TECHNOLOGY heavyweights Huawei and ZTE will never leave Shenzhen, the mayor said, as rumors circulated that the companies are being pushed out of the city by rising costs.

“The headquarters of Huawei and ZTE and their research centers will never leave Shenzhen,” Xu Qin told media in Guangzhou, capital of Guangdong Province, while attending the 2016 Imperial Springs International Forum on Sunday.

“Huawei has submitted its development plan to the city government and has no plans to withdraw from Shenzhen,” Xu said.

He confirmed that ZTE, a global leader in telecommunications and information technology, will relocate its phone production and assembly business to Heyuan in July, a city in eastern Guangdong that is about 200 kilometers from Shenzhen.

“But the move is an aid project agreed on between the governments and has nothing to do with property costs,” he said. “The company will be based in Shenzhen forever,” he said.

ZTE denied plans to leave Shenzhen on Sunday in a statement.

According to the company, the Heyuan base, one of multiple production bases for ZTE in China, is a project to aid eastern areas of the province.

The 2-square-kilometer base in the Heyuan High-tech Development Zone will be put into use in October and is expected to generate a yearly output value of 10 billion yuan (US$1.5 billion) in 2017, 30 billion yuan in 2018, and 100 billion yuan in five years, according to Li Yannan, head of the zone.

Last week, another technology giant, Huawei, also issued an official statement saying it had no plan to move its headquarters out of Shenzhen in response to rumors the technology giant will ditch the city due to its soaring property prices and rising labor costs.

In 2012, Huawei invested more than 10 billion yuan in the purchase of a 1,900-mu (126.77-hectare) piece of land in Dongguan to set up a manufacturing and research headquarters for its consumer business group.

According to Huawei Consumer Business Group’s plans, the company will invest about 10 billion yuan in the construction of the headquarters, which will focus on research and development, sales, and value-added services.

The project will include the company’s research and development office center and a high-end training center. It is reported that the Dongguan government has promised the company more land in the future. Huawei owns 2,460-mu of land in Shenzhen.

(Han Ximin)