chongqing: facts & figures · chongqing is the shipping center at the upper reach of yangtze...

CHONGQING: Facts & Figures

Chongqing always functions as the largest industrial and commercial

center, and the traffic pivot at the upper reaches of the Yangtze River

and southwestern China. Since it became the only municipality

directly under the Central Government in West China in 1997, the

economy of Chongqing has been soaring, and Chongqing has

cultivated a sound investment environment, making Chongqing an

ideal destination for domestic and overseas investors in West China.

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In March 2007, during the period of National People’s Congress

and Chinese People’s Political Consultative Conference, General

Secretary Hu Jintao attended the meeting of Chonqqing

delegation and put forward that Chongqing will be built into an

important growth pole in West China, an economic center in the

region of the upper reach of Yangtze River and a municipality with

development of urban and rural areas as a whole in an expedite

manner so as to take the lead in achieving the target of establishment

of moderately prosperous society in West China. In June 2007,

approved by the State Council, the National Development and

Reform Commission formally approved Chongqing as the national

reform and experimental area of comprehensive complementation of

rural and urban area as a whole, which is another significant

strategic development opportunity for in its 10th year since it

became a municipality directly under the Central Government.

I. Economic Overview

Broad Market Space

The administrative area of Chongqing is 82,400 square kilometers

and the population is 32 million. It has a vast local market and

powerful radiation ability on the neighboring provinces and cities,

covering a peripheral market with a population of 300 million.

Dual Economic Structure

The dual economic structure of the coexistence of big urban and

rural areas makes Chongqing have not only modern industry and

service but also the agriculture with abundant products, which

provides extensive cooperation field and numerous business

opportunities.

Rapidly growing economy

From 1997 to 2006, the annual average growth rate of GDP in

Chongqing is more than 10% and the annual average growth rate of

fixed assets is more than 20%, keeping a relatively long economic

growth period. GDP in Chongqing in 2006 reached RMB 348.62

billion, up 12.2%; Investment on fixed assets of the whole society

reached RMB 245.184 billion, up 24.9%; Total amount of export and

import was US$ 5.47 billion, up 27.4%, including US$ 3.35 billion

for export of foreign trade, up 33%; actual utilization of foreign

capital valued US$ 700 million, up 34.9%. The export amount of

foreign trade from January to April in 2007 reached US$ 1.23

billion, up 26.5% over the same period of last year, and the paid-up

foreign capital valued US$ 190 million, up 37.6%.

Foreign investment: coming in a continuous stream

Foreign relationship/presence Chongqing has established economic

and trade relations with 180 countries and regions. Britain, Canada,

Japan, Denmark and Cambodia have established consulates in

Chongqing; Austria and Germany have established agencies of

chambers of commerce in Chongqing. By the end of April 2007, the

total number of foreign investment enterprises approved by

Chongqing Municipal Government is up to 4,246. 71 of Fortune Top

500 enterprises including Ford, BP, Ericsson, ABB, Lafarge, Carrefour,

Metro, Isuzu Motors and Suzuki Motor have established their presence

in Chongqing.

Sound Industrial Base

Chongqing is one of the six old industrial bases in China. It has a

sound industrial base, with a complete range of industries and strong

supporting capacity. Industry is the dominant force in national

economy in Chongqing. There are 100,000 industrial enterprises. In

2006, the industrial added value in Chongqing was RMB 123.4

billion, up 18%. At present, six large key industries in Chongqing

have been formed and cultivated, i.e. automobiles and motorcycles,

petroleum and natural gas chemistry, equipment manufacture, new

materials, high-tech and labor-intensive industry.

Gross Industrial Output Values in Chongqing (1997-2006)

0500

100015002000250030003500

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006-20.00%

-10.00%

0.00%

10.00%

20.00%

30.00%

40.00%

Gross Industrial Output Values(RMB 100 million) Growth Rate

——Auto Famous City in China

The production capacity of automobiles of Chongqing ranks the

third place in the country. The production and sales volume of all

kinds of automobiles reaches 790,000 in 2006. The categories of

automobiles are complete, including heavy trucks (represented by

Hongyan Motor), light trucks (represented by Qingling light trucks),

saloon cars (represented by Changan-Ford Motor and Changan-

Suzuki Motor), passenger cars (represented by Chongqing Passenger

Car Factory) and mini-type car (represented by Changan mini-type

car).

——Capital of Motorcycle in China

The annual production capacity of motorcycle in 2006 reached 7.5

million, ranking the first place in China. There are famous brands

including Jialing, Jianshe, Longcin, Zongshen and Lifan. The export

volume accounts for one third of the total export volume of Chinese

motorcycles.

——Important City of Chemical Industry in China

The chemical industry mainly includes natural gas and salt chemical.

