Guide to Invest in the Furniture Industry of Chengdu

Guide to Invest in the Furniture Industry of Chengdu August 2008   ·23· ·24·   CONTENTS 1. THE INDUSTRY STATUS QUO………………………………1 1.1 THE INDUSTRY PROFILE ……………………………1 1.1.1 The current industry profile ………………………1 1.1.2 The industry volume and growth……………………1 1.2 THE INDUSTRY CHAIN…………………………………2 1.3 MARKET OVERVIEW……………………………………4 2. INVESTMENT ENVIRONMENT………………………………5 2.1 LABOR RESOURCE………………………………………5 2.2 INFRASTRUCTURE………………………………………6 2.3 LOGISTICS ………………………………………………7 2.3.1 Railway transportation……………………………7 2.3.2 Highway transporation……………………………9 2.3.3 Waterway transportation……………………………10 2.3.4 Customs clearance procedures for waterway transportation………………………………………11 2.4 ENVIRONMENTAL REQUIRMENTS……………………11 2.4.1 Environmental quality standards……………………11 2.4.2 Wastes discharge standards…………………………12 3. INDUSTRY GROWTH PLANNING…………………………13   ·25· 3.1 INDUSTRY PLANNING…………………………………13 3.1.1 Planning for the manufacturing of furniture and asssociated products………………………………14 3.1.2 Planning for the furniture commerce and distribution…………………………………………16 3.2 INDUSTRY POSITIONING:1 District by 1 Industry……16 3.2.1 About the furniture industry hosting parks/zones…18 4. IMPACT OF WENCHUAN EARTHQUAKE ON THE INDUSTRY GROWTH OF cHENGDU………………………20 4.1 IMPACT OF WENCHUAN EARTHQUAKE ON CHENGDU………………………………………………20 4.2 IMPACT OF WENCHUAN EARTHQUAKE ON THE FURNITURE INDUSTRY OF CHENGDU………………21 ·26·   1. The industry status quo 1.1 The industry profile 1.1.1 The current industry profile Based on decades of growth, the local furniture industry of Chengdu has become one of the 5 leading in China in terms of manufacturing, and one of the 4 leading in terms of distribution. At present, there are over 3 000 furniture manufacturing and associated businesses employing over 500 000 people. And with production and sales accounting for over 80% of the whole province of Sichuan, the local industry is the largest in China in the production of panel-made/style furniture. 1.1.2 The industry volume and growth Since 2002, the local furniture industry revenue of Chengdu has been growing at over 20% annually, and reached 21 billion yuan in 2007 which witnessed 84 large-size companies raking in 6.386 billion yuan in their main business revenue and 1.98 billion yuan in added value. In all, 14 companies in 2007 saw over 100 000 000 yuan in individual revenue from their furniture business. Overall production value of Chengdu’s furniture industry from 2002 to 2007 250 200 150 100 50 0 20022003 2004200520062007 80 100 120 150 180 210 Overall production value （in hundred million）   ·1· 1.2 The industry chain The local furniture production activities have extended from processing and manufacturing to woods growing, boards processing, and furniture upholstery in the upper-stream industry chain and packaging, logistics and sales in the down-stream industry chain, as well as the commercial and service activities such as reclaiming of waste materials and processing leftovers, thus forming a primary production chain. Currently, the furniture industry of Chengdu is still mainly driven by local enterprises such as QuanU Furniture, Mingzhu Furniture and Shuanghu Industrials among others. ——QuanU Furniture Co., Ltd. is located at the Yangma Industrial Zone/Park of Chongzhou city, Chengdu metropolis, and is one of the largest enterprises in China committed to R&D, production and marketing of panel furniture. The company now boasts 20 factories, 1 R&D center, 1 marketing center, over 20 regional offices, and more than 1 000 outlets. Its products cover an upward of 30 brands and 200 designs in panel, solid wood and soft furniture series. ——Located at the Mingzhu Furniture Park of Chongzhou city, Chengdu metropolis, Mingzhu Furniture is a furniture company with modern steel-structure factories and nationally leading R&D center, logistics center and exhibition center. The company boasts world leading automatic production machinery and internationally advanced quality test lab imported from ·2·   Germany and Italy, as well as R&D center with strong research and development capabilities supported by prestigious universities. The corporate now comprises panel furniture factory, sofa factory, tea table factory, marble factory, dining table factory, TV