At the end of last month, there was another big gene-related event in Shanghai. Local firm United Gene Holding Company declared that it would establish China's first large-scale modern biotech centre.

Although genomics research in China is at a high level, the genomics industry has lagged behind that of the United States for at least 10 years.

In the last three years, several thousand enterprises have developed and produced biomedicines, but the scale and strength is somewhat behind foreign leaders.

Experts believe that the biotech centre, referred to as "Gene Valley", will push forward the biomedicine industry and genomics research in China. To some extent, it's a sign that Chinese enterprises will compete with foreign leaders in the biomedicine industry.

The technology centre has an initial investment of 200 million yuan (US$24 million).

Covering about 3.3 hectares, "Gene Valley" is in northeast Yangpu District, which enjoys the city's richest science and human resources, with 22 universities including Fudan and Tongji.

As the main investor in "Gene Valley", United Gene plans to develop the project into a major biochemistry centre and compete with foreign leaders in genetic industries like Cerela.

United Gene was founded by two former professors of Fudan University in March 1998. In three years, the private company has developed into China's leading genomics company, engaged in gene cloning and sequencing, bioinformatics, drug discovery and others.

With about 20 subsidiaries, the company's assets total about 1 billion yuan (US$120 million). The firm has applied for domestic patents for about 3,700 genes, and has applied for international patents for about 420 human genes.

The Valley is expected to be completed in one year and the first group of gene projects will move in 2002.

"The construction of the Valley is just the initial step," said Huang Zhengping, vice general manager of United Gene Valley Investment & Development Incorporated. He is also vice executive general manager of United Gene.

Huang said their goal is to build the Valley into the world's largest and most competitive centre of the gene industry, a global navigator in the research, development and manufacture of biology industries.

In two to three years, United Gene itself will invest in more than 20 projects in the Valley with an estimated capital injection of over 3 billion yuan (US$362.3 million).

Then, United Gene will invest in an additional 30 to 40 projects, and the Valley is expected to attract about 20 projects from other biomedicine companies. The total investment in the valley has risen to 10 billion yuan (US$1.21 billion) in five years.

Gene Valley aims to bring together potential biochemistry companies and factories developing gene chips, biomedicine and gene-related tonics in the park.

Domestic companies with leading research results are possible residents. "We also hunt for foreign companies, especially overseas Chinese students," Huang said.

"The advantages of our Valley include management and services, property rights exchange and loans."

In the Valley, Huang plans to set up a framework which allows property rights to flow smoothly. "A good project should be industrialized and making profits," he said.

Compared with the abundant capital environment in foreign companies, Chinese firms are troubled by a shortage of capital.

Huang said the Valley will attract both direct and indirect capital.. Recently, United Gene got a 10 million yuan (US$1.21 million) loan from the Jinqiao Branch of Bank of Shanghai, with two patented human genes as security.

It is said that in the past year, many famous banks and venture capital companies have discussed possible co-operation with Gene United, including Morgan Stanley and United Bank of Switzerland.

According to Huang, Gene Valley plans to collect international capital of 40 billion yuan (US$4.8 billion) in 10 years.

Differing from the State-supported Chinese National Human Genome Centre at Shanghai, "Gene Valley" is driven by the market.

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