A World Top-Class Science Park to Attract World Top-Class Human Resources -----How Zhongguancun Science Park Becomes a Magnet for Overseas Returnees Zhang Qian

2 I. Chinese Overseas Returnees 3 waves of fever to study abroad and the number of people going broad to study has reached 802,000. u The 1 st wave was in the early 1980s u The 2 nd wave started in the 1990s u The 3 rd wave continues from 2000

3 u Wave of returning By 2005, 190,000 of the oversea Chinese has returned with an annual increase of 13% u Hai Gui -Sea Turtles returning to the shores they left to grow up in the sea.

4 II. Zhongguancun Science Park u University-based Science Park u Hi-tech Experimental Zone

u the number of hi-tech ventures grew from 527 to over 18,000 u employees increased from less than 10,000 to 600,000. u overall income that grew from RMB1.4 billion to RMB600 billion, u tax collected increased from RMB51 million to RMB21billion

6 III. A Rising Trend of Pioneering Business Year : u 32,000 returnees for business consultation u 7,600 have chosen to stay and 3,200 firms have been started up u number of the returnees stayed in the park is 7.6 times of that in 1999, and number of the firms they operate is 12.7 times. 91% of the firms are in the hi-tech industry. The original registered funds of these firms has totaled 3.95 billion yuan. u Incubator increased from 1 in year 2000 to 19 in 2006

7 Overview of Returnees in Z-Park

8 Distribution of Receiving Countries

9 Educational Degree of Returnees

10 By the end of 2006, there are 7 firms listed in US Nasdaq, accounting for 50% of the total firms listed in Nasdaq from Zhongguancun Science Park.

11 IV. Reasons Behind the Back Flow 1.Steadily growing and secured Chinese economy with a growth of 7% since year China's policy towards overseas students Ø "supports students to study abroad, encourages them to come back" and guarantee their "freedom of coming back and leaving".

12 V. Attraction of Z-Park Local preferential policies to make Zhongguancun Science Park the preferred destination of overseas returnees

13 Tax Incentives The income tax rate is 15% for the hi-tech companies in the park. 1-3yrs, tax rate 0; 4-6yrs, tax rate 7.5%. For the certified software and IC companies, VAT rate is 17% before year 2010.

14 Beijing city’s residency permits will be preferentially issued to overseas returnees as well as technology & management talents from other provinces in spite of the limited quota. Stock equity and stock option are rewarded to the distinguished sci-tech researchers and operation management. Talents Policy

15 Financial Policy Developing Funds for Hi-tech Companies Developing Funds for Software Industry Supporting Funds for Overseas Returnees Loan Guarantee Green Channel VC Matching Fund Risk Subsidies for VC Companies China's OTCBB

16 5 Overseas Liaison Offices

17 Incubators 19 incubators has set up especially for the returnees and 1,600 firms has been incubated within the 420,000 square meters' offices

18 Supporting Funds System u For the new start-ups by the overseas returnees, a free supporting fund of 60,000 to 100,000 RMB is offered as a token gift by the government. u Among the 711 start-ups who have received 58.3 million RMB totally since 2002, 96% of them have operated their business successfully longer than 3 years.

19 Green Passage for Bank Loans Zhongguancun Guaranty Cooperation has guaranteed million RMB's bank loan for 156 firms of overseas returnees.

20 u Resources from the around 39 universities u The culture of "Bold in Innovation and Afraid of No Failure" is popularized in the Park.

21 VI. Social and Economical Effect of the Returnees u China's strategy of "rejuvenating the country through human talent." u "irreplaceable" and of "outstanding historic role". u overseas returnees bring back many things including advanced technology, international conception of management, connections with the outside world, foreign funds and investment

22 VII. Policy Suggestions 1.To create a pleasant environment; 2.To popularize English as the working language especially in the non-English spoken country; 3.To intensify the education and propaganda of moral and belief for the purpose of attracting its foreign educated talents back to their homeland