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Business / Economy

Foreign investment eyes Chongqing's connections

By Luo Wangshu and Ji Jin in Chongqing (China Daily) Updated: 2014-01-21 14:06

Diplomats see the traditionally competitive cities in southwest China, Chengdu and Chongqing, as instrumental in developing the economic power of the region, expecting more foreign investment and cooperation opportunities.

"About 500 German companies are about to invest in the southwestern region in the next three to five years, especially in Sichuan and in Chongqing. The figure accounts for 10 percent of German companies already engaged in China," said Jens Kraus-Masse, deputy consul general of the consulate general of Germany in Chengdu, after the opening of the Chongqing People's Congress - the local legislature - on Sunday.

Kraus-Masse agrees that Sichuan and Chongqing are competitors. However, he sees the competition as an opportunity to drive the development of the whole region.

"The competitors are able to attract much investment, enough to develop the secondary cities in this area. The entire entity can therefore create an economic and social development center," he said.

"In Germany, there are also major cities in this competitive situation. In our case, the major cities also attract much investment, enough to develop the small cities. The region as a whole has been developed," he said, adding that the consulate attempts to develop the whole region, aiming to make it a stronger economic entity.

Tamas Hajba, consul general of the consulate general of Hungary in Chongqing, echoed his German counterpart's views, saying that the two cities cannot be separated.

"The central government has decided to open up the area and establish the Chengdu-Chongqing Economic Zone, aiming to develop the economy in this region," he said.

He also said all of Europe is pursuing ore investment and cooperation in the southwest region of China, as is Hungary itself.

"This region is maintaining a fast pace of development. Compared with the coastal areas, there are more opportunities. The growth in gross domestic product is very high," Hajba explained.

He also believes that less competition and lower costs are key drivers for European companies to move to the southwest.

"Many big companies and countries have already invested in big cities in China and coastal cities. There will be strong competition with them if they settle there. However, the competition in the southwest region is comparatively less," he said, adding that the southwest region provides lower labor, energy and property costs than coastal cities.

He estimated the cost in Chongqing might be 30 to 40 percent lower than that in coastal areas.

Companies are also showing their interest in the region.

The former prime minister of Sweden, Goran Persson, led the Sweden-China Trade Council Green Tech delegation to Beijing and Chongqing in January, to discuss possible cooperation opportunities.

He told China Daily the reason for companies choosing Chongqing was because of its highly ambitious economic growth in this region.

"I'm extremely satisfied with the active and strongly growing region," he said.

In the first three quarters of 2013, Chongqing's GDP growth was 12.4 percent, ranking it third in China.

Its full-year GDP is expected to reach 1.3 trillion yuan in 2013, according to the Chongqing Foreign Trade and Economic Relations Commission.

Exports and imports amounted to $68.7 billion in 2013, ranking it 10th in China and first in the midwest region.

Persson also values Chong-qing as a center of convenient logistics.

"Chongqing is a transportation center, connecting the world with the ocean and railways. The railway connecting to Europe provides a convenient logistics choice to companies," he said, adding that Chongqing has an open attitude to foreign investment.

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