February 13, 2015

The Research of Agricultural Sector in Sichuan

Province Internship Report

Author:

Yuhao Xie 2218030

NBI INTERNATIONAL

Presented to:

Ms. Yen

Ms. Dieteren

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Table of contents

1. Executive summary ....................................................................................................... 4

2. Introduction ................................................................................................................. 5

3. Research method and limitations................................................................................... 6

4. Literature review .......................................................................................................... 6

5. Macro analysis of Sichuan.............................................................................................. 7

5.1 DESTEP analysis of Sichuan ................................................................................... 7

5.1.1 Demographic aspects of Sichuan ................................................................ 7

5.1.2 Economic aspects of Sichuan ...................................................................... 8

5.1.3 Socio-cultural aspects of Sichuan .............................................................. 10

5.1.4 Technological aspects of Sichuan .............................................................. 12

5.1.5 Ecological aspects of Sichuan.................................................................... 14

5.1.6 Political-legal aspects of Sichuan .............................................................. 16

6. Meso analysis of Sichuan ............................................................................................. 17

6.1 Meso environment ............................................................................................ 17

6.1.1 Agricultural/food Industry analysis ........................................................... 17

6.1.2 Distribution analysis ................................................................................ 19

6.1.3 Customer analysis.................................................................................... 20

7. Reference ................................................................................................................... 22

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List of tables

Table 1. Age distribution in Sichuan ................................................................................... 7

Table 2. Industrial structure of Sichuan .............................................................................. 8

Table 3. Industrial added value of Sichuan.......................................................................... 8

Table 4. Education condition of Sichuan ........................................................................... 10

Table 5. Education condition of Sichuan 2 ........................................................................ 10

Table 6. Another basic information about education condition of Sichuan ......................... 11

Table 7. Some basic data about agricultural industry of Sichuan in 2013 ............................ 17

Table 8. Some basic data about distribution of Sichuan in 2013 ......................................... 19

Table 9. The consumer prices changed in 2013 ................................................................. 20

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1. Executive summary

NBI International provides business opportunities to global public and private parties. Now

they planning extend their business on food/agriculture industry to a new market, a Chinese

province—Sichuan. This report is committed to provide a clear, detailed description of Sichuan.

Analyze the advantages and disadvantages of conducting business in this province. Try to give

some advices to support NBI International makes their decision.

When it comes to new markets, research always plays an important part, therefore use some

tools to analyze the market is a crucial mission. Not only because of their unique style that

matches NBI International’s values, but it can also gain an enormous opportunity to extend

their business more effective and efficient. In this report, the data are based on desk research

in many diverse aspects of Sichuan. And focus on food/agriculture industry. Exploratory

research, deceptive research and causal research will be used in the following chapters.

Meanwhile, the author will use a SWOT analysis table to display the results of this report.

SWOT analysis of doing business in Sichuan for NBI International

STRENGTHS Superior geographic condition for agriculture

Huge amount of potential customers

High economic potential

Top output of agricultural products in China

Developing high-tech industry

Developed distribution channels

WEAKNESSES

Lack of sunshine

Soil erosion

Aging problem

Poor education condition

Consumer prices increasing

Corruption

OPPORTUNITIES

The government is already created plans to

improve their education, solve soil erosion

problem, anti-corruption and make Sichuan

more open to foreign investors

THREATS

Internal

Existing staff working intensity is too high for

NBI already extend their business to many

countries

External

Intense competition

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2. Introduction

The final goal of this report is providing sufficient information about macro and meso

economic environment of Sichuan province. Support for NBI to analyze the situation of

cooperation with agricultural/food sector in this province.

NBI International was founded with the mission to

strengthen international trade relations. They provide

business opportunities to global public and private parties, offer support and cooperation in

the development of export opportunities and inward investment promotion for nations

worldwide through consultation and facilitation. The matchmaking program generates one to

one industry-focused meetings with high-level decision makers. Every year policymakers,

entrepreneurs and investors from 60 countries gather to acquire information about new

worldwide developments, investment and trade opportunities.

Sichuan, usually known as “Land of Abundance”, is

a province where located in southwest China, on

the upper reaches of Yangtze River, neighboring 7

provinces and municipalities. It is the 5th largest

province in China covering an area of 485,000 km2.

