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H.K. loses 'Silicon Harbor' project to Shanghai.

HONG KONG, Oct. 17 Kyodo

Hong Kong has lost a microelectronics project that aimed to turn the territory into a ''Silicon Harbor,'' as the organizer, H&Q Asia Pacific Ltd., said Tuesday it has decided to move the project to Shanghai.

Company Chairman Hsu Ta-lin told reporters that Shanghai has been chosen instead of Hong Kong because foreign investment receives preferential treatment in Shanghai.

H&Q Asia Pacific, one of Asia's largest venture capital and management companies, announced in July last year that it would lead a consortium of multinational semiconductor and technological firms to build a microchip manufacturing project in Hong Kong, hoping to develop the territory's own version of Silicon Valley.

But Hsu said the plan has been aborted because the terms of land and tax concessions offered by Shanghai were more attractive.

In Shanghai, the project will be exempt from taxes for the first five years of operation, and will have half of its taxes waived for the following five years, Hsu said.

In addition, land costs are minimal in Shanghai, he said.

Hsu said it is important to have concessions from authorities because the project needs an investment of US$1 billion to $2 billion.

A spokesman for the Hong Kong government's Innovation and Technology Commission said the talks between the government and H&A Asia Pacific were complicated.

Both parties decided not to pursue the plan following H&A Asia Pacific's choice of Shanghai to develop its chip manufacturing plant, the spokesman said, without elaborating.
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Publication:Asian Economic News
Date:Oct 23, 2000
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