Chengdu mayor hopes Fortune 500 firms set up in his city

Ge Honglin hopes Fortune 500 companies can create jobs in the capital of Sichuan province

PUBLISHED : Thursday, 06 June, 2013, 4:18pm
UPDATED : Friday, 07 June, 2013, 2:50am

Chengdu wants to attract more Fortune 500 companies to help it achieve at least one goal - the creation of jobs offering decent salaries.

Ge Honglin, mayor of the mainland's western financial capital, spoke to more than 100 chief executives and chairmen of Fortune 500 companies yesterday, the first day of the Fortune Global Forum, which Chengdu is hosting this year. About half of Fortune 500 firms have already set up businesses in the city.

He said the capital of Sichuan province faced increasing difficulty attracting foreign investment, partly owing to the growing reluctance by some foreign companies to move their businesses, and hence jobs, to China.

"Many big bosses of Fortune 500 companies nowadays do not like to talk about moving industries and businesses [to China], whenever I meet them," Ge, an engineer who became a politician, said in a panel discussion.

"But in fact I want them to make something new here, something like what Siemens has done in Chengdu," he said, referring to the research and innovation facility the German industrial giant had set up in the city of 14 million.

Ge did not elaborate on why a growing number of foreign companies were hesitating to move a part of their business, in particular manufacturing-related businesses, to the world's No 2 economy.

Industry analysts have blamed rising payroll and property costs for discouraging some foreign companies from selecting China as the base for their manufacturing operations.

Chengdu already plays a part in that role. For example, more than 70 per cent of Apple's iPads sold around the world are made in the city. Two models of Volvo cars are also made in the city, following Chinese carmaker Geely's landmark acquisition in 2010 of the Swedish firm.

To further encourage foreign companies to invest in Chengdu, Ge said the local government had set up a new industrial transformation fund, the size of which he did not disclose, to attract business innovators.

Typical of these, he said, would be a Fortune 500 company that sets up a research office in Chengdu even before it decides to set up a large-scale manufacturing plant, which can often create hundreds or even thousands of new jobs. US technology giant Dell announced yesterday a plan to make computers in Chengdu.

"It will not be difficult for foreign companies to pay the minimum required salary to their local employees in Chengdu. I used to work for a company, too, so I know how it feels - the more you pay your employees, the happier they will be and the harder they will work," Ge said.

The minimum monthly salary in Chengdu is about 1,000 yuan (HK$1,260).

"I know Chengdu land is not cheap, compared with other cities, but we have to do something to compete," he said in response to a question about Chengdu's competition for foreign capital with other mainland cities, including Beijing, Shanghai and Guangzhou.

"Actually it's not just about manufacturing," Ge said. "If you want to come here to just open a representative office, I welcome that, too. The key is to get more people to visit Chengdu more often and learn more about Chengdu step by step."