A population of 87 million (include floating

population) ranks the 3rd most populated province

in the country. There are 21 municipalities

(prefectures) with 181 counties under Sichuan

provincial administration. The total value of

production, total cereals production, total industrial production value and total amount of

social commodity retail account for 1/4 of total for all the 12 provinces and autonomous

regions in west China. Industries like Information technology, mechanics, pharmaceuticals,

chemical, food and tourism play an important role in China. Sichuan is the largest central place

for commodity distributing and collecting in the west China. Chengdu, the capital city of this

province, also a center for trading, finance, science&technology and hinge for transportation

and telecommunication.

Whether economic perspective or popularity perspective, Sichuan has huge development

potential. The government attach importance to attract foreign direct investment. They made

a policy named “Sichuan opening up to outside” on the basis “wide opening up promote great

development”. Sichuan has established cooperative relations on economic and trade with

around 200 countries and regions. United States, Germany, South Korea, Thailand, France and

Singapore have established consulates in Chengdu. 283 of Fortune Global 500 open

operations or branches in Sichuan. In 2005, Sichuan successfully sponsored the first session

Cooperation and Development Week for Sichuan International Friendship Cities, France Day

and Sichuan-Russia Week. In 2014, new added 2 foreign consulates in Chengdu, total of 12.

For these reasons, in this province NBI can find plenty of opportunities to find suitable

cooperative enterprise.

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3. Research method and limitations

As with the theoretical framework and methodology, it is important to demonstrate that I

have read other studies in the area of research. I will address the strengths and limitations of

the methods in similar research and justify why I choose them. In this report, business-to-

business markets are the main subject. So I will focus on organizations in Sichuan.

In the method, the following aspects will discussed:

Data collection

Desk research will be applied in this report. Then, the problem is where I can find useful

information. Usually, data from website of government or some other statistical agencies are

valuable.

Limitations

Because most of the data are secondary data. Perhaps the original data is out of date. To avoid

this situation, I will concentrate on the latest information as much as possible.

4. Literature review

To analyze the environment of Sichuan I choose both macro and meso analysis. The macro

environment of an area is the external environment of the company. It is not possible for NBI

to change the macro environment. Macro analysis includes DESTEP analysis tool, it will lead

to the opportunities and threats of this province. DESTEP is an analysis that goes over these

aspects;

Demographic:

The size, growth, and structure of target market/area.

Economic:

The national income and financial situation of target market/area.

Social:

Values, norms, lifestyle, and behavior of target market/area.

Technological

Level of “know-how” when it comes to Information Communication Technology and the

impact of technology in target market/area.

Ecological

Environment-related regulations, safety, energy, and sustainability levels of target

market/area.

Political

The target country’s laws and regulations that must be taken into account.

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5. Macro analysis of Sichuan

5.1 DESTEP analysis of Sichuan 5.1.1 Demographic aspects of Sichuan

Key words: plenty of labor resources, mobility of labor, aging area

At the end of 2012, Sichuan has a resident population of 80.76 million (include 75.75 million

Han Chinese and 4.91 million people from other 55 peoples), the urban population is 35.16

million and the rural population is 45.61 million. The urbanization rate is 43.53 percent, 1.7

percent higher than that of last year. There are a total 797 thousand newborns in 2012. The

birth rate is 9.89 per thousand, growing by 0.10 per thousand. The death population is 558

thousand with the death rate being 6.92 per thousand, growing by 0.11 per thousand. The

population growth rate is 2.97 per thousand. (Statistics of Population, 2013) [1]

Table 1. Age distribution in Sichuan

The data based on Fifth (in 2000) and Sixth (in 2010) Population Census of the PRC

These information demonstrates that in Sichuan every 5 working-age population only is

required to bear less than 2 children and senior people. The population age structure is in a

golden age. This structure means Sichuan has plenty of labor resources, less burden, higher

saving rates and demand level.

Sichuan is the most important province of labor export in China, the mobility scale of labor

export expanded year by year. In 2000, the number of labor exports from Sichuan only 6

million people. Ten years later, the data increased to 10.5 million. Depending on data of the

Sixth Population Census of the PRC, more than 20.91 million people moved out Sichuan more

than half year. In these people, 49.77 percent of them still in Sichuan province, most of them

moved to large and medium-sized cities. The rest try to find work in other provinces. (Li Junxia,

2014)[2]

However, the concern, is aging problem. The definition of retirement ages may vary but a

typical cutoff is 65 years, and nowadays a society is considered relatively old when the fraction

of the population aged 65 and over exceeds 8-10%. (Gavrilov and Heuveline, 2003)[3]

According to the definition and statistical data, Sichuan is already an aging area, the next few

years the expenditure on healthcare and medicine will be increased.

