Sichuan Economy and Trade Trends

Monthly, February 2016

Published by CCPIT Sichuan Council

Contents

Macro Economy

Total Output of Grain Manufacturing Industry Broke RMB 500 Bln in 2015

At the end of 2015, the total output of all grain and food oil manufacturers in Sichuan Province reached RMB 150 billion and the general output of industries involved in grain manufacturing broke RMB 500 billion, accounting for around 20% GDP of Sichuan. During the period of the “12^th Five-Year Plan”, Sichuan Province purchased 30.46 million tons of grains and 4.11 million tons of rapeseeds, sold 55.08 million tons of grains and 5.45 million tons of food oil, imported 60.14 million tons of grains in Sichuan and established 4269 emergency grain supply centers. The Government has implemented the grain purchasing policy at the lowest price for three consecutive years and the temporary rapeseed purchasing and storage policy for 5 consecutive years, which have helped farmers earn nearly RMB 3 billion additionally. In 2015, 13.5 million tons of grains had been delivered into Sichuan by trains. Sichuan has become the major grain producer and the principle province of circulation in China as well as the largest province for grain consumption and the second largest province for import and transformation.

In the next 5 years, the People’s Government of Sichuan will give impetus to supply and demand and lead farmers to grow and produce high-quality grains and food oil to satisfy the demand of impoverished people and group for grains and establish a sound system of providing high-quality and healthy grains and food oil for urban and rural residents. In 2016, the government will strengthen the assessment on provincial governor responsibility system for grains safety, digest unreasonable inventory by means of differentiated sales, supporting processing conversion and reducing operational costs, attach importance to food security projects, strengthen the construction of 5 projects which include rejuvenating food industry by science and technology, services after the production process, scientific grain storage, healthy grains and food oil demonstration and staple food industrialized production and develop production-purchasing-storage-sales integrated industrial economy to manage the Tianfu Grain Warehouse well. (January 29^th, Sichuan Daily/Wang Chengdong)

Three Activities in 2015 Achieved Trading Volume of Over RMB 577 Bln

In 2015, three market expanding activities including the “Beneficial Shopping for Sichuan People”, “Nationwide Promotion of Sichuan Products” and the “10000 Enterprises Go Abroad” had been conducted for more than 1000 times throughout Sichuan, involving 100,000 enterprises. Last year, the sum of business transactions reached over RMB 577 billion. Compared to 2014, the number of activities, enterprises and the total value of business transactions were all higher in 2015. The three events have become important opportunities for Sichuan to improve its internal demand and expand its market.

Good services can effectively boost growth and demand. According to the statistics made by the Sichuan Provincial Department of Commerce, the gross retail sales of consumer goods of Sichuan Province in the first 11 months of last year was 11.9% higher than that of the same period of 2014 and 1.3 percent higher than the average. Thus it can be seen that the three events played a significant role.

Service restructuring can force enterprises to transform and upgrade. According to the inverse market information transmission mechanism, timely adjusting product structure and changing marketing method can improve competitiveness. Last year, the government of Sichuan implemented the “Plan for 251 (20 key countries, 50 key projects and 100 key companies) 3-Year Action” and established 187 overseas offices for foreign trade and economic affairs. Wherein, 57 are located in counties and regions along the Belt and Road.

Services will promote openness and build a larger team of foreign trade companies. Up to now, over 20,000 companies obtained the import-export operation right, increased by 2900 than last year. In the first 11 months of last year, nearly 900 companies achieved growth in import and export.

Services benefit people and help to lift areas from poverty. The government brought more than 100 companies from 60 poverty-stricken counties to other provinces to seek for business opportunities last year. They achieved a total trading volume of more than RMB 10 million. (February 2^nd, Sichuan Daily/Zeng Xiaoqing)

Sichuan Invested RMB 531.8 Bln in Technical Transformation in 2015, Ranking the 1^st in Western China and the 7^th in China

The investment scale of Sichuan in technical transformation reached a new high last year. The government of Sichuan Province cumulatively invested RMB 531.8 billion for technical transformation last year, with a year-on-year growth of 5.6%. With a large investment scale, Sichuan ranked top in western China and 7^th throughout the country. During the period of the 12^th Five-Year Plan, Sichuan had invested RMB 2.25 trillion for technical transformation, with an average annual growth of 12.0%. The investment scale within the period of the 12^th Five-Year Plan was 2.38 times of that during the period of the 11^th Five-Year Plan.

