Sweet spot for investment

Different strokes

The real success of Chengdu, however, can be measured in the vast range of high-tech industries that have bases there. Companies from sectors as diverse as IT, new energy, new materials, bio-pharmaceuticals, aviation and aerospace, automobile, equipment manufacturing, petrochemical industry are present in Chengdu.

With an eye on attracting more foreign investment into these industries, the local government has invited some leading global enterprises to set up industry-specific clusters and parks in Chengdu.

The automobile industry is an ideal example of this cluster approach. There are 139 automobile enterprises in Chengdu, including Volvo, FAW Volkswagen and FAW Toyota.

At the Chengdu Economic and Technological Development Zone, more than 50,000 skilled workers work on various activities related to the auto industry - ranging from trade, exhibitions, entertainment, research and development to manufacturing of spare parts and whole vehicles.

In 2011, the total output value of the automobile enterprises in Chengdu was around 50 billion yuan. By 2015, the number is expected to reach 275 billion yuan, with annual production capacities of 1.5 million vehicles.

"We have a history of automaking in Chengdu, and therefore we have sufficient facilities and skilled people to support those major investment," says Chen Xiaoming, deputy director of the Automobile Investment Service Bureau at the development zone.

According to Chen, low logistics costs and easy access to other parts of China, coupled with the fast access to Europe and Southeast Asia, have proved irresistible for many global auto firms. "In addition, the presence of key players like China FAW Group, Volkswagen, Toyota and Geely, have brought many auto-related business and industries to this area," he says.

During the past 12 years, Chengdu has been at the forefront of western development in China and its average annual economic growth rate is the best among all 12 provincial capital cities in central and western areas.

As a trade and logistics center and major transportation and communications hub, Chengdu boasts the most developed aviation and railway system among central and western regions of China.

IBM, which opened a Global Delivery Center in the Tianfu Software Park in March 2008, is one of the multinational companies looking to grow further in Chengdu.

Talent power

Chengdu's biggest advantage perhaps lies in its diverse and abundant talent pool which gives room for companies to chart further expansion plans in the city. There are more than 50 educational institutions in Chengdu, including several top universities, such as Sichuan University, Southwest Jiaotong University, University of Electronic Science & Technology of China, and the Southwestern University of Finance and Economics. Every year the city adds more than 150,000 graduates and more than 100,000 professional skilled workers to its labor pool.

It is also this advantage that prompted the world's largest car stereo manufacturer, Harman International, to set up a research and development center in Chengdu earlier this year.

According to Yang Jinsong, senior manager of Chengdu R&D unit of Harman Automotive China, the center reflects the company's utmost confidence in Chengdu.

"We are also looking to cash in on the vast talent pool here and plan to recruit at least 300 professionals specializing in car entertainment every year from Chengdu."

The relatively settled labor scenario is also another major draw for foreign companies. Gerold Amelung, the consul general for Germany in Chengdu, says that during the three months he has been in Chengdu, he has not received a single complaint or request for support. Amelung feels that it is an indicator of the robust industrial climate in Chengdu.

"All the German companies I have spoken to so far seem to be very happy with the investment environment and with the support they received here, especially in the many industrial parks around the city," he says.

The presence of more than 120 German companies in Chengdu has prompted the German Chamber of Commerce in China to set up a liaison office in the city.

"Chengdu has many geographical advantages and favorable climate conditions in addition to abundant talent. Chengdu has taken the lead across China in the past 10 years in building a standardized service-oriented economy," says Sheng Yi, vice-president of the Sichuan Academy of Social Sciences.

Contact the writers at zhaoyanrong@chinadaily.com.cn and liyu@chinadaily.com.cn