New economic powerhouse

Authors: Go Chengdu

2014-05-20

Chengdu is one of the most vibrant regions in China and shows a powerful momentum of economic and social development, which is changing the look of the city and the life of its residents.
Vigor and Vitality
Chengdu is one of the most vibrant regions in China and shows a powerful momentum of economic and social development, which is changing the look of the city and the life of its residents.
Benchmark city for investment environment
China’s state council has designated Chengdu as the country’s western center of logistics, commerce, finance, science and technology, as well as a hub of transportation and communication. It is also an important base for manufacturing and agriculture. According to the World Bank’s 2007 survey report on global investment environments, Chengdu was declared a “a benchmark city for investment environment in inland China”.
By the end of 2013, 252 Fortune 500 companies had set up branches in Chengdu, ranking it first in terms of the number of Fortune 500 companies in Central and Western China. Of these, 203 are foreign enterprises and 49 are domestic companies.
The main industries in Chengdu — including food, medicine, machinery and information technology — are supported by numerous large-scale enterprises. The local government plans to attract overseas and domestic companies for service outsourcing and become a well-known service outsourcing base in China and beyond.
Electronics and IT industries
Chengdu has long been established as a national base for the electronics and IT industries. Several key national electronics R&D institutes are located in Chengdu. Chengdu Hi-tech Industrial Development Zone has attracted a variety of multinationals, at least 30 Fortune 500 companies and 12,000 domestic companies, including Intel, IBM, Cisco, Dell, Nokia, Motorola, SAP, Siemens, Canon, HP, Xerox, Microsoft, Tieto, NIIT and Wipro, as well as domestic powerhouses such as Lenovo.
Intel Capital acquired a strategic stake in Primetel, Chengdu’s first foreign technology company in 2001. Intel’s Chengdu factory, set up in 2005 is its second in China, after its Shanghai factory, and the first such large-scale foreign investment in the electronics industry in interior mainland China. Intel, the world’s largest chip maker, has invested US$525 million in two assembly and testing facilities in Chengdu. Following the footsteps of Intel, Semiconductor Manufacturing International Corporation (SMIC), the world's third largest foundry, set up an assembly and testing plant in Chengdu.
In November 2006, IBM signed an agreement with the Chengdu High-Tech Zone to establish a Global Delivery Center, its fourth in China after Dalian, Shanghai and Shenzhen, within the Chengdu Tianfu Software Park.
Over the past few years, Chengdu’s economy has flourished rapidly. Chengdu has been quick to become a major base for communication infrastructure, with one of China’s nine top level postal centers and one of six national telecom exchanges.
In 2009, Chengdu hosted the World Cyber Games Grand Finals (11–15 November). It was the first time China hosted the world’s largest computer and video game tournament.
Financial industry
Chengdu is positioning itself to be a financial center for Western China and has successfully attracted major international financial institutions, including Citigroup, HSBC, Standard Chartered Bank, ABN AMRO, BNP Paribas, JPMorgan Chase and The Bank of Tokyo-Mitsubishi UFJ.
Historically, Chengdu has marked its name in the history of financial innovation. The world’s first ever paper currency ‘Jiao Zi’ was seen in Chengdu in the year 1023, during the Song dynasty.
Now, Chengdu is not only the gateway of western China for foreign financial institutions, but also a booming town for Chinese domestic financial firms. The Chinese monetary authority, People’s Bank of China (China’s central bank), set its southwest China headquarters in Chengdu City. In addition, almost all domestic banks and securities brokerage firms located their regional headquarters or branches in Chengdu.
Modern logistic industry
Because of its logistic infrastructure, professional network, and resources in science, technology, and communication, Chengdu has become home to 43 foreign-funded logistic enterprises, including UPS, TNT, DHL, and Maersk, as well as a number of well-known domestic logistic enterprises including COSCO, CSCL, SINOTRANS, CRE, Transfar Group, South Logistic Group, YCH, and STO. By 2012, the logistic industry in Chengdu will realize a value added of RMB 50 billion, with an average annual growth exceeding 18%. Ten new international direct flights will be in service; five railways for five-scheduled block container trains will be put into operation; and 50 large logistic enterprises are expected to have annual operation revenue exceeding RMB 100 million.
The first train of Chengdu-Europe international direct rail freight was launched in Chengdu on Dec. 18, 2012, and successfully reached Poland. The line shortens the time of the rail freight from Chengdu to Europe to 14 days, greatly reduces the freight cost compared with the air cargo, and enormously cuts the transport time in comparison to sea and ordinary railway transport operations.
