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Sichuan: Market Profile

Major Economic Indicators

Economic Indicators2015Jan-Nov 2016
ValueGrowth
(%, y-o-y)
ValueGrowth
(%, y-o-y)
Gross Domestic Product (RMB bn)3,005.37.912,379.437.51
Per Capita GDP (RMB)36,7757.21
Added Value Output
   Primary industry  (RMB bn)367.73.71301.133.71
   Secondary industry (RMB bn)1,324.87.511,028.037.51
   Tertiary industry (RMB bn)1,312.89.515,050.238.71
Value-added Industrial Output2 (RMB bn)7.917.91
Fixed-assets Investment (RMB bn)2,597.410.22,688.912.2
Retail Sales (RMB bn)1,387.812.01,398.511.6
Inflation (Consumer Price Index, %)1.51.8
Exports (US$ bn)33.2-25.925.0-19.2
   By foreign-invested enterprises (US$ bn)15.3-25.114.20.2
Imports (US$ bn)18.2-28.118.915.4
   By foreign-invested enterprises (US$ bn)11.5-17.813.632.1
Utilised Foreign Direct Investment (US$ bn)10.0-2.8

Notes:
1 In Renminbi real term

2 For all state-owned and other forms of enterprises with annual sales over RMB20 million
3 Jan-Sep 2016

Sources: Sichuan Statistical Yearbook 2016, Sichuan Statistical Bureau; China Customs Statistics 12.2015 & 11.2016

 

General Background

Sichuan is located at the upper reaches of the Yangtze River in southwestern China. It has a total area of 486,052 sq kilometres. Total resident population stood at 82.04 million by end-2015. Chengdu, the capital of Sichuan, is the western hub for business and trade.

Sichuan is rich in natural resources and has the most well developed industrial sector in the region. Sichuan is also one of the major agricultural production bases in China, its output of rice, wheat, rapeseed, citrus fruit, peach, sugar cane, sweet potato and Chinese herbs all account for a significant share of China’s total.

The private sector in Sichuan has grown fast in recent years. The share of non-state activities in Sichuan’s GDP rose from less than 50% (46.9%) in 2006 to 60.7% in 2015. Sichuan has developed a number of famous local enterprises and brands, including the country’s largest colour TV producer – Changhong Electric Group Co. Ltd. (長虹); steel company – Panzhihua Steel Group (攀枝花), alcohol manufacturers – Wuliangye Group (五糧液), Jiannanchun Group (劍南春) and Luzhoulaojiao (瀘洲老窖); medicine manufacturers – Di’ao Group Company (地奥) and Di’kang Group (迪康); and animal feed company – New Hope (新希望).

Industries

While Sichuan is strong in agriculture, its industrial activities have expanded rapidly in the last decade. In 2015, the secondary sector accounted for 44.1% of its GDP, up from the level of 36.5% in 2000.

 

Composition of GDP (%)

 20002015
Primary24.112.2
Secondary36.544.1
Tertiary39.443.7

Source: Sichuan Statistical Yearbook 2016

 

Nowadays, Sichuan is one of the most industrialised provinces in western China. While heavy industries (66% of the gross industrial output value in 2015) such as coal, energy and iron and steel remain as dominating sectors, the province has also established a light manufacturing sector comprising electronics, building materials, wood processing, food, silk processing, etc.

Sichuan’s production of TV sets, natural gas, electricity, steel, cement, Chinese medicine, wine and chemical fibre is among the largest in western China. Notably, the production of “telecommunication equipment, computer and other electronic equipment” has continued to increase rapidly and its share in gross industrial output increased from 5.5% in 2010 to 10.2% in 2015.

 

Output Share of Leading Industry Groups (2015)

 % share of gross industrial output #
Food and beverage, farm byproducts processing16.3
Telecommunication equipment, computer and other electronic equipment10.2
Nonmetal mineral products7.0
Raw chemical materials and chemical products6.4
Automobile manufacturing6.0
Smelting and pressing of ferrous metals5.4
General purpose machinery manufacturing4.9

# For all state-owned enterprises and other forms with annual sales over RMB20 million
Source: Sichuan Statistical Yearbook 2016

 

Sichuan’s high-tech industry has been developing fast. In 2015, high-tech products accounted for 46% of its total trade in value terms. Sichuan has more than 70 universities and two state level hi-tech industries development zones – The Chengdu New and Hi-tech Industries Development Zone (CDDZ), and the Mianyang New and Hi-tech Industries Development Zone (MYDZ). These zones have attracted a number of internationally renowned IT companies such as Microsoft, Cisco, Intel, IBM and Motorola to set up R&D centres.

