The Growth of Chengdu Part II

TheGrowth of Chengdu: Part II

TheGrowth Old Chengdu: Part II

Howdoes the economy develop in Chengdu?

Chengducity existed in an age of monetary success and elitism during theSecond World War when the national government fled to the plain. Inthe past, Chengdu has been one of the most influential cities inWestern China in both economic and political terms (Wang, 2008).Early during the Tang and Song dynasties, the trade and commerceactivities in Chengdu had outgrown the traditional family workshopsas they gradually developed into a modern city of sophistication witheach month being dedicated to different events such as February forflowers and March for silkworms fair (Xu, 2014). Besides, theproduction of the paper money played a significant role in promotingfinancial transactions, trade, and economic development in China.Chengdu also has a long history of gas exploration and utilization.For example, during the early Western Han dynasty, they discoverednatural gas and used it in the salt refinery. Later, Chengduintroduced and adapted the wood block printing technology, whichfamiliarized the Chinese people to the civilization of the world. Thecity was also known for its handicrafts due to its famous brocadeweaning and the silk culture (Xu, 2014). On the other hand, themerchants set out from Chengdu and embarked on a long journey forsilk trade, which further improved the economy. The city has alwayshad a well-improved transportation system since the ancient times.For example, the early magistrate of Sichuan province build canals,which led the river to flow through Chengdu city thus, improvingtransportation significantly.

Theeducation in Chengdu has been well developed since ancient times.During the 141 B.C., Wen Weng built schools to promote education inthe region, which was the first attempt at establishing publiceducation in China. By the time the Southern Song dynasty took over,the school has grown into a college enrolling a thousand members.Consequently, Sichuan province, particularly the Chengdu Plain, hasbeen the origin of so many talents. Consequently, the city was vitalin enhancing the economic development of the area. Chengdu has alwaysbeen a city with successful business activities and boomingindustries (Hutchinson, 2014). The city is also a thrivingmanufacturing sector where over one hundred of the world’s top 500largest corporations operate (Xu, 2014). The city’s improvedinfrastructure, green environment, and laid-back culture becameoperational in late 2010, which have contributed significantly inattracting many entrepreneurs and businesses to strengthen itstraditional tourism and commercial industries (World Bank, 2009).

Currently,Chengdu contributes to approximately 30 percent of Sichuan’s GrossDomestic Product thus, the city is a vital part of the province’seconomy. In 2012, Chengdu GDP was 13 percent, which was anincrease from 8.7 percent making it higher than the average GDP ofthe whole country (WorldBank, 2009).The city’ income level is also rising steadily, which is improvingthe living conditions of the people. The macroeconomics of ruralChengdu income rose to 2.4 percent, which indicated a more balancedconsumption and narrowing income gap structure. Thus, people arecapable of purchasing goods and services, which improve businesses inthe region(Legates, Ye &amp Qin, 2013).Moreover, the region’s economy is expected to continue to growstrongly with a healthy growth and inflation rate at a higher levelthan the national average. Thecity has also invested in other developments such as transportationand information technology to promote even more businesses anddevelop the region even further.

Howdoes Chengdu influence the global economy?

Chengduhas a significant contribution to China’s economy, which alsoaffects the world economy in different ways. The city increasesbusiness opportunities for global businesses to operate in China.Chengdu has a reputation for of a commercial hub and center wherecraft and art trade is established. Chengdu’s influence graduallyspread outwards to the rest of Western China due to its prosperity(Legates, Ye &amp Qin, 2013). Additionally,real estate business has previously being a significant contributorto fast economic growth in China. Chengdu has had a better scenarioin real estate despite the China’s real estate downturn. The city’shousing industry has some advantages because the city is wellsituated geographically (Lynn&amp Wang, 2010).Besides, it has high status in the Southwest region of China, whichmeans that it continues to attract people from areas around Sichuanprovince hence, housing demands is not expected to decrease. Chengduis the transportation hub for West China due to its air and railwaynetworks. Furthermore, the city is planning to build a new airportand railways transportation that will facilitate congestion in thecity and ease connection with other regions. The infrastructure willimprove tourism and at the same time relief massive trafficcongestion in this populous city. The hotel industry as well isreceiving much attention from foreign investors. For example,currently the city has ten five-star hotels, which is an increasefrom the six that existed five years ago(Legates, Ye &amp Qin, 2013).

Chinais becoming more active and open to foreign businesses andinvestments. However, there is increased competition in thefirst-tier cities. Thus, businesses planning to expand to China optfor second tier cities with a richer experience and more options forbusiness development such as Chengdu (Walcott,2007).Thus, it is gaining much attention from the foreign enterprises.Chengduis also highlighting its ambitions by hosting major global eventssuch as the 12thFortune Global Forum to attract foreign investment. Other activitiesinclude business conferences such as the annual world ChineseEntrepreneurs Convention aims at bringing together Chineseentrepreneurs from abroad and encourage them to invest in China.During the event, the entrepreneurs signed more than 240 contractsworth 130 billion Yuan(Walcott,2007). The city has also built a vast exhibition hall measuring15,000 square meters in one of Chengdu’s newest districts.Furthermore, the city has tried to present itself a symbol ofmodernity and a center for foreign investment. The Chengdu globalcenter opened officially during the summer, which is a symbol of thecity’s ambitious future. The center has the largest building byfloor space in the world, which further presents it as an excellentpotential opportunity for global business.