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5.1.2 Economic aspects of Sichuan

Key words: economic center of western China, agricultural base, growing hi-tech industry

The national economy in Sichuan grows rapidly. This province is the only one western region

figured in top 10 of China, also the transportation hub and the main engine of economic

development in western China. (‘Top 10 regions with highest GDP in China’, 2014) [4] In the

year 2014, the total production value amount to 2.85 trillion CNY, up by 8.5 percent over the

previous year. In 2013, non-public economy added value were 156.9 billion CNY, increased

12.1 percent than 2012, occurred 59.8 percent of the whole GDP. According to data of 2014,

the fixed assets investment amount to 1514.16 billion CNY, up 17.7 percent on year-on-year

basis.

In 2014, the total retail sales of consumer goods reach 1166.58 billion CNY, up by 12.7 percent.

In the same year, from January to May, the total value of import and export reaches 172.35

billion CNY, up by 7.2 percent, utilized 10.65 billion USD of overseas investments. The fund

from other provinces which outside Sichuan, record 879.8 billion CNY. New overseas

investment enterprises break through 100, accumulative total more than 500, foreign

contracted projects completed turnover of more than 7 billion USD.

Table 2. Industrial structure of Sichuan

The data from National economy and society developed statistical bulletin of Sichuan[5] and Report on

the work of the Sichuan government for 2015 [6]

Economic sector In 2012 In 2013 In 2014

Primary sector 13.8 13.0 12.4

Secondary sector 51.7 51.7 50.9

Service sector 34.5 35.3 36.7

Table 3. Industrial added value of Sichuan

The data from National economy and society developed statistical bulletin of Sichuan[5]

Economic sector Added value in 2013 (billion

CNY)

Compare with 2012 Contribute rate to economy

Primary sector 342.6 3.6%↑ 4.4%

Secondary sector 135.8 11.5%↑ 62.3%

Service sector 92.6 9.9%↑ 33.3%

Sichuan is a traditional, major agriculture province, one of the main production areas for grain,

cotton, oilseeds and tea. Total grain output reaches 33.87 million tons in 2014. Table 2 and 3

demonstrates the industrial structure and industrial added value of Sichuan. The data show

this province focused on improving their service sector and invests their industry. Also we can

see the percentage of primary sector keep declining in all the three sectors, but the

contribution rate was raised.

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The reason is the government tries to increase the technology content and efficiency of their

agricultural production. As the previously stated, many people who live in Sichuan but work

in other provinces. This means Sichuan will lack of labor resources. Therefore, increase the

utilization rate of agricultural machine or increase the technology content are useful solutions.

In 2013, total power of newly added agricultural machinery was 2.432 million kilowatts, total

power of agricultural machinery was 39.37 million kilowatts, increased 6.6 percent than the

number of 2012. In 2014, the added value of enterprises above designated size (annual

revenue above 20 million CNY) grows 9.6 percent, higher than average level of China (8.3

percent).

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5.1.3 Socio-cultural aspects of Sichuan

Key words: improved significantly, poor primary education, teacher resources

Table 4. Education condition of Sichuan

The data based on the Sixth (in 2010) Population Census of the PRC

Table 4 illustrates primary education condition of Sichuan province is still poor. Totally 74.71

million people that more than 80 percent people only have a diploma of middle school or

lower. People who have a diploma of university only occurred less than 10 percent.

There are two reasons: first one, children who from poor areas, their family does not have

money to support them to finish their studies; second one is lack of education resources for

adult education. Therefore, in the Report on the work of the Sichuan government for 2015

showed, the government is already started some new plans to solve these problems. One of

them named the second phase of the three years of preschool education plan. In this plan,

the government decides build, rebuild and expand 468 public kindergartens to make more

children who from poor areas can receive education. Further plans include increase education

funds accounted for more than 4 percent of total GDP.

Table 5. Education condition of Sichuan 2 (every 100,000 people) (in thousand)

The data based on the Fifth (in 2000) and Sixth (in 2010) Population Census of the PRC

Education condition In 2000 In 2010

University (include college) 2.5 6.7

High school (include technical secondary school) 7.6 11.2

Middle school 2.9 3.5

Primary school 4.3 3.5

As table 5 showed, the education condition and educational level of Sichuan is raised

significantly during 2000 to 2010. Be compared to the number of Fifth Population Census of

the PRC, illiteracy rate decreased from 7.64 percent to 5.44 percent, it includes nearly 2 million

people. And for the government made some plans to build more schools, more people can

receive higher degree of diploma, in this table, it showed on the number of people who have

a diploma of primary school, it decreased from 4,300 people per 100,000 people to 3,500.

