Why it's Chengdu, again?

Authors: Go Chengdu

2014-07-09

Known for its mouth-watering cuisines and rich tourism resources, the capital city of Sichuan province is a magnet for travelers both from China and abroad. Envy of other western Chinese cities, it has also become increasingly attractive for senior foreign officials in recent years.
German Chancellor Angela Merkel went to Chengdu first on her recent visit to China, but obviously she’s there not for the hot Sichuan food.

Known for its mouth-watering cuisines and rich tourism resources, the capital city of Sichuan province is a magnet for travelers both from China and abroad. Envy of other western Chinese cities, it has also become increasingly attractive for senior foreign officials in recent years. There has been a long list of top officials visiting the city, such as British Prime Minister David Cameron and US First Lady Michelle Obama.

Exotic food or scenery is unlikely to be the attraction for these globe-trotting politicians to the inland city. It is more probable that the city’s growing importance as an emerging economic hub in China’s vast western regions has replaced the local food to become a new tag of the city.

A Chinese-language newspaper quoted German ambassador to China Michael Clauss as saying that China is shifting its development focus from its eastern coasts to the western regions and Chancellor Merkel’s visit to Chengdu is in line with China’s new development strategy.

Indeed, Sichuan has become the most dynamic economy in southwestern regions, where Chengdu is arguably the most promising city. As its economy expands and investment environment continues to improve, more and more multinationals, especially technology and services companies, are establishing regional headquarters, factories and research and development centers in the city. Now more than 200 multinationals out of the world’s top 500 have establishment in Chengdu, while in 2008, the number was only about 130. Besides, Chengdu is also the city in the west that has most foreign consulates.

China started to make more inputs to accelerate the development of the western regions in the 1990s. Although it remains too early to claim that the country’s western development program has been successful, it is indisputable that the economic growth rates of western provinces have been higher than their eastern counterparts in recent years. In 2013, GDP growth of eastern provinces was on average 9.1 percent year-on-year, while that of western regions was 10.7 percent. The western regions have outperformed their eastern counterparts for the past six years, according to official statistics.

As the western economy expands, Chengdu has played an increasing role in driving regional development and connecting China’s east and the west.

What is noteworthy is that its economic clout is not built in the sheer scale of GDP, but the strength of its core high-tech and services industries, such as IT, biopharmaceutical, software outsourcing, high-end equipment-making and logistics. The emerging Internet-related industries, such as cloud computing and mobile payment, are also a major part of the local development blueprint.

Such a development strategy, which caters to China’s economic restructuring and overall development roadmap, is set to keep the long-term competitive edge of the city, making it an entrenched economic leader in the western regions.

If foreign leaders want to have a closer look at China’s development potentials, the best option is for them to follow Merkel’s footsteps to Chengdu.
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