Foreign Investment Booms in Chongqing

A bird view of the Liangjiang Special Economic Zone in Chongqing. [Photo: kaiwind.com]

The creation of a Special Economic Zone in the southwestern Chinese municipality of Chongqing is being credited with creating a major influx of foreign investment through new funding streams, tax breaks and favorable policies, which are designed to try to speed up economic development.

On the 33rd floor of a modern skyscraper in the heart of Chongqing's financial district you'll find the offices of ENGIE – a Sino-French venture which develops electricity, cooling and heating services for industrial companies.

Doctor Zhang Jinbai is the company's Chongqing representative.

"Chongqing is really the hot topic in China and a lot of foreign investors, and not only foreign investors, domestic investors entering the Chongqing market – how we can find a balance to allowing the foreign investors to invest and in the meantime to balance the interests of the different parties."

Zhang says the potential for growth, as well as the flexibility within the municipality areas of policies and finance, has been key to the company's development in China.

"Chongqing is the most dynamic city in China and also the Chongqing government has just signed the Sino Singapore initiative demonstration program here and located in Chongqing so we think there are a lot of opportunities, airport, IT, financial activities, and as an energy player we think we can bring our exercise and our capability of investment."

Financial service is one of four priority areas of the China-Singapore initiative which focuses on connectivity and modern services.

There are currently 246 Singaporean companies doing business in Chongqing, making the city-state the biggest investor in the Chongqing among all foreign investors.

Wu Shicun is with the Singaporean Business Association in Chongqing.

"There are several advantages in Chongqing. First, this is a very big municipality with a big population and land base. More importantly, the government has given a lot of encouragement to us in doing investment projects here. Also with the operation of Yuxinou railway, there has been great improvement in the field of logistics, international finance and trade."

That government encouragement is channeled through the Liangjiang Special Economic Zone – one of only three in China – behind only Shanghai's Pudong New Area and Tianjin's Binhai.

It was set up in June 2010, and is located in the main urban districts of Chongqing, north of the Yangtze River and east of the Jialing.

The zone itself covers 12-hundred square kilometers.

Automobile production, electronic information and equipment manufacturing have been the three major industries driving economic growth in the zone.

But in the next five years, another 10 new industries are expected to rise in Liangjiang.

They include intelligent vehicle manufacturing, smart devices, cloud computing, and bio-medicine.

Tang Zongwei, deputy director of the management committee of the Liangjiang New Area, says they have a lot of ambitions moving forward.

"In terms of adjusting the industrial structure, our goal for the Liangjiang New Area is that by the year 2020, the output value of the three traditional industries will reach 600 billion yuan, while the output value of the other new, emerging industries will reach 450 billion yuan. Within the new industries, we want to achieve 80 billion yuan in new energy vehicle manufacturing."

The figures speak for themselves…

The GDP of the area was put at 320-billion yuan in 2015.

By 2020, officials expect the Liangjiang New Area's GDP to hit 650-billion yuan, with industrial gross output coming in at 1 trillion yuan.