However, in 2010, the proportion between people who have university, high school or middle

school degree and the whole population still less than the national average by 2.26, 2.78 and

3.9 percent. The rate of people with a university degree in every 100,000 people less than the

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national average a quarter, ranked 26 in China. The percentage of people who have a primary

degree is still more than Chinese average 7.85 percent. Illiteracy rate is likewise more than the

average level 1.36 percent, ranked 8 in China. (The Bulletin 2010 Sixth Population Census of

the PRC of Sichuan, 2012)[7]

Table 6. Another basic information about education condition of Sichuan

The data from National economy and society developed statistical bulletin of Sichuan for 2013

Education level Number of school Enrollment students Student at school

Primary school 7,257 950 thousand 5,260 thousand

Middle school 3,895 879 thousand 2,717 thousand

High school 735 512 thousand 1,516 thousand

Technical secondary school 595 531 thousand 1,302 thousand

University (include college) 103 377 thousand 1,271 thousand

Master training units 42 28 thousand 88 thousand

Table 6 illustrate some other basic information about education condition of Sichuan province.

We can see this province have plenty of students but their teacher resources are still not

enough. In the end of 2013, Sichuan have 25,000 different level of schools, 977 thousand

teaching and administrative staff, include 812 thousand full-time teachers. Normally,

universities and master training units have the most teacher resources, it means the resources

will concentrated in universities. Teacher resources still shortage in primary education.

Promoting education is still a crucial work for the government in the near future.

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5.1.4 Technological aspects of Sichuan

Key words: improving technology strength, government support, hi-tech zones

At the end of 2014, Sichuan province has 1,779 hi-tech enterprises above designated size (here

means annual revenue above 20 million CNY), achieve 1,052.14 billion CNY of values of output.

Be compare with 2013, up 10.4 percent on year-on-year basis, total assets were 1,034.65

billion CNY with 9.69 million employees.

The total value of output of high-tech industry in 2014 was 1,223.05 billion CNY, up by 18.3

percent than the previous year. Meanwhile, contribution rate of high-tech industry export

delivery value occurred 92.4 percent of industrial export delivery value growth. In the same

year, provincial financial department arranged 2 billion CNY to support 100 strategic emerging

industries projects. The government emphasizes enterprise as the main body of innovation,

3,270 invention patents authorized.

In order to provide a superior environment to develop technology and attract foreign and

domestic hi-tech companies, Sichuan established three technological development zones

which are located in Chengdu (capital city) and Mianyang (the second biggest city).

Chengdu Economic and Technological Development Zone(CETDZ)

Chengdu Economic and Technological Development Zone was approved as state -level

development zone in February 2000, planned construction area is 56.34 km2. The zone lies

12.6 km east of Chengdu and 28 km to Chengdu Shuangliu International Airport (CTU). CETDZ

has attracted investors and developers from more than 20 countries to fulfill their projects

there. Industries encouraged in this area include mechanical, electronic, new building

materials, medicine and food processing. In 2012, it ranked 25 in all the Chinese development

zones.

Chengdu Hi-Tech Industrial Development Zone (CDHT)

First established in 1988, Chengdu Hi-tech Industrial Development Zone ranks the 4th among

all the China’s state-level hi-tech zones and is strongly supported by national provincial and

municipal authorities. In 1991, it was approved as one of the first national hi -tech

development zones. With an area of 130 km2, comprises of the South Park and the West Park.

The floor space of South Park is 87 km2, it focusing on creating a modernized industrial park

of science and technology with scientific and technological innovation, R&D incubation,

modern service industry and Headquarters economy playing leading roles. Priority has been

given to the development of software industry. The West Park aims at building a

comprehensive industrial park targeting at industrial clustering with complete supportive

functions. The West Park gives priority to three major industries: ele ctronic information,

biomedicine and precision machinery.

There are 33,237 companies registered in the CDHT, among which 1,115 companies are

foreign invested enterprises including over 120 Fortune 500 and world renowned companies.

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In 2013, Chengdu Hi-tech Industrial Development Zone added value 104 billion CNY, an

increase of 19 percent over the previous year.

Mianyang Hi-Tech Industrial Development Zone

Founded in 1992, located in west of Mianyang with a planned area of 105 km2. The zone is

situated 96 kilometers away from Chengdu, and is 8 km away from Mianyang Airport. The

zone is a leader in the electronic information industry, biological medicine, new materials and

production of motor vehicles and parts. There are more than 136 high-tech enterprises in the

zone and they accounted for more than 90 percent of the total industrial output of this

province. In 2009, the regional gross domestic product of this zone was 10.4 billion CNY,

increased 21.7 percent than 2008.

