How did one take the lead in achieving "leapfrog development" and "city of industry and investment" from "creating something out of nothing"? Society | Strategy | Ancestors

Hefei: Guiding the Layout of Strategic Emerging Industries through Investment

In recent years, Hefei, Anhui Province has been vigorously developing strategic emerging industries through a "investment driven" investment attraction model. Nowadays, industrial clusters such as integrated circuits, artificial intelligence, and new energy vehicles have formed. How did Hefei seize the opportunity to achieve its high-quality development? Please refer to the journalist's research.

In just two years, more than 80 related enterprises have gathered in the Aerospace Information Industry Park of Hefei High tech Zone.

Chen Jingying, Deputy Director of the Investment Promotion Bureau of Hefei High tech Zone: We have established the Aerospace Information Industry Fund, specifically to invest in our early commercial aerospace projects. Through this approach, the government participates and then leads social capital to participate together.

The newly emerging aerospace information industry has once again taken the lead in Hefei. The person in charge explained that they actually invested in the first satellite terminal enterprise that had just started in 2017.

The investment promotion model of "investment led by investment" is a unique development path explored by Hefei. Nowadays, Hefei has become one of the largest display screen bases in the world. In recent years, Hefei has invested in a group of leading enterprises to leverage the upstream and downstream industries of semiconductors and new energy vehicles, achieving an overall improvement in the industrial chain. The new energy vehicle industry chain in Hefei has achieved a production value exceeding 100 billion yuan, and has gathered over 300 supporting enterprises such as components. The successful investment of these major projects has sparked heated discussions among people.

Hefei: A City of Industry and Investment that Pioneers Take One Step Forward

Hefei prefers to call itself a "city of production and investment". What is "industrial investment"? How did Hefei introduce strategic emerging industries through investment?

When the reporter arrived at this enterprise that produces quantum computers, the staff were debugging the soon to be delivered products. This big guy, which covers an area of seven or eight square meters, is the first civilian quantum computer delivered in China.

Zhang Hui, the person in charge of the enterprise, told reporters that the enterprise was established based on the quantum computing research team of the University of Science and Technology of China. At the beginning of its establishment, the team couldn't find a company willing to invest in them.

Just as the team was struggling, an injection of government industrial investment funds allowed the company to survive. In just a few years, the company has become the first quantum computing unicorn enterprise in China.

Why were investment institutions initially not optimistic about such a company, while the government's industrial investment was willing to pour in funds?

Yuan Fei, member of the Standing Committee of the Hefei Municipal Party Committee and Party Group of the Municipal Government: When its market logic was not particularly clear, we felt from the government's perspective that we needed to support this industry.

Yuan Fei told reporters that taking the lead and cultivating strategic emerging industries is a characteristic of industrial investment by the Hefei Municipal Government. The fundamental difference between government investment institutions and venture capital is that industrial investment projects do not seek control or aim for short-term benefits, but rather choose investment projects along the direction of the industrial chain.

For enterprises, they not only receive valuable start-up funds, but also receive strong government support for every step of their development, from office space to talent pool, due to investment relationships.

From the perspective of cultivating the industrial chain, investment is continuously transforming Hefei's industrial development towards high-end. Driven by industrial clusters such as display devices, integrated circuits, and artificial intelligence, each industry chain is forming a vertical chain and a horizontal network. How does Hefei achieve step-by-step management?

Yuan Fei, member of the Standing Committee of the Hefei Municipal Party Committee and Party Group Member of the Municipal Government: How to achieve advanced planning is actually a difficult task. For example, when we make display screens and integrated circuits, we are thinking about what else lies beneath it. For example, its equipment and materials, from screen to core, are a typical extension of the industrial chain.

From "making something out of nothing" to achieving "leapfrog development", with the gradual improvement of the industrial chain ecology, Hefei has also formed a gathering effect of strategic emerging industries. In 2022, the cumulative electricity consumption of strategic emerging industries in Hefei increased by 9.79% year-on-year, and the electricity consumption of the six leading industries increased by 20.86% year-on-year. Nowadays, there are an average of 5 high-tech enterprises born in Hefei every day. In 2022, the proportion of strategic emerging industries in the above scale industry will reach 56.2%, and the contribution rate to the city's industrial growth will reach 78%.

Leveraging social capital to nurture innovation for the future

Hefei utilizes the support and guidance of investment to attract upstream and downstream enterprises in the industrial chain to settle and form industrial clusters. The reporter's research found that the production and investment model in Hefei is still constantly innovating and upgrading.

In the past two days, Researcher Wang Shaoliang from Anhui University has been leading a research team to continue exploring technological breakthroughs in ultra-low temperature refrigerators, while also liaising with the seed fund manager of the Hefei Municipal Government to establish a company based on new technologies, accelerating the industrialization of this technology achievement that has not yet left the laboratory.

Wang Shaoliang, a researcher at the Institute of Material Science and Information Technology of Anhui University: We all believe that investing in a company may be done with our own money, including coordinating with the government. I didn't expect there to be such seed funds now to help you coach, create a company, and establish relationships with various aspects of the government.

Huang Xuxin, the head of seed fund operation and management: Seed funds focus on technology, so we propose investing in early and small investments in technology. The investment of seed funds is actually an investment behavior, and more importantly, it may be the cultivation behavior of an industry.

In order to leverage unlimited innovation with limited capital, Hefei has shifted its investment focus to more research teams still in the laboratory stage in recent years, providing initial funding support to these teams through seed funds.

Yuan Fei, a member of the Standing Committee of the Hefei Municipal Party Committee and Party Group of the Municipal Government: It's just the "first mile". What can this money do? It's not much, but it can support this stall and turn it into a decent enterprise. Other social capital will be invested in later, and this seed will gradually grow into seedlings and trees.

Although there is not much money, it is still difficult for the government to afford it. Following this issue, the reporter found the parent fund of the "seed fund", the Hefei High Quality Development Guidance Fund, which was just established in March last year.

Wang Kegui, General Manager of Hefei High Quality Development Guidance Fund Co., Ltd.: Mainly through attracting social capital, we gather and attract investment institutions from society to cooperate with us to establish sub funds. We adhere to the approach of government guidance and market emphasis, and have achieved deep integration of high-quality capital with the industries in Hefei.

In just over a year, 37 sub funds have been established here, fully operated by marketization, gathering social capital of 103.5 billion yuan, and the leverage effect of fiscal funds has been amplified by 6.5 times. The funds are also invested in the future industries such as quantum and aerospace information that Hefei focuses on cultivating.

Nowadays, the artificial intelligence, integrated circuits, and new displays industries in Hefei have been selected as the first batch of national strategic emerging industry clusters. Behind the development of strategic emerging industries in Hefei, which is "creating something out of nothing" and "growing from being strong", lies a firm innovation and a spirit of daring to take the lead. Technological innovation has become the biggest symbol, driving force, and potential for the development of Hefei. Innovation empowers and drives high-quality development, giving this city an inexhaustible source of vitality and infinite possibilities for the future.