2.5.2001

Sichuan is one of the major agricultural production bases in China. Grain, including rice and wheat, is the major product with output that ranked first in China in 1999. Commercial cash crops include rapeseeds, citrus fruits, peaches, sugar canes and sweet potatoes. Sichuan also had the largest output of pork among all provinces and the second largest output of silkworm cocoons in China in 1999.

With domestic developed technology, the provincial government started the construction of the first magnetic levitation train rail at Chengdu -- Qingcheng township in April 2000. The rail will be a 425-meter low-speed tourist trail line upon completion.

Sichuan is one of the major industrial bases in Western China. In 2000, added value of industrial output in Sichuan totalled Rmb189.4 billion, an increase of 13.5% over 1999. In addition to heavy industries such as coal, energy, iron and steel industry, the province has established a light manufacturing sector comprising building materials, wood processing, food and silk processing. Chengdu and Mianyang are the production bases for textiles and electronics products. Deyang, Panzhihua and Yiban are the production bases for machinery, metallurgy industries and wine respectively. The wine production of Sichuan accounted for 21.9% of the country’s total production in 2000.

To accelerate development of Sichuan into a hi- and new technology industrial base, investments are encouraged in electronics and information technology, machinery and metallurgy (including automobiles), hydropower, pharmaceutical, food and beverage industries.

In 2000, about 462,000 overseas tourists (+23.7%) visited the region and generated a total revenue of US$120 million, an increase of 25.3% over 1999. As tourism industry is one of the major focus areas in Sichuan’s 10^th Five-Year Plan, provincial government set up a Tourist Information and Advisory Services Centre in Chengdu in April 2001 to promote the industry. Besides, in order to attract new financial resources and management techniques to improve the industry performance, Sichuan government has announced recently its plan to transfer the operating rights of 10 selected scenic spots, including Jiuzhaigou and Huanglong Temple to private operators.

Sichuan's retail sales of consumer goods reached Rmb152.4 billion in 2000, increased by 10.2% over 1999. The largest consumer centre is located in Chengdu, which accounted for 36% of the province's total sales.

With 43 universities, 184 state-owned science and technology research institutes and more than 1.2 million scientists and engineers, Sichuan holds a leading position in scientific researches in areas like high-molecular chemistry, leather, nuclear technology, technology of aerospace and aviation, stomotological medicine, genetic engineering and optical fiber communication. Besides, Xichang is the hi-tech research centre in rocket launching.

The West Software Park, approved by the Ministry of Science and Technology in 1997, is one of the four State-level computer software centres to develop domestic computer software industry. The park aims at developing applied software for State-designated key industries, providing specialized product training programmes for users and cultivating small and medium-sized software firms.

With a rich endowment in herbs (around 4,500 species), large number of senior Chinese medicine doctors and research institutes like Chengdu University of Tradition Chinese Medicine (TCM), Sichuan is also strong in research and development of modern Chinese medicine. Ranked the top in China, the total amount of output from medical and pharmaceutical industry in Sichuan reached Rmb8.7 billion in 1999, of which Rmb4.6 billion was contributed by TCM. At present, over 300 research projects are being undertaken in Chengdu, and many of them are close to success. With this outstanding performance, Chengdu is selected by the Ministry of Science and technology to set up the first state-level Modernized Science and Technology Industry Base for TCM.

Given Sichuan’s advantage in science and technology development, and the preferential policies provided for hi-tech industrial investment by the provincial government, it attracts a number of internationally renowned IT companies such as Microsoft, Cisco, Intel, IBM and Motorola to invest and set up research and development centres.

Sichuan exports increased by 23.1% to US$1.4 billion in 2000. Major exports included chemicals and industrial raw materials, steel products, garments and textiles, silk yarn and fabrics, electronics and power generation equipment. Major exports markets were Hong Kong, Japan, the US, Iran and Russia.

Imports dropped by 14.3% to US$1.3 billion in 2000. Major imports included aviation equipment, electronic components, electrical appliances, automobile spare parts, chemical raw materials, steel products, non-ferrous metals, electronics and machinery. Major import sources were Japan, Hong Kong, the US, France and Germany.

Hong Kong is one of the major trading partners of Sichuan. In 1999, the province's exports to Hong Kong totalled US$322.8 million, accounting for 18.6% of the total. As for imports, 17.2% of the total province's imports was from Hong Kong, amounting to US$242.9 million.

By the end of 2000, 5,481 foreign investors invested in Sichuan, with the total accumulated contractual and utilized foreign investment reaching US$14.0 billion and US$7.3 billion respectively. Over 60 multinational enterprises on Fortune 500 like Siemens, Procter & Gamble, Toyota and Motorola have established their presence in the province.

In 1999, there were 62 Hong Kong-invested projects with a total contracted investment amount of US$103.1 million in Sichuan. Actual utilized foreign investment was US$82.3 billion. Hong Kong's investments were mainly concentrated in manufacturing, real estate, transportation, telecommunications and construction industries.

In the 10^th Five-Year Plan, Sichuan will concentrate on the improvement of product quality and competitiveness of its state-owned enterprises. Besides, the Sichuan government has decided to transform Chengdu into a hi-tech industrial centre, developing electronic information, bio-technology, new materials and integration of optics and machinery. Besides, efforts will be devoted into five sectors -- electronics and information technology, hydropower, machinery and metallurgy, chemical and pharmaceutical, food and beverage -- to enhance them as pillar industries. Besides, tourism industry is another key sector for Sichuan’s future development.

To boost the development of the central and western regions in China, the State Council has granted further tax incentives to foreign-invested enterprises (FIEs) in China. Beginning from January 2001, foreign-invested enterprises in the central and western regions would enjoy another three years of preferential tax rate at 15% on top of the existing preferential treatment (exemption of profit tax for the first two years and 50% reduction for three years thereafter). The tax rate can be further reduced to 10% when an enterprise is proved to export more than 70% of its annual output in terms of value.

Sichuan currently has 50 development zones, which specialize in new and hi-tech and service sector. There are 2 state-level ETDZs which are located in Chengdu and Mianyang. Some international renowned corporations such as AT&T, Motorola, Coca-Cola, Siemens and Fuji have invested in the development zones.

Other major development zones included Chengdu New and Hi-tech Industrial Development Zone, Chengdu Economic & Technology Development Zone, Ziyang Economic and Technological Development Zone, Chengdu Phoenix Mountain Tertiary Industrial ETDZ, Chengdu Xindu Industrial Development Zone and Chengdu Industrial Park for Taiwan and other Foreign Investors.