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City leading light of development in western China

Updated: 2013-02-08 07:46
By Chen Jia (China Daily)

 City leading light of development in western China

A high-end residential neighborhood in Chengdu. Provided to China Daily

Domestic, foreign companies see great potential for their businesses

Chengdu, capital of Sichuan province, is expected to be a pillar of economic growth in western China in the coming years, analysts said.

Chengdu has a population of about 14 million, making up a sixth of Sichuan's total. It is now the fifth-largest city measured by population in China, making it potentially one of the most important markets in the western part of the country.

To take advantage of its positioning as the economic driver and largest market in western China, the city is establishing a modern manufacturing base - high-end automotive and electronics, for example - while at the same time creating the conditions for a high-end service industry to flourish.

Chengdu has seized development opportunities in recent years and benefited from industrial transfers from the eastern coastal provinces to the west, said Deng Lixin, a researcher with the Chengdu municipal policy research office.

City leading light of development in western China

Although China's economic growth may proceed at a slower pace in the coming years and the global economy may continue to be gloomy, Chengdu still has opportunities to speed up its development, Deng said.

"Strategic investment will be very important to support the economy, especially in the construction of urban railways and the development of emerging new-energy industries and new-materials and cultural projects," he said.

The central government's decision to ease its monetary policies and use fiscal stimulus may provide the right conditions for the city's growth, Deng said.

"The manufacturing sector depends on innovations in information technology ... and environmental protection measures.

"Research and development will be the main driving force of high-tech enterprises," Deng said.

Chengdu's gross domestic product in 2012 was expected to reach 800 billion yuan ($128 billion), up at least 13 percent from the previous year.

Its foreign trade was expected to surge 25.1 percent to reach $47.4 billion, with exports hitting $30.4 billion, up 32.4 percent year-on-year.

Its GDP growth rate was more than 5 percentage points higher than the national rate of growth, which stood at 7.8 percent last year.

In 2012, the city's total industrial output was expected to reach 260 billion yuan, and investment in the industrial sector was expected to hit 170 billion yuan.

 City leading light of development in western China

Visitors examine models of Tianfu Software Park at Chengdu High-Tech Industrial Development Zone. Li Mingfang / Xinhua

The value of its retail sales of consumption goods was equal to 21.2 percent of the total amount for the 11 cities in western China.

A survey from The Nielsen Co, a global consulting company, showed Chengdu scored 97 points on the consumer confidence index in the third quarter, 2 points higher than the entire western region did during that period.

Yan Xuan, president of Nielsen Greater China, said Chengdu is the consumer market with the greatest potential among cities in central and western China.

"Both domestic and overseas retail businesses see Chengdu as a good place to develop, which means the competition here will be more fierce," Yan said.

The number of retail stores in Chengdu increased by 25 percent year-on-year in the first nine months of 2012, even as the number for the country as a whole dropped by 3 percent, according to Nielsen's research.

Chengdu consumers also expressed more optimism about employment prospects in the city. A Nielsen index gauging confidence in the job market rose to 58 points in the third quarter from 51 points in the first half, the consulting company said.

Chengdu's advanced financial market will do much to bolster the city's economy, analysts said.

"Chengdu is paying a lot of attention to the expansion of the financial industry and is setting a goal of building a financial center for western China," said Zhao Changwen, head of the enterprise research institute under the State Council's Development Research Center.

Improving Chengdu's financial system will help advance the country's western development strategy and strengthen the Chengdu-Chongqing economic zone, Zhao said.

Chengdu has a diverse financial system. One reason for that is that small commercial banks have enjoyed success in the city, which has helped add to Chengdu's financing channels and provided support to medium- and small-sized enterprises, said Liu Xiliang, head of the Southwestern University of Finance and Economics' Financial Research Center.

"At the next stage, Chengdu needs to improve international communications and continue with its opening-up strategy, which will consolidate its global influence in the field of economics," Liu said.

Foreign direct investment reached $8.59 billion, a year-on-year increase of 31 percent.

Meanwhile, the city attracted another 26 companies from Fortune Magazine's annual ranking of the world's 500 largest companies during 2012. A total of 233 Top 500 enterprises have now set up business in the city, the most of any among western cities, according to Chengdu Investment Promotion Commission.

chenjia1@chinadaily.com.cn

City leading light of development in western China 

The plant of Intel Products (Chengdu) Ltd in the capital of Sichuan province. Provided to China Daily

(China Daily 02/08/2013 page15)

 
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