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When Intel announced that it would invest $500 million to build a factory in Chengdu in 2003， most people in the industry outside China asked， “Where is Chengdu？” Now， Intel’s manufacturing base in the capital of southwest China’s Sichuan Province has become the company’s largest assembly and testing center. In May， the 1.3 billionth chip rolled off the production line. Nine chips per second are produced there.
“The Intel Chengdu production base has been responsible for over 50 percent of Intel’s global chip production and 60 percent of CPU output since the first half of 2011. It’s also a center for testing and producing on a large scale the latest Intel products，” Bian Cheng， General Manager of Intel Products （Chengdu） Ltd.， told Beijing Review.
Ten years ago， 70 percent of the products that Chengdu shipped out were clothes and agricultural products. Today， IT products are the norm.
Major international players in the electronic information industry have clustered in the city， including IBM， Accenture， SAP， AlcatelLucent， Nokia-Siemens， Singtel， DHL， Wipro and Symantec. “A higher-level concentration of industrial players will benefit all in the industrial chain. For instance， after Lenovo， Intel’s downstream firm， set up its Chengdu base， it took us only half an hour to ship our chips to Lenovo，”said Bian.
In 2012， the output value of the city’s electronic information industry totaled over 300 billion yuan （$48.96 billion）， ranking fourth nationwide after Beijing， Shanghai and Guangzhou， capital of south China’s Guangdong Province. The electronic information sector has become one of the pillar industries in Chengdu， accounting for over one third of its GDP.
Chengdu’s GDP reached 813.89 billion yuan （$132.83 billion） in 2012， up 13 percent year on year—a growth rate much higher than the national average. As an inland city， Chengdu has attempted to seize opportunities by upgrading its industrial structure to include more advanced industries.
Top-notch gov’t service
Traditionally known as the hometown of the panda， 238 Fortune Global 500 companies have established presence in Chengdu.
“I think China’s ‘Go West’ campaign will continue and Chengdu will become a hotter place for investment， especially after the 2013 Fortune Global Forum and more foreigners get to know what kind of miracle the city has created during the past decade，” said Bian.
When Damco， a logistics company affiliated with the world’s top shipping and oil conglom- erate A.P. Moller-Maersk Group， considered building a customer service center in China in 2009， it looked into a number of cities， including west China’s Chongqing Municipality， Xi’an， capital of northwest China’s Shaanxi Province， Nanjing， capital of east China’s Jiangsu Province， and Chengdu. “Only one day after we talked to Chengdu government officials about the potential cooperation， a complete and detailed proposal was handed to us. This is the most effective and quickest response we received from a local government during our investigation of Chinese cities，” said Shao Wei， Senior Director of the Maersk Global Service Center Chengdu.
Five months later， Maersk decided to locate its global service center in Tianfu Software Park in Chengdu， citing as one reason the government’s strong desire to learn from multinationals. To date， the center employs over 1，000 workers and provides professional supply chain services to 250-plus global clients.
Bian said that Intel chose Chengdu after a careful， all-round evaluation of the city’s investment environment.
“After communicating with the Chengdu Municipal Government， we found that it has forward-looking plans for supporting hi-tech companies. It has a vision to cooperate with multinationals， making it easier for us to operate，” he said.
Founded in 2010， Chengdu Pinguo Technology Co. Ltd. is a start-up software company known for its Camera 360 app. Over 100 million people have used the app worldwide as of mid-April. Xu Hao， CEO of Pinguo， told Beijing Review that the government helped the company a lot when it moved to the Tianfu Software Park in 2010.
“Back then， we didn’t have any venture capital. The government offered us offices， desks and chairs. Later， when venture capitalists came to Chengdu to look for projects，the government introduced them to us，”said Xu.
Wang Yuehua， Director of Damco Customer Service Center in Chengdu， told Beijing Review that the Chengdu Government didn’t simply go away once the center was established but pays close attention to the needs of companies through regular consultation.