The main enterprises include Sinopec Sichuan Vinylon Works, and

its joint venture with BP Yangtze River Acetyls Co., Ltd, Changshou

Chemical Works, Agrochemical Group and Jianfeng Chemical

Factory. Salt chemical enterprises mainly include Wanzhou Salt

Group.

It focuses on the development of these three industries including

natural gas chemical industry, chlorine alkali chemical industry and

petroleum chemical industry and forms six product chains including

natural gas methanol, natural gas acetic acid, natural gas acetylene,

chlorine alkali, fine chemical industry and new materials. Chongqing

has become the natural gas chemical industry base with the largest

scale, most complete categories of products and most advanced

technology all over the country. The Yangtze River Acetyls Co., Ltd,

invested by BP is the largest production base of acetic acid in West

China. Chongqing will build the largest comprehensive chemical

industry base and world-class natural gas chemical industry base at

the upper reach of Yangtze River in the future.

——Processing Base of Aluminum Material in Asia

Southwest Aluminum (Group) Co., Ltd. is a comprehensive and

extra-large aluminum processing enterprise with largest production

scale, most advanced technical equipment and most complete

categories and specs in China, China’s aluminum materials base for

aviation and spaceflight, production base of high and fine aluminum

plate with foil, export and processing base of aluminum materials,

with an annual production capacity of 400,000 tons of various

aluminum profiles.

II. Investment Advantages

Enrichment of Favorable Policies

Favorable policies in Chongqing are the superposition of national

general favorable policies, favorable policies for West China and

favorable policies for Three Gorges Reservoir Area. It has an

obvious policy advantage. Industrial enterprises enjoy the favorable

policy of 15% of the income tax for enterprises and the tax rate is

10 percentage points less than that in East and Central China; the

income tax imposed on foreign enterprises can be exempted for two

years and paid in half for three years since the year of making profit.

In addition, when the number of migrants, lay-off workers or

disables employed reaches a certain proportion, the enterprises can

enjoy related favorable policies. There will be RMB 55 billion

investment from national and local finance departments in the Three

Gorges Reservoir Area in the future five years and favorable policies

are accessible for the investment in the Three Gorges Reservoir

Area.

System of Municipality Directly under the Central Government

The political and economic status of municipality directly under the

Central Government is relatively high in China. It has approval

jurisdiction at provincial level, so it has a few approval sectors and

high working efficiency. Chongqing is one of the four municipalities

directly under the Central Government in China and enjoys various

administrative rights and legislative rights granted by the State to the

municipality. It possess unique advantages of system of municipality

directly under the Central Government in the aspects of policies.

Advantages of Location and Traffic

Chongqing is the only municipality directly under the Central

Government in West China and located in the geometric center in the

territory of mainland China. It is the combination part of economic

developed area in East China and resources enrichment area in West

China. It has location advantages of connecting of West, East, South

and North China and has access to rivers and seas. It will be formed

as the comprehensive traffic hub at the upper reach of Yangtze River.

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By 2010, 2,000 kilometers of expressway framework with “two

circles and eight radiating lines” and 2,000 kilometers of railways

with “one circle and nine radiating lines” will come into being.

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Chongqing is the shipping center at the upper reach of Yangtze River

and the largest port linked to the sea in West China. By 2010, the

throughput capacity of cargos in ports in Chongqing will reach 125

million tons, 1.6 million TEU of container and 760,000 vehicles of

automobile Ro/Ro.

Throughput capacity of the cargos of the ports will reach 120 million

tons. After the completion of construction of the Three Gorges

Reservoir, an 18,000-tonnage fleet with a single ship of 3000-

tonnage can directly arrive at Chongqing.

The throughput volume of passengers of the airport will reach 16

million person times by 2010. Jiangbei International Airport is the

national airport as a trunk and hub in China. The length of the

runway is 3,200 meters, airplanes of any type can land and take off

in this airport, and the area of terminal building is 100,000M2. There

are also branch airports including Wanzhou Airport and Qianjiang

Airport. There are 53 domestic routes which have been open to

traffic in Chongqing, and 13 cross-boundary routes to Nagoya,

Tokyo (Japan), Seoul (Korea), Düsseldorf (Germany), Hong Kong,

Macro, Bangkok, Singapore and Kuala Lumpur.

Strong comprehensive service function

As the largest central city and important town for industry and

commerce in West China, the population of the city proper of

Chongqing has exceeded 5 million, which presents a strong function

of comprehensive service in urban area. There are over 400

wholesale markets of all kinds radiating more than 300 million

persons in peripheral areas. The construction of modern business

facilities ranks the first place in West China; convenient and fast

inspection and quarantine system for export and import commodities

and high efficient capacity for passing customs are accessible.

