Sichuan Economy and Trade Trends

Monthly, March 2014

Published by CCPIT Sichuan Council

Contents

Macro Economy

“Ten Thousand Enterprises Going Abroad” Sets Out

On March 3, the launching ceremony of “Ten Thousand Enterprises Going Abroad” was held by Sichuan Provincial Government at the International Terminal of Chengdu Shuangliu International Airport. 61 representatives from nearly 50 enterprises are ready for 10-day economic and trade promotion activity of “Outbound Steps into ASEAN” in Malaysia, Thailand and Vietnam to develop ASEAN market. This is just the beginning of the “Ten Thousand Enterprises Going Abroad”.

In order to encourage outbound steps of Sichuan enterprises to the international market and improve the share of “Sichuan products” in the international market, Sichuan Provincial Government decided to initiate the “Ten Thousand Enterprises Going Abroad” activity throughout the province since 2014. The objective is to have more than 10,000 enterprises in Sichuan to reap import and export performance and reach foreign investment cooperation within 3-5 years. Following the theme of “Dynamic Sichuan Enterprises, Worldwide Business” and the “government-driven, enterprises-led and intermediaries-organized” principle, “Ten Thousand Enterprises Getting Abroad” provides opportunities for Sichuan enterprises to attend international exhibitions and relevant economy and trade activities by different levels, regions and industries. The activities are to be launched both at home and abroad in a mode combining exhibition and promotion, investigation and matchmaking, investment, and on-site negotiation and cross-border e-business. In this year, there are totally 56 activities for “Ten Thousand Enterprises Going Abroad”. Relying on intermediaries, Sichuan will organize enterprises to go to ASEAN, Northeast Asia, Western Europe, Latin America, Africa, Central and Eastern Europe, North America, and South Asia to develop international economy and trade activities. These destinations share common features such as the consumer demand for “Sichuan Products”, cooperation feasibility and development potential. Enterprises participating in “Outbound Steps into ASEAN” activity come from the fields of agriculture, machinery, building materials, foods, chemical engineering and furniture, etc.

By promoting enterprises to expand international markets proactively, the volume of provincial foreign trade in Sichuan reached USD 70 billion last year. (Sichuan Daily reported on March 4)

Sichuan Financial Reform Accelerated

In 2013, by shifting thinking and innovating products, Sichuan financial institutions changed crisis into opportunity and supported Sichuan’s economic development and reform while developing themselves. Data shows that Sichuan realized annual financing of RMB 762.02 billion with a year-on-year increase of 15.7%, 5.7 percentage points higher than growth rate of GDP. At the end of 2013, Sichuan financial institutions’ loan balance in Renminbi and foreign currencies topped to RMB3.03 trillion, raising RMB 410.399 billion compared with the opening amount of 2013 and ranking top among provinces (district and cities) in central and western China. 14 public listed companies realized financing incomes of RMB 12.272 billion through allotment of shares, corporate bonds, private placement and public issue, etc. Moreover, Sichuan achieved premium income of RMB 91.468 billion with year-on-year growth of 11.61%, up 6.37 percentage points, and the scale of insurance fee in 2013 ranked No. 7, up one notch.

Sichuan financial industry is also keeping going steadily. By the end of 2013, Sichuan, with 264 banking institutions, has become the most prosperous, creative and attractive financial market in central and western China. With 300 securities and futures institutions, the province saw a sharp increase in securities and futures trading volume of 72% year on year to RMB 15.6 trillion, ranking in the top three on business scale of quasi-financial institutions in China. A financial center in western China is taking its shape. (Sichuan Daily reported on March 5)

Chengdu Tertiary Industry Added Value Accounts for Half of Total in Chengdu

Statistical data shows Chengdu achieved stable and fast economic development in 2013 and reached economic aggregate of over RMB 910 billion in the context of domestic economic transition being accelerated.

According to the preliminary accounting, the added values of Chengdu's primary, secondary and tertiary industries reached RMB 35.32 billion (up 3.6%), 418.15 billion (12.2%) and 457.42 billion (8.8%) respectively in 2013. Industrial structure was further optimized, and added value of tertiary industry accounted for half of total added value of the city. The ratio of the three industries was 3.9:45.9:50.2.

