siemensbeijing.jpgSiemens has opened a new research centre in Beijing which will spend €80m in developing new environmental, energy, healthcare and automation technologies over the next two years.

The centre is dubbed a corporate technology centre, and, according to Siemens, its function is to foster group-wide innovation rather than, as is often the case with the Chinese R&D operations of western firms, to support a particular product line or business unit.

In addition to China, Siemens has corporate technology centres in Germany, the US, the UK, India, Russia and Japan. They account for around 5% of Siemens' R&D budget, so the lion's share of Siemens' R&D activities is thus handled by the operational units and is focussed more on product development.

Nevertheless, corporate technology is seen as a strategically important function, particularly for a company like Siemens that prides itself on being an innovator — it is second only to Philips in the number of patents filed with the European Patent Office.

The first Chinese CT unit was established in Beijing in 1999 and had responsibilities ranging from patents and standardisation to user interface design research. Its brief has since been expanded into areas like IT security, software and engineering, automotive and industrial automation.

The new purpose-built Beijing centre has already hired 200 scientists, and that number will grow to 300 by the year 2008. Siemens claims to be one of the largest employers among foreign-owned enterprises in China with over 31,000 employees. Siemens also has a CT centre in Shanghai.

Given China's desire to promote home-grown technology companies, I suspect the going will get increasingly tough for western companies that continue to view China as primarily an offshore manufacturing location for technologies developed in the west.

This move from Siemens seems to be one western company's way of saying that China has much more to offer than just cheap workers for its production lines.

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