Chips and bytes

Chengdu aims to build itself into a major information technology industrial base. Sales revenue from the city's IT industry reached 301.9 billion yuan last year, a year-on-year growth of 63.8 percent, and is expected to hit 1 trillion yuan by 2015. Provided to China Daily

Chengdu puts best foot forward to attract more investment from IT majors

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When more than 500 global CEOs and world leaders arrive in Chengdu next year for the Fortune Global Forum, the capital of Sichuan province in southwestern China is expected to take the final steps to its aspired transformation into the "Silicon Valley of the East". Long overshadowed by industrial powerhouses like Guangzhou and Shenzhen, Chengdu's erstwhile claim to fame has been its tourism, pleasant living environment and the giant pandas. But in the last decade, there has been a sea change and the city has made rapid strides in the information technology sector and become the manufacturing destination of choice for multinational corporations such as Intel, Apple and Dell.

"Nearly 70 percent of the Apple tablet computers are made in Chengdu, while more than 50 percent of the notebook computers in the world run on chips that are made in Chengdu," says Ge Honglin, the mayor of Chengdu.

With a host of policies aimed at attracting investment in the IT sector, the city is looking to be an integral link in the global IT industrial chain.

Statistics from the Chengdu Economic and Information Committee show that in 2011 sales revenue from the primary operations of Chengdu's software and information technology enterprises reached 301.9 billion yuan ($47.8 billion, 36.6 billion euros), up 63.8 percent year-on-year. By 2015, the revenue from the sector is expected to hit 1 trillion yuan.

"It is an opportune time to develop Chengdu's IT industry, as many enterprises in the eastern regions are migrating inland due to rising labor costs. The go-west strategy of the government also gives further impetus to our plans," Ge says.

There are more than 1,400 IT companies in Chengdu, including some global majors, says Chen Fu, deputy director of the Chengdu Investment Promotion Commission. By the end of March, about 200 Fortune 500 companies had branches in Chengdu, mostly in the IT and IT-related businesses.

"The global majors have acted as the bellwether in the overall development of the IT industry in Chengdu," Chen says.

Like the global companies, there are also several domestic IT majors such as Lenovo, which has played a key role in Chengdu's rise to prominence.

Last year, the company's Lenovo (Western) Industrial Base started volume output in Chengdu. The base combines the R&D, manufacturing and sales operations of Lenovo. It currently makes desktops and laptops and at a later stage will encompass all Lenovo products.

"The new base will further optimize our global supply chain, research and development as well as sales system, and be an important step in our global strategic layout," says Liu Jun, Lenovo's senior vice-president.

Liu says in addition to boosting Lenovo's production capacity, the new base, with a total investment of more than $100 million, will also serve as one of Lenovo's key mobile Internet R&D centers, focusing on sectors like mobile Internet services and applications and laptop and other mobile Internet devices.