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SWEDEN CHINA TRADE COUNCIL BUSINESS MEETING PROGRAM
– Presentation of Chengdu and Chongqing
The SCTC Business Meeting Program will take the
participants to the south-western cities of Chengdu and
Chongqing. This document aims to give a brief
introduction of the region and the two cities. We hope this
information will help the participants get a basic
understanding and thereby get more out of the visit.
BASIC OVERVIEW
Sichuan province and Chongqing municipality are known for spicy food and panda bears, but that
is not all. Sichuan is one of the most densely populated areas in China and have 87.2 million
inhabitants. Sichuan and Chongqing used to be one province until 1997 when Chongqing was
separated into a municipality. Today Chongqing city is counted as one of the largest cities in the
world, with a population of 31.2 million. But in all fairness, the city center “only” inhabits 5 million
people, and the rest live in the countryside surrounding the city.
WHY VISIT CHENGDU AND CHONGQING?
In 1999 the Chinese government launched the “Go West” campaign, encouraging investments in
the western part of China. Despite this encouragement, involving a combination of infrastructure
development, tax incentives and public promotion, the foreign direct investment (FDI) have not yet
really taken off. It has been hard for the development zones in inland cities, offering similar tax
incentives as their counterparts on the coast, to compete with the latter due to reasons such as
better-developed infrastructure, more experienced administrative officials, richer local markets and
easy access to the world. However, Chengdu seems to be the exception with a growing high-tech
industry and Chongqing has a thriving automotive industry, which are the two industries of focus for
this visiting program. Chengdu and Chongqing are regarded as the most interesting cities in
China’s western region for setting up a business and they both have national-level economic and
technological development zones (ETDZ) and high-tech development zones (HTDZ).
Below you find a table with key indicators of the economies of Chengdu and Chongqing:
2004 key indicators – interior cities
GDP per capita (RMB) Annual GDP growth (%) Utilized FDI (USD million)
Chengdu 20,625 16.8 330
Chongqing 9,608 18.4 405
(Source: EIU)
Swedish Trade Council, 205 A Dongwai Diplomatic Office Building, 23, Dongzhimenwai Dajie, Beijing 100600, P.R. China
Tel: +86 (0)10 6532 1857 Fax: +86 (0)10 6532 3803 E-mail: beijing@swedishtrade.se Web: www.swedishtrade.se
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Below you can see the investments made from 2000 to 2004 by foreign companies in the two cities.
FDI in Chengdu and Chongqing
million USD
738
800
581.9 555.8
600 436.9
412.3 405
400 256.5 260.8
244.4 195.8 Chengdu
200 Chongqing
0
2000 2001 2002 2003 2004 Source: EIU
CHENGDU
The city has an urban population of 3.5 million people or 11.3 million if you count the surrounding
suburbs, and is renowned for its many traditional tea houses. In the city you find many small
restaurants serving the spicy dishes characteristic for this region. The reason for eating such spicy
food is the moist climate, and in order to keep you body in balance you need to eat something that
makes you sweat.
Chengdu is located in the Chengdu Basin, a rich agricultural area but also China’s biggest natural
gas producing region. Chengdu is more commercially savvy than Chongqing, and has attracted
more FDI even though being smaller and with far less of an industrial tradition. Among the high-
profile project you find Toyota’s USD 99 million bus-manufacturing venture and a Motorola
semiconductor factory and research center. Intel has also constructed a USD 200 million chip
testing and assembly plant.
Sichuan’s very large population is the greatest challenge and the province has the lion’s share of
China’s 130 million-strong surplus labor force. Chengdu can therefore offers low-cost labor, but
also have a better than average education system with more than 30 universities providing skilled
employees.
Chengdu is connected to Chongqing by the 340-km Chengdu-Chongqing Expressway but also to a
cluster of flourishing mid-sized cities in the region by newly built expressways. Chengdu is also a
major hub with railways connecting to Xi’an, Beijing, Kunming and more. The city also has a
international airport with flights to Hong Kong, Thailand, Singapore, Japan and South Korea.
Swedish companies present
In April 2004, Ericsson announced it was setting up a research and development centre in the
region, which would also serve as the company’s purchasing base for Sichuan. Other Swedish
Swedish Trade Council, 205 A Dongwai Diplomatic Office Building, 23, Dongzhimenwai Dajie, Beijing 100600, P.R. China
Tel: +86 (0)10 6532 1857 Fax: +86 (0)10 6532 3803 E-mail: beijing@swedishtrade.se Web: www.swedishtrade.se
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companies present are ABB (China) Ltd., Alfa Laval (Shanghai) Technologies Co., Ltd., Atlas
Copco, Sandvik China Ltd., SKF China Limited, Stora Enso China Sales, Tetra Pak China Ltd.
CHONGQING
The city is known as one of China’s three furnaces, with summer temperatures exceeding 40ºC. It
also used to be the Kuomintang’s wartime capital from 1938 to 1945 when they retreated to Taiwan.
Chongqing became a provincial municipality in 1997 and was off to a slow start, but has since 2001
had an average growth rate of 11% each year. The city is ranked as the top industrial city in
China’s south-west and has great plans connected to the building of The Three Gorges Dam.
Cheap electricity from the dam and faster communication to Wuhan and Shanghai is very likely to
boost the city’s industries and kick-start economic growth throughout the whole south-western
region.
The economy in Chongqing suffers from aged and heavily polluting industry that includes chemical,
steel and automotive plants. There are not that many foreign investors, but you have large
companies present and operating such as Suzuki, producing mini-cars since the mid 90s and Ford
with a USD 49 million investment set up in 2003 producing Fiestas. The FDI is still just a fraction of
the investments done in coastal cities, and the investments furthermore have a disproportional
focus on heavy industry.
When it comes to Chongqing’s infrastructure, it needs a big upgrade even though being the south-
western transport hub. In 2005 a highway to the southern port of Zhanjiang in Guandong was
completed. Access to Chongqing will also be greatly improved by 2007 when the 2,000-km
Shanghai-Chengdu expressway will be completed. Chongqing is also connected to Shanghai by
the Yangze River, and can carry vessels up to 2,000-dwt (dead weight tons), and will in 2009 be
able to handle vessels of 10,000-dwt.
Swedish companies present
During the summer of 2006, the first cars will roll out of Volvo’s factory in the city. Among other
Swedish companies with offices or production in Chongqing you find ABB (China) Ltd., Ericsson
(China) Co., Ltd., Ericsson Communications Co., Ltd., Ericsson Technology Co., Ltd., Atlas Copco,
Sandviken China Ltd. and SKF China Limited.
Prepared by the Swedish Trade Council
March 24, 2006
Swedish Trade Council, 205 A Dongwai Diplomatic Office Building, 23, Dongzhimenwai Dajie, Beijing 100600, P.R. China
Tel: +86 (0)10 6532 1857 Fax: +86 (0)10 6532 3803 E-mail: beijing@swedishtrade.se Web: www.swedishtrade.se
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