Low factor cost and powerful guarantee

Factors such as land and energy resources in eastern regions are in

short supply and the construction cost and costs of production and

operation remain increasing, the advantages of production factor

cost of Chongqing become more prominent. At present, the average

land price in Chongqing is only about 33% of that in eastern region.

The prices of electricity, gas and water for industrial use are only 60-

70% of that in eastern region, labor cost is about 60% of that in

eastern region and comprehensive cost of production factors of all

kinds is only 50-60% of that in eastern region.

The proved-up reserves of natural gas in Chongqing are 370 billion

cubic meters, accounting for one fourth of the total reserves all over

the country. The existing two pipelines of refined oil and two

pipelines of natural gas made Chongqing becomes the important

base of crude oil and natural gas supply in West China. The Three

Gorges Reservoir Area will become the largest manmade freshwater

resources reservoir in the world, capable of storing 39.3 billion cubic

meters. As for the minerals in Chongqing, the reserves of strontium

salt (strontium carbonate and strontium sulfate) ranks the third place

all over the world. The reserves of manganese ore and aluminum ore

are also very rich. Coal can be self-supported. Chongqing is

becoming the national important collection and transportation base

of energy sources including petroleum, natural gas, electricity and

coal.

Powerful financial supporting capability

The categories of financial institutions in Chongqing are complete.

Number of foreign financial institutions and outlets of financial

institutions and density of employees come top in Central and West

China. 6 foreign banks including Sumitomo, HSBC, Po Sang Bank,

Bank of Nova Scotia, Philippine Allied Bank, ABN AMRO Bank,

BEA have established their presence in Chongqing; overseas

insurance companies including Liberty Mutual, Metlife, Great

Eastern, Yasuda insurance (Japan) and Sun Life Assurance (Canada)

have established branches (subsidiaries) or offices in Chongqing.

Chongqing is the important center of bill settlement in West China. It

has the most active trading on bill market, lending market and bond

market in Central and West China. Growth of insurance fees is far

higher than that of the average level all over the country in

consecutive four years and the depth and density of insurance is in a

leading place in Central and West China. The financing environment

is relaxing and the balance of loans per capita is RMB 15,400. The

ratio of deposit to loan of the bank keeps at around 80% and the rate

of bad assets of financial institution is only 6%. In the future 10

years, Chongqing will be built into the financial center at the upper

reach of Yangtze River.

Rich resources of science and education

Chongqing now has 57 colleges and universities with a total number

of nearly 600,000 undergraduates and 356 secondary vocational and

technical schools with a total number of 450,000 students.

Universities and secondary technical schools feed over 300,000

professional of all kinds to the society annually. Chongqing has

become an important base of talent supply in West China. There are

totally over 1,000 R&D institutions of all kinds all over the city

including 100 R&D institutions at municipal level or above level and

more than 700,000 professional technicians of all kinds.

III. Comparison of Comprehensive Factor Cost

Comparison of comprehensive costs Data S/N Items Unit

Beijing Shanghai Tianjin Chongqing Guangzhou Nanjing Changchun

1 Comprehensive average land price

RMB/square meter 3393 3416 1785 1175 2635 3613 1167

2 Electricity for industrial use

RMB/kilowatt hour 0.68 0.69 0.74 0.5 0.77 0.85 0.7

3 Gas for industrial use RMB/cubic meter 1.95 2.1 2.1 1.24 2.9 2 1.8

4 Water for industrial use RMB/cubic meter 5.6 5 4.6 3.35 2.46 2.65 4.6

5 Average salary of employees RMB 28348 24396 17810 14357 30807 26063 15722

Low land cost

Data Source: Administrative Department of Land-use of the Ministry of Land and Resources-Dynamic Monitoring System of Urban Land Price in China

Comparison of comprehensive construction cost

The cost in Chongqing is RMB 260 350 per square meter less than that

in Shanghai and Tianjin

The cost in Chongqing is RMB 250 350 per square meter less than that

in Nanjing.

