Chengdu
At A Glance
- Capital of Sichuan (map of Sichuan)
- City information available at the Chengdu Foreign Investment Promotion Center
- Economic Zones for Chengdu include:
Known for: spices & traditional medicine.
For Importers: Though Chengdu is located deep within China’s interior providing logistical problems, the city has emphasized education, creating a highly skilled labor market at rates much lower than wages on China’s east coast. With 150 million people in the vicinity, Chengdu provides a good alternative for manufacturing. The government is attempting to make Chengdu a center for high-tech education and R&D.
For Exporters: A city of 11 million (projected to be over 15 million in the next 5 years or so), Chengdu is well-off when compared to its regional neighbors. Since 1995, Chengdu has recorded an astonishing 400 percent increase in GDP, doubling its per capita disposable income. Targeted as one of the primary cities for growth in the Central Government’s “Go West” policy, Chengdu should continue experiencing economic growth.
For Services: Many western cities are given freer range in attracting foreign direct investments (in efforts to minimize the disparity between the coastal and interior regions), leaving the city leaders of Chengdu with more flexibility on regional policies. This may translate to looser policies for service sectors.
Prioritized Industries:
- electronic information
- biology engineering and pharmaceuticals
- machinery manufacturing
- food processing
- metallurgy and building materials
- petrochemical processing
Advantages: As a primary focus for the “Go West” policy of the Central Government, Chengdu has tax incentives and land-use fee free periods to encourage FDI. The advanced IT and precision manufacturing industry combined with low wages makes this a good choice for manufacturing. The pro-business policies of the government has meant a threefold surge in FDI from 2000 to 2004.
Disadvantages: In the heart of the country, transportation to the nearest seaport takes 7–10 days (even as Chengdu is the primary transportation hub for the region). There is a shortage of cargo containers for shipping, and though the government is investigating a second runway in order to increase cargo capacity. Though higher than other Western regions, per capita income is still lower than some coastal cities.
Trade Shows:Tangjiuhui (the Spirits and Candy Festival). This is China’s largest domestic food show, attracting food manufactures. The USDA Foreign Agricultural Service regularly participates in this event. For more information, contact the USDA’s Shanghai office.
- Go West – a relatively new trade show launched by the city government in 2005.
- Chengdu Motor Show (CDMS) features the latest vehicles from around the world.
- CMEF Chengdu is the largest medical equipment trade fair in Asia.
Statistics:
- GDP $26.4 billiong ($79.2 billion in the province of Sichuan)
- GDP growth rate 13.6%
- GDP/Capita $2,490 ($907 in the province)
From the book:
“In the province of Sichuan, Chengdu is the financial and information technology hub of southwestern China, but transportation from Chengdu to the nearest seaport takes seven to ten days. There is also currently a shortage of cargo containers, and there are no regular flights for large cargo planes. Still, Sichuan Province is now home to more than five thousand foreign-funded enterprises, because of tax breaks and other perks offered to companies investing there. Over thirty large multinational corporations, including Motorola, PepsiCo, Coca-Cola, and McDonnell Douglas of the Untied States, chit Tat of Thailand, Bayer and Siemens of Germany, and Toyota and Mitsubishi of Japan, have started operations in Sichuan. Key industries are IT, machinery, metallurgy, pharmaceuticals, chemicals, food and beverage, and building materials.”