“Every quarter， I am invited to a meeting presided by the city mayor to express company concerns. One time， I complained that buses passing by the Tianfu Software Park， where Damco is located， were too few. The problem was solved within days，” she said.“When I complained that the traffic lights near my company were broken， the mayor sent out an inspection team to check all the traffic lights in the city. It’s the transparent working procedures and the quick response of the government that makes the city valued by global companies.”
IPR protection
When it comes to encouraging innovation in the hi-tech sector and attracting multinationals， the city’s emphasis on protecting intellectual property rights （IPRs） has been highly valued.
In 2012， Chengdu carried out 270 special inspections on copyright protection. Law enforcement officials shut down 127 illegally operating institutes and eight underground businesses， handled 21 IPR infringement cases and destroyed over 650，000 illegal publications and productions.
Ding Xiaobin， Vice Director General of the Intellectual Property Right Bureau of Chengdu， told Beijing Review that Chengdu’s efforts in IPR protection are illustrated in its attempts to create regulations in accordance with international rules and raising awareness of copyright infringement.
The city had 32，563 patents in 2012， the highest number in China’s central and western regions.
“Nearly 40 percent of those patents are related to hi-tech industry，” said Ding， adding that the city rolled out many incentive policies to encourage technology innovation as well as protect intellectual property in order to get ideas and products out to the market faster.
Chengdu also offers office rental subsidies， tax breaks and industrial support to companies in the hi-tech sector.
“We formulated an incentive system to encourage companies to shift away from the traditional industries of the last three decades to a more high-end focus，” said Ding. “For instance， we offer subsidies to companies that have established labs in cooperation with universities. Also， if companies have invented strategic and key new products， we will reward them 1 million （$163，200） and 200，000 yuan（$32，640）， respectively. We have an evaluation center to assess those products according to the future market potential of those products. “
Ding said that Chengdu has made strides in turning its academic strength into productivity.
“This year， Chengdu released a policy to encourage university teachers to start up their own businesses. The government will award each professor who does so 200，000 （$32，640） to 1 million （$163，200） yuan as reward. If they are not willing to open new firms， they can go to local companies full time or part time to contribute research. If so， they can receive a 100，000 yuan （$16，320） reward.”
Patents are the city’s intangible assets， and Chengdu is currently embarking on a path to turn those assets into fortune. “Chengdu established a platform that allows companies use their intellectual property as a mortgage to get bank loans. To date， 99 companies， with over 100 patents total， have received 850 million yuan （$138.72 million） in bank loans through this platform. By solving their financing difficulties， we make sure companies can grow，” said Ding. “Encouraging innovation by rolling out incentives and protecting IPRs will greatly lower Chengdu’s investment risks and help transform its pattern of growth.”
A talent pool
In addition to the government’s effective and efficient service and its efforts on protecting IPRs， a rich talent pool is a crucial reason why many multinationals have turned to Chengdu.
The city has 52 universities and colleges， which injects a large number of graduates every year into the economy. In 2012， a total of 202，224 students graduated from those universities and colleges. An abundance of talent is an important advantage for Chengdu.
The FAW-Volkswagen Automotive Co. Ltd. set up its Chengdu Branch in May 2009. With a total investment of 16.3 billion yuan （$2.66 billion）， the annual production value of the Chengdu manufacturing base is estimated to be 108 billion yuan （$17.63 billion）.
Liu Jurong， President of the Chengdu Branch of the FAW-Volkswagen， told Beijing Review that one of the major reasons that the company selected Chengdu was the rich talent pool. “We came for the talent. Chengdu has many college graduates and offers qualified professionals for us，” said Liu. “Also the western region in China has great market potential.”
Bian， General Manager of Intel Chengdu， agreed.
“Tapping the talent pool is the primary reason we are here. We believe the mature education system in Chengdu will offer a great talent pool for the company，” said Bian. “Right now， the average age of Intel Chengdu’s employees is only 28. We recruit a lot of local graduates.
