The State Council (cabinet) has decided to back the building of a national technology innovation zone at the Zhongguancun Science Park (Z-Park) in northwest Beijing, said Minister of Science and Technology Wan Gang on Friday.

Z-Park is known colloquially as "China's Silicon Valley".

Wan said the decision was intended to make Z-Park more innovative and give it global scientific and technological influence.

The State Council decided that policies would be formulated to support the zone, the first of its type in China, attendees at a mobilizing conference of the Beijing Municipal Government were told.

State Councilor Liu Yandong and Beijing Municipal Committee of the Communist Party of China Liu Qi were present at the meeting.

Policies would cover stock option incentives, financial support and access to major national technology projects, according to a State Council document.

The goal was to push the growth of China's high-tech industry and gain a competitive edge over powerful global rivals, said Zhao Hong, director with a Z-park research center under the Beijing Academy of Social Sciences.

Most Chinese companies have relied on imported technology during the three decades since China adopted the reform and opening-up policy.

Financing for small and medium-sized companies was important for the development of the high-tech sector, and it was also vital to encourage innovation with stock option incentives, according to Zhao.

"Independent innovation, technology and capital are vital for a high-tech company and Zhongguancun has all of them," said Liu Chuanzhi, board chairman of Lenovo Group.

"Zhongguancun is the cradle of China's high-tech companies. The plan will be an opportunity for it to follow a path of innovation with Chinese characteristics," said Ni Guangnan, academician with the Chinese Academy of Sciences.

Z-Park, which was born as "Electronics Street" in the early 1980s, was officially established as the first national science park in 1988. There are nearly 20,000 high-tech enterprises in the park, including computer giant Lenovo. So far, 112 of those companies have listed on domestic and overseas stock exchanges.

(Xinhua News Agency March 20, 2009)