Chinese Aim To Build The Next Silicon Valley China's leaders are pushing for a big change: They want their country's entrepreneurs to become innovators, too. The goal is to move away from mere manufacturing and on to the pioneering of cool tools like the iPad and establish global brands like IBM and Microsoft.

Chinese Aim To Build The Next Silicon Valley

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Many of the cool tools you crave, iPads, smart phones and computers, were dreamed up here in the United States. But when it came time to turn the inventors' ideas into real products, most of the manufacturing work was sent to China. Now, China is pushing for a big change: It wants to become an innovator, too.

NPR's senior business editor Marilyn Geewax went to China to see for herself how the country is trying to transform into a high-tech leader. And she's in the studio. Welcome back, Marilyn.


HANSEN: What were you doing in China?

GEEWAX: Well, I traveled with a group of U.S. journalists. We were invited by a nonprofit group called the China-United States Exchange Foundation. And they wanted us to see how China's economy has been evolving. This was my fourth trip to that country. And I have say, Liane, I probably used the wrong word when I said evolving, because the place just doesn't so much evolve as it leapfrogs. And I'm constantly amazed at the pace of change.

And one place with an intense burst of change is Dalian. Dalian is a very beautiful coastal city in northeast China. It's across the Yellow Sea from the Korean peninsula. And traditionally it was known for its fishermen and its farmers. But today, Dalian's population is more than six million. And it's pretty quickly transformed itself into a prosperous center that has manufacturing, ship building, tourism. And, in fact, the government has even created a commodities exchange there, so it's an increasingly important financial center.

But the big thing that we wanted to see was that for its next reinvention, Dalian is turning itself into a world-class center of innovation, especially in software.

HANSEN: So how is this new Silicon Valley being built on an old fishing village?

GEEWAX: Well, the Chinese leaders, they try to do things by thinking big. About a dozen years ago, they created the Dalian Software Park to service an innovation center. This is a really sprawling campus that mixes academic pursuits with business investments.

The park is just huge. It covers several square miles and it blends classrooms with office buildings. They're occupied by hundreds of foreign companies. There's research facilities, apartments, bilingual grade schools, restaurants, recreation facilities - all the ingredients that you'd need to attract the best students, the professors, workers, all kinds of deep thinkers from around China and, really, from all over the world. A lot of these buildings are already up and running. Some are under construction; others are in the planning stages.

But, you know, when you throw all these things together, all these people are thrown into the soup together: Does it really cook up fresh ideas? Well, you know, it's a recipe that's worked for the United States. You look at Stanford University, which has a beautiful campus in California, and they put together a lot of bright students, entrepreneurs and it spun off the Silicon Valley. And we've seen the same kind of thing at MIT in the Boston area or the University of Texas in Austin.

These are all places that became clusters of innovation. So it's really possible that this Dalian Software Park, with all of its classrooms and its entrepreneurs, that they really could come together to become a hotbed of new ideas.

HANSEN: But how confident are the Chinese that they can generate their own intellectual property?

GEEWAX: They're very optimistic. They think they have a lot of potential to add real value to the high-tech world. They want their own brands of computers and software. And they want their people to be the ones who have the patents, not just doing the low-end work in a factory as an hourly worker.

HANSEN: So, Marilyn, if Dalian does spin off lots of new ideas, doesn't that mean a relative decline for Silicon Valley?

GEEWAX: Not necessarily. If you believe in capitalism, then you believe that competition is a good thing. And competition from China could really help the United States by pushing our innovators to work harder to develop new products and come up with more efficient ways to do things.

And, just as one example, the Chinese are particularly determined to come up with ideas for clean energy. If they were successful, potentially that could help the whole planet.

HANSEN: Marilyn, what was your sense about how much of what you saw and what you heard was actually true, and how much might be propaganda?

GEEWAX: Well, I don't know if you'd call it propaganda but there may be some wishful thinking. You can't necessarily just throw everybody together and automatically produce the results you want. That still has to be proven. So, I don't that they're giving us propaganda, but maybe it's a little bit optimistic beyond what the evidence shows so far.

HANSEN: So, sugar coating, a little.

GEEWAX: Maybe a little. But, you know, it's an impressive facility and it could very well come together.

HANSEN: NPR senior business editor, Marilyn Geewax. Thanks and welcome back.

GEEWAX: Oh, you're welcome, Liane.

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