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Huawei will invest 2 billion yuan in the first phase of construction which is expected to be finished by the end of the year. The second phase will cost another 2 billion yuan. After the completion of the whole project, output from Dongguan will hit 70 billion yuan annually, Chen Jianzhi, an official with Dongguan Songshan Lake Sci & Tech Park, said in a statement published on its Website.

Huawei's project is mainly on "mobile-end and software," a park official who declined to be identified said today.

Shenzhen-based Huawei, China's biggest private telecommunications equipment maker, declined to comment today.

Huawei has signed with global first-tier mobile carriers such as Vodafone to provide 3G phones.

"It will focus on 3G as the domestic market is a gold mine although 2G's competition has eroded the industry's profit," Chen said.

China is expected to issue next-generation mobile network licenses later this year. These will provides high-speed data services to phone users from video conferences, multi-player games and film downloads.

ZTE Corp, Huawei's domestic arch rival, has invested heavily to establish a research center on mobile communications in Shanghai employing 5,000 engineers.

Huawei's handset manufacture and research facility is now located in Shenzhen.

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