“Chengdu has the charm to keep the talent to start a life here， with its good environment and profound cultural heritage.”
（Reporting from Chengdu， Sichuan Province）
“The Intel Chengdu production base has been responsible for over 50 percent of Intel’s global chip production and 60 percent of CPU output since the first half of 2011. It’s also a center for testing and producing on a large scale the latest Intel products，” Bian Cheng， General Manager of Intel Products （Chengdu） Ltd.， told Beijing Review.
Ten years ago， 70 percent of the products that Chengdu shipped out were clothes and agricultural products. Today， IT products are the norm.
Major international players in the electronic information industry have clustered in the city， including IBM， Accenture， SAP， AlcatelLucent， Nokia-Siemens， Singtel， DHL， Wipro and Symantec. “A higher-level concentration of industrial players will benefit all in the industrial chain. For instance， after Lenovo， Intel’s downstream firm， set up its Chengdu base， it took us only half an hour to ship our chips to Lenovo，”said Bian.
In 2012， the output value of the city’s electronic information industry totaled over 300 billion yuan （$48.96 billion）， ranking fourth nationwide after Beijing， Shanghai and Guangzhou， capital of south China’s Guangdong Province. The electronic information sector has become one of the pillar industries in Chengdu， accounting for over one third of its GDP.
Chengdu’s GDP reached 813.89 billion yuan （$132.83 billion） in 2012， up 13 percent year on year—a growth rate much higher than the national average. As an inland city， Chengdu has attempted to seize opportunities by upgrading its industrial structure to include more advanced industries.
Top-notch gov’t service
Traditionally known as the hometown of the panda， 238 Fortune Global 500 companies have established presence in Chengdu.
“I think China’s ‘Go West’ campaign will continue and Chengdu will become a hotter place for investment， especially after the 2013 Fortune Global Forum and more foreigners get to know what kind of miracle the city has created during the past decade，” said Bian.
When Damco， a logistics company affiliated with the world’s top shipping and oil conglom- erate A.P. Moller-Maersk Group， considered building a customer service center in China in 2009， it looked into a number of cities， including west China’s Chongqing Municipality， Xi’an， capital of northwest China’s Shaanxi Province， Nanjing， capital of east China’s Jiangsu Province， and Chengdu. “Only one day after we talked to Chengdu government officials about the potential cooperation， a complete and detailed proposal was handed to us. This is the most effective and quickest response we received from a local government during our investigation of Chinese cities，” said Shao Wei， Senior Director of the Maersk Global Service Center Chengdu.
Five months later， Maersk decided to locate its global service center in Tianfu Software Park in Chengdu， citing as one reason the government’s strong desire to learn from multinationals. To date， the center employs over 1，000 workers and provides professional supply chain services to 250-plus global clients.
Bian said that Intel chose Chengdu after a careful， all-round evaluation of the city’s investment environment.
“After communicating with the Chengdu Municipal Government， we found that it has forward-looking plans for supporting hi-tech companies. It has a vision to cooperate with multinationals， making it easier for us to operate，” he said.
Founded in 2010， Chengdu Pinguo Technology Co. Ltd. is a start-up software company known for its Camera 360 app. Over 100 million people have used the app worldwide as of mid-April. Xu Hao， CEO of Pinguo， told Beijing Review that the government helped the company a lot when it moved to the Tianfu Software Park in 2010.
“Back then， we didn’t have any venture capital. The government offered us offices， desks and chairs. Later， when venture capitalists came to Chengdu to look for projects，the government introduced them to us，”said Xu.
Wang Yuehua， Director of Damco Customer Service Center in Chengdu， told Beijing Review that the Chengdu Government didn’t simply go away once the center was established but pays close attention to the needs of companies through regular consultation.