In terms of the industrial distribution, competitive industries in Sichuan always draw high attention from investors last year. Investment structure was gradually optimized. In 2015, 7 competitive industries achieved a total investment of RMB 348.4 billion in technical transformation, accounting for 65.5% of Sichuan’s total investment in technical transformation. Manufacturing industry achieved an investment for technical transformation of RMB 380.3 billion, accounting for 71.5% of the total investment in technical transformation. Compared with competitive industries, the energy-consuming industries and over-capacity industries present slow growth and relatively smaller ratio. And investments in these fields have been effectively controlled. According to statistics, the 6 high energy-consuming industries achieved a total investment of RMB 123 billion, with a year-on-year drop of 1.4% and its ratio dropped by 1.7%.

From the perspective of regional layout, a situation of the investment being supported by two poles and driven by multiple points is generally formed. Last year, Chengdu completed an investment of RMB 133.6 billion in technical transformation, with an increase of 10.6%. It drove a growth of nearly 3% in the total investment of Sichuan, serving as a primate city which has a leading role in urban investment. Meanwhile, 11 municipals (prefectures) in Sichuan Province have invested over RMB 20 billion in technical transformation, making a total investment of RMB 427.9 billion which accounted for more than 80% of the total investment of Sichuan. (February 7^th, Sichuan Daily/Dong Shimei and Wu Jing)

Foreign Trade

Susun Group Invested RMB 100 Bln in PPP Project in Liangshan

Under the leadership of the president of the board of Yarenhe Education and the president of Pacific Business School – Yan Jiehe, Susun Group hosted the Poverty Alleviation PPP (Public-Private-Partnership) Forum in Liangshan. 500 people including elites of the “Five-Arm” system (Industrial Arm, Financial Arm, Consulting Arm, Cultural Arm and Educational Arm) from the Huatuo CEO Forum Organizing Committee, leaders in PPP project at home, experts and scholars, principals in local government, media representatives, etc. gathered in Xichang to discuss about the opportunities and challenges of PPP project in Liangshan. The Forum will be an ice-breaking event of PPP-mode poverty alleviation project which will emancipate the mind of local people.

In virtue of its comparative advantages and successful experience of PPP mode, Susun Group will act to promote the poverty alleviation work in Liangshan. During the event, Susun Group signed the PPP cooperation framework agreement for a RMB 100 billion infrastructural project with the Liangshan Yi Autonomous Prefectural People’s Government. (February 24^th, Sichuan Daily)

Key Projects

The First LNG Plant of Sinopec Put into Production in Sichuan

LNG Plant of Sichuan Zhongjing Natural Gas Co., Ltd. has entered its trial production stage and has the first batch of tank trucks for outward transportation, which means that the first Sinopec LNG plant has been put into production in Sichuan.

Sichuan Zhongjing Natural Gas Co., Ltd. is a holding subsidiary of Sinopec Southwest Oil and Gas Field Company had won an investment of RMB 360 million to be established in Deyang at the end of 2014. It was designed to provide a LNG plant with a production capacity of 130,000 tons per year and natural gas processing capacity of 600,000 m³ per day.

According to the principal of the company, they only use high-quality natural gas which can not only increase the production but also lower the cost of materials. The plant is located in the Chengdu-Deyang-Mianyang Economic Zone. Its products can easily reach Sichuan, Yunnan and Guizhou. (February 10^th, Sichuan Daily/Guo Wang and Li Xinyi)

Industries

Number of Individual Business of Sichuan Province Firstly Broke 3 Mln

In 2015, there were 643,900 newly-registered market entities in Sichuan. Their total value reached 3.9873 million with a year-on-year growth of 12.33%. Wherein, newly-registered companies reached a new high of 174,000, which means that a new company will be established in every two minutes. By the end of 2015, the number of individual business in Sichuan exceeded 3 million. Individual private economy became the most active economic growth point of Sichuan.

