications manufacturers on the development and production of the third-generation mobile telephone, making Hangzhou a real 'mobile valley','' said Shi Jixing, president of Hangzhou Eastcom Telecommunication Corp, the park's main investor.

"The park is by no means like any other industrial park in the country, for it is a highly professionalized one, and is run like a company. Unlike the traditional idea of attracting investments with preferential policies and cheap labour , the 'mobile valley' provides investors with a complete mobile market that covers every single part of the whole mobile industry chain, from parts production, to new product development, after-sale service, everything,'' said Sun.

"So, it is like a huge super-market, which all mobile-related companies will find convenient for their business,'' he said.

"The high concentration of the mobile industry will not only cut down significantly on the cost of logistics to enterprise, but will also enable them to better adapt themselves to the increasingly fast information update.''

Sun said that a Hong Kong and American joint venture signed a sales contract with UT Starcom, another Hangzhou-based telecommunications company in the park, immediately after it moves into the "valley.''

The first 1 million mobile phones will be turned out by the end of this year, making some of the fastest investment returns in the country.

"We have seen that the world's mobile production and development base is now moving to China, owing to its huge mobile phone consuming populace, which currently stands at over 170 million and is still soaring at a pace of 7 million a year,'' said Shi.

"We have no reason not to have a large share of this big pie. The production of mobile phones in Zhejiang accounts for half of China's total. However, compared to world production, it is still too small,'' said Sun. (May 12,2003 )(China Daily)