Chengdu Business Guide
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About this ebook
Rising costs and intensified competition in Beijing, Shanghai and other coastal cities have caused many investors to shift their attention to other parts of China.From its rich history to current economic and social developments, lifestyle choices to essential investment tips, Chengdu Business Guide is more than a quick read on investing in Chengdu. This book offers a insider knowledge on Chengdu.
Chong Loong Charles Chaw
Charles Chaw is the author of many business guidebooks and market research reports on China. His bestselling: "Manufacturing, Outsourcing and R&D in China" is the first rating guide on China's industrial parks across the country. Began in 2000, he has researched, consulted and promoted China's most established industrial parks. Today, his rating on hundreds of industrial parks set the benchmarks for the sector and made available in Bloomberg BMART, FactSet, Standard & Poor's Capital IQ and Thomson Reuters Research Bank. Under his leadership, the company has published hundreds of research reports covering more than 40 industries on China for over a decade. Charles also appears regularly as guest speaker in numerous business channels with BBC Asia, CNBC, Bloomberg TV, Phoenix TV (Chinese), Channel News Asia, Russia TV 24 and Al Jazeera etc. Leveraging on his extensive knowledge and experience on China's industrial parks development, he has produced a 5-episodes television documentary program titled: "Inside the World Largest Factory" in 2004, and another 6-episode: "Inside China Next Powerhouse" in 2007. Both programs were broadcast internationally in 4 languages. Charles had worked with Deutsche Morgan Grenfell's investment banking unit and Cargill Financial Services Asia, the proprietary trading arm of Cargill Group prior founded China Knowledge.
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Chengdu Business Guide - Chong Loong Charles Chaw
CHENGDU BUSINESS GUIDE
Published by:
China Knowledge Press Pte Ltd
119 Genting Lane, HB@119 Genting, Singapore 349570.
T.: +65 6235 8468 F.: +65 6235 2374
www.chinaknowledge.com
ISBN: 978-981-4163-45-3
at Smashwords
© China Knowledge Press Pte Ltd, 2013
FOREWORD
Today, your pick on Chinese cities is crucial in establishing your point of entry and the roadmap to expand into other parts of China. Though China is big, savvy investors who have scrutinized the country's map may find the need to sharpen their focus as they plan their next step.
As setup costs continue to rise along the coastal cities and established industrialized regions of Pearl River Delta (Guangdong) and Yangtze River Delta (Shanghai, Zhejiang and Jiangsu), lower costs in inland China are beginning to attract manufacturers and exporters worldwide. The growing consumption rate also presents tremendous market opportunities.
To us, Chengdu is definitely an attractive location in inland China. Chengdu, the capital city of Sichuan province with a population of 12 million, is well positioned as a vital hub to access other provinces and cities in Central and Western China. In a recent research and survey by the state media, Chengdu ranked among the top out of 40 selected cities. Thanks to the city's clean and green environment, it scored the highest in terms of living standards.
Chengdu is our third location-specific business guide after Doing Business in Shanghai
and Doing Business in Beijing
. In this guide, we present to readers the dynamics of the growing economy and attractive opportunities in sectors which we have researched and compared with other regions of China. This guide presents many opportunities which readers could explore given China's current boom phase.
This guide benefited from the invaluable support of the Chengdu government and plethora of local and foreign companies sharing and giving the insights of this magnificent city.
'First comes first to win' is the strategy I recommend to businesses and investors in Chengdu, where opportunities are plentiful and less-publicized.
