Go China - Chengdu

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Go China - Chengdu

Taking the high road

City shuns heavy industry to specialise in technology and innovation

PUBLISHED : Thursday, 17 September, 2015, 5:54pm
UPDATED : Monday, 21 September, 2015, 2:48pm

The China Western Development strategy started in 2000 as the mainland sought to spread the economic vitality of its booming eastern cities across the country. This resulted in Chengdu, the capital of Sichuan province, transitioning into a kinetic 14-million person hub of manufacturing, hi-tech research and development, financial services, retail and trade, and tourism.

"In the past decade, the city experienced an economic transition," says George Sun, a lecturer at Chengdu University. "The heavy industry companies were moved out by the government and manufacturing businesses, software industry, and service industry was moved in from coastal cities." 

With new policies, including tax breaks, free rent and interest-free loans, Chengdu became a prime destination for businesses and start-ups. Sun says there are 1.14 million registered businesses in the city. 

Chengdu opted to move beyond manufacturing and specialise in the hi-tech and innovation sectors. Playing a major role in this progression was the creation of multiple large-scale hi-tech development zones. The 82.5-square-kilometre Chengdu Hi-Tech Zone is now home to more than 33,000 companies, including over 1,100 foreign invested enterprises. 

The massive technological hub has clusters for the electronics, biomedicine, software and precision machinery industries. These include New Tianfu City, a 37.5-square-kilometre new urban core that is expected to attract 600,000 residents along with 200,000 to 300,000 tech industry workers; Tianfu Software Park, which is more focused on long-term innovation; the Sino-Singapore Innovation Zone, which is a joint venture for hi-tech research and development between Sichuan and Singapore; Chengdu Internet of Things Technology Institute, a national epicentre for the internet of things (IoT) industry; and General Electric's China Innovation Centre, which is the company's first such innovation centre and will serve as a location for research on industrial automation, green energy and health care.

The zone ranks fourth out of China's 88 state-level hi-tech areas.

The Tianfu New Area is a colossal, 1,578-square-kilometre emerging manufacturing, research and development, and high-end service area that includes portions of three cities and seven counties. It includes the southern part of the Chengdu Hi-Tech Zone and five other economic and development zones, and is projected to have a GDP of US$103 billion by 2020.

Great City is a low-carbon, car-free, "eco-city" being built in the Tianfu New Area. It will be a testing ground for green urban design and renewable energy technologies, and is expected to be home to 80,000 people when completed in 2020.

Chengdu is a stop on two major high-speed rail lines, seven inter-provincial highways, and a major terminus on the "New Silk Road", and trains are already making the 14-day journey to Europe. 

Chengdu is the busiest air passenger and cargo hub in western China and the fifth busiest in the country, with direct flights to 71 international destinations. 

Due to its business environment, Chengdu is a regional base for more than 250 Fortune 500 companies, including Toyota, Intel, Cisco, Sony, GE, IBM, Hewlett Packard, Microsoft and Siemens. 

As the economies of many of China's more established, easterly cities have shown signs of slowing down, Chengdu continues driving new industries, innovation and growth. Last year, Chengdu's GDP grew by 8.9 per cent, well above the national average.

Setting internet trends

Rather than playing catch-up with the West, China has become a global trendsetter in the internet of things (IoT) industry, with the city of Chengdu taking a leading role in realising the country's ambition.

IoT is a network of everyday objects that can send and receive information and directives through the internet, such as refrigerators that can send you a text message when it's empty or stop lights that can assist in the regulation of traffic. 

On the prospect that IoT could bolster China's GDP by US$1.8 trillion by 2030, the central government is slated to invest US$800 million into the industry by the end of this year, making the country a global leader in the industry. China is the largest investor in smart grids in the world, and it is predicted by International Data Corp (IDC), a major IT research agency, that by 2020, 20 per cent of all IoT connected devices in the world will be in China.

With an initial investment of US$160 million from the central government, the state-owned Chengdu Internet of Things Technology Institute (CIOTTI) was founded in 2010 with the intention of becoming a catalyst for growth and innovation in this new sector. 

One of the major projects that is under way in the CIOTTI is the development of a distributed health care system which consists of capsules, which are hardly larger than phone booths, that patients from rural areas can step into and remotely receive diagnoses and prescriptions from doctors in faraway cities.