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5.1.5 Ecological aspects of Sichuan

Key words: various terrains, rainy and warm, abundant resources for agriculture

Sichuan Province is located in the upper reaches of the Yangtze River, between east longitude

92°21' to 108°12' and between north latitude 26°03 ' to 34°19' , 1,075 km from its east

to west, and over 900 km from its north to south. The topography over the whole province

differs enormously from east to west with complex and various terrains, including mountains,

hills, plains, and plateaus, accounting for 77.1, 12.9, 5.3, and 4.7 percent respectively of the

total area. The whole province can be divided into three major parts: the Sichuan Basin, the

Sichuan Northwest Plateau and the Sichuan Southwest Mountains.

The Sichuan Basin is one of the four largest in the country, surrounded by mountainous

regions. It is covering an area of 165 thousand km2 and the regional climate is warm and

humid, warm in winter and hot in summer, most areas with annual rainfall of 1,000 to 1,200

mm, 50 percent of which is concentrated in the summer and at night. The annual temperate

of 16 to 18 degrees and accumulated temperature of 4000 to 6000 degrees. In this area frost-

free period of 230 to 340 days and fewer sunny days and short year-round sunshine duration

of 1,000 to 1,400 hours, 600 to 800 hours fewer than areas of the same latitude in the

downstream Yangtze River area.

The northwest of Sichuan Province is Northwest Sichuan Plateau, belonging to the southeast

corner of Tibetan Plateau, average elevation of 3,000 to 5,000 meters, alpine climate, covered

with alpine meadow vegetation. The dominate climate is cold temperate with a cold winter

and collection summer. Valleys here are dry and warm while the mountains are humid and

cold, lacking of hydrothermal. The annual average temperature here only 4 to 12 degrees and

annual average rainfall of 500 to 900 mm. Year-round sunshine duration amounts to 1,600 to

2,600 hours.

The annual average temperature in Southwest Sichuan mountain area is 12 to 20 degrees.

There is no distinctive season. Due to fewer clouds and a large number of sunny days, the

year-round sunshine duration reaches 2,000 to 2,600 hours. But there is comparatively less

annual rainfall, 900 to 1,200 mm, and distinctive wet and dry seasons with the duration of dry

season of 7 months. 90 percent of the rainfall are concentrated from May to October.

Sichuan has rich soil types and abundant water resources, because there are nearly 1,400

rivers and streams, this province also well-known as “a province with a thousand rivers”.

Their soil resources including 25 soil types, 66 subtypes, 137 soil geniuses, 380 soil species.

And the water, average yearly precipitation is about 488.975 billion cubic meters. These

resources make highly developed agriculture in Sichuan. The lands in West Sichuan Pl ain are

fertile and with high productivity, the pattern of agricultural use is double cropping in a year.

However, for economy developing, the area of forest was continuous decrease. The

government pays attention to it. In 2013, the annual afforestation on barren hills, wasteland

or sand to 2 million m2. The complete natural forest resources protection project of 520

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thousand m2, to complete the project of returning farmland to forest area of 190 thousand

m2. At the end of the year, actual forest area was 177.1 million m2, total 27 wetland parks,

including 13 provincial wetland parks (5 new batches in 2013), 14 national wetland park (4

new batch in 2013). Forest coverage rate was 35.5 percent, an increase of 0.2 percent over

the previous year. There are 19.2 million hectares of forests with a coverage rates of 29

percent.

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5.1.6 Political-legal aspects of Sichuan

Key words: optimize invest environment, structural tax reduction, anti-corruption

The politics of Sichuan is structured in a dual party-government system like all other governing

institutions in mainland China. The Governor of Sichuan is the highest-ranking official of the

People's Government of Sichuan. However, in the province's dual party -government

governing system, the Governor has less power than the Sichuan Communist Party of China

Provincial Committee Secretary, colloquially termed the "Sichuan CPC Party Chief".

The Sichuan Provincial CPC Commission and the Government attach great importance to build

a better investment environment. While improving transportation, telecommunication and

energy supplying. They improve government functions and ways of working, optimize soft

investment environment. They keep check, revise and enact relevant laws and regulations,

open more fields for foreign investment and non-government investment. Government

Service Centers of provincial and city level have established for “one stop service”. To protect

investor's right, establish law-breaking report center.

According to the Report on the work of the Sichuan government for 2015, the government

will continue to implement structural tax reductions, it will benefit for 450 thousand self-

employed companies. The threshold of value-added tax and sales tax will be increased to

20,000 CNY, the threshold is also the highest in China. Set up energy, water investment groups

and Sichuan provincial public resources exchange center to boost investment.

