CHENGDU - Philips (China) Investment Co.,Ltd. announced plans on Thursday to invest more than 25 million euros (USD 32 million) in the next four years to build a plant to make light-emitting diodes in the Chengdu High-tech Industrial Development Zone.
It was the latest in a stream of technological investment that has flown into this Southwestern Chinese city, once perhaps best known for panda bears and spicy cuisine.
"In the future, we will build a second regional headquarters and make more investments in the central and western regions," said Patrick Kung, chief executive officer of Philips Greater China.
Philips (China) Investment Co Ltd is the latest technological company to follow Intel Corp, a maker of computer chips and other components, which announced plans in August 2003 to invest USD 375 million to build a chip-assembly and testing plant in the Chengdu High-Tech Industrial Development Zone.
Intel continued to spend money there after its plant started production in September 2005. The same year, it announced plans to build a microprocessor-assembly and testing center and a state-of-the-art training and conference center at the site.
The expansion brought Intel's total investment in Chengdu to USD 525 million.
Seeing the success of that expansion, more technology companies have turned their eyes to Sichuan.
On Oct 17, Siemens AG, a giant electronic and electrical-engineering company, announced it had chosen the Chengdu high-tech zone as a base for automated manufacturing and research (R&D)and development.
When it begins operations in the first half of 2012, the base will be the third R&D center for the company's industrial automation business.
Since 2008, nearly USD 20 billion in foreign investment has found its way to Sichuan, surpassing the total sum of foreign investment the province had seen in the past three decades, according to Zhang Gu, chief of the Sichuan Provincial Bureau of Investment Promotion.
Most of the foreign investment has gone into the Chengdu high-tech zone.
All year round, potential investors have visited the zone to assess if they can start a business there. Because so many have shown an interest, the zone is very strict in screening investment projects and usually accepts only large proposals, according to officials with the administrative committee.
A total of 166 Fortune 500 firms from overseas have invested in Sichuan, which is more than have gone into any other province in central and western China. Fifty of them have invested in the Chengdu high-tech zone.
Chendu's appeal stems largely from its position as a center of transport, telecommunications, shipping, commerce, trade and finance in southwest China.
In 1992, the State Council designated the city as a hub for those activities.
In recent years, the city has accelerated work to build a network of railways, flights and expressways. February saw operations start for the first phase of an air cargo terminal at Chengdu Shuangliu International Airport, which will be the largest of its kind in central and western China.
Chengdu Shuangliu International Airport, which will become the first with two runways in central and western China, is used by 25 million passengers a year. It has 19 direct international routes to destinations such as Amsterdam and Bangalore.
In October 2010, the US-based magazine Forbes announced which cities it believed will become the fastest-growing economies in the next 10 years.
New highways, railways and an air network connect Chengdu with different parts of China and international cities, the magazine noted.
Because of its improved transport system, Chengdu has become more attractive to international corporations, which are often eager to avoid the high land prices, high production costs and traffic jams often found in Shanghai, Hong Kong, Shenzhen and other coastal cities, the magazine said.
Chengdu is also one of the cities with the greatest concentration of institutions of higher learning and of scientific research institutes in the southwest of the country.
It is also home to nearly 600,000 science and technology workers. Each year, the city furnishes businesses with more than 100,000 college graduates and about 80,000 skilled workers, said Chengdu's Mayor Ge Honglin.
Since 2001, the city government has cancelled 1,059 of the requirements companies must meet to gain official approval to conduct business, or 91 percent of its requirements.
A business that submits a complete application to the city will only have to wait three and half hours to receive an approval, so long as it meets the city's requirements, said Sun Ping, Chengdu executive mayor.
Chongqing, a city bordering Sichuan province to the east, has also witnessed a sharp increase in the amount of foreign investment it attracts.
In 2000, it had attracted fewer than $300 million from overseas. By this past year, though, the figure had increased to $4 billion.
More than 180 Fortune 500 firms have invested in the city, and that number is expected to surpass 200 by the end of the year, according to Chongqing's Mayor Huang Qifan.
Like Chengdu, Chongqing has become an alternative location for multinational corporations desperate to avoid the high land and production costs found in China's coastal regions.
The influx of these companies has brought jobs and higher incomes to the people of Southwest China.
In 2010, Taiwan's Foxconn Technology Group, one of the largest electronics manufacturers in the world, announced plans to invest $5 billion to build a production base in Chengdu. The company alone has brought about 100,000 jobs to Sichuan.