In terms of the industrial layout, wholesale and retail trade is still the first choice of social investment and new start-ups. Last year, 52.8% of the newly registered market entities were wholesalers and retailers. Accommodation and catering industries attracted 80,800 new companies, with a year-on-year growth of 84.1%, ranked top among other industries. Seven strategic emerging industries developed well in Sichuan, within which the number of market entities got involved in the energy conservation and environment protection industry reached 77,000 by the end of 2015, ranking the top. (February 8^th, Sichuan Daily/Liu Jia)

More than 300 Logistics Companies above Designated Size in Sichuan

In Sichuan, there are more than 300 logistics companies above designated size, among which the number of logistics companies above Grade A reached 136, which is 16 more than last year. Logistics market of Sichuan Province has been expanded.

Last year, the Logistics Office of the Sichuan Provincial People’s Government established 7 logistics alliances including air-land, railway-waterway, highway-waterway, highway-railway, communication, swap trailer transportation and special line service alliances. Developing the multimodal transport in an enterprise-alliance inter-transformation way can greatly lower the cost of logistics management and coordination and also effectively fill the gap in social logistics services.

The level of modern logistics has greatly risen. Last year, the government of Sichuan actively promoted the data exchange and common use between industrial logistics information platform, enterprise logistics information system and Sichuan Provincial logistics information platform and established regional logistics big data center. The platform big data center received more than 25 million data and attracted nearly 9000 newly registered users, ranking the top among other websites. (February 8^th, Sichuan Daily/Zhao Ruoyan)

Sichuan Convention and Exhibition Industries Association Established

The establishment ceremony of Sichuan Convention and Exhibition Industries Association was held in Chengdu, symbolizing the incorporation of the first conference and exhibition industries association in Sichuan.

The Association was initiated by convention and exhibition leaders in Sichuan, approved by the Department of Civil Affairs of Sichuan Province, supervised by the Sichuan Bureau of Expo Affairs and would attract sponsors and organizers involving in convention and exhibition industries, venue operators, conference centers and hotels, exhibition organizers, exhibition service providers, relevant associations, educational institutions, finance institutions, etc.

The Association will integrate the industry resources, strengthen communication and cooperation of our convention and exhibition industry and help it to develop healthily and steadily by playing an effective role in connection, coordination, supervision, service provision and industry promotion. (February 13^th, Sichuan Daily/Zhao Ruoyan)

The First RMB 300 Bln-Level Industrial Park Established in Western China

In the first year after the first national independent innovation demonstration zone in western China was approved and established, the total industrial output value of Chengdu Hi-Tech Development Zone reached RMB 308.5 billion. Chengdu Hi-Tech Development Zone which ranked the first among all national hi-tech zones in China became the first industrial zone in Sichuan achieved a total industrial output value of over RMB 300 billion.

At a growth rate of 10.1%, the GDP of Chengdu Hi-Tech Zone was up to RMB 127.76 billion last year and its industrial added value attained RMB 90.55 billion, accounting for 70.9% of the total value in this area. (February 16^th, Sichuan Daily/Zhang Lan and Ran Qianting)

Convention & Exhibition Economy

The 1^st Sichuan Merchant Returning Promotion Meeting Held in Chengdu

The 1^st Sichuan Merchant Returning Promotion Meeting themed by “return home to prosper the hometown” was held in the morning of February 24^th. Secretary of Sichuan Provincial Party Committee – Wang Dongming attended the meeting and delivered a speech. The deputy secretary of Sichuan Provincial Party Committee and the governor of Sichuan Province – Yi Li presided over the meeting and the president of the Sichuan Committee of Chinese People’s Political Consultative Conference – Ke Zunping also took part in it. More than 400 Sichuan business representatives from home and abroad were present at the meeting.

In the two-day event, 278 projects were signed with a total investment of RMB 158.216 billion.

Among all projects signed at the meeting, 139 projects were the secondary industry and achieved the highest investment ratio of more than 60% followed by the tertiary industry which involved 102 projects with an investment ratio of about 35%.