Meanwhile, the government implements a more active employment policy, combining with

the major industries in human resources and employment promotion work. Promoting youth

practice bases construction, micro credit projects and youth entrepreneurship. Sichuan

government increase the minimum living standard, ensure more people join endowment

insurance and new rural social pension insurance. These measures are ensure youth can

concentrate on their work without worries for their elders.

Because Chinese government focuses on the fight against corruption. Three public

consumptions is the most famous one. It refers to Chinese mainland fiscal appropriation for

abroad (boundary) fee, government vehicle purchase and operating cost, official business

expenses. Because of the three costs relating to use public funds to travel, eat and drink; use

government car for private purpose and other bad behaviors. It becomes a common concern

of the community. As Sichuan government published, in 2013 the financial budget for three

public consumptions only 7.18 hundred million CNY, keep decreasing by 1.25 percent.

Also in 2014, Central Commission for Discipline Inspection arrested a large number of

embezzlers in Sichuan, includes Zhou Yongkang, the former Standing Committee of the

Politburo Standing Committee of the Communist Party of China. All of these things could help

create a more liberal investment environment.

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6. Meso analysis of Sichuan

6.1 Meso environment Meso environment is the setting between the macro and micro opportunities. In this report,

it is the industry in which a company operates and the industry’s market(s).

6.1.1 Agricultural/food Industry analysis

Key words: agricultural base, increasing output, soil erosion

Sichuan is famous for their agriculture in China, their grain acreage and total output all ranked

top five in China. Their total production of pork, beef and mouton also rank first nationwide,

and production for cotton, silk, tea, citrus, tung oil, dairy products play an important role in

China. According to the statistical data in 2006, Sichuan province has 7 countries ranked

Chinese top 100 highest output of grain and 16 countries also ranked Chinese top 100 highest

output of meat countries.

Table 7. Some basic data about agricultural industry of Sichuan in 2013

The data from National economy and society developed statistical bulletin of Sichuan[5]

Subject unit In 2013 Compare with 2012

Added value of primary industry billion CNY 342.6 2.6%↑

Oil crops acreage million km2 1.26 1.4%↑

Medicine acreage million km2 0.10 2.2%↑

Vegetable acreage million km2 1.28 2.4%↑

Aquaculture area million km2 0.20 2.6%↑

Total output of grain million tons 33.9 2.2%↑

Total output of cooking oil million tons 2.90 1.4%↑

Total output of vegetable million tons 39.1 3.9%↑

Total output of tea million tons 0.22 4.9%↑

Total output of fruit million tons 7.19 4.9%↑

Total output of medicine million tons 0.40 2.3%↓

Total output of hog million 73.1 2.0%↑

Total output of cattle million 2.64 4.2%↑

Total output of goat million 15.8 1.3%↑

Total output of poultry No data 2.9%↑

Total output of rabbit No data 3.4%↑

Total output of egg No data 0.8%↓

Total output of milk No data 1.5%↓

Total output of aquatic product million tons 1.26 6.0%↑

Table 7 illustrate the detailed total output of Sichuan of different kinds of product. As this

table showed, the output of majority products were increased, only the output of medicine,

egg and milk decreased. The most important reason is the investment of Sichuan province for

agriculture keep increasing. The investment have three important trends: the amount of

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investment raised year by year, forms of investment become more diversification and

practitioners increased.

During 2001 to 2009, Sichuan provincial government invest on primary industry accumulated

to 119.9 billion CNY, accounted 8.8 percent of the whole provincial fiscal expenditure. In these

nine years, the money invested on agriculture raised 4.3 times, annual growth rate was 20.3

percent. Especially after 2005, the data became 30 percent per year, in 2007 reached its peak

which was 53 percent. Meanwhile, government applied some policies to reduce the burden

of peasants. For example, abolished agricultural tax and encourage rural credit. In 2009, the

total amount of agricultural loan was 87.5 billion CNY, accounted 17.8 percent of the total

amount of short-term loan. In that decade, Sichuan added newly agricultural loan 56.4 billion

CNY, nearly twice than before. It makes farmers have more money to improve their

productive fixed assets. During 2000 to 2009, the cost on productive fixed assets increased

580 percent, annual growth rate was 21.2 percent. (Feng Jiuxian, 2010)[8]

At the end of 2013, the whole province has 375 thousand legal entities and 1,800 thousand

self-employed venture with a certificate. There were 14.64 million people working for

secondary and service sectors. Be compare with the data at the end of 2008, added 3.56

million people. Also during 2008 to 2013, the number of self-employed people with a

certificate raised by 8,200 to 4.58 million. Meanwhile, there were 926 thousand people

engaged in agriculture, forestry, animal husbandry and fisheries, includes 2,000 self-employed

people with a certificate.