Non-public economy plays a vital role in economic growth. The added value of non-public economy realized RMB 539.36 billion with an increase of 12% in 2013, contributing 68.8% to the economic growth.

Industry maintained its leading role in development and eight advantageous industries reaped growing share in added value up to RMB 251.8 billion in 2013, accounting for 86.3% of that of industries above designated scale. Among these industries, automobile industry and electronic information products manufacturing industry grew fast and contributed 69.3% to the growth in added value of industries above scale in Chengdu.

The scale of fixed-asset investment also kept expanding. In 2013, Chengdu completed fixed-asset investment of RMB 650.11 billion with an increase of 10.4%, among which RMB 359.53 billion was private investment, up 17.2% and taking up 55.3% of the total fixed investment, RMB 375.29 billion was the retail sales of social consumer goods, up 13.1%. (Sichuan Daily reported on March 4)

Foreign Trade

Chengdu-Rangoon Flight to be Opened on March 30

An international airline from Chengdu to the largest city of Burma Rangoon (via Kunming) is to be opened on March 30.

The flight (CA905/6) will be performed by Airbus A319 passenger plane and take off from Chengdu Shuangliu International Airport at 8:05am and land at Rangoon International Airport at 11:05am. For return trip, it will take off from Rangoon at 12:15am and land in Chengdu at 6:15pm. There is one flight per day. (Sichuan Daily reported on March 7)

Sichuan Foreign Trade Export Ranks First in Central and Western China in Jan-Feb

In the first two months this year, Sichuan realized total import and export value of foreign trade of RMB 73.16 billion, up 19.8% year on year and 19 percentage points higher than national level in same period. Among, export value was RMB 51.69 billion with an increase of 24.8%, ranking the first in central and western China.

In Jan–Feb, continuous declination is witnessed in the proportion of processing trade which accounted for only 37.5% of total export-import volume of Sichuan, 4.2 percentage points lower than last year. Processing trade import can reflect the tendency of the next market cycle. Looking from the growth momentum of mechanical and electrical products import in first two months, export of processing trade is expected to rebound. Customs data showed that staple commodities of processing trade import, mechanical and electrical products had a growth at 10.6% in the first two months, accounting for 72.3% of total import of Sichuan, and drove the provincial import growth at 8 percentage points. The main products include integrated circuits, airplanes, printed circuits, and detecting instruments.

U.S. was the most important trade partner to which the export accounted for 19.8% and ASEAN still ranked the second. The trade increase between Sichuan and Hong Kong was the fastest, up to 52%. In the corresponding period, Sichuan exported mechanical and electrical products including laptop and integrated circuit worthy of RMB 32.45 billion, rising by 26.1% and accounting for 62.8% of total provincial export value. They drove the increase of total export value of Sichuan of 16.2 percentage points.

Private enterprises have become main impetus to promote export growth. In the same period, import and export value of private enterprises achieved RMB 31.31 billion, rising by 45.2% and accounting for 42.8% of total export, and drove the increase of total foreign trade of Sichuan of 16 percentage points. Besides, the import and export scale of foreign-invested enterprises levels off that in 2014, while import and export scale of state-owned enterprises declined at some degree. (Sichuan Daily reported on March 20)

Singapore Logistics Project Commenced in Guanghan

On March 21, the Prologis (Guanghan) E-commerce Logistics Industrial Park Project worthy of RMB 400 million in Guanghan Hi-tech Development Zone was started. The Project will be constructed into an industrial park and electronic commerce logistics settlement center, allocating center and distribution center radiating great Chengdu commercial district and southwest region with total area of 200 mu and building area of over 100,000㎡. A large number of representatives of electronic commercial enterprises such as Jingdong Mall and Amazon have come to inspect investment environment. In addition, a public logistics park project of Sichuan Hongtu Logistics Co., Ltd. worthy of RMB 150 million was also commenced that day. It is planned to build an IOT information center, a logistics storage demonstration area and commercial supporting facilities in Guanghan Hi-tech Zone.

