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Fortune smiles on city that pledges it ‘can do’ even better
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THE city’s slogan is “Chengdu, can do,” and now the capital of Sichuan Province is exploring ways of doing it even better. In the year since Chengdu hosted the Fortune Global Forum and later the World Chinese Entrepreneurs Convention, its development has shown no signs of letting up.
“Chengdu is going full steam ahead with plans to attract world-class investment and high-end projects after the two great events introduced the city to a wider world,” said Chen Fu, a spokesman for the Chengdu Investment Promotion Commission. “Chengdu has leapfrogged into prominence as an investment magnet.”
The figures tell the story. During the Fortune Global forum last June, the city snagged 74 major projects valued at 112 billion yuan (US$18.2 billion) from Fortune 500 companies. By the end of 2013, 252 companies on the Fortune 500 global list had set up offices or branches in Chengdu, compared with just 42 10 years earlier. The achievement fulfilled the city’s dream of making itself home to half of Fortune 500 global companies. It hasn’t lost sight of the other half.
Industry chains
French energy giant GDF Suez, Japan’s Sumitomo Mitsui Financial Group and South Korea’s Hyundai Motor Co are among the newer investors in Chengdu. Long-term business partners like Toyota Motor Inc and Texas Instruments Inc have given Chengdu a higher profile in their strategic plans for China.
Toyota invested another US$156 million last year to launch a new production line in the city, while Texas Instruments earmarked US$325 million for a testing and packaging center for its chip manufacturing.
This year, the Chengdu government said it expects to attract at least 20 more Fortune 500 companies or their equivalents. Foreign direct investment is projected to exceed US$10 billion for the second year in a row.
In 2013, Chengdu’s foreign direct investment rose 20 percent from a year earlier to top US$10.3 billion.
“Chengdu will strengthen efforts to create industry chains that are in line with global standards,” Chen said. “We hope to attract investment that advances that goal.” Sectors such as information technology and automobiles have already developed mature industry chains integrating suppliers, producers and support service providers. IT giants such as Intel, Dell and Lenovo all have operations in Chengdu, while automotive leaders like Volkswagen, Toyota, Volvo, FAW, China National Heavy Duty Truck and Geely also do manufacturing in the city.
“Chengdu can accommodate more industry chains,” Chen said. “The government’s role is to create a friendly, efficient and transparent business environment for investors.”
Indeed, the city rests its recruitment pitch on its huge market potential, a talented workforce, a good lifestyle environment and a supportive municipal government.
Located in the heart of western China, Chengdu, a city of 14 million, is within easy reach of a market of more than 300 million people. The central government in China is continuing its policy of encouraging the development of the western interior, where progress has lagged that of the eastern seaboard.
Transport, which used to be a major barrier to growth in interior areas, has been modernized in the city, with 71 international and regional airlines connecting Chengdu with cities in China and beyond. Last year alone, the city opened new direct routes to Melbourne, Frankfurt, Doha and London, making the city’s airport the busiest in western China. Next month, Chengdu will launch a direct flight to San Francisco, creating a faster connection with countries across the Pacific.
In addition, Chengdu has a cargo rail linking the city with Kazakhstan, Russia, Belarus and Lodz in Poland that started operation last year. The high-speed train, with a capacity of 41 TEUs, carries laptops, electronic parts and other goods to Europe from Chengdu and elsewhere in China, which covers 10 specially administered zones for trade including Shanghai Pudong New Airport, Suzhou Industrial Park, Wuxi High-tech Zone Comprehensive Bonded Zone, Shanghai’s Qingpu District and Wujiang Export Processing Zone in Jiangsu Province. Goods from the 10 specially administered zones accounted for 51 percent of all the exports. The train trip takes 14 days — five days longer than airborne transport but 25 percent cheaper. By April 26, 45 trips had been made with 8,292-ton goods being delivered. It has proved to be a better way getting to Europe than traveling through coastal cities.
Chengdu has become the fourth city on the Chinese mainland, after Beijing, Shanghai and Guangzhou, to permit 72-hour visa-free stays. That makes it convenient for businessmen in need of a short stop.
In the first quarter, Chengdu’s gross domestic product expanded 7.8 percent from a year earlier, faster than the national average of 7.4 percent.
While the city welcomes foreign and domestic capital, it is selective about investment. It is seeking projects that are environmentally friendly, conserve energy and advance high technology. In 2013, the government rejected 59 project proposals that didn’t fit criteria related to its development goals.
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