However, the main problems of Sichuan agriculture still need to solve. First one is some area

did not receive irrigation water effectively and efficiently. Second one is soil erosion.

In 2013, Sichuan province newly added effective irrigation area 8,000 km2, at the end of this

year, the total effective irrigation area were 2,647,000 km2. Meanwhile, decrease soil erosion

area of 2,460 km2, the total were 77,230 km2. These provides superior conditions for

agricultural or food sector companies developing their business in this province.

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6.1.2 Distribution analysis

Key words: developed road system, first-class infrastructure, cheaper and faster distribution

Until the end of 2012, the total mileage of highways in Sichuan reach 29000 kilometers. 5500

kilometers express ways (2014), ranked fifth in China. The number of total railway can reach

6380 kilometers in 2015. Sichuan have 4000 kilometers inland waterway and 6 more than 1

million tons of annual throughput havens. Sichuan has 10 civilian airports, Chengdu Shuangliu

International Airport is the biggest one. In 2013, Shuangliu Airport ranked 44 in top 50

worldwide airport comparisons. (Airport Traffic Report, 2014) [9]

As the research in 2005 showed, the total length of optical cable is as long as 203,000 km, long

distance call reaches 909,000 lines and the capacity for local programmed-controlled

switchboard reach 41.45 million sets. The telephone coverage in Sichuan accounts for 38

percent, with stationary phone 18.3 percent. The newly increased capacity for power

installation is 2.72million kW in year 2005.

Table 8. Some basic data about distribution of Sichuan in 2013

The data from National economy and society developed statistical bulletin of Sichuan[5]

Subject Unit In 2013 Compare with 2012

Turnover of freight traffic billion ton-km 243.8 8.1%↑

Road billion ton-km 148.5 12.0%↑

Railway billion ton-km 82.0 0.3%↑

Air billion ton-km 0.80 14.3%↑

Water billion ton-km 12.4 20.1%↑

Turnover of passengers traffic billion people-km 192.4 10.6%↑

Road billion people-km 10.7 6.3%↑

Railway billion people-km 31.0 2.3%↑

Air billion people-km 54.3 26.2%↑

Water billion people-km 0.27 1.3%↓

Business volume of post

and telecommunication

billion CNY 77.0 11.1%↑

Business volume of post billion CNY 8.3 15.1%↑

Business volume of tele billion CNY 68.7 10.8%↑

Table 8 demonstrates the distribution power in different channels of Sichuan in 2013. The

trend is turnover of freight traffic keep improving, especially road, air and water freight traffic.

The reason is government concentrating their efforts on infrastructure construction. The main

projects are highway and high-speed railway. In 2014, express way added 500 kilometers and

the government costs more money on building high-speed railway. They planned the total

mileage of high-speed railway should reach 2500 kilometers, accounted to 10 percent of the

total mileage in China until 2015. Meanwhile, the government also planned to build and

upgrade a transport network covered eight big cities in Sichuan. It means in the nearly future,

product distribution in Sichuan will be easier, faster and cheaper.

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6.1.3 Customer analysis

Key words: increased income, more cost of living, improve life quality

The statistical data showed in 2013, per capita income of urban household is 23,894 CNY,

urban per capita disposable income is 22,368 CNY. (‘Last year, urban per capita disposable

income of Sichuan province is 22,368 CNY. Ranked no. 22 of the country’, 2014) [10] The income

from wage was 14,976 in 2013, rose 5.1 percent than previous year. Meanwhile, per

capita consumption expenditure also went up by 8.6 percent, the number is 16,343. The

resident expenditure, family equipment and service expenditure, transport and

telecommunications increased remarkably, which are 2.9, 9.0 and 12.3 percent. The

Consumer Price Index (CPI) increased 2.8 percent than 2012, detailed price increase will show

in the following table. For urban residents their Engel Coefficient was 39.6 percent and for

rural residents were 43.5 percent in 2013.