All projects signed during the meeting feature distinctive characteristics, large investment scope and wide range of home returning. Investment volume of the “double-seven and double-five” industries which include seven competitive industries, seven strategic emerging industries, five high-end growing industries and five newly-emerging leading industries account for 64.5% of the total investment. Nearly 100 companies made investment in the seven competitive industries and seven strategic emerging industries with a total investment of RMB 77 billion. (February 25^th, Sichuan Daily/Zhang Hongping and Zeng Xiaoqing)

CCPIT Sichuan Council

"Make in India" Road Show Held in Chengdu by the CCPIT Sichuan Council

The “Make in India” Road Show sponsored by the CCPIT Sichuan Council and the Indian Consulate-General in Guangzhou was held in Chengdu on the morning of January 28^th, 2016. The president of the CCPIT Sichuan Council – Li Gang and the consul-general of the Indian Consulate-General in Guangzhou – Tang Shien attended the event. Over 120 Chinese and foreign representatives including representatives of the Department of Trade and Industry of India and government representatives of Kerala and Punjab Pradesh, representatives from Dongfang Electric, Changhong, Beier Group, Chengdu Industry Investment Group Co., Ltd., CCIC, Bank of Chengdu, Chengdu City Construction Investment & Management Group Co., Ltd., etc. were present..

President Li Gang and Consul-General Tang Shien made addresses at the event. President Li Gang indicated that India was an important trade partner of Sichuan. As the targets for project contracting and investment, both parties had strong complementarity and great potential. Cooperative relationship should be established and enhanced in accordance with specific circumstances. President Li Gang also said that he would support Sichuan companies to go to India for economic and trade cooperation. Consul-General Tang Shien expressed his gratitude to CCPIT Sichuan Council for its supports for mutual cooperation and communication. In addition, Tang also invited Sichuan companies to go to India to seek for cooperative and investment opportunities.

The joint secretary of the Department of Trade and Industry of India – Ador Shatuweidi gave a report on the Indian manufacturing industry and the “Make in India” at the meeting. He made an introduction to the development of Indian information technology, service outsourcing and biological technology industry and emphatically pointed out the three highlights of the “Make in India” Road Show, which include Indian Manufacturing Center, Asian Business Conference and Hackathon.

The principal of Dongfang Electric which is known as one of the first Chinese company entering into Indian market introduced the development history of their company in India and shared some experience with participants. Leaders of relevant government departments of Kerala and Punjab Pradesh introduced the basic development situation of their own states as well as their investment orientations and economic and trade policies. They all extended their warm welcome to Sichuan companies to invest in India.

Indian guests also gave special introduction about Indian manufacturing industry, relevant policies on making investment in India and other topics mostly concerned by Sichuan companies. Participants showed their initiative and great interests in “Make in India”. The CCPIT Sichuan Council was planned to organize company representatives to take part in the event.

Deputy president – Li Li presided over the meeting.

Deputy President Li Li Met Member of Australian Federal Parliament Bob Baldwin and His Delegation

The deputy president of the CCPIT Sichuan Council – Li Li met the member of Australian Federal Parliament – Bob Baldwin, CEO of Australian International Trade Association and Associates – Michael Guo and their delegation on January 29^th, 2016.

Li extended his warm welcome to Bob and his delegations and made an introduction about the trade and economic cooperation between Sichuan and Australia. He indicated that both parties had been in a friendly relationship for a long time and had relatively large cooperation spaces in many fields. He expressed that he would like to work together with the Australian government for the bilateral economic and trade cooperation. In addition, he also proposed to encourage representatives to have exchange visits to all kinds of convention and exhibition activities as well as business practices to build platforms for the pragmatic cooperation between both parties.

Bob Baldwin and Michael Guo said Sichuan and Victoria were sister province and state. They suggested the government of Sichuan Province could take the “Australia China Cities Summits – China as Guest of Melbourne Royal Expo” as one of the important exchange activities for sister states and cities. The government leaders of Victoria sincerely invited leaders of Sichuan government to go to Victoria with their delegations and they hoped both parties could enhance communication and encourage Sichuan companies to go to Australia to carry out trade and economic businesses.

Deputy President Li Li Met Chinese Representative of the Commercial and Industrial Association of Budapest

The deputy president of the CCPIT Sichuan Council – Li Li met the Chinese representative of Commercial and Industrial Association of Budapest – Mr. Fu Long and his delegation on February 1^st, 2016.

