Foreign enterprises look westward in China
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E-mail CNTV, June 9, 2013
Over the past few decades, many foreign enterprises have been shifting their focus from China's coastal regions to the country's west, where many believe has huge market potential. Our reporter Liu Yang visits Fortune 500 companies Intel and Molex in Chengdu in China's southwest province of Sichuan to find out why.
China's coastal regions have attracted millions of foreign enterprises. Yet in the past decade, many enterprises have been jumping on the "go west" bandwagon. Intel is one of these enterprises. It has integrated its eastern Shanghai and western Chengdu factories. Will Tong was one of their Shanghai employees who decided to relocate to Chengdu.
"Chengdu is a very beautiful city, very nice weather, my family love here and it's good for my long term career development," said Tong, an engineering supervisor.
For employees like Will Tong, the migration to western China has led to more opportunities, while the companies that are aligning with China's "go west" development strategy, have contributed to the local economy of the western region.
"China made big effort in developing western regions and that matches Intel's development agenda as well. And because of Intel's coming, there are whole eco-system being developed around us. That is something that has not only to be proud of, but also contribute a big time to the local economy, and also to Intel's overall growth," said Wangli Moser, corporate program general manager at Intel China.
"You look at China's coastal region, it's very well developed very sophisticated in a PC consumption. When you look at inland China, there are may opportunities, Chengdu is a gateway to connect those opportunities," said Bian Chenggang, vice president of Intel Technology & Manufacturing.
300 support chain enterprises have followed in Intel's footsteps in setting up factories in Sichuan province. 180 are top Fortune 500 companies.
Among them is Molex. It is the world's second largest manufacturer of interconnect products. The company set up factory there in 2007 after closing down its three plants in Europe. The plant in Chengdu is the largest they've ever built. They hope that the location will position them well for growth in Asia. Their senior director of operations, H. T. Leong, says the company's shift is mainly about providing efficient production and value for their customers.
The westward industrial expansion by foreign enterprises is part of a long-term strategy. One leading analyst says the shift has come in two forms.
"One way is to keep R & D centers in coastal regions. The other way is to relocate their production plants and service sector to inland areas," said Mei Lianghua, executive VP of China Industry Transfer Investment Promotion Organization.
It's no coincidence such business giants are jumping into Western China all at once. Their presence is helping drive the local economy, which is in turn stimulating balanced growth in China.
China has given foreign enterprises access to the biggest market in the world. And their investment horizon has been expanding beyond eastern China. This tells us an undoubted truth: China's developing western and central areas are catching up with the east. More and more foreign investors will reap unexpected benefits from these regions.
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