Cambridge technology R&D specialist Generics Group is to set up a product development operation in China after linking up with a Hong Kong manufacturing group.
Generics and Automatic Manufacturing Limited (AML) will together set up SGAI, a new company based in Hong Kong that will provide integrated research, development and production services.
Via its subsidiary, Scientific Generics, the UK group will own two-thirds of the joint venture company, which it said would ‘leverage the combined benefits of Hong Kong’s intellectual property laws and its proximity to China’.
The manufacturing muscle of the new company will be provided by AML’s 330,000sq ft facilities in Dongguan, China, where it employs 4,000 people and conforms to standards such as ISO 9001.
According to the two firms, using a single source for product development and low-cost manufacturing ‘will mitigate the inherent commercial and technical risks of offshoring’ and link technology firms from Cambridge and elsewhere with Chinese production facilities.
SGAI already has a major client in the bag, it said.
Hong Kong is attempting to use its special status under Chinese rule and its established links with the western business community to position itself as a technology transfer gateway to the South China region and its vast manufacturing resources.
At the centre of this effort is the Hong Kong Science and Technology Parks initiative, which is concentrating on developing clusters of expertise in areas such as electronics, precision engineering and telecoms.
One of the major attractions of Hong Kong for multinationals is its relatively sophisticated licensing and IP system. The former UK colony operates in accordance with major international copyright laws, a situation that inspires more confidence among foreign firms when using it as a base for registering their innovations in the region.
For example, Hong Kong recently signed a wide-ranging agreement with the Chinese semiconductor industry over the use of integrated circuit IP in China’s electronics industry.