stand factory, and mattress factory. Over 1 000 outlets are established in all over China; and the products are also sold to countries and regions such as Japan, Australia and middle Asia. — — Shuanghu Industrials Co., Ltd. is located at the furniture production base/hub of Southwest China- the city of Pengzhou on the ChengPeng industrial corridor of furniture manufacturing that is 20 minutes’ drive from downtown Chengdu. First incepted in 1989, the company has expanded to 1 600 mu of land and over 8 000 employees with 100 000 000 yuan of fixed assets. Covering R&D, manufacturing and marketing activities, the company is one of the largest manufacturer and supplier of panel household furniture in China. Leading furniture companies, domestically and internationally Internationally leading companies Haworth, USA HNI Group Herman Miller Empire Furniture, HK   Domestically leading companies Beijing Qumei Furniture Bejing Tiantan Furniture Hinglee Group, HK Empire Furniture, HK ·3· Internationally leading companies Knoll Steelcase Vitra, Germany AURORA, Taiwan MASCO, USA AV Furniture, Germany Fortune Furniture, USA Ashley Parisot Group, France Gautier Natuzzi, Italy Dickson Furniture, HK Domestically leading companies Shenzhen Fuliyuan Furniture Zuoyou Furniture, Shenzhen Shenzhen Jichuang Furniture Shenzhen Furniture CN (Huayuanxuan) Shenzhen Right Home Furniture Zhejiang Lihao Group Haobainian Furniture Group Homeyoung Furniture Kuka Technics Sofa Manufacture Foshan Huangjia Mache Furniture Wenzhou Homing Furniture FuZhiDao Furniture 1.3 Market overview Over the recent years, as the furniture industry has been on a fast development track with the increasing size and capacity of enterprises and the improved manufacturing machinery, the furniture industry has been experiencing constant dropping of average profits together with the pressures posed by the increasing costs of raw materials. At the present day, the production costs of furniture in the European countries and America are 20 times those of China, making export hardly possible; while the materials, machinery, equipments, facilities and production chain in China have been considerably improved. Therefore, as the European countries and America outsource ·4·   their production to China and as the industrial activities are relocating to inner China, Chengdu is seeing unprecedented opportunities. After over two decades of constant development, Chengdu has become one of the leading three furniture manufacturers of China, with a small share of the international market however. Going International, as a result, has become the shared belief of the local furniture industry to boost growth and acquire new benefits. 2. Investment environment 2.1 Labor resource As one of the leading cities in China with a concentration of universities and research institutes, as well as a vital science & technology R&D center and intelligence resource pool, Chengdu boasts 40 universities and colleges, 144 vocational colleges and schools, over 2 700 research institutes of various disciplines, as well as over 500 000 professionals in various sciences and technologies. Over 100 000 new graduates are available every year together with over 80 000 technicians/skilled workers. Ranked on the top in human resources amongst the major cities in China, Chengdu could provide the companies from all over the world with strong support in technologies and talents. Until 2007, Chengdu has 120 medium-level vocational   ·5· schools in various disciplines at which approximately 246 000 students are learning their trades. The excellent vocational education system in Chengdu is a powerful guarantee of talents supply to the market. In the past 5 years, the vocational educational schools have produced an excess of 200,000 graduates to the local market and delivered practical technological training to more than 830 000. With its labor cost being two thirds and turnover 8% of those in costal cities of China, and more talents coming than leaving the city, Chengdu has a competitive edge in the costs of labor. Reference salary of some of the skilled workers/professionals Professionals Computer programmer Mechanical engineer Software engineer Other engineers Reference salary in Chengdu low/middle/high Median 12117/21040/33035 22064 11340/20445/60100 30628 33795/46408/110160 63454 12439/19440/71658 34512 Note: the data come from Salary Reference for Some of the Positions/Professions in the Labor Market of Chengdu. 