(National economy and society developed statistical bulletin of Sichuan, 2014)[5]

Table 9. The consumer prices changed in 2013

The data from National economy and society developed statistical bulletin of Sichuan[5]

Subject Province-wide Urban Rural

Consumer price 2.8%↑ 2.8%↑ 2.8%↑

Food 4.8%↑ 5.0%↑ 4.5%↑

Grain 3.1%↑ 3.1%↑ 3.0%↑

Cooking oil 1.4%↑ 1.7%↑ 0.6%↑

Pork 0.0% 0.1%↑ 0.2%↓

Egg 6.6%↑ 6.7%↑ 6.5%↑

Aquatic product 4.4%↑ 3.7%↑ 5.9%↑

Vegetable 8.8%↑ 8.1%↑ 11.3%↑

Cigarette and wine 0.6%↓ 0.4%↓ 1.0%↓

Clothing 0.8%↑ 1.1%↑ 0.1%↑

Family equipment and service 1.9%↑ 2.4%↑ 0.7%↑

Health care 2.2%↑ 1.3%↑ 4.1%↑

Transport and telecommunications 0.0% 0.0% 0.2%↑

Entertainment, education products 1.6%↑ 2.0%↑ 0.6%↑

Resident 3.7%↑ 3.4%↑ 4.1%↑

As Table 9 showed, in 2013, the price of most products was increased. The crucial reason is

people cost more on resident and food. Because of this reason, customers reduce their

expenditure on shopping in the store but choose on shopping online for this way is cheaper

and flexible. The survey showed in 2014, the total amount of online retail turnover was over

than one hundred billion reached to 142.85 billion CNY, dramatic growth 54.7 percent on year-

on-year basis.

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Another noteworthy phenomenon is upgrade product, like car, becomes a new support point

for the economy. In 2014, the sales amount of vehicle and related petrol occurred 23 percent

of the total sales volume. At the same time, sales value of electronic goods like smart phone

and tablet also increasing rapidly. Sichuan commercial office monitored nine key enterprises,

their sales volume of 3g mobile phone growth nearly 50 percent on year-on-year basis. These

data demonstrate although the cost of living increased, people still want to improve their life

quality but in another way.

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7. Reference

[1] Statistics of Population. (2013, March 27)

Retrieved January 19, 2015, from

http://www.sc.gov.cn/10462/10778/10876/2013/3/27/10253740.shtml

[2] 李俊霞 (2014) 人口流动对农村经济社会发展的影响研究

Li Junxia (2014) The research of influence of population flow to rural economic and social

development

Retrieved February 03, 2015, from

http://www.sss.net.cn/ReadNews.asp?NewsID=50915&BigClassID=27&SmallClassID=93&bel

ong=sc

[3] Leonid A. Gavrilov and Patrick Heuveline(2003). Aging of Population

Retrieved February 03, 2015, from

http://longevity-science.org/Population_Aging.htm

[4] Top 10 regions with highest GDP in China. (2014, April 01). Chinadaily

Retrieved January 19, 2015, from

http://www.chinadaily.com.cn/bizchina/2014-04/01/content_17393546_8.htm#Contentp

[5] 2013 年四川省国民经济和社会发展统计公报

National economy and society developed statistical bulletin of Sichuan for 2013 (2014,

March 04)

Retrieved January 20, 2015, from

http://www.sc.gov.cn/10462/10464/10465/10574/2014/3/4/10294729.shtml

[6] 2015 年四川省人民政府工作报告

Report on the work of the Sichuan government for 2015 (January 28, 2015)

Retrieved February 05, 2015, from

http://www.sc.gov.cn/10462/10464/10797/2015/2/5/10326259.shtml

[7] 四川省 2010 年第六次全国人口普查主要数据公报

The Bulletin 2010 Sixth Population Census of the PRC of Sichuan (2012, February 28)

Retrieved January 21, 2015, from

http://www.stats.gov.cn/tjsj/tjgb/rkpcgb/dfrkpcgb/201202/t20120228_30404.html

[8] 冯久先 (2010) 四川农业生产投入与效益状况分析

Feng Jiuxian (2010) The analysis of Sichuan agricultural production input and benefits

Retrieved January 30, 2015, from

http://www.sc.stats.gov.cn/tjcbw/scsq/2013_702/201301/rdts/201011/t20101129_13948.h

tml

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[9] Airport Traffic Report (2014, April 01) (p. 32)

Retrieved January 21, 2015, from

http://www.panynj.gov/airports/pdf-traffic/ATR2013.pdf

[10] 去年四川城镇人均可支配收入 22368 元, 排全国第 22 位

Last year, urban per capita disposable income of Sichuan province is 22368 CNY. Ranked

no. 22 of the country (2014, January 21). Sichuanzaixian

Retrieved January 19, 2015, from

http://sichuan.scol.com.cn/dwzw/content/2014-01/21/content_6795409.htm?node=968