On the 21^st day, 22 key projects of Guanghan in one quarter got started intensively, coming up with a total investment of RMB 6.61 billion. The city plans to complete investment of RMB 3.33 billion in 2014 which involves equipment manufacturing, modern agriculture, modern service industry and other sectors. (Sichuan Daily reported on March 22)

“SOFAGUO” Signed Great West China Cooperation Agreement in Chengdu

On March 27, the “Signing Ceremony of Our Southwest and SOFAGUO Great West China Cooperation” was held at Chengdu Nanhu Tourist Resort. As the first government brand co-supported by two great districts in southwest of France Aquitaine and Pyrenees, “SOFAGUO” promotes French wine and cuisine culture in the southwest of France.  For example, Bordeaux, already familiar to Chinese, is one of famous wine regions in Aquitaine. Taking Sino-France public and private cooperation as the foundation, “SOFAGUO” is an important project that will be promoted in China and it is the display window for products in southwest France. After “SOFAGUO” signed the Great West China Cooperation Agreement with Chengdu Senyu Industrial Group, it will radiate the southwest platform to Sichuan, Yunnan, Guizhou, Tibet, Guangxi and Chongqing and provide 450 kinds of grape wine from 125 chateaus and nearly 200 kinds of food from southwest France to southwest China by taking Chengdu, Sichuan as the strategic point. (Sichuan Daily reported on March 27)

Key Projects

8 Trans-provincial Cities and Prefectures to Co-construct Shipping Logistics Center in Upper Yangtze River

Eight cities and prefectures located in the border area of Sichuan, Yunnan and Guizhou will co-construct a shipping logistics center in the upper reaches of Yangtze River so as to promote the connection between Yangtze River Economic Zone and southwest opening bridgehead, to activate the rich resources in Panxi-Liupanshui area, and to drive the ecological civilization construction in this area. On March 1, on the “Forum of Upper-Yangtze-River Shipping Logistics Center Co-construction of 8 Cities & Prefectures in Sichuan, Yunnan and Guizhou”, a cooperation consensus agreement was co-signed by Yibin City, Panzhihua City, Luzhou City, Leshan City and Liangshan Prefecture of Sichuan Province, Zhaotong City of Yunnan Province, and Liupanshui City and Bijie City of Guizhou Province. (Sichuan Daily reported on March 2)

Guangyuan Port Expected to Have Trial Operation by Year End

In 2014, Sichuan will complete investment of RMB 3 billion on waterway construction to realize annual container handling capacity of 2.18 million TEU by then. This year will also see the acceleration in construction of key ports in the province, and Hongyan Operation Area Phase I of Guangyuan Port is to be finished for commissioning by the end of the year.

In 2014, Luzhou Port and Yibin Port will introduce and add new feeder liner ships of large-scale shipping companies to intensify liner interval, develop river and ocean combined transportation and improve the ports’ radiating influence on hinterland economy, helping Sichuan's leading advantageous industries merge into global value chain via Shanghai Free Trade Zone. The construction of Bonded Logistics Center of Luzhou Port and Yibin Port is also being speeded up. The Bonded Logistics Center of Luzhou Port enjoys a total area of 204 mu, its Phase I investment comes up to RMB 120 million and is to be completed in May 2015 as proposed. (Sichuan Daily reported on March 3)

Industries

China’s Second Sino-German SMEs Cooperation Park Settled in Pujiang

China’s second Sino-German SMEs Cooperation Park was settled in Chengdu. On February 28, Pujiang had centralized contract signing with Kappes Environment Technology Co., Ltd. (KET) of Germany on 9 environmental WPC profile projects with total investment of RMB3.6 billion and 5 projects in bioengineering and pharmaceutical industry with total investment of RMB960 million.