Charles Chaw
Managing Director
China Knowledge Company Limited
CHENGDU BUSINESS GUIDE
Forward
Part One Overview
Chapter 1 Introduction to the City
Chapter 2 Economic Overview
Special Report I: Chengdu in China in the era of Globalization
Chapter 3 Infrastructure
Part Two Services Sector in Chengdu
Chapter 4 Software and BPO
Special Report II: Chengdu: China’s Emerging BPO Hub
Chapter 5 Finance
Chapter 6 Real Estate
Chapter 7 Tourism
Chapter 8 Food & Beverage
Chapter 9 Retail
Chapter 10 Media
Part Three Manufacturing in Chengdu
Chapter 11 Electronics
Chapter 12 Food Manufacturing
Chapter 13 Pharmaceuticals
Chapter 14 Petrochemicals
Chapter 15 Automobiles
Part Four Investment in Chengdu
Chapter 16 Investment Guidelines
Chapter 17 Setting up Business in Chengdu
Chapter 18 Industrial parks and development zones
Special Report III Fortune 500 in Chengdu
Part Five Living in Chengdu
Chapter 19 Living Manual
Chapter 20 Foreigners in Chengdu
CHENGDU MAJOR STATISTICS (2006)
Chapter One
Introduction to the City
1.1 Overview
Chengdu, the capital city of Sichuan province, is located in Southwest China. It is not only a city with abundant historical relics, natural resources and leisure lifestyle, but also a booming political, cultural and economic center in Southwest China.
Chengdu has been recognized as an important central city in Southwest China
by the State Council since 1999. As a political and economic center in Western China, Chengdu has attracted the U.S., Germany, U.K., France, South Korea, Singapore, Thailand and Pakistan to set up consulates. Currently, Chengdu ranks the third by the number of foreign consulates, next only to Shanghai and Guangzhou. To develop closer relationship with international society, Chengdu has established the friend-city
ties with 11 foreign cities from the U.S., Canada, France, Sweden, Japan, South Korea and so forth. Also, Chengdu is a friend-city
with other 19 Chinese cities.
Its civilization of over 3,000 years left Chengdu with various cultural heritage. Chengdu is one of the first 24 famous historical and cultural cities in China rated by the State Council and awarded the Best Tourism City in China by World Tourism Organization and China National Tourism Administration. Besides the renowned scenic spots inside the city, Chengdu is also the gateway to a number of world cultural and natural heritage in the neighborhood.
Also, Chengdu is a city rich in intangible cultural heritage. The First International Festival of the Intangible Cultural Heritage was held in Chengdu from May 23 to June 10, 2007, giving Chengdu an opportunity to show its various intangible cultural heritage to delegations from over 70 countries and regions around the world and share its experience in protecting these heritage with its foreign counterparts.
Supported by the opening-up policy and the strategy of developing the western region
of the Chinese government, Chengdu has been experiencing rapid economic growth. In 2006, Chengdu's GDP reached RMB 275 billion, up 13.8% from 2005. Its retail sales reached RMB 115.5 billion, 14.9% higher than 2005.
Unlike some other cities, to develop the economy at the expense of the environment, Chengdu has made many efforts to balance the economic development and environmental protection. The Funan River restoration project was granted the Habitat Scroll of Honor award by the United Nations in 1998. Just 8 years later, Chengdu's another integrated river program – Sha River restoration project was awarded the 2006 International Thiess River prize for excellence in river management. To improve the living environment for local people, Chengdu has moved its factory clusters in eastern part of the city which cause serious pollution out of the downtown in an industrial structural reform.
Chengdu's favorable policies, vast consumer market, low-cost labor sources as well as the pleasant living conditions have made it a good choice for more overseas investors when seeking business opportunities in the Chinese market other than Beijing and Shanghai. A sustainable economic growth of the old and vigorous city is expected in the future.
1.2 Culture and History
Brief History
The history of Chengdu can be traced back to Neolithic age. The ancient Shu people left Chengdu a large number of valuable relics which can date back to about 3000 years ago. Kaiming IX, the king of ancient Shu kingdom moved the capital of Shu to the place of current Chengdu in about 400 BC. It is him who first gave the name Chengdu
, which means a place that has become the capital
. About 2300 years ago, the urban construction of Chengdu was completed. Since then, Chengdu has been experiencing continuous development.
With 76,000 households, Chengdu was China's second largest city in west Han dynasty (from 206 BC to 24 AD). At that time, Shu brocade (a kind of silk) made in Chengdu was so famous that it earned the city the honor of the city of brocade
. Another symbol of the city is Hibiscus. It was planted around the city wall of Chengdu in about 927 AD and won the city another title - the city of Hibiscus
.
