Go north is the message from Dawning

A display room at Dawning Information, a supercomputer manufacturer in Tianjin. [Photo/China Daily]

Cutting-edge technology is nothing new in China's industry. You can read every day about the spectacular advances being made by companies here. But Dawning Information, a supercomputer manufacturer, is slightly different because of its location.

The new breed of Chinese high-tech companies are increasingly setting up business outside the original Special Economic Zones. These were in the southern coastal provinces, where China's economic miracle began back at the beginning of the opening-up policy in 1979-80.

This is not only good news for the country's high-tech industry development but for the Chinese economy as a whole.

Dawning is based in Tianjin, which borders Hebei province and Beijing municipality, and is a perfect example of the spread of industrial development northward. Lenovo Group Ltd, the personal computer manufacturer, is another with its headquarters in Beijing.

Key to sustainable economic growth in China is the spread of companies like these from outside the industrial heartland of Guangdong. West China and northwest China are unlikely to catch up with the south unless key clusters of strategic industries are located there.

It is critical that more Chinese companies follow in the footsteps of Dawning by investing in the least developed Chinese regions and cities. This will bring innovation to these areas and increase manufacturing output.

Another key byproduct will be the increased flow of foreign direct investment into these regions. This is precisely how the seeds of growth were sown in the early SEZs.

Dawning's decision to set up business in north China should not be seen as an isolated initiative. Industrial clusters are also emerging across major northern cities, including Dalian, Xi'an and Lanzhou.

Dalian's high-tech zone spreads for approximately 30 kilometers and has already attracted many of the world's leading companies. Moving further west, the Xi'an high-tech industrial zone also provides ample opportunity for cluster development.

Dawning and other companies that venture north will also be well-positioned to build premium brands for their domestic and international markets. Since 2012, the Lanzhou high-tech zone has provided the clearest path for those pioneering companies keen to spread across China.

Rapid economic development there was closely associated with the successful Lanzhou Investment and Trade Fair in 2013, where major projects were unveiled. Up to 12 agreements where signed at the provincial-level exhibition, with contracts totaling more than 7.29 billion yuan ($1.17 billion). At the end of May 2014, 2.81 billion yuan had already been allocated.

In short, Dawning continues to set the bar higher while spreading the expansion message across northern China. Those that follow Dawning will benefit immensely by going down a similar route. Those that do not will forever regret it.

The author is a visiting professor at the University of International Business and Economics in Beijing and a senior lecturer on marketing at Southampton Solent University's School of Business. The views do not necessarily reflect those of China Daily.