In November 2011, one of Fortune Global 500 Bosch Group was settled in Shou’an New City of Pujiang. Among the 4 projects of Bosch settled in Chengdu, 3 were located in Pujiang. Up to now, the packaging technology and electric tools of Bosch have been put into production, the Packaging Technology (China) R & D Center has been established and relevant contracts have been signed to introduce some projects of New Windows and Doors Building Materials Production Base of KET, as well as a batch of packaging technologies and electric tools supporting projects. Besides, there are about over 10 German-funded enterprises are negotiating with Sichuan on cooperation. According to plan, the development and construction of starting area of Sino-German SMEs Cooperation Park is to be completed in 5-8 years and realize output value of over RMB8 billion. (Sichuan Daily reported on March 1)

Gross Output Value in Pharmaceutical Industry Topped RMB100 Bln for First Time

In 2013, the pharmaceutical industrial output value of Sichuan broke RMB100 billion for the first time and reached RMB 108.43 billion, up 17.7% year on year. Meanwhile, the sales value, main business income and total assets of pharmaceutical industry of Sichuan also topped RMB100 billion in 2013 and realized RMB 104.09 billion, RMB 103.55 billion and RMB 103.27 billion respectively, all achieving double-digit growth.

From the perspective of industry, sales value of four subdivided industries, traditional Chinese medicine manufacturing industry, pharmaceutical chemicals manufacturing industry, biologics manufacturing industry and medical equipment manufacturing industry of Sichuan, realized over double-digit growth on year-on-year basis in 2013. According to the statistics on total assets of pharmaceutical enterprises in Sichuan, Sichuan has 23 pharmaceutical enterprises on the list of 500 top national pharmaceutical enterprises now. (Sichuan Daily reported on March 9)

Sichuan Gas Turbine Industry Alliance Established in Deyang

Sichuan Gas Turbine Industry Alliance was established in Deyang on March 6. As an alliance led by Dongfang Turbine Co., Ltd. of Dongfang Electric Corporation, Sichuan Gas Turbine Industry Alliance integrates the resources of 22 alliance members and co-conducts research on gas turbine generic technologies and core technologies, trying to obtain substantive breakthrough on the R & D ability of core technologies of heavy gas turbine in future 5-10 years and realize independent development of gas turbine in 20 years. (Sichuan Daily reported on March 10)

Output Value of Chengdu High-tech Industry Topped RMB500 Bln

In 2013, Chengdu high-tech industry achieved output value of RMB512.304 billion with year-on-year growth of 25.1%, accounting for 50% of total output value of entire Sichuan.

Chengdu has 1258 high-tech enterprises in total, among which more than 300 enterprises realized main business income of over RMB100 million and more than 40 enterprises realized that of RMB10 billion in 2013. Main business of Chengdu high-tech industry covers electronic information, biomedical medicine, new materials, new energy and aerospace, etc.

In 2013, Chengdu high-tech industry achieved value added of RMB134.950 billion, taking up 46.3% of that of industry above designated scale; and achieved main business income of RMB476.211 billion with year-on-year growth of 16.8%, taking up 54.2% of that of industry above designated scale. (Sichuan Daily reported on March 10)

Chengdu Ranks First on Industrial Growth in Sichuan Last Year

In 2013, Chengdu ranked the first on total industrial output and growth rate among all cities (states) in Sichuan, hitting a new record in recent 10 years.

In 2013, Chengdu industry above designated scale realized industrial added value of RMB291.76 billion with growth of 13.4%, 3.7 and 2.3 percentage points higher than national and provincial average level respectively. Among the 15 sub-provincial cities in China, Chengdu maintained its leading level and took the second place on industrial growth rate, up 1 ranking on total output value compared with that in 2012.

At present, industrial growth of Chengdu mainly relies on industries like automobile industry and electronic information industry, while some traditional industries like mechanical industry, building materials industry and light industry have growth rate below 5%. (Sichuan Daily reported on March 13)

Above-scale Industrial Added Value Realized Year-on-year Growth of 9% in Jan-Feb

From January to February 2014, Sichuan above-scale industrial added value realized increase of 9.05% year on year, 0.4 percentage point higher than national average level. Among these industries, automobile manufacturing industry and electronic information industry grew obviously.

On year-on-year basis, heavy industry realized value added increase of 10.0% and light industry realized value added increase of 7.0%.