According to the official statistics, 33 international direct flight routes were formally put into operate in 2013, all the routes solidified the city’s status as China's fourth aviation city.
Modern business and trade
Chengdu is the largest trade center in western China with a market covering all of Sichuan province, exerting influence on a population of 250 million in six provinces, cities, and districts in western China. Chengdu ranks first among cities in central and western China in terms of the scale of foreign investment in commerce and trade. Out of the 40 World Top 250 retail enterprises based in China, 15 have opened branches in Chengdu. In downtown Chengdu, there are 71 department stores whose business area exceeds 10,000 sq. m, with the total business area reaching 2,600,000 sq. m.
Convention and exhibition industry
One of China’s Famous Exhibition Cities, Chengdu takes the lead in central and western China for its scale of convention economy. It has become one of the five largest convention and exhibition cities in China.
More than 13.2 million people have come to Chengdu to participate in conventions and exhibitions from foreign countries and other parts of China. Numerous convention and exhibition companies have invested in Chengdu such as the UK-based Reed Exhibition, as well as domestic companies such as the Chinese European Art Center, Sanlian Exhibition, and Eastpo International Expo.
The Chengdu Municipal Bureau of Expositions signed a framework agreement with the International Association of Exhibitions and Events in January, 2014, which means the bureau is now an IAEE member.
The success of the 2013 Fortune Global Forum and the 12th World Chinese Entrepreneurs Convention held in Chengdu in 2013 showed that the city has an excellent environment for holding exhibitions and conventions, said IAEE chairman Skip Cox.
Software and service outsourcing industry
Chengdu is one of the first service outsourcing bases in China. More than 150, 000 people in Chengdu are engaged in software-related work. Among the Top 10 service outsourcing enterprises in the world, Accenture, IBM, and Wipro are based in Chengdu. In addition, 20 international enterprises including Motorola, Ubi Soft Entertainment, and Agilent, have set up internal shared service centers or R&D centers in Chengdu. Maersk Global Document Processing Center and Logistic Processing Sub-center, DHL Chengdu Service Center, Financial Accounting Center for DHL China, and Siemens Global IT Operation Center have been put into operation.
New energy industry
Chengdu is the “National High-Tech Industry Base for New Energy Industry”, as approved by the National Development and Reform Commission. Leading enterprises are operating in Chengdu and providing research and technology support such as Tianwei New Energy Holding Co., Ltd., Sichuan Sanzhou Special Steel Tube Co., Ltd., Zhejiang Tianma Bearing Co., Ltd., and key research institutions such as the Nuclear Power Institute of China, Southwestern Institute of Physics, Southwest Electric Power Design Institute.
By 2012, Chengdu’s new energy industry will realize an investment over RMB20 billion and sales revenue of RMB50 billion.
Electronics and information industry
Chengdu is home to the most competitive IT industry cluster in western China, an important integrated circuit industry base in China, and one of the five major national software industry bases.
Manufacturing chains are already formed in integrated circuits, optoelectronics displays, digital video & audio, optical communication products, and original-equipment products of electronic terminals, represented by such companies as IBM, Intel, Texas Instruments, Microsoft, Motorola, Nokia, Ericsson, Dell, Lenovo, Foxconn, Compal, Wistron, and others.
Automobile industry
Chengdu has developed a comprehensive automobile industry system, and preliminarily formed a system integrated with trade, exhibitions, entertainment, R&D, and manufacturing of spare parts and whole vehicles (e.g. sedans, coaches, sport utility vehicles, trucks, special vehicles). There are whole vehicle makers, such as Volvo, FAW Volkswagen, FAW Toyota, and Sinotruk Wangpai, as well as nearly 200 core parts makers covering German, Japanese, and other lines of vehicles.
Modern agriculture
Chengdu enjoys favorable agricultural conditions and rich natural resources. It is an important base for high-quality agricultural products. A national commercial grain and edible oil production base, the vegetable and food supply base as well as the key agricultural products processing center and the logistics distribution center of western China are located in Chengdu.
List of industrial zones in Chengdu:
Chengdu Economic and Technological Development Zone
Chengdu Export Processing Zone
Chengdu Hi-Tech Industrial Development Zone
Chengdu National Cross-Strait Technology Industry Development Park
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