2.2 Infrastructure Urban water price of Chengdu (including sewage/water treatment charge) Categories Living water Water used in business/service industry, and construction Water for industrial use Water for special uses ·6·   Price 2.15yuan/m3 4.60yuan/m3 2.7yuan/m3 6.7yuan/m3 The urban electricity price of Chengdu Categories Residents’ living electricity Electricity used in commercial activities Electricity in average industrial activities Electricity in major industrial activities Electricity in major industrial activities Price 0.5224yuan/kwh（below 1KV，at the hours of the average raining season） 0.8638yuan/kwh（below 1KV，at the hours of the average raining season） 0.6928yuan/kwh（below 1KV，at the hours of the average raining season） 0.5308yuan/kwh（below 1KV，at the hours of the average raining season） 0.5608yuan/kwh（below 1KV，at the hours of the average raining season） Price 1.43yuan/m3 1.72yuan/m3 1.66yuan/m3 2.08yuan/m3 average average average average average The urban natural gas price of Chengdu Categories Living natural gas consumption Public facilities natural gas consumption Industrial natural gas consumption Commercial natural gas consumption 2.3 Logistics 2.3.1 Railway transportation   ·7· The city of Chengdu is the largest railway transportation hub of Southwestern China where the 4 major railways (Cheng-Yu, Bao-Cheng, Cheng-Kun and Da-Cheng) converge; and there are now 4 major freight train stations in Chengdu: East Station, South Station, West Station and Dawan Station in Qingbaijiang District. And the International Central Container Station, the largest one in Asia, invested with 1.17 billion yuan under the planning of the Ministry of Railway China to be launched at early 2009 will boast an annual capacity of 2 200 000 to 2 500 000 standard containers. Information about the price of container transportation on railways (in yuan) Destinations North Shenzhen Yangpu, Shanghai North Shanghai North Tianjin Tianjin Port South Tianjin Lianyungang Port 1 ton 236.65 -174.3 159.74 -160.04 -10 tons 2960.57 2208.84 2198.34 1982.64 -1986.74 -20 tons 5997.09 4499.55 4477.74 4098.85 4195.97 4107.55 3993.91 40 tons 11112.38 8326.43 8287.82 -7519.42 -7178.12 Railway transportation services providers in Chengdu Yuan Cheng Group Co., Ltd. Chengdu China Railway Container Transport co., Ltd Chengdu China Logistics Co., Chengdu Frozen Freight Co of the Chengdu Railway Substation Chengdu ChengTie International Storage & Freight China Railway Modern Logistics Chengdu Chengdu Shun’anjie Logistics Co., Ltd. ·8·   2.3.2 Highway transportation There are 8 major state trunk highways and state trunk highways starting from Chengdu or passing Chengdu, 2 of them being major state trunk highways and 6 being state trunk highways. Apart from them, there are 10 freeways (Cheng-Yu, Cheng-Mian, Cheng-Le, Cheng-Ya, Cheng-Nan, Cheng-Guan, Cheng-Peng, Raocheng and Cheng-Wen) established in Chengdu; and there are 2 highways leading to the sea: Chengdu-North Sea passage and Chengdu-Chongqing-Shanghai passage that could transport the containers to the coast.   ·9· Transportation of containers via highway from Chengdu to ports Passage Target port Route Price （in Mileage Container （in kilo- Duration yuan） dimension meters ） One-way 2508 2 days 40 feet 12500 Chengdu- Xi’an, Shangqiu-NanjingSuzhou-Shanghai Chengdu-Chongqi Chengdu-She ng-Guiyang-Nanni Yantian Port nzhen ng-Guangzhou-Sh enzhen Chengdu-Sha Yangshan nghai Port Chengdu-Xi’anChengdu-Tia Tianjin Port Zhengzhou-Shijianjin zhuang-Tianjin Chengdu-Xi’anChengdu-Lia Lianyungang Shangqiu-Liannyungang Port yungang 2400 2 days 40 feet 13000 2230 2 days 40 feet 12500 2491 2 days 40 feet 13000 Highway transportation services providers in Chengdu FM Logistic Chengdu Chengdu Zhongji Logistics Co., Ltd. Chengdu Wantongda Freight Co Sichuan Yuancheng Logistics Co., Ltd. Chengdu Railway Station China Railway Freight Co 2.3.3 Waterway transportation The major river ports/wharfs closest to Chengdu are Leshan Port, Luzhou Port and Chongqing Port. Ports LeshanPort （dedicated to large-piece cargo） ·10·   Distance to Chengdu （in kilometers ） 144 Freeway close by