To most foreign investors Sichuan is an agricultural province rich in minerals but far removed from the more prosperous coastal cities. Whilst Chinas southern and eastern provinces have benefited from Deng Xiaoping's economic reforms, his home province of Sichuan has lagged behind, accounting for just 6.5 per cent of gross national product.
Yet if for no other reason than its size, Sichuan is an important region. With 110m people it is China's most populous province and the fifth largest by area, being equivalent to France in size. Its 1991 industrial production of Yn128bn (US$22.8bn) was the seventh largest in the country. Moreover its rate of industrial growth over 1990 was an impressive 13.6 per cent, eighth out of China's 29 regions, provinces and municipalities and higher than any other inland province. Between January and September 1993 the output level of enterprises at and above township level in Sichuan grew 20 per cent on the previous year. The governor Mr Xiao Yang is planning an ambitious growth strategy which would lead to a doubling in per capita income by the year 2000.
In the west, Sichuan is located next to Tibet and Qinghai; Gansu and Shaanxi are its borders in the north; Yunnan and Guizhou in the south; and in the east lie Hubei and Hunan. The central Sichuan Basin, known as China's rice bowl, is surrounded by mountains. The climate is sub-tropical monsoon with the principal city Chengdu enjoying hot and humid summers and fairly mild winters. The average January temperatures in the province is 6.6 C and average July temperatures of 27 C. The average annual rainfall is 900-950mm. The more remote parts of Sichuan are home to rare speciesof animals including the giant panda.
Sichuan, known as 'the land of abundance', is the nation's second largest agricultural producer. It is China's-largest source of grain, including rice, winter wheat, millet and maize. It also has the most pigs and is a major producer of rapeseed, citrus fruit and silkworms ? the province accounts for one-third of China's silk production.
Sichuan's mountainous areas produce tea and forestry products such as tung oil, balla wood, walnuts and ternmella. Leshan, Daxian and Wanxian are China's major black tea producing areas but they have cut back production in favour of green tea.
Sichuan's overall trading volume rose by 50 per cent during 1985-88 but relative to its size the province plays a minor role in foreign trade.
Industry has largely developed from defence factories relocated there in the 1960s. In recent years the provincial government has attempted to turn many of these industries towards civilian production. Chengdu Aircraft manufactures mainly military aircraft but has begun making parts for civilian aircraft, motor cycles and other equipment.
The province has 49,000 enterprises with its main strengths being machine building, instruments, textiles and clothing, leather, chemicals and food processing. Sichuan, Yunnan, Guizhou and Tibet form the newly created South-west China economic zone which will concentrate on the manufacture of military products, machinery, non-ferrous metals and motor vehicles.
All this industrial development has created a serious pollution problem and since 1989 the province has invested US$245m in over 7,000 anti-pollution projects. Indeed, environmental protection has become an important industry in its own right with annual output in the province exceeding US$35m.
Chengdu is the provincial capital, where nine million people are packed together in greater density than the population of Hong Kong. A wide range of industries are located here including electronics, measuring and cutting tools, and publishing. Whilst most foreign investment is concentrated in the other principal city of Chongqing, overseas funds are being channelled into Chengdu such as transport and the construction of a shopping centre.
Chongqing's population is around 14.5m, of which 3.45m live in urban areas. It was opened to foreign trade in 1978 and in 1983 it was given the equivalent of provincial power over economic affairs. Chongqing stands at the confluence of the Yangtze and Jialing rivers and is the main industrial and economic centre in southwest China. The Chaotianmen port is to be rebuilt at a cost of about US$10m.
Chongqing is an ancient city, being the capital of the Ba Kingdom in the 11th Century BC. After Nanjing was occupied by the Japanese it became the capital of the Kuomintang government. Now as a regional centre it is attempting to coordinate economic activity in Sichuan, Guizhou, Guangxi and Tibet.
Machine building represents 35 per cent of the city's total industrial output with the metallurgical industry accounting for a further 11 per cent. Other major industries are textiles, chemicals and light industry. The Chongqing Optical Instruments Factory is the leading producer of optical instruments in China. In 1989 the city's exports were US$260m, almost half being chemicals and pharmaceuticals. The UK became Chongqing's major trading partner in 1989.
