Nokia, the world's top mobile phone maker, will invest more than 450 million yuan (US$56.3 million) to build its new China headquarters in Beijing.

The Finnish firm yesterday began construction of the campus in the Beijing Economic-Technological Development Area (BDA).

The campus will be a new hub for Nokia's activities in China, including Hong Kong, Taiwan and Macao.

Company Chairman and Chief Executive Officer Jorma Ollila said the campus will also include Nokia's research and development (R&D) centres and its existing mobile phone manufacturing base.

The campus is scheduled to open in late 2007 and will host more than 1,500 of Nokia's staff from R&D, sales and marketing, pre-production, logistics, sourcing and manufacturing.

More than 2,000 Nokia employees are expected to be based at the new hub. Currently Nokia employs more than 6,000 people in China, including Hong Kong, Taiwan and Macao.

Ollila said development of the Nokia China campus will be a "big milestone" in the firm's operations in the country.

The campus will be one of the largest mobile communications parks in the world, integrating R&D, product design, supply of components and spare parts, logistics, manufacturing activities and regional headquarters.

"For us, it will integrate all parts of our operations in one location, providing unique opportunities for the exchange of information and ideas, as well as for very effective operations across all of Nokia and with our partners," said Ollila.

In 2000, Nokia established its Xingwang (International) Industrial Park in the BDA, one of its major global production bases.

The park attracted nearly 20 leading mobile phone component suppliers and service providers with 30,000 employees and a total investment of 10 billion yuan (US$1.25 billion).

The park's annual sales exceeded 70 billion yuan (US$8.75 billion) last year. And more than half of the handsets made on site were exported.

Zhang Boxu, director of the BDA administrative committee, said the campus will be an extension of the Xingwang model, integrating all parts of the industry chain in a single location.

Nokia is the first multinational company to build its China headquarters in the BDA area.

With increasing activities and expanding staff numbers, major global telecommunications companies are rushing to establish new headquarters in China.

Canada's Nortel Networks in 2004 committed US$200 million over three years to build its new China headquarters and R&D centre.

And Sweden-based Ericsson, the world's largest mobile phone network maker, invested 400 million yuan (US$50 million) in late 2004 to build its new China headquarters, which could be operational this year.

Motorola has also poured US$90 million into building a new office complex in China.
Nortel, Ericsson and Motorola all chose the Wangjing zone of Beijing for their new China headquarters.

Insiders said Nokia opted for the BDA as the land supply in Wangjing is already inadequate to host its ever-growing expansion in China.

The BDA will become "a true world-class end-to-end business park that over time will potentially rival the reputations of the world famous high-tech business parks in the Silicon Valley and other parts of the world," Ollila said.

Nokia's annual net sales in China  including Hong Kong, Taiwan and Macao  last year surged by 29 per cent to 3.85 billion euros (US$4.95 billion).

China is now Nokia's largest single market.

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