With regard to industry, 31 industries of the 41 kinds of industry maintained growth on added value, among which automobile manufacturing industry realized value added increase of 28.4%, computer, communication and other electronic equipment manufacturing industry realized increase of 17.1% and the two major industries continued to lead the industrial economy of Sichuan due to accelerated release of productivity. This is very prominent on production increase of products, for example, the production of automobiles increased by 64.6% in January-February and that of complete electronic computer increased by 31.9%.

As the installed capacity of hydropower of Sichuan realized large growth in 2013, the generating capacity also increased rapidly this year. In the first two months of 2014, generating capacity of Sichuan realized 34% growth year on year. Besides, production of chemical pesticide also achieved growing rate of 70.8%. (Sichuan Daily reported on March 20)

Road Investment Increased by 94% Year-on-year in Jan-Feb

In the first two months of 2014, fixed-asset investment to nationwide road completed RMB151.2 billion, up 94% year on year when compared with RMB77.9 billion during the same period in 2013. In 2014, emphasis of road investment is to promote the construction of “dead end part” of national highway, promote the reconstruction of bottleneck section of common national road and enhance the construction of integrated transportation junction. In future years, investment to road may still maintain a rising momentum. (Sichuan Daily reported on March 20)

Sichuan Adds 162 New Innovative Enterprises

On March 20, 162 enterprises including the Second Research Institute of CAAC were newly added as the seventh batch of innovative enterprises in Sichuan. At present, Sichuan has 1436 innovative enterprises in total and the number of national innovative (pilot) enterprises ranked the first in western China.

The 162 innovative enterprises newly added are mainly involved in high-tech industry, strategic emerging industry and “7+3” competitive industry. All of the enterprises have R & D institutions and nearly 30 enterprises established R & D platform above provincial level; they own 1104 patents, among which 155 are patents for invention; they realized main business income of RMB25.597 billion and R & D input of RMB780 million; the R & D input accounted for 3.04% of main business income. (Sichuan Daily reported on March 21)

Sichuan Agricultural Technology Transaction Recorded New High in 2013

In 2013, 573 agricultural technology transaction contracts with total transaction volume of RMB428 million were registered in Sichuan. The registered number of contracts and transaction volume realized year-on-year growth of 91% and 172% respectively, recording a new high over the years.

In 2013, the agricultural technology transaction contracts were mainly involved with transfer of technology and they had transaction volume of RMB218 million, up 211% year on year and accounting for 51% of total transaction volume of agricultural technology transaction contracts in Sichuan. 65% of technology transfer was related to intellectual property. Technology licensors were mainly enterprises and the transaction volume of contracts was RMB306 million, up 308% year on year and taking up 71% of total transaction volume of agricultural technology transaction contracts in Sichuan. Chengdu, Mianyang, Ya’an and Neijiang are active areas for agricultural technology transaction in Sichuan. (Sichuan Daily reported on March 21)

On-stream Projects

160 Projects Commenced in Leshan

Up to March 3, Leshan has had 160 project commenced in the beginning of this year. The 160 projects have total investment of RMB26.2 billion and 80 projects among them belong to tertiary industry, accounting for 50%.

With total investment of RMB17.3 billion, projects in tertiary industry cover transportation, urban construction, commerce and trade, tourism and livelihood, etc. Among these projects, the phase II Chengdu-Kunming Double Line Project of Emeishan Central Shopping Park is to complete a multi-functional characteristic commercial block in the end of 2014. The Happy and Beautiful Village Construction Project with investment of RMB80 million in Jiajiang County will accelerate the pace of constructing radiation area of Emei tourism. The tertiary industry projects including infrastructure construction of leisure part at Emei river greenway campsite account for 90% of total investment of newly launched project in Shizhong District. A great batch of projects in modern service industry will further perfect urban functions and improve city grade.

Commenced 61 industrial energy projects will accelerate the transformation and upgrading of Leshan industry. (Sichuan Daily reported on March 4)

Two Tourist Roads in Danba County Constructed

On March 3, the construction of key infrastructure construction projects Niexia-Bawang Network Road and Jiaju Tibetan Village Tourist Road in Danba County supported by Chenghua District of Chengdu was formally started.