Sichuan is richly endowed with herbs (around 5,000 species) and is the home to many senior Chinese medicine doctors. Sichuan is strong in R&D of modern Chinese medicine. Chengdu is selected by the Ministry of Science and Technology to set up the first state-level Modernized Science and Technology Industry Base for Traditional Chinese Medicine.

Tourism

Sichuan has abundant tourism resources: it is home to the giant panda; it has four world natural heritages and nine national AAAA grade nature parks, the largest number in China. Its internationally famous scenic attractions include Mt. Emei (峨眉山), Jiuzhaigou Valley (九寨溝) and Dujiangyan Irrigation System (都江堰).

 

 2015% change
Number of overseas tourist (million)2.712.5
Foreign exchange income (US$ mn)1,18137.3

Source: Sichuan Statistical Yearbook 2016

 

Foreign Trade

Sichuan’s foreign trade grew strongly in the past few years. It is the leading export base in the western region. Major export markets in 2015 included the US (22.4% of the total), Hong Kong (11.3%), Malaysia (6.1%), the Netherlands (5%) and Japan (4%). Major export products included computer products (29.1%), integrated circuits (6.3%), jewellery (4.3%), garment (2.8%), footwear (2.9%) and steel (2.8%).

Major import sources in 2015 were the US (28.3% of the total), Japan (10.2%) , Taiwan (7.5%), South Korea (7.2%) and Malaysia (6%), and with integrated circuits, minerals, printed circuit boards and testing apparatus being the major import items.

As a result of increased foreign investment in recent years, foreign trade conducted by foreign investment enterprises has risen. In 2015, exports conducted by FIE accounted for 46% of the province’s total exports.

Foreign Investment

 

Chart: Utilised FDI of Sichuan
Chart: Utilised FDI of Sichuan

 

Sichuan came first in attracting FDI among all western provinces. Prominent multinationals like Intel, Onsun, Sony, UPS, Sanyo and Kingfisher have invested in Sichuan, especially in its capital Chengdu. By the end of 2015, 219 of the world’s largest 500 overseas companies have invested in Sichuan.

Consumer Market

Sichuan has the biggest consumer market in western China. In 2015, annual per capita disposal income of urban households reached RMB26,205 (+8.1%).

 

Composition of Per Capita Expenditure of Urban Household (%)

 20002015
Food41.535.2
Transportation & communications6.312.5
Clothing9.68.8
Recreation, cultural & education12.910.2
Residence4.617.3
Household articles8.66.5
Medicine & medical services5.57.1

Source: Sichuan Statistical Yearbook, 2016

 

Since China fully liberalises the retail and wholesale distribution sector, the expansion of foreign retail enterprises into Sichuan has speeded up in recent years. Major foreign retail enterprises include Metro (麥德龍) from Germany, Carrefour from France, Trust-mart (好又多), Pacific (太平洋) from Taiwan, Itoyokado (伊藤洋華堂) from Japan, and Parkson (百盛) from Malaysia.

 

Economic Indicators of Major Cities (2015)

CitiesGDP
(RMB bn)
Per Capita GDP
(RMB)
Gross Industrial
Output #
(RMB bn)
Retail Sales
(RMB bn)

Exports
(US$ mn)
Chengdu (成都) 1,080.174,2731,193.3494.623,974
Zigong (自貢) 114.341,447170.450.2266
Panzhihua (攀枝花) 92.575,078154.628.6219
Deyang (德陽) 160.545,701305.961.62,384
Mianyang (綿陽) 170.035,754244.487.91,921
Leshan (樂山) 130.139,973153.455.2687
Yibin (宜賓) 152.634,060202.467.6636

Notes:  # For all state-owned enterprises and other forms with annual sales over RMB20 million
Source: Sichuan Statistical Yearbook, 2016


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