Cheng-Le Freeway Capacity Cargo capacity 200,000 tons; container capacity: 25 000 standard containers Maximum lifting load （in tons） 500 Luzhou Port 277 Cheng-Lu Freeway Chongqing Port 290 Cheng-Yu Freeway Cargo capacity: 200 000 tons; container capacity: 25 000 standard containers Cargo capacity: 8 million tons; container capacity: 50 000 standard containers 35 180 2.3.4 Customs clearance procedures for waterway transportation The cargo could go from Shanghai to Luzhou, Chongqing or Leshan ports via waterway, and then to Chengdu. There are customs supervision, administration, examination and testing facilities set up in Luzhou and Chongqing. And the cargo could be transferred to the factories for customs clearance. 2.4 Environmental requirements 2.4.1 Environmental quality standards Environmental quality standards Ambient air hydrogen chloride, ammonia, sulphuric acid mist, and chlorine Surface water Noise the 2nd level standard of Ambient Air Quality Standard GB 3095-1996 In conformity with the maximum limit of harmful substances in the air of residential area of the Hygienic standards for the Design of Industrial Enterprises （TJ 36-79） GB 3838-2002III Category water standard Environmental Quality Standard for Surface Water of the 3rd level standard of Standard of Environmental Noise of Urban Area GB 3096-93 ·11·   2.4.2 Wastes discharge standards Waste Discharge Standards Waste water In conformity with the 3rd level standard of Integrated Wastewater Discharge Standard GB 8978-1996 In conformity with the 2nd level standard, the discharge limit of air pollutants from new polluting source, Integrated Emission Standard of Air Pollutants GB 16297-1996 In conformity with Emission Standard for Odor Pollutants GB 14554-93 In conformity with standard of 2nd category areas of Emission Standard of Air Pollutants for Boilers GB13271-2001 in conformity with the III category standard of the Standard of Noise at Boundary of Industrial Enterprises GB12348-90 Waste gas Ammonia Exhaust/flue gas from natural gasrun boilers noise (at boundary of industrial enterprises) 3. Industry growth Planning 3.1 Industry planning In order to further guide and promote the cluster development of furniture industry, the Chengdu Economic Commission has published Planning for the Cluster Development of Furniture Industry in Chengdu. In line with the plan, the city will invest approximately 10 billion yuan to boost the cluster and efficient development of the local furniture industry and form a 112 Structure in physical layout, that is, 1 Core, 1 Base and 2 Points/Parks. According to the plan, the production value of the local furniture industry could reach 35 billion yuan by 2010 with 30 export-oriented companies aimed to be formed. ·12·   The 112 Structure indicates specifically: 1 Core that is a core venue of furniture industry cluster based in Xindu District. (the plan is to leverage geographic edges of the Furniture Park of Xindu District to fully develop corporate headquarters, public R&D platforms, finished furniture products as well as raw and associated materials markets in the core venue, on the basis of certain growth scale of furniture manufacturing enterprises); 1 Base that is based on the city of Chongzhou as the base for the development of furniture industry cluster aimed as the largest production hub of panel furniture, which will be represented by QuanU Furniture and Mingzhu Furniture among other nationally leading panel furniture manufacturers; Map of strategic planning for the cluster development of furniture industry in Chengdu 2007   ·13· and 2 Points which are Chengdu Furniture Industry Point (Pengzhou City) and Qionglai City Yang’an Town Furniture Industry Point that both boast competitive industrial and land advantages. Apart from helping the growth of the competitive enterprises currently, the two parks will be focused on hosting the relocations of medium and small furniture companies. 