Laptop manufacturing accelerates Chongqing’s growth

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Chongqing is the fastest-growing industrial region in central China. The recent resurgence of this industrial city has been fuelled by electronics manufacturers, particularly those producing laptops.

Located in central China, Chongqing is known as a hub for heavy industries. Metal production, engineering works, building materials, manufacturing and chemical industries are still important sources of income, but it is the electronics that are leading the city’s unprecedented industrial boom.

According to The Economist, Chongqing’s economy grew 16.4 per cent last year – significantly more than the national average.

HP lures in competitors

Other inland growth centres such as Chengdu and Xi´an are Chongqing’s main competitors for investments and high-tech companies. So far the most visible industrial segment to arrive in Chongqing has been the manufacturers of portable computers. HP was the first one to settle into the city, and Acer and Asus followed with their own manufacturing plants. Contract manufacturers that assemble these machines were the next ones to arrive. The production of electronic components is also quickly growing.

Tomi Asikainen, area director of Finnair Cargo in Asia, points out that Chongqing’s goal is to be the world’s leading manufacturer of laptop computers.

”If they reach this goal, every fifth laptop will come from Chongqing in the future,” he says.

Car manufacturing is another growing area of industry. A large portion of cars and motorcycles sold in China are currently made here. Ford, for example, is a shareholder in a large auto plant in Chongqing.

One of China’s main construction sites

Chongqing is governed directly by Beijing’s central government. It is an autonomous region with roughly 33 million inhabitants. Two thirds of them live in the surrounding countryside.

Companies are drawn to Chongqing by a labour force that’s more affordable than in the coastal regions, as well as monetary incentives provided by the Chinese government. New jobs in this growing metropolis attract more and more people from the surrounding regions, and new residential neighbourhoods have popped up in the city in recent years.

The building boom continues. The most notable individual development project has been the financial centre of Liangjiang. The area has been compared to Shanghai’s Pudong as a rising hub for production and logistics, and it’s predicted to be the future home of about six million people.

Finnair provides a direct connection to Europe

The city’s growth is also supported by major investments in infrastructure. One of these projects is the expansion of the current airport, which will allow it to compete with international hubs. According to Asikainen, additional capacity is sorely needed in both passenger and cargo traffic.

”One of the bottlenecks encountered by areas with growing electronics industries is the absence of direct connections abroad. The situation is now improving, however,” he says.

On May 9 of this year, Finnair will open a route between Helsinki and Chongqing. For companies utilising air cargo, it is one of the first direct connections to Europe.

”We are expecting the majority of air cargo from Chongqing to be laptops and their accessories. From Europe, however, the main cargo items will be consumer products and components for auto industries,” Asikainen estimates.

Text by Matti Remes
Photo by iStockphoto

 

Published April 25, 2012

Category: Market updates

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