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Chengdu demonstrates its 'can do' attitude
2012-11-28
By Wang Yanlin

WELL-KNOWN as the hometown of the giant panda, spicy food and a relaxed lifestyle, the southwestern provincial capital of Chengdu also stands at the forefront of the Chinese government's campaign to hasten development of economies in interior areas of the country.

Chengdu, capital of Sichuan Province, chalked up a 13.3 percent gain in gross domestic product in the first half of this year, exceeding the national average of 7.8 percent and ranking it among the fastest growing urban area of its size. The city is home to more than 14 million people.

Fortune City

Highlighting its status as a poster city for western development, Chengdu will host the 2013 Fortune Global Forum, a prestigious event formerly bestowed only on metropolises such as Shanghai, Hong Kong and Beijing.

The high-ranking business leaders who will congregate in Chengdu next year will have much to marvel at by way of progress.

"Chengdu has strategic geographical advantages and can serve as a gateway to China's inland," said Sun Lijian, an economic professor at Fudan University. "The city has a special culture that mixes a relaxed pace of life with a fast-growing commercial hub."

In Chengdu, there is a traditional Sichuan art form called bian lian, or "changing face," in which a performer can remove a mask and don a new one in less than a second. It is a reflection, perhaps, of the rebirth of Chengdu as "a city of the next decade."

Changes are everywhere.

In the eastern part of Chengdu, there is an 180,000-square-meter park where young people love to spend time with friends or just enjoy a bit of solitary contemplation. It is not an ordinary park of trees and flowers, but rather the renovated site of a former electron tube factory. Sky-high chimneys are still there, along with old-style slogans encouraging hard work. They are decorative touches meant to stimulate the imagination.

Industrial renovation in Chengdu is proceeding rapidly. A former military production center has been transformed into a base to promote progress in pillar industries such as information technology, aerospace, photoelectric photovoltaics, biomedicine, new energy, advanced industrial materials and automobiles.

Sectors such as information technology and automobiles have already developed into mature industry chains that integrate suppliers, producers and various service providers. IT giants such as Intel, Dell, Lenovo and Texas Instruments 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.

Far-sighted foreign investors now incorporate Chengdu into their strategic plans for China. According to the Chengdu Investment Promotion Commission, 229 of the Fortune 500 global companies have targeted the city for investment, compared with 42 in 2002.

Indeed, the pace of foreign direct investment in Chengdu is picking up. In the first three quarters, foreign investors channeled US$6.54 billion into Chengdu, up 14.4 percent from a year earlier. That compared with a decrease of 3.8 percent nationally.

More than 80 percent of Apple's iPads sold around the world are manufactured in Chengdu, and DHL is considering moving its China headquarters there.

Better prospective

The fast-changing economic face of Chengdu has many facets.

For one, the residents of Sichuan Province no longer look at Beijing, Shanghai or Guangzhou as ultimate destinations for good jobs. In Chengdu nowadays, they can enjoy good career opportunities and a lower cost of living.

Wang Liping, a 20-something employee at Chengdu Faway Johnson Controls Automotive Systems Co Ltd, is an example of someone content to stay put.

"My hometown is now capable of offering jobs with quite decent pay," she said. "Plus, we have better prospects here than in those bigger cities. I am fortunate because I don't have to leave my family and go live in a strange place. I will stay in Chengdu."

Her boss Li Fuyuan is another example. He used to work as a project manager in Changchun, the capital of his native province of Jilin in northeastern China. He came to Chengdu seven months ago and is thrilled by both his job and his living conditions.

"Chengdu people are friendly, and the culture here is quite inclusive," he said. "With many industries starting to take off, the business environment is good for those who have dreams and courage."

Recent labor shortages in coastal cities may also be another facet of the rising economic power of Chengdu and other areas in the west. The city draws its workforce from the more than 90 million people living in Sichuan, and the 300 million in neighboring provinces.

According to the commission, Chengdu has nearly 2 million registered professionals with special skills and management expertise, ranking the city fourth in the country and first in the west.

Furthermore, the turnover rate of labor in Chengdu is as low as 5 percent, in contrast to the worker churn that frustrates so many companies in Shanghai and Beijing.

Dramatic transformation

The central government for years has been promoting its "Go West" policy to unlock the economic potential of inland areas bypassed in the first waves of foreign investment and modernization. Companies are offered incentives to locate production sites away from coastal regions.

But credit for Chengdu's dramatic transformation equally rests with local officials quick to seize the initiative of new challenges.

The city opened China's first municipal Bureau of Exposition, with a staff dedicated to promoting the convention and exhibition industry.

The bureau provides a one-stop service for companies wishing to take advantage of convention and exhibition facilities, cutting through red tape by coordinating applications that have to pass through different agencies.

Chengdu has been praised for its efforts to streamline government approvals for all businesses. The number of agencies with permit approval responsibilities has declined to 48 from 179 just 10 years ago.

Chengdu also attaches special attention to intellectual property protection. It is China's first model city in protecting intellectual property and the first to set up a government award to encourage patent registration.

For big projects, the government will set up special task force to provide tailored services. The Bureau of Major Projects, also unique, is aimed at guiding companies through the local culture and environment.

Geely Chairman Li Shufu is said to have been so impressed by the efficiency of government officials in Chengdu that his company decided to invest in a Volvo plant in Chengdu after acquiring the prestigious brand from Ford in 2010.

Lower business costs, of course, are a strong commercial magnet, but Chengdu isn't content to rest on those laurels as it plans its future.

The city is continuing with construction of the Tianfu New Area to accommodate commercial development away from the city center.

The area, still in its initial stages of construction, strikes visitors as a new version of Shanghai's Lujiazui financial district or Hongqiao business zone.

Chengdu's rapid development pace seems to have been little affected by the global financial crisis and resulting economic slowdown, partly due to its more limited exposure to the broader world than coastal cities.

It is a paradox, perhaps, that a city famous for its leisure lifestyle can at the same time be such a dynamo of economic development.

But "slow life, fast growth" has become the city's mantra in a grand experiment to meld progress and pleasure, work and relaxation. Small wonder that smiling faces seem to be everywhere in the city.

Chengdu is trying to learn from the mistakes of bigger coastal cities in its efforts to thwart pollution and build an environmentally balanced city.

Sichuan Province Party Secretary Liu Qibao has charted a growth path for Chengdu to become an economic hub of western China first, before turning its gaze outward in a bid to become an international city. It's a big dream and a long process. No doubt, the Fortune Global Forum next year will prove an important milestone in that strategy.

Chengdu by numbers

GDP

13.3%

Chengdu chalked up a 13.3 percent gain in gross domestic product in the first half of this year, exceeding the national average of 7.8 percent and ranking it among the fastest growing urban area of its size.

Fortune 500 global companies

229

Far-sighted foreign investors now incorporate Chengdu into their strategic plans for China. According to the Chengdu Investment Promotion Commission, 229 of the Fortune 500 global companies have targeted the city for investment, compared with 42 in 2002.

Turnover rate of labor

5%

The turnover rate of labor in Chengdu is as low as 5 percent, in contrast to the worker churn that frustrates so many companies in Shanghai and Beijing.

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