3.1.1 Planning for the manufacturing of furniture and associated products The furniture products manufacturing will follow a clustering development based on the current enterprises in Xindu District, Chongzhou City, and Pengzhou City; these furniture manufacturers will move to the industrial development zones and points/parks in the planned cluster area. Planning for the furniture products Materials Categories Bedroom furniture Block board Children’s furniture Hotel furniture Office furniture Kitchen furniture Bedroom furniture Hotel furniture Office furniture The key development zones/parks to host Furniture Park of Xindu District Industrial Development Cluster Zone, Chongzhou City Industrial Development Cluster Zone, Pengzhou City Qionglai Yang’an Furniture Industry Point/Park Furniture Park of Xindu District Furniture Park of Xindu District Furniture Park of Xindu District, Industrial Development Cluster Zone of Chongzhou City Furniture Park of Xindu District, Industrial Development Cluster Zone of Pengzhou City Furniture Park of Xindu District, Industrial Development Cluster Zone of Chongzhou City, Industrial Development Cluster Zone of Pengzhou City Solid wood ·14·   Materials Steel Plastic Categories Bedroom furniture Hotel furniture Office furniture Hotel furniture Office furniture The key development zones/parks to host Industrial Development Cluster Zone of Chongzhou City and Shaqu Industrial Point/Park of Dayi County Furniture Park of Xindu District, Industrial Development Cluster Zone of Chongzhou City, Industrial Development Cluster Zone of Pengzhou City Planning for manufacturing of raw materials and complementary products Product categories Products Composite materials for furniture Leather and fabric products for furniture Raw materials Rubber and plastic products for furniture The key development zones/spots Industrial Development Cluster Zone of Chongzhou City Industrial Development Cluster Zone of Shuangliu County Industrial Development Cluster Zone of Chongzhou City, Industrial Development Cluster Zone of Qingbaijiang District Petrochem Base or Industrial Development Cluster Zone of Pengzhou City Industrial Development Cluster Zone of Shuangliu County Industrial Development Cluster Zone of Qingbaijiang District Furniture Park of Xindu District Glass products furniture for Associated products Hardware fittings and paint for furniture (except for surface painting and plating crafts) Steel structure and surface painting and plating crafts for hardware articles for furniture Machines and tools for the manufacturing of furniture Shaqu Industrial Point/Park of Dayi County Industrial Development Cluster Zone of Xindu District ·15·   3.1.2 Planning for furniture commerce and distribution The plan is to focus on establishing wholesale and retail markets of furniture and associated products in accordance with the requirement for maximum flow and the principles of improving the operation of brick-and-mortar markets, establishing a modern e-commerce, boosting regional brands and expanding sphere of influence. The key development zones/hosting venues under the plan are as follows. Furniture commerce and distribution markets Market category Retail market furniture Forms of the markets Franchises, flagship stores and outlets National furniture wholesale market Integrated furniture materials market (distribution center) Furniture materials market Furniture hardware items, boards and limber products market Specialized furniture leather and fabric products market Furniture exhibitions, forums and summits The key development zones/spots under the plan Downtown area, High-tech District and key towns in the close-by cities and counties Market Cluster Development Zone in North Xindu District or Furniture Park of Xindu District Xinfan Town, Xindu District Chongzhou City Xinfan Town, Xindu District Chongzhou City Chongzhou City South High-tech District (close to the New International Exhibition Center) Wholesale furniture market Furniture exhibitions, forums and summits 3.2 Industry positioning: 1 District by 1 Industry In accordance with the aims and requirements of The Trial Concepts on Expediting the Construction and Development of Industrial Development Cluster Zones by Chengdu Government, the city of Chengdu will further improve the planning of ·16·   industrial development cluster zones of Chengdu following the principles of scientific construction, development and management, and speed up the construction of infrastructure facilities and associated facilities, and innovate the management system and operation system, so that industrial development cluster zones with distinguished industry