Low labor cost

IV. World Top 500 Enterprises in Chongqing

World Top 500 enterprises in Chongqing as of the end of 2006 World Top 500

enterprises Enterprise in Chongqing Sector

1. Honda corporate 1. Jailing-Honda Engine Co., Ltd

Motorcycle and parts

manufacturing

2. Qingling Motors Automobile and

parts manufacturing

3.Chongqing Qingling Casting Co., Ltd

Auto parts manufacturing

4.Chongqing Qingling Mould Co., Ltd


5. Chongqing Qingling Plastic Co., Ltd

Auto parts

manufacturing

6. Chongqing Qingling NHK Seat Co., Ltd


7. Chongqing Qingling Axle Co., Ltd


8. Chongqing Aluminun Alloy Casting Co., Ltd


9. Chongqing Qingling Forging Co., Ltd


10. Chongqing Qingling Technical Centre


11. Chongqing Tokyo Radiator Co., Ltd


2.Isuzu Motors 12. Chongqing Shiqi Meter Co.,

Ltd Auto parts

manufacturing

3. Nissho Iwai 4. Suzuki Motor

13. Chongqing Changan Suzuki Automobile Co., Ltd


14. Chongqing Wangjiang Suzuki Engine


5. Sumitomo Metal 6. Mitsubishi Heavy

Industry

15. Chongqing Four-partners Continuous Casting Co., Ltd

Tooling manufacture

7. Denso 16. Chongqing Denso Auto parts manufacturing

8.BP

17. Yangtze River Acetyls Co., Ltd

Crude Chemicals

18. ABB Chongqing Transformer Co., Ltd Electric

9. ABB 19. ABB Chongqing Jiangjin Turbo Systems Co., Ltd

Turbocharger Manufacturer

20. Chongqing Tianfu Cola Yulong Foods & Beverage Co.,

Ltd

Beverage

21. Chongqing Pepsi-Tianfu Beverage Co., Ltd Beverage

10. Pepsi Cola

22.

Chongqing Huamei Foods

Beverage Co., Ltd

Beverage

11. Carrefour

23. Chongqing Carrefour Hypermarket Chain Store Co.,

Ltd Retail

24. Ericsson Communication (Chongqing) Co., Ltd

Telecom Equipment

12. Ericsson 25. Chongqing Ericsson Technology Co., Ltd

Telecom Equipment

13. Metro 26. Metro Warehouse Management Co., Ltd Retail

14. Ford Motor

15. Japan Mazda Motors

27. Changan Ford Mazda Automobile Co., Ltd

28. Chongqing Ante Import & Export Tradings

Auto/ parts manufacturing

and sales

29. West Gypsum (Chongqing)

Co., Ltd

Building Materials

16. France Lafarge

30. Chongqing Lafarge Cement Co., Ltd

Building Materials

31. Chongqing Sino French Water Supply Co., Ltd

Water works

17. Suez Group 32. Chongqing Sino French

Water Works Investment Co., Ltd

Investment in urban water

supply

18.APL Logistics 33. Chongqing Changan Mingsheng Distribution Co., Ltd

Logistics

19. Lear China Ltd

34. Chongqing Lear Changan Automobile Interior Trim Co.,

Ltd

Auto parts

20.Krommschoder 35. Chongqing Qianwei Krommschoder meter Co., Ltd

Instrumentation

21.Kerry Group (part of Share held by Coca Cola

36.Chongqing Coca Cola Beverage Co., Ltd

Beverage

22. Johnson Control 37. Chongqing Yanfeng-Johnson Seat Co., Ltd

Auto parts

manufacturing

23. Danone Group 38. Robust (Chongqing) Foods & Beverage Co., Ltd

Food &

beverage

39. Hutchison Enterprises (Chongqing) Co., Ltd

Real Estate

40. Hutchison Whampoa Property (Chongqing Nanan)

Co., Ltd

Real Estate

41. Hutchison Whampoa Property (Chongqing Jiangbei)

Co., Ltd

Real Estate

42. Hutchison Optel Telecom Technology Co., Ltd

Optical fiber

telecom

43. Hutchison Whampoa Property (Chongqing Economic Development Zone ) Co., Ltd

Real Estate

25. TRW China 44. CSG TRW Chassis Systems Co., Ltd Auto Parts

26. Mitsubishi Corporation

45. Chongqing Kinglong Fine Strontium Chemical Co., Ltd

Crude chemicals

27. Sumitomo Corporation

46. Chongqing Sumitomo Yunxin Logistics Co., Ltd

Road transport

28. Mitsui Corporation

29. Hitachi

47.Chongqing Monorail Transit Engineering Co., Ltd

Rail transit

30.Warner Bros HK 48.Warner Szitic Cinemas (Chongqing) Co., Ltd

Entertainment

31.UK Kingfisher Group 49.Chongqing B&Q Building Material Co., Ltd

Building Material Sales

50.Chongqing Changan Engine management system Co., Ltd


51.Visteon Automobile A/C system( Chongqing) Co., Ltd


32.Visteon Corporation

52.Yanfeng Visteon Automobile Interior Trim( Chongqing ) Co.,

Ltd


33.Shell china 53.Chongqing Dongyin Shell Petroleum & Chemical Co., Ltd Others

34.Scotia Bank 54.Canada Scotia Chongqing Branch Banking

35.HSBC 55.HSBC Chongqing Branch Banking

36.ABN Amro 56.ABN Amro Chongqing Branch Banking

37.Liberty Mutual 57.Liberty Mutual Chongqing Branch Insurance

38.Metlife 58.Metlife Chongqing Branch Insurance

chongqing: facts & figures · chongqing is the shipping center at the upper reach of yangtze...

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