The vast majority of joint ventures are small-scale projects. Most investment is from Hong Kong but additional funds come from the US, Japan and the UK. Japanese companies are particular active with Honda, Suzuki, Toyota, Isuzu and the trading houses, Mitsui and C Itoh all investing in the city. About 10,000 light trucks (mainly Isuzu design) were produced in 1990 from the Qingling and Yuzhou plants and 30,000 'minitrucks' were produced at the Chancan plant. Heavy trucks of M Benz, Roman and Steyr design are produced in small quantities at the Xinan and Dazu plants. Chongqing makes 30 per cent of China's motor. vehicles. China Jialing Group, in a technical joint venture with Honda, produces 18 per cent of the country's motorcycles and output is growing fast. Recently signed contracts include General Motors and Suzuki, which is to start manufacturing cars in Chongqing for sale on the domestic market starting in 1995. In addition a Thai company recently signed a joint venture to make 200,000 agricultural vehicles a year in the province.
Chongqing has also been active with overseas investments; in 1988 the city paid US$10m for the Modern Manufacturing Corporation of Seattle, USA, a workshop for making aircraft parts. And in 1990 Chongqing bought a Canadian company, JPS Microsystems Inc, which manufactures laser printers. Both companies were bought to earn foreign exchange and bring technical know-how to the city.
Energy supply remains a problem in Chongqing but the construction of the Jiangbei power station is helping matters. Throughout south-western China foreign capital has become a major source of funding in power projects. The 3.3m kW Ertan hydroelectric power project is planned to come on stream in 1996 at a cost of US$3.45m and should help solve energy problems in southwest Sichuan and also Guizho and Yunnan provinces. The project is particularly important to the area of Panzhihua and Xichang where there are large deposits of non-ferrous metals. The high profile Three Gorges hydroelectric project now slated to start in 1995 is certain to have far-reaching effects on the province as well as providing opportunities for foreign companies in construction work and machinery sales. Investment in the main infrastructural areas of energy, transport and telecommunications grew by 120 per cent in the first nine months of 1993.
The province is rich in mineral resources which include iron, gold, copper, aluminium, vanadium, titanium, oil, asbestos and natural gas (largely untapped). New natural gas finds in the east of the province suggest reserves of tens of billions of cubic metres. Sichuan province produces more than 6m cu m of natural gas every year ? 40 per cent of the country's total.
The Panzhihua Iron and Steel Works, the fourth largest in China, is also the world's largest vanadium base. A deposit of over 600m tons of phosphorous has been verified. Coal is the major fuel for industry.
In the past the mountains surrounding Sichuan effectively blocked communications, but the construction of a railway line west through the mountains in the 1950s connected Sichuan to the main rail network. But Sichuan's transport network remains inadequate, a fact which has greatly retarded economic growth. Internally, the numerous waterways provide a good communications network and the port of Chongqing on the Yangtze river has been modernised to accommodate ships of up to 3,000 tons.
A new rail link between Yunnan province and Zhuzhou in Hunan province which would cut the journey time from Panxi to the nearest port by two-thirds is due to be completed shortly and work is underway on the Chengdu-Chongqing and Jiancheng railways.
The plan to build a 43km metro system in Chengdu will cost about US$3bn. Construction will begin in 1995 and planners expect that over one million passengers a day will use the system. City authorities hope that by linking the metro with the development of the commercial centre, and thereby tapping into a consumer market worth about US$2.3bn in 1992, they will attract foreign investment. Not to be outdone, Chongqing is also to have a metro, totalling over 44km and split into three lines. Finance is provided by Hong Kong and tunnelling has begun with a 3km section already completed, although final completion is not expected unti11998.
The Chengdu to Chongqing expressway is expected to open to traffic by the end of 1995, shortening the driving distance between the two cities by 165km. A key element of the project ? a 6,000-metre tunnel through Zhongliang Mountain near Chongqing ? was opened last October. In addition the Jiangyou to Leshan expressway will be built with Singaporean finance.
Expansion of Chengdu airport is one of the most ambitious construction projects. Two international routes, to Singapore and Bangkok, are already open and two others to Hiroshima and Moscow are at the planning stage. *
Sources of in formation include the Department of Trade and Industry, UK.
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