features, sophisticated supporting functions, strong capacities, substantial quality benefits and sustainability will be formed. It is aimed that by 2010 the added-value from large-scale enterprises in the industrial development cluster zones of Chengdu will reach over 130 billion yuan, and the over 70% enterprises will be clustered. And 10 industrial development cluster zones with yearly sales revenue exceeding 10 billion yuan individually will be built, over 5 of which will see sales revenue of more than 30 billion yuan individually. Moreover, 70% of the value-added businesses in the zones will enjoy substantial incentives/supports. The 1 District by 1 Industry positioning of the industrial development cluster zones of Chengdu SN 1 District name High-tech District, Chengdu Jingkai District, Chengdu Petrochem Base, Chengdu Jinjiang District   Prioritized/supported industries Electronics, information (including software), and biopharmaceutical industries Modern manufacturing industry represented by whole vehicles (including mechanical engineering) and parts Petrochemicals industry Headquarters park of companies mainly in creative designs, electron1. 2. 2 3 4 3. 4. 5. Prohibited industries sugar refinement monosodium glutamate manufacturing （ except for packaging） printing and dying leather tanning production of ·17· 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 Qingyang District Jinniu District Wuhou District Chenghua District Wenjiang District Qingbaijiang District Xindu District Dujiangyan City Pengzhou City Qionglai City Chongzhou City Jintang County Shuangliu County Pi County Dayi County Pujiang County Xinjin County ics and information industries Headquarters park of companies mainly in the aviation die industry Headquarters park of companies mainly in electronics and information service industry Headquarters park of companies mainly in light industrial designs and software development industries Headquarters park of companies mainly in electrical and mechanical research and development Electronics and mechanical industries Metallurgy and construction materials industries Precision machinery manufacturing industry (with furniture industry in Xinfan Town) electrical and mechanical industry and software industry Plastic manufacturing industry Natural gas chemicals industry Light industries driven by footwear New-type construction materials manufacturing industry (with textile and footwear industries in Huaikou Town) PV, electrical and mechanical industries Precision machinery industry (with Sichuan cuisine ingredients processing industry in Ande Town) Light industrial machinery manufacturing industry Foods and beverage production industry Chemicals industry represented by new energies and new materials 6. 7. 8. 9. man-made base oil coking processing of nuclear fuel manufacturing of reclaimed rubber metal smelting (except for pressing, or rolling processes) 3.2.1 About the furniture industry hosting parks/zones In line with the The 1 District by 1 Industry positioning in the industrial development cluster zones of Chengdu, Xinfan ·18·   Town of Xindu District and Chongzhou City will be the main venues hosting furniture industry. a) Xindu District. Xinfan Town of Xindu District is the place hosting the largest number of furniture manufacturers now in Chengdu. The planned area for the Xindu Furniture Industry Cluster Zone is 6 square kilometers; and its investment will be more than 6 billion yuan. The zone will be a concentrated and efficient furniture industry cluster comprising furniture R&D, training, manufacturing, living, products exhibition, limber trade and logistics which together make a complete industry chain and create a whole portfolio of service facilities. According to the estimation, the 1st phase of the park/zone will be finished within 2008 and could realize 10 billion yuan in production value and 3 billion yuan in annual trade when fully launched. b) Chongzhou city. Chongzhou city boasts the two largest furniture enterprises in Chengdu: QuanU Furniture and Mingzhu Furniture. QuanU Furniture has purchased 700 mu of land in the Chongzhou Industrial Development Cluster Zone and invested 450 000 000 yuan to build a corporate park with modern production facilities that boast a annual capacity of 500 000 sets of furniture and annual production value of 2 billion yuan, making it the largest manufacturer of household furniture in China. Whereas, the Mingzhu Furniture Park currently under construction covers a land of 1 000 mu with an investment of 500 000 000 yuan, and will have an annual production capacity of 400 000 sets of furniture in 2008 with a yearly production value of 2 billion yuan, making it the   ·19· largest corporate furniture park in western China. 