“Every quarter， I am invited to a meeting presided by the city mayor to express company concerns. One time， I complained that buses passing by the Tianfu Software Park， where Damco is located， were too few. The problem was solved within days，” she said.“When I complained that the traffic lights near my company were broken， the mayor sent out an inspection team to check all the traffic lights in the city. It’s the transparent working procedures and the quick response of the government that makes the city valued by global companies.”
IPR protection
When it comes to encouraging innovation in the hi-tech sector and attracting multinationals， the city’s emphasis on protecting intellectual property rights （IPRs） has been highly valued.
In 2012， Chengdu carried out 270 special inspections on copyright protection. Law enforcement officials shut down 127 illegally operating institutes and eight underground businesses， handled 21 IPR infringement cases and destroyed over 650，000 illegal publications and productions.
Ding Xiaobin， Vice Director General of the Intellectual Property Right Bureau of Chengdu， told Beijing Review that Chengdu’s efforts in IPR protection are illustrated in its attempts to create regulations in accordance with international rules and raising awareness of copyright infringement.
The city had 32，563 patents in 2012， the highest number in China’s central and western regions.
“Nearly 40 percent of those patents are related to hi-tech industry，” said Ding， adding that the city rolled out many incentive policies to encourage technology innovation as well as protect intellectual property in order to get ideas and products out to the market faster.
Chengdu also offers office rental subsidies， tax breaks and industrial support to companies in the hi-tech sector.
“We formulated an incentive system to encourage companies to shift away from the traditional industries of the last three decades to a more high-end focus，” said Ding. “For instance， we offer subsidies to companies that have established labs in cooperation with universities. Also， if companies have invented strategic and key new products， we will reward them 1 million （$163，200） and 200，000 yuan（$32，640）， respectively. We have an evaluation center to assess those products according to the future market potential of those products. “
Ding said that Chengdu has made strides in turning its academic strength into productivity.
“This year， Chengdu released a policy to encourage university teachers to start up their own businesses. The government will award each professor who does so 200，000 （$32，640） to 1 million （$163，200） yuan as reward. If they are not willing to open new firms， they can go to local companies full time or part time to contribute research. If so， they can receive a 100，000 yuan （$16，320） reward.”
Patents are the city’s intangible assets， and Chengdu is currently embarking on a path to turn those assets into fortune. “Chengdu established a platform that allows companies use their intellectual property as a mortgage to get bank loans. To date， 99 companies， with over 100 patents total， have received 850 million yuan （$138.72 million） in bank loans through this platform. By solving their financing difficulties， we make sure companies can grow，” said Ding. “Encouraging innovation by rolling out incentives and protecting IPRs will greatly lower Chengdu’s investment risks and help transform its pattern of growth.”
A talent pool
In addition to the government’s effective and efficient service and its efforts on protecting IPRs， a rich talent pool is a crucial reason why many multinationals have turned to Chengdu.
The city has 52 universities and colleges， which injects a large number of graduates every year into the economy. In 2012， a total of 202，224 students graduated from those universities and colleges. An abundance of talent is an important advantage for Chengdu.
The FAW-Volkswagen Automotive Co. Ltd. set up its Chengdu Branch in May 2009. With a total investment of 16.3 billion yuan （$2.66 billion）， the annual production value of the Chengdu manufacturing base is estimated to be 108 billion yuan （$17.63 billion）.
Liu Jurong， President of the Chengdu Branch of the FAW-Volkswagen， told Beijing Review that one of the major reasons that the company selected Chengdu was the rich talent pool. “We came for the talent. Chengdu has many college graduates and offers qualified professionals for us，” said Liu. “Also the western region in China has great market potential.”
Bian， General Manager of Intel Chengdu， agreed.
“Tapping the talent pool is the primary reason we are here. We believe the mature education system in Chengdu will offer a great talent pool for the company，” said Bian. “Right now， the average age of Intel Chengdu’s employees is only 28. We recruit a lot of local graduates.
“Chengdu has the charm to keep the talent to start a life here， with its good environment and profound cultural heritage.”
（Reporting from Chengdu， Sichuan Province）