(Beijing, 9/9/2006) Bob Mundell and I spoke Thursday at a venture capital conference in Haidian district, Beijing, where I am the Chief Advisor for Finance to the Governor. Haidian is the home of China’s 2 top universities. We were knee deep in physicists. It was a great audience for me to talk about work I have been doing to apply non-equilibrium thermodynamics to issues in capital markets and economics. I will post the slide show on the blog in the next day or two.
Haidian is the “silicone valley” of China. With only 2.6 million people and 400 square kilometers in size, Haidian generates 3% of the total tax revenues for the entire country. Haidian is the home of 80 universities including Beijing and Tsinghua (#1 and #2 in China), 400,000 students, 30,000 graduate students, 100,000 private companies, 15,000 tech companies (including Lenovo, IBM and AMD) and is headquarters for 13 NASDAQ companies. As a designated high-tech zone, high-tech companies that move to Haidian pay 0% taxes for 3 years, 7.5% taxes for 3 additional years, and 15% in year 7. Capital gains taxes on stock profits are 0%.
The purpose of the conference was to introduce venture capital and private equity investors to Chinese entrepreneurs and potential business opportunities coming out of the Haidian universities and to educate the entrepreneurs about venture capital. We had an audience of 300 plus, including many U.S. investors, who came to hear about what the opening of China’s capital markets later this year will mean for investors.