By2030, the city is expected to have a population of 18 million peoplewithin its expanding boundaries as the local government proceeds withthe large-scale construction projects(Walcott,2007). For example, they are building the second airport with fourairstrips and a new economic development zone, which can host sixmillion people. The city has also opened a railway line that connectsChengdu to Poland and carries freight to Europe in as minimal time aspossible, approximately twelve days. Furthermore, the city hasreceived an invested of approximately £5.3from foreign investors (Walcott,2007).By December 2014, Chengdu was home for 233 fortune 500 companies,which signifies that the city is developing rapidly. Besides, largeUK companies are also taking advantage of the rapid development inChengdu by expanding their businesses and invested £125 million inthe region. For instance, the British Airways launched direct flightsbetween Chengdu and London thrice a week. The initiative meant toincrease the investment and trade between the United Kingdom andChengdu.

Furthermore,Chengdu’s government has enacted policies that favor and supportthe most advanced information technology and software industry, whichwill help to boost innovations in the city. Hence, the number of ITbusiness start-up reached a record level, which made many globalcompanies consider expanding their companies in Chengdu as well(Bergman,2015).The operation and expansion of the hi-tech industry zone have alsolaid a foundation for future development. Moreover, the municipalgovernment has focused on innovation and emerging industries, whichcreate more optimism for future business developments. Consideringthe media attention, government policies, investment and culturalenvironments, Chengdu is a perfect place for local and foreigninvestment (Bergman,2015).

Besides,development of IT has also improved retail business in Chengdu as itis expected to change both online and offline business. The 14million populations is a substantial market in the Western part ofChina (Bergman,2015).The region also has cheap labor despite the rising operational andlabor cost in China, which attract both local and foreign investmentto Chengdu. Largely, 2014 has been a successful year for Chengdu withits economic development growing rapidly even as the China’soverall economy slowed down. Therefore, these developments aresignificant to the world economy as they facilitate development andadvancement of business in Chengdu and China, which is connected toother enterprises through globalization (Bergman,2015).

Recommendation

However,Chengdu has to improve some issues if it expects to have increasedinvestments and boost businesses even further. Sichuan province isdeeply affected by corruption, which affects the fair distribution ofresources and economic growth in the region. In the past, many seniorofficials have been alleged of abuse of power and bribery, whichdamages the city’s image. While those officials suspected ofcorruption are dismissed under inspection, the efforts are temporarybecause they still have a negative impact on the region’s economy,particularly in luxury consumption (Walcott, 2007).Although there has been a massive anti-corruption campaign in China,Chengdu needs to initiate strict measures and counter-actions thatwill directly deal with the corruption issues because it might hindersome businesses from expanding into the region. These actions shouldaddress corruption issues in the region regardless of the initiativesimplemented in the province or the whole country. However, some mayview these problems as temporary, but it is important to have aremarkable reputation when attracting international business.

Oneof the outstanding features of Chengdu is the unique culturalidentity (Bergman,2015).Then again, the city has encouraged the idea of attracting businessand cultures from the West, which might end up eroding the ancient,unique culture identity of Chengdu. Even if the idea is meant topromote foreign investment especially from the West, it willadversely affect one of the significant features that make Chengduattractive to tourism thus, affecting the hospitality industry.Accordingly, it is significant to safeguard the intangible culturalheritage of the region as it has had far-reaching effects on Chineseculture.

Conclusion

Chengduis the only major city that has remained in the same position and hasthe same name after more than two thousand years in China. Since itsformation, the city has had an excellent history of openness and hasflourished on its ability to absorb and advance cultural influences.Hence, it has contently learned to absorb new, advanced cultures andintellectuality, which explains why it has remained prosperousculturally, politically, and economically throughout history. Chengduis a city of revolutionary and rebellious traditions due to thenumber of peasants in the regions, the uprisings, and revolutionsexperienced during various dynasties. The city has always been famousfor its rich cultural heritages and a center for art and craft trade.Furthermore, Chengdu has a reputation of a commercial hub that isattracting all forms of businesses from all over the world. Overall,Chengdu made significant achievement last year, and it aim to attaineven more in the future.

Bibliography

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Hutchinson,F. E. (2014). Architectsof growth?: Sub-national governments and industrialization in Asia.Singapore: Institute of Southeast Asian Studies.

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Walcott,S. M. (2007). The Dragon’s Tail: Utilizing Chengdu and ChongqingTechnology Development Zones to Anchor West China EconomicAdvancement. Journalof Chinese Economic and Business Studies,5(2), 131-145.

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Xu,T. (2014). Ecological Civilization City Construction under NewUrbanization Strategy: A Case of Chengdu City. ScholarsJournal of Economics, Business and Management,1(7), 298-303.