4. Impact of Wenchuan Earthquake on the industry growth of Chengdu 4.1 Impact of Wenchuan Earthquake on Chengdu The parts of Dujiangyan, Pengzhou and Chongzhou city of Chengdu Metropolis which were close to the earthquake fault/fracture belt suffered great loss during the Wenchuan Earthquake with 4304 people killed and 95.84 billion yuan of direct economic loss resulted. However, the GDP of the three cities combined only accounted for 9% of the total GDP of Chengdu in 2007. The main downtown districts and the major industrial zones/parks experienced very little damage; and expect for those in these seriously damaged areas, the businesses in other places of Chengdu suffered very little loss. And by June 2nd, 2008, 94.82% of large-scale industrial enterprises in Chengdu had resumed their normal production activities. Chengdu Plain lies at the west of Sichuan Basin and the west fringe of Yangzi Land Mass in regard to geotectonics. Yangzi Land Mass has been a very steady land mass; and the 3 major faults in Sichuan Province do not pass the Yangzi Land Mass, or the Sichuan Basin, or Chengdu Plain. Therefore, no possibility exists for the occurrence of any major earthquake directly taking place in Chengdu. Experts’ comments: ·20·   “Since the energy accumulated in the earth surface has been released during the Wenchuan Earthquake, the city of Chengdu will not see any major earthquake beyond 8 degrees in the future 200 years. Chengdu is safe for at least 200 years.” -- Professor Liu Baojun, a famous geologist and member of Chinese Academy of Sciences and Technologies “The slowness of the slipping of the faults near Mount Longmen would prolong the cycle of strong earthquake reoccurring; therefore, it is safe to say that it will take at least 3 000 to 5 000 years for a major earthquake beyond 8 degrees to happen around the Mount Longmen faults.” -- Zhang Peizhen, head of Institute of Geology China Seismological Bureau, team leader of the South-North Earthquake Formation Research Team of China Wenchuan Earthquake Experts Committee 4.2 Impact of Wenchuan Earthquake on the furniture industry of Chengdu In terms of physical layout, the main venue of the furniture industry- Xindu District was fundamentally untouched by the Wenchuan Earthquake; while the furniture parks in Pengzhou and Chongzhou suffered very little impact. As a result, confidence of the most investors was not compromised in their investing in Chengdu. On May 22nd, Tencent Corporation signed an official cooperation intent agreement with the Chengdu Government to invest 550 000 000 yuan in a R&D center, and an information   ·21· management and customer service center in Chengdu. On June 5th, Yadong Cement Co. Ltd. signed an agreement with the city of Pengzhou to increase their investment for a further 140 000 000 US dollars to build a new-type dry process cement production facility with daily capacity of 4 200 tons of cement clinker. June 16th, Monolithic Power Systems, Inc. signed an agreement with the High-tech District of Chengdu to increase their investment and build their headquarters for greater China in Chengdu. MPS increased their investment in Chengdu from 12 million US dollars to 51 million US dollars. Within 5 years, its Chengdu facility will become the largest R&D center for analog integrated circuit in China. By July 23rd, there had been 130 investment projects (80 industrial projects and 39 services projects) from non-local companies contracted with the city of Chengdu with a total investment of approximately 75 billion yuan. Today —— The city of Chengdu is still the central strategic location for the growth of western China; ——The city of Chengdu still boasts extraordinary living and business environment; ——and the city of Chengdu has not seen any changes in its industrial fundamentals, market orientations or government administration. ·22·