Trade Mission to Sichuan - AmCham China

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Trade Mission to Sichuan - AmCham China

(From left) AmCham-China Vice

Chairman Jim Gradoville, Chairman

Emory Williams and Sichuan Vice

Governor Huang Xiaoxiang

(From left) Shi Zhenghua, deputy director general of Sichuan’s

Department of Commerce, AmCham-China Chairman Emory

Williams, Mianyang Mayor Tang Limin, Sichuan AmCham

Chairman Benjamin Wang and AmCham Member Firth Griffith.

Leshan-Phoenix was one of numerous businesses visited.

The delegation met with officials in three Sichuan cities.

The trade mission brought AmCham-China members together

with provincial and municipal officials.

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Trade Mission to Sichuan

b y

K i p p y Y e

AmCham-China’s latest provincial visit took delegates to three cities in this

south-central province to meet officials and tour local businesses.

AmCham-China Chairman

Emory Williams

led a delegation of 20

member companies

on a three-day trade

mission to Sichuan, November 15 to

18, at the invitation of provincial Vice

Governor Huang Xiaoxiang. The delegation

got a sense of the investment climate

in Sichuan by meeting top city

and provincial leaders, visiting companies,

and having a breakfast meeting

with local AmCham members and U.S.

business representatives who have

established local operations. The Sichuan

American Chamber of Commerce

was instrumental in planning the

trip.

The delegation visited the cities of

Mianyang, Leshan and Chengdu, and

received three unique perspectives on

what Sichuan has to offer. The first

stop was Mianyang, which is Sichuan’s

second largest economic center and is

strong in the predominantly stateowned

and labor-intensive electronics

assembly industry.

In Mianyang, the delegation visited

a privately owned company, Sichuan

Fengtai Group, which specializes

in packaging and printing. The growing

private business sector in Sichuan

provides fertile ground for small foreign

investment funds. In this case, the

U.S.-based Sichuan SME Investment

Fund became the foreign partner of

Fengtai. With USD2.5 million in investment,

the fund acquired