The year 1646 is a horrible chapter in the history of Chengdu, as the whole city was ruined in a fierce battle and became an empty city within 5 to 6 years after that. It was not until the late seventeenth century that Chengdu was able to resume its vitality, as the emperor Kangxi made a policy to emigrate a large number of residents from other regions to Chengdu as well as other cities in Sichuan province. During the period of the Republic of China (1912-1949), Chengdu was still the political center of Sichuan province. Its position as the capital city of the province remains the same after the Liberation in 1949.
Tianfu Square
Religion
Daoism
Sichuan is an important cradle for China's home-grown religion – Daoism. In late East Han dynasty, an official, Zhang Ling, resigned from his position in the government to study Daoism. He came to Heming Mountain in Dayi county of Chengdu to cultivate himself. And, according to legend, his discipline moved the Taoist gods to award him with the title of Tianshi
(master from heaven), as well as many magic weapons to combat the evil. Thereafter, Tianshi Zhang began to fight the evil and ghosts in ancient Shu region with the magic weapons, bringing peace back to the local people. He set Qingcheng Mountain as a base for China's Daoism after dispelling the evil ghosts which once resided there.
Chengdu is associated with many important events in Taoist history and is left with a number of Taoist relics. Besides one of the cradles of Daoism ---- Heming Mountain in Dayi county of Chengdu, the Qingcheng Mountain, the Qingyang Taoist temple, Doutuan Mountain, Wenchang Taoist temple and Xishan Taoist temple are all precious religious relics of Daoism.
In particular, the Qingcheng Mountain enjoys high reputation. There are dozens of well-preserved Taoist temples in the mountain, which keep a wide range of historical art pieces and modern works of renowned calligraphers. To some extent, the mountain is a living Taoist museum with thousands of years of history.
Starting from 2005, the Chinese Festival of Taoist Culture is held in Chengdu every year. The annual event provides a forum for Taoists to exchange understandings and present various aspects of Daoism to the public. Moreover, the theme of the festival - nature, life, harmony and development
has been added to the spirit of local life in Chengdu.
Buddhism
Since Buddhism was introduced to Chengdu in 365 AD, there had emerged many famous monks who were influential nationwide and had made significant efforts to the development of China's Buddhism. Among them, Mazu Daoyi, Deshan Xuanjian and Guifeng Zongmi in Tang dynasty were the most famous Zen Buddhists. In Song dynasty, a famous Chengdu monk - Yuanwu Kele created literal zen
and contributed a lot to the development of Zen Buddhism in Japan. Chengdu Zhaojue Buddhist temple, where the monk lived, is honored as the cradle of Japanese Zen Buddhism.
Anshun Bridge over the Jingjing River
There is an old Chinese saying, every Buddhist in China should know something about Shu
. Sichuan, where Chengdu lies in, has been an important place for propagation of Buddhism. During the 2000 years of Buddhist history in Chengdu, Buddhism has placed significant impact on the culture, economy, politics and local life.
Among various cultural relics of Buddhism in the region, there are Emei Mountain - a holy land of Chinese Buddhism, Leshan giant Buddha - the world's largest stone Buddha figure, Wenshu Buddhist monastery and Baoguang Buddhist temple. There are also Buddhism seminars, forums and cultural festivals held in Chengdu to promote the religion.
Local Cultural Features
Sichuan Opera
Sichuan opera is one of Chengdu's cultural symbols. It has been regarded as one of China's top art forms since Tang dynasty. It is not only known for the alt and shrill singing, but also for its unique skills such as face-changing and fire-breathing during performance.
Face-changing does not really change the face, but thin silk masks. The masks are usually painted with the looks of key roles in traditional opera, and represent different feelings of the character - happy, sad, angry and cheerful. When the actor is changing faces
, it is impossible to find out how he does it. And, the highest record is to change three faces
within one and half seconds. To some extent, it is the magic in Chinese art.
Another exciting performance in Sichuan opera is fire-breathing. The actor puffs towards a lamp held in his hand to produce flames. It is said that actually the actor puffs coal oil in his mouth to make fire. It sounds easy but is quite dangerous in reality. Some careless actors have burned themselves, as the flames turned back to their faces. However, watching the breathtaking play is absolutely safe.
