Sichuan’s Role in China’s Overall Development

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Table of Contents

Introduction
Sichuan Demographics
Sichuan role in China Overall Development
Foreign Investment (Current and Future)
Environmental impacts
Linkage
Potential Challenges shortly
References:

Introduction

Sichuan is one of the provinces in western China. Its capitals city is Chengdu. The province is surrounded by the Himalayas Mountains, on the Sichuan basin. On the west, its border Qinling province, the mountains area of Yunnan forms the southern border.

Sichuan has two distinct climates, the western area is characterized by a mountainous climate with cold winters, and plenty of sunshine in summer. The eastern half of Sichuan including the capital Chengdu has a tropical monsoon climate with cloudy and dry winter, and warm, humid summer. Sichuan shares its border with the following provinces; Tibetan autonomous province, Qinghai, Yunnan, Gizmo, and Chongqing municipality.

Sichuan Demographics

The Sichuan population is estimated at million people as of 2007, with the Han Chinese forming the main ethnic majority group. Tibetans, Kiang, Yi, Naxi, Mongolia, Tujia, Lisu, Dai, Miao, and Bouyei are the minority ethnic groups found in the western region of Sichuan. The Sichuan population is the second largest after Henan but due to the high number of local and foreign immigrants to the area, it has the highest number of people.

The ethnic composition of Sichuan does not play any significant role in Economic Development.

Sichuan role in China Overall Development

The standard of living for the middle class in Sichuan is very attractive with 1,100 US Dollars as the average per capita disposable income per person, per year with increased growth by 8% per annum. Sichuan GDP currently stands at US 120 Billion dollars with economic growth currently stands at 15%

Sichuan has witnessed accelerated development in the recent past into a high-tech, modern industrial base. A local and foreign investor has responded to calls to invest in the provinces in the past few years. Today, Sichuan is one of the main industrial bases in China. There are heavy and light industries, all contributing to the industrial output of Sichuan and China in general.

Heavy industries include; steel, iron, energy, and coal while light industries comprise food processing, wood, building materials, silk processing, Information technology, and pharmaceuticals. Xiangyang, Luzhou, Nanchong, and Chengdu host Electronics Industries, Auto Manufacturing, and Textiles Industries. Yibin is an important base for Wine Production, Heavy machinery industries are based in Deyang while the Panzhihua area forms the production bases for metallurgy.

Military and Aerospace Industries are other important industries in Sichuan province. The province is renowned for having hosted most of China’s Satellite and Rocket Launching where most rockets and satellites have been launched at Xichang Satellite Launch Center in Xichang city. Through the Sichuan region, the Government of China can compete with the leading world power in Technological Advancement.

Due to the favorable climate, historical relics, and beautiful landscapes, tourism is a thriving business contributing to the growth of Sichuan and China in general. Three world-renowned Natural Heritage and cultural sites are found in Sichuan, there are over 40 Nature Reserves, 11 National Forest Parks, and over 40 marked scenic areas. International Tourism to the Sichuan region fetches the Chinese Government a lot of money. Besides, the people from other regions benefit directly by visiting the Sichuan region as tourists.

There are more than 130 different kinds of underground minerals in Sichuan province. These include Titanium, Vanadium, and lithium. Of the whole country, the Panxi region has more than 75% of the total lithium, cobalt, and vanadium found in the whole of China. This places Sichuan province at a strategic place to the economy of China as mineral-related industries benefit greatly from these reserves.

Sichuan Economy affects the entire China Economy on all fronts. Exports of goods from Sichuan to other countries fetch China over 2.5 Billion Dollars. The central government in turn uses the wealth from this region to develop other regions of China which are undergoing slow Economic Development.

Foreign Investment (Current and Future)

Of all regions of China, Sichuan is receiving most of the New Foreign Investment than any other region in China, attracting over 5000 foreign-funded business ventures in the past 3 years alone. Foreign investors have invested in Tourism based industries, construction, and infrastructure, Information technology, Agriculture development, High technology projects. Etc.

Out of the 5000 foreign investments, 50 world large corporations are already in operation in Sichuan. They include;

Motorola, Coca-Cola, Pepsi Cola, McDonnell Douglass-United States
Bayer, Siemens-Germany
Toyota, Mitsubishi-Japan
Chit Chat-Thailand
The President Group, dealing with food production-Taiwan

Recent investments launched in the Sichuan region include;

Microsoft R&D center of video games launched in September 2006.
Bio-tech Industry garden in Chengdu was launched in September of 2006.
Establishment of Maersk shipping line subsidiary Feb. 2007.

