Beijing will support science and tech startups in Zhongguancun by providing R&D subsidies up to 200,000 yuan, the city announced on March 14.
The announcement came as an interpretation by the Zhongguancun Administrative Committee on a guideline recently issued on supporting the R&D of small and micro enterprises in the Zhongguancun National Independent Innovation Demonstration Zone.
The guideline covers tech startups that are launched within five years and have fewer than 100 employees and less than 10 million yuan (US$1.58 million) in revenue. These companies shall be granted subsidies based on their R&D expenditures in the previous year, with a maximum of 200,000 yuan.
There are three levels of grants: Companies that spent between 100,000 to 1 million yuan will receive subsidies for 5 percent of the expenditures. Those that spent 1 million yuan or higher and less than 5 million yuan will receive 100,000 yuan in subsidies. The companies that spent 5 million yuan or more will receive 200,000 yuan.
"With the subsidies, we can hire more experienced researchers," said Leng Zhe, the head of R&D for a tech startup in Zhongguancun. "Even one more researcher can be very important to help to push forward the company's R&D.”
According to an estimation in 2016, Zhongguancun had more than 1,000 startups that meet the requirements to receive the subsidies according to the guideline. Eligible companies can apply on the official website of the Zhongguancun Administrative Committee, and receive the subsidies after submitting required materials and a relatively quick review process.
Statistics show that tech startups founded within five years account for more than 10 percent of the total in Zhongguancun, and its companies over the past three years have invested about 9 percent of their revenues into R&D, higher than the national average.
"Real scientific R&D is lonely work, with big investment and high risk," said Weng Qiwen, deputy director of the Zhongguancun Administrative Committee. "In order to encourage people to invest and help companies survive the period when they have not yet formed a stable cash flow, we have introduced this policy to guide enterprises to develop better through technological innovations.”
Compared with existing policies supporting the R&D of Chinese tech companies, Zhongguancun's new guideline has a lower barrier of entry. One major difference is that the guideline does not require applications to have a revenue; the companies need only to report their expenditure on R&D.
In addition, the scope of the R&D expenditures referred to in the guideline includes daily expenses, fixed-assets for R&D, and expenditures on R&D by outside contractors.