With total length of 5.477km and road width of 6m, Niexia-Bawang Network Road has asphalt concrete pavement and total investment of RMB29.85 million, which was completely provided by Chenghua District. It is expected to be completed and opened to traffic in the end of 2014. With total length of 11.34km and road width of 4.5-7.5m, Jiaju Tibetan Village Tourist Road has asphalt concrete pavement and total investment of RMB20 million. It is expected to be completed in March 2015. After being completed, the two roads will form a Jiaju travel link with provincial road 221. (Sichuan Daily reported on March 5)

Convention & Exhibition Economy

“Well-known Enterprises at Home and Abroad Visit Sichuan” to be Held in Chengdu in April

The activity of “Well-known Enterprises at Home and Abroad Visit Sichuan” is to be held in Chengdu from April 8 to 9. This is another move for promoting Sichuan’s opening up after the “Three Major Investment Promotion Activities” (private enterprises entering into Sichuan, state-owned enterprises entering into Sichuan, Hong Kong and Macao enterprises entering into Sichuan) conducted in 2014.

Themed with “Investing in Sichuan, Sharing Opportunities”, the “Well-known Enterprises at Home and Abroad Entering into Sichuan” activity carries out cooperation on seven competitive industries including electronic information, equipment manufacturing, beverage and food, oil and gas chemical engineering, energy and power, automobile making and vanadium-titanium rare earth and six strategic emerging industries including a new generation of information technology, high-end equipment manufacturing, new energy, new material, biology and energy conservation and environment protection. Enterprises to be invited are mainly state-owned enterprise, national 500 top enterprises and Fortune Global 500 enterprises that have close correlation with Sichuan industries, have signed contracts in Sichuan or have investment intents in Sichuan. It is expected that more than 300 well-known entrepreneurs at home and abroad will attend the activity. (Sichuan Daily reported on March 12)

90th China Food & Drinks Fair Opened in Chengdu

On March 28, the 90th China Food & Drinks Fair lasting for 4 four days was opened in Chengdu Century City New International Convention & Exhibition Center with nearly 3000 enterprises from over 30 countries and regions in the world attending the Fair, presenting a feast of food and drinks to more than 100,000 audiences. Compared with China Food & Drinks Fair of previous years, the 90th China Food & Drinks Fair improved more on internationalization. It recorded new high on exhibited quantities and exhibition area of grape wine and the exhibition area for grape wine exceeded that for white wine for the first time.

Occupying a total area of 125,000㎡, the 90th China Food & Drinks Fair had exhibition area for grape wine and international spirit of 34,600㎡, nearly 5000㎡ greater than that in 2013. 15 countries including France, Spain and Italy and Hong Kong area of China attended the Fair in form of national or regional group. Compared with the white wine exhibition hall area on China Food & Drinks Fair of previous years, white wine exhibition hall area on the 90th China Food & Drinks Fair decreased a lot and there were only two exhibition halls (No. 4 and No. 5 exhibition hall) for white wine. (Sichuan Daily reported on March 29)

CCPIT Sichuan Council

Focusing on “Ten Thousand Enterprises Going Abroad”, Professional Training for Export-oriented Enterprises Held

To carry out the “Ten Thousand Enterprises Going Abroad” activity of Sichuan and improve the appropriateness and effectiveness of Sichuan enterprises to expand international markets, Sichuan held professional training on “Ten Thousand Enterprises Going Abroad” through March 24 to March 25, 2014. On the training, two experts in CCPIT exhibition industry provided special-topic counseling on overall development condition of Chinese exhibition industry, existing problems and difficulties that enterprises may encounter when they participate in some international exhibitions and economy and trade activities and also the countermeasures they may take under these conditions and had exchange and interaction with export-oriented enterprises on the training. The training was highly praised by participating trainees. More than 100 people from export-oriented enterprises, industry associations and trade promotion system of Sichuan participated in the training.