Li extended his gratitude to Mr. Fu Long for his contribution to the economic and trade cooperation between Hungary and Sichuan when Mr. Fu served as the commercial counselor of Hungarian Consulate in Chongqing. Then he indicated that he and all members of CCPIT Sichuan Council were looking forward to cooperating with the Commercial and Industrial Association of Budapest after Mr. Fu Long held the position as Chinese chief representative of THE Commercial and Industrial Association of Budapest.

Mr. Fu Long made a brief introduction about the current situation of the Commercial and Industrial Association of Budapest and said he would communicate with Chinese companies as the representative of enterprise members of the association. He was expecting for a good cooperative relationship with CCPIT Sichuan Council. In addition, he also extended his warm welcome to the delegation of CCPIT Sichuan Council to visit Hungary and communicate with Hungarian companies. He told us he planned to hold a promotion meeting for Hungary in Chengdu in the first half of 2016.

Li said he will organize companies to visit Hungary in the next few years. Hungary was the first country in Europe which signed the “Belt and Road” cooperative agreement with China. This year, he would bring two delegations to go to Hungary and hope to jointly conduct a corporate cooperation promotion meeting with the Commercial and Industrial Association of Budapest at that time.

“China (Chengdu) International Intelligent Life Expo” to be Held

On January 7^th, 2016, CCPIT approved the Sichuan Council’s application to the organization of “China (Chengdu) International Intelligent Life Expo” (hereinafter referred to as (“the ILE”). This is another major exhibition succeeding “Chengdu International Trade Fair for Automotive Parts and Aftermarket Services (CAPAS)” that is listed as a Sichuan Provincial Government’s major exhibition project in Opinions on Implementation of Further Promoting Reform and Development of the Exhibition Industry.

The ILE is an industrial promotion platform founded according to major strategic deployment of Sichuan Provincial CPC Committee and Sichuan Provincial People’s Government on jointing “Internet plus Action Plan” and “Made in China 2025”, speeding up optimization and upgrades of advantageous industries, accelerating strategic emerging industries and prioritizing high-end growth-type industries.

The ILE will be co-hosted by CCPIT Sichuan Council, Sichuan Provincial Economic and Information Commission and Messe Frankfurt (Shanghai) Co., Ltd. Its 1^st session will be held in New International Convention & Exposition Center Chengdu Century City from April 4^th to 7^th, 2016. The planned exhibition area is 30,000 m². There will be seven sections including smart city, digital home, intelligent manufacturing, intelligent security system, IT, digital entertainment and intelligent creation space, when events such as the “World Intellect Industry Conference” will also be held at the time.

The ILE will create new platforms with new concepts, demands and approaches to promote the construction of a new pattern of urban and industrial development in the era of Internet. With five to eight years’ efforts, it aims to become a platform of investment attraction, equipment procurement, technical cooperation, brand promotion, innovation and entrepreneurship for smart city and industry that is well-known to the world and of first-rate domestically.

President Li Gang Met with Consul-General of the Consulate General of the Federal Democratic Republic of Ethiopia in Chongqing

On February 23^rd, 2016, President Li Gang of CCPIT Sichuan Council met with Consul-General Mr. Kebede Abera Ido of the Consulate General of the Federal Democratic Republic of Ethiopia in Chongqing and his delegation.

   President Li Gang made a brief introduction to Consul-General Mr. Kebede Abera Ido about the economic conditions of Sichuan in 2015, its characteristic and advantageous industries. He especially mentioned that Sichuan DEC International Cooperation Co., Ltd. and Chengdu Engineering Corporation Limited played an important role and cooperated well with Ethiopian companies in the construction of its largest hydropower station.

Consul-General Mr. Kebede Abera Ido also introduced Ethiopia to Li. He said that Ethiopia is a great agricultural country. It has the second largest population among African countries. Its capital, Addis Ababa is the place where the AU (African Union) headquarters is. He emphasized that Ethiopia has demands on infrastructure, investment and labor-intensive industries, and also expressed his wish for further cooperation between the Consulate General of the Federal Democratic Republic of Ethiopia in Chongqing and CCPIT Sichuan Council.

Li agreed with Mr. Kebede Abera Ido on his views of the cooperation prospect. He also invited Mr. Kebede Abera Ido to participate in “CAPAS” and “ILE” to be held by CCPIT Sichuan Council in 2016.