Intl companies see potential for Chengdu as IT hub

Dell CEO Michael Dell inspected the company's base of operations in Chengdu during the recently concluded Fortune Global Forum. Wang Weixi / for China Daily

The breakthroughs made by industry leaders at this year's Fortune Global Forum in Chengdu have helped consolidate the host city's position as a high-tech and IT hub in western China, participants said.

At the forum, which closed on June 8, companies from around the world were able to see the potential of Sichuan's capital to become an innovation center and China's hub of mobile and cloud technologies. IT is already the core industry of the city.

US computer giant Dell opened its new operations site in Chengdu during the forum. The new facility will combine manufacturing, customer service and sales.

The site covers about 30,000 square meters in Chengdu's booming high-tech zone. Its 1,500-strong workforce will manufacture desktop computers for China, Europe and the United States, and its capacity is expected to reach 7 million units a year.

"Dell's Chengdu operations site is a milestone in Dell's 'Go West' strategy and underscores our deep commitment to the China market," said Admit Midha, president of the company's Asia-Pacific and Japan operations and chairman of Dell Global Emerging Markets.

The first shipments from the new facility are scheduled to start next month.

Dell is now China's largest provider of computers, including desktops and laptops.

The establishment of Dell's Chengdu facility is also expected to help attract worldwide suppliers to the city and to spur related manufacturing industries in the area.

The revenue of Chengdu's IT industry is 19 times what it was in 2001, according to a recent report, making the city China's fourth IT center.

Industrial revenue reached 377.7 billion yuan ($61 billion), according to a report jointly published by Intel (Sichuan), the Sichuan Academy of Social Sciences, and the Chengdu Foreign Business Investment Association in late May.

More than 20 percent of computers, 50 percent of laptop chips, and 70 percent of iPads globally are made in Chengdu.

IT is now the city's biggest industry, according to the report.

China is a very important market for German software company SAP AG, said Alex Atzberger, the firm's senior vice-president and head of emerging markets.

"Chengdu can be a hub of mobile and cloud (technologies) in China. Therefore it is important for SAP to have a development plan in this market," he said.

Atzberger said SAP has sent engineers to Chengdu to develop cloud services and other technologies, and it is also working with many partners based in Chengdu and other parts of western China.

"Clearly, the business in China is moving from the coastal regions to the west," Atzberger said.

SAP announced in 2011 it would invest more than $2 billion by 2015 to expand its business in China. Atzberger is the mastermind behind the investment plan and also responsible for its implementation.

Atzberger said it is important for the company to penetrate markets in different provinces because the level of economic development is uneven throughout the country.

He sees a good opportunity for Chengdu to become a center of innovation if the city can develop new cloud or mobile technologies.

"I believe Chengdu has the opportunities because of its geographical location, talented workforce and the fact that China is very strategic when it thinks about the development of cities," he said.

"So we are committed to China's agenda of growing in the west and also increasing our focus on investment."

SAP has a wide array of technologies, including mobile and cloud technology as well as analytical capabilities based on its super-fast and memory-based systems, Atzberger said.

Commenting on China's urbanization, Atzberger said he feels encouraged by the central government's strategy of developing western regions.

Atzberger called on cities in western China to leverage its strength and develop new areas.

"You need to use what you are good at, but then you need to think about how you can use new technologies to make it better," he said.

With its expertise in technologies as well as solutions, SAP is targeting both state-owned companies as well as small and medium-sized enterprises in China.

Xinhua contributed to the story.

zhuanti@chinadaily.com.cn