Candy Painting
The edible candy painting is a creation of Chengdu people to integrate food with art. It was created as a sacrifice to gods at festivals over 400 years ago. The craftsman, who is also the cook, simmers brown sugar in a brass pot. The brown sugar is scooped out after it melts. And the craftsman is then able to paint on marble slate with the syrup in a round spoon. The common figures include flowers, fruits, birds, fishes, dragons and phoenixes. The most interesting thing is, whether you can get the painting you like depends on your luck.
Usually, you will be asked to pay for an opportunity to dial a pointer, which is fixed on the core of a square slate that is painted with all the available figures. When the indicator stops, you will get the candy figure to which it points. In this regard, the candy painting in Chengdu is also a game.
Shadow Play
Shadow play refers to an art that displays to the audience a white-cloth screen which reflects the shadow of flat figures. The figures are usually made of donkey skin. After processing, whittling and polishing, the skin sheet will be carved and painted into different characters, plants, animals and architectures, ranging from 10 mm to 55 mm long. Different parts of the figures are carved separately and joined together with strings attached to bamboo sticks. It is manipulated like marionette, but is not shown directly to the audience. A light will be placed behind the cloth, so that the shadow of the flat figures could be seen on the screen.
The Shadow play in Chengdu is abundant in characters and manipulation skills. The flat puppet has five categories of characters, the same with real Chinese operas. The shadow play artists have to sing and kick drums as accompaniment while they are manipulating the puppets. Chengdu's shadow play, together with candy painting, is being applied for China's national intangible culture heritage.
Shu Brocade and Shu Embroidery
The Shu brocade made in Chengdu is the first brocade invented in the world. In ancient time, it was not only favored by aristocrats and wealthy families for making clothing, it was also a best-selling Chinese product on the Silk Route. It was often sent to foreign countries as diplomatic presents too. There were about 2,000 workshops in Chengdu producing Shu brocade before the Liberation (1949). After that, the production has been industrialized and has developed many new patterns. Now, the Shu brocade remains a good handicraft and souvenir for tourists from home and abroad.
The Shu embroidery is an art that embroiders colorful silk threads on satin. There are over 130 kinds of different embroideries, some of which require excellent skills and are extremely hard to make. Among the most difficult ones, there is the double-sided embroidery. The designs on both sides of the satin sheet are different - probably a Persian cat on one side and a panda on the other. However, the two designs share the same profile - that is why you cannot see anything embroidered on the back of such a thin fabric. A piece of Shu embroidery, Pandas in Jiu Zhai Valley
, was presented to Macao Special Administrative Region at its return to China mainland in December 1999.
1.3 Natural Conditions
Geography
Chengdu is situated at the center of Sichuan province, extending between 102 degrees 54 minutes to 104 degrees 53 minutes east longitude and 30 degrees 5 minutes to 31 degrees 26 minutes north latitude. The city spans 192 km from east to west and 166 km from north to south, covering an area of 12,390 sq km, which accounts for 2.55% of the total area of Sichuan province. By the end of 2005, urban area of Chengdu totaled 2,177 sq km, with a built-up urban area of 395.49 sq km.
Topographically, Chengdu lies in the western margin of Sichuan basin and slants from northwest to southeast. The west of Chengdu is mountainous, with many foothills ranging from 1,000 m to 3,000 m above sea level. The east of Chengdu is much flatter, averaging 750 m above sea level. Dotted with sporadic low foothills, the Chengdu plain covers the majority of eastern Chengdu and is surrounded by Longquan Mountain and Longmen Mountain standing to its southeast and northwest. In conclusion, plains, foothills and mountainous region account for 40.1%, 27.6% and 32.3% of the city's total area respectively.
City panoramic view
Climate
As Chengdu is in the semitropical monsoon climate zone, the transition of seasons is evident and with heavy rainfalls. Except the mountainous region in the northwest, the majority of Chengdu shares the same characteristics: mild long summer and short winter, long non-frost period, moderate temperature and wind speed, high humidity, rainfalls that present mostly in autumn and nights, thick clouds and little sunshine.
The average temperature of a year ranges from 15.2 °C to 16.6 °C. July and August are the hottest months there, having a temperature averages from 25.0 °C to 25.4 °C. With an average temperature of 5.6 °C, January is the coldest month in Chengdu. The non-frost period of a year totaled more than 337 days there.