Chengdu is the capital of Sichuan Province and a major city in western China. A thriving economic, transportation and communications center in southwestern China, Chengdu is also one of China’s primary manufacturing and agricultural bases. The city is part of the West Triangle Economic Zone along with Xi’an and Chongqing.
Chengdu is mainland China’s top performing economy in job growth, foreign investment and high-value-added industries. The city has a land area of 4787 mi (12,400 km²) and a population of more than 14 million. Accorded sub-provincial administrative status by the Chinese government, it has direct jurisdiction of more than 10 districts, five counties and four major cities.
In the past 10 years, Chengdu rapidly developed its sophisticated transportation system. It hosts one of China’s busiest airports – Chengdu Shuangliu International Airport – and four trunk railway systems that start or run through the city. Chengdu is also an important center for education and R&D in China. Several prestigious universities are located in Chengdu, including Sichuan University, the University of Electronic Science and Technology of China, Southwestern University of Finance and Economics, and Southwest Jiaotong University.
Chengdu has a rich cultural heritage originating from the Shu Kingdom and the Three Kingdoms Period at the end of the Han Dynasty. The city’s unique architecture, scenic beauty, Sichuan cuisine and Sichuan opera attract tourists to the region. Chengdu is also the birthplace of the country’s tea culture and a major tea base in China.
Key Industries
The economic growth of Chengdu’s service industry recently surpassed manufacturing. In 2013, services contributed to 50.2 percent of the city’s GDP, while the manufacturing industry contributed 45.9 percent. Chengdu has eight primary industries – electronic information, food processing (including tobacco), machinery, petrochemicals, metallurgy, automobiles, building materials and light industry. Collectively, their value added output in 2013 was U.S.$32.8 billion (RMB 251.8 billion) – a rise of 14.4 percent over 2012 and 86.3 percent of total industrial output.
Tourism is a pillar of Chengdu's service sector. In 2013, Chengdu welcomed more than 153.39 million visitors, providing revenues of US $19.5 billion (RMB 128.54 billion) (27.2 percent annual growth). Foreign exchange earnings amounted to U.S. $730 million during the same year, an increase of 16.5 percent over 2012. Chengdu is one of the top 14 service outsourcing cities in China and is among the world's top 50 emerging outsourcing cities.
In 2014, total foreign trade grew 9.3 percent reaching U.S.$55.32 billion (RMB 342.98 billion). Imports rose 16.7 percent and totaled U.S. $21.83 billion (RMB 135.32 billion). Key sectors of Chengdu’s economy which are easily accessible to U.S. exporters include the following:
Food and Agricultural Products
Fueled by Chengdu’s rapidly growing middle class, the demand for imported products has skyrocketed. Within the vibrant tourism sector, hotels in particular are avid consumers of imported food and beverage products. As an interior emerging city market, Chengdu has experienced less import penetration than other Chinese port cities, despite China’s burgeoning demand for imported goods. This provides attractive advantages to U.S. exporters.
Currently, U.S. exporters may find strong markets for the following agricultural/food products in Chengdu: Soybeans, poultry (especially chicken feet and wing tips), nuts, fresh fruits (oranges, California table grapes, apples, cherries), dried fruits (prunes and raisins), wheat, breakfast cereal, dairy products, seafood, spaghetti sauce/tomato products, candy and chocolate, baby food, premium ice cream, coffee and potato products.
During the past decade, U.S. agricultural exports to China have risen sharply, transforming the country into the fastest-growing and highest-value export destination for U.S. food and agricultural products. In 2011, China surpassed Canada to become the top U.S. export market. Approximately 16 percent of all U.S. agricultural exports are now to China. In 2015, food and agricultural exports totaled U.S.$25.9 billion.
Automobiles
With its growing upper class population and strategic location, Chengdu provides immense opportunity for U.S. auto exporters. China's State Council recently designated Chengdu’s railway port as an automobile import port – the first in Sichuan Province. American automobile manufacturers and auto parts exporters could find tremendous business opportunity just as European automakers have found. Hybrid cars and environmentally friendly automobiles are particularly in demand. In 2014, China’s vehicle market continued to be among the top five performing export segments for the U.S., worth U.S. $136 billion (8.4 percent annual growth), but still showed a trade deficit of U.S.$125.1 billion.
Machines, Engines and Pumps
Manufacturing provides more than 45 percent of Chengdu’s GDP. The city implemented a “1-3-13” development strategy, whereby the establishment of one modern industry system is enhanced by three levels of development, in turn promoting 13 industries such as electric information, automobiles, petrochemicals, and energy conversation. Consequently, there is a market for U.S. machines, engines and pumps, particularly for Chengdu’s aviation, aerospace and automobile industries. This segment is the top performer among U.S. exports, reaching U.S. $219.8 billion (13.6 percent of total exports) in 2014.
