European Chamber report provides recommendations for Southwest China to close the development gap with coastal regions Go back »

2018-11-15 | Southwest China

15^th November 2018 – The European Union Chamber of Commerce in China today released the European Business in China – Southwest China Position Paper 2018/2019 (Southwest China Position Paper), the second of its reports to focus on how to improve the business environment in Chengdu and Chongqing. The Southwest China Position Paper provides the two cities with constructive recommendations based on input from European businesses operating in the region, to help it become a leading investment destination in China.

Rapid developments in 'hard infrastructure'—such as railways, roads, airports and bridges—mean that the region is now better connected to the rest of China, and the rest of the world, than ever before. This, coupled with low costs compared to coastal cities, has helped Southwest China to develop as an increasingly attractive place to do business for European companies.

However, recent slower economic growth in the region has necessitated a shift towards upgrading traditional heavy industries and the promotion of advanced manufacturing and services. In order to achieve this transition fully, the Southwest China Position Paper argues that Chengdu and Chongqing now need focus their attention on 'soft infrastructure', i.e. the human capital and institutions that will allow these goals to be realised. This includes enhancing overall governance, law enforcement, the financial system, education and healthcare, as well as creating the right conditions to attract and retain the talent necessary for both cities to begin climbing the value chain and set out on a path towards sustainable development.

European companies operating in Chengdu are impressed by the local government’s willingness to listen to the needs of the business community. They are also attracted by the wealth of local talent on offer, especially in technology fields, due to the high concentration of top universities. At the same time, the reportnotes room for improvement when it comes to the regulatory and legal environments, and puts forward recommendations on how to make them more predictable and transparent.

In Chongqing, European businesses are drawn principally by the abundant natural resources and logistical advantages. Yet Chongqing is held back to a large extent because it is relatively unknown outside of the region. As a first step towards Chongqing becoming a more international city, the Southwest China Position Paper calls for the authorities to organise more frequent exchanges with the international business community.

"Chengdu and Chongqing need to focus on upgrading their soft infrastructure if they are to position themselves as top investment destinations in China," said Paul Sives, chairman of the Southwest China Chapter. "By addressing inefficiencies in the local business environment, while at the same time playing to their individual strengths, Chengdu and Chongqing can set a leading example of how to successfully develop China's inland regions."

Please click here to download the report.

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