The Chinese government and the Canadian Advanced Technology Alliance have launched a program to encourage Canadian companies to expand into one of China's fastest-growing regions.

The CATA-China Business Portal, officially announced at a conference in Toronto on Friday, will seek to attract Canadian technology firms to the Xishan economic zone, centred around the city of Wuxi, about 130 kilometres west of Shanghai.

Foreign technology companies will be wooed to the region through its $1.8-billion "123 Plan," which includes enticements such as rent reductions, recruiting awards, income tax rebates and training subsidies.

CATA chairman John Kelly said the current economic crisis has reiterated just how global markets are, and he urged Canadian technology companies to expand outward into other countries.

"Those who maintain a silo approach are not going to be successful," he said.

The Xishan economic zone, founded in 1992, is a relative latecomer to China's boom. Other special economic zones — such as the ones centred on Shanghai and on Shenzhen, near Hong Kong — were formed earlier and thus got a head start on Wuxi.

The city itself has a population of 4.4 million, but the zone has 150 million inhabitants.

China's national government is trying to establish the region as a service outsourcing zone for multinational companies, similar to those found in India.

Canadian technology firms have been relatively slow to set up operations in China, which critics attribute to an over-reliance on the United States as an export market.

"We are functioning with too comfortable a mentality," University of Waterloo president David Johnston said in a recent interview. "We are very much focused on the U.S. market whenever we do look beyond our borders and insufficiently focused on world markets, particularly India and China."

CATA, the Canadian technology industry's advocacy group, said the new joint venture hopes to counter that mentality by easing and encouraging entry into China. The organization is aiming to help 10 to 15 firms gain footholds in the country over the next five years, Kelly said.

Technology firms have also been cautious in their dealings with China because of the country's poor record on intellectual property enforcement.

But court enforcement is generally improving, Kelly said, with the biggest advances being made in regions such as Xishan, where the government is actively wooing foreign technology firms.