Development Zones
The city of Chengdu has two state-level development zones. Each of these zones cater to the specific requirements of their investors.
Chengdu Hi-Tech Industrial Development Zone
Ranking fourth among national hi-tech zones, the Chengdu Hi-Tech Industrial Development Zone was established in 1988 as part of the first group of national hi-tech development zones. Membership was extended to Asia-Pacific Economic Cooperation (APEC) members in 2000.
Chengdu Economic & Technological Development Zone
The Chengdu Economic and Technological Development Zone was established in 2000 and ranks 25th among national development zones for comprehensive strength in China and 2nd in western China. The zone is hailed as the gateway connecting Chengdu with the Chongqing-Shaanxi-Guangxi sea-bound channel. The leading industry is automobiles (engineering machinery).
To facilitate people who want to invest and set up business in Chengdu, here is an introduction of Types of business presence in China:
Before starting up a business in China, you have to know what are the options. Foreign Investors generally establish a business presence in China in one of five modes: Wholly Foreign Owned Enterprise(WFOE); Representative Office; Foreign Invested Partnership Enterprises (FIPE); Joint Venture and Hong Kong Holding Company.
Wholly Foreign OwnedEnterprise (WFOE) is a Limited liability company wholly owned by the foreign investor. WFOE requires no registered capital and it's liability of equity , can generate income, pay tax in China and it's profit could be repatriate back to investor's home country. Any enterprise in China which is 100 percent owned by a foreign company or companies can be called as WFOE.
Representative Office (RO) is aLiaison Office of it's parent company. It requires no registered capital. It's activities would be: product or service promotion, market research of it's parent company's business, Quality Control liaison office etc in China. RO generally is prohibited to generate any revenue nor generating contracts with local businesses in China.
Joint Venture (JV) is a Limitedliability company formed between Chinese investor and Foreign investor. The parties agree to create a entity by both contributing equity, and they then share in the revenues, expenses, and control of the enterprise. JV usually been used by foreign investor to engage the so called restricted in areas such like: Education, Mining, Hospital etc.
Since March 1, 2010: Measures of Establishment of Foreign Invested Partnership Enterprises (FIPE) in Chinaistaking effect. The regulation, which take effect since March 1, 2010, are known as the Administrative Measures for the Establishment of Partnership Enterprise in China by Foreign Enterprises or Individuals. There's no required minimum registered capital for a Foreign Invested Partnership Enterprise (FIPE) in Shanghai, Beijing, Guangzhou, Shenzhen, Hangzhou and rest cities of China
Hong Kong Company usually been used as a Special Purpose vehicle (SPV) to invest Mainland China. Hong Kong is one of the quickest locations to Incorporate a business. Although a HK company is not a legal entity in Mainland China (Mainland China and Hong Kong, See Wiki 1 country, 2 systems), lots foreign investors, especially investors from Europe and North America still chose to setting up a Hong Kong company as SPV to invest China.
After China's entry to WTO, most industries in China welcome foreign investment, WFOE setting up in China becomes the first option of foreign investment's entity structures instead of Rep. Office setting up in China. At the mean time, for tax purpose, effective licensing system etc more and more investors use Hong Kong as the holding company to invest China mainland, using this offshore company to hold their operations in China.
Business set-up in Chengdu is a big project by itself, which requires financial and time commitments, business management knowledge and China expertise. Identifying a competent agent to manage the complex process will be a cost and time effective way to avoid potential pitfalls . Tommy China Business Consulting has direct connections in the local government
Since 2006, TCBC has been focusing on consulting services for our clients to invest in Chengdu China. We are specialized in establishment of wholly foreign owned enterprises (WFOEs), setting up of offshore companies, trading services, tax minimization, Assist in obtaining government approvals and certificates for running business, negotiate and draft various legal documents provide legal advice, negotiate government officer for Land acquisition. Advising on formation of WOFE and business structures, managing and controlling WOFE in Chengdu China, drafting privacy policies and structuring commercial transactions
TCBC will manage all aspects of incorporation to get you a business license in Chengdu China. We offer a range of company formation services including helping you to set up:
-Wholly Foreign Owned Enterprises (WFOE )
-Joint Ventures (Equity/Co-operative)
-Foreign Invested Partnership Enterprises (FIPE)
Contact Tom Lee for business setup consulting in Chengdu now.
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