Sichuan can continue attracting foreign investment in the next 10 years due to its overall characteristic.

As countries continue to relocate to the Asia region and in particular China in search of cheap labor, it’s evident that Sichuan has positioned itself as one of the favorites destinations with a population growth of over 80 million people.

The world’s largest dam, Three Gorge Dam, ever to be constructed, is in its last phase in Hubei, in Sichuan province. The main purpose of the dam is to control the flooding of Sichuan and neighboring Yunnan provinces. The completion of this dam will boost the current Sichuan power of 150 million watts by a considerable percentage. This will further boost Sichuan as a major foreign investment destination.

The Sichuan authority has a compressive arrangement for land leasing for that foreign investor who wants to set up industries and bases in the Sichuan region.

Sichuan has the most stable Macro-economy in china and has the most rapid economic growth in China. This growth has promoted china’s economy to be the fastest-growing economy in the world. A growing economy is likely to attract foreign investment than a stagnating economy.

Improved government efficiency is rapidly changing the negative foreign investor perception on Sichuan, there is increased perfection of infrastructures and all this are working toward the attraction of foreign investment.

Some of the projects slated to be offered to a foreign investor shortly are:

Energy savings and production.
Communication infrastructure development.
Products exports.
Provision of Higher Education.
Ecological and environmental protection.
Development of agricultural processing and products using new technology.
Forestry development
Tourism development

All these factors favoring direct and foreign investment in the next 10 years will help Sichuan build a strong economic foundation making it a favored investment definition for many years to come. Sichuan will remain a powerhouse and continue to be the power for the next 20 years.

Environmental impacts

With continued economic growth, Sichuan environmental crisis is getting worse. Their authority is quite aware of the difficulties facing Sichuan province, but there is always a problem with the implementation of the solution. A good example is the construction of three gorge dams in Hubei, which directly damaging the ecology besides rendering people homeless.

Environmental impacts resulting from Mining in the Sichuan region can not be ignored. The natural environment is disturbed making the area vulnerable to erosion and other damages. Besides people are being displaced to give way to mining companies to set up bases in those regions.

Many Industries and motor vehicles use fossil fuel leading to pollution of the atmosphere, and the destruction of the ozone layer. The resultants effect of Global warming is very evident in China and the entire world.

Linkage

Airports

The Chengdu Shuangliu Airport links the whole world with china. It’s one of the busiest International airports in china. Other airports linking Sichuan and other parts of china are Xichuang, Yibin, Dachuan, Nanchong, and Luzhou civil airports.

Roads

Sichuan Boast of a total of 360 express highways covering over 90,000 kilometers. A union of over 41 enterprises going by the name Singapore-China-Hong Kong group has financed the Chengdu-Mianyang highway opening up Sichuan to the west.

Potential Challenges shortly

Export Risk

Sichuan economy is based on export since the begging. The entry of China to the world Trade organization in 2001 provided a further boost to Sichuan Export as an investor from all over the world flocked Sichuan province to undertake off-shore manufacturing. While the increased level of trade has boosted the Sichuan region, on the other end, it has left Sichuan in vulnerable market trends. In this regard, the Sichuan authority and the Chinese government must work together to offset these risks and disengage Sichuan’s economic future from those of its export market.

Energy Crisis

Sichuan, just like the rest of China is faced with energy challenges. Increased industrial growth means an increased energy use. China’s oil reserves are not adequate to cater to all industries including those in the Sichuan region. There is the risk of oil prices shooting up as the authority in Sichuan expands supply to meet the demand.

The Sichuan authority will have to fund the Chinese Government more money to explore another overseas source of oil. Failure to secure more oil reserve means Sichuan may be at a one-time halt to a stop due to a lack of energy.

References:

Brian Hook (1991) the Cambridge Encyclopedia of China, Cambridge University Press, United Kingdom.

Christopher M. Clarke (1982) Gale publishers, United Kingdom.

Gregory C. Chow (1987) The Chinese Economy, world scientific publisher, china.

Thomas Gale (1987) People’s Republic of China Yearbook, Thomas Gale Publishers, China.

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