Chengdu changes

The government of Chengdu, capital of Sichuan province, plans to invest 20 billion yuan in its planned software mega-center, Tianfu New City this year.

Located alongside Tianfu Avenue - the axis for Chengdu's technology and commerce center - Tianfu New City will be a sci-tech business city highlighting software and service outsourcing industries.

The city will cover a floor area of 37 sq km, with a planned construction area of 60 million sq m, says Liu Pu, vice-mayor of Chengdu.

According to Liu, the city, slated for completion in five years, will accommodate 600,000 employees, and half of who will be from the software and service outsourcing industries.

At present, 32 projects are under construction.

The Chengdu government expects the city to become a new landmark in western China, just like Shanghai's Pudong New District.

"Developing outsourcing industries will bring Tianfu New City opportunities as well as challenges," says Zhao Yue, professor at the Hong Kong University of Science and Technology.

Statistics show that the software outsourcing industry has grown steadily in recent years and the industry output is estimated to be $600 billion by 2010. But Chinese enterprises were small in the industry, accounting for only 3 percent in 2004.

"I'm confident about this 'Silicon Valley' of Chengdu," Zhao says, adding that the city would be able to improve the global competitiveness of enterprises in Sichuan through its outsourcing services.

But "financing would be an important issue for the new city's development", says Liu Xiliang, professor from Southwestern University of Finance and Economics.

According to him, the development of the city should depend more on sustainable capital investment.

In comparison, he says that such financing played an important role in developing Shenzhen, Guangdong province from a fishing village into a modern city, and the high-efficient financing mechanism in Pudong has driven the development of the Shanghai municipality as a whole.

"We need to consider how to make use of government funds to attract more capital investment, how to build up a regional equity trading market, and how to develop a financial service outsourcing cluster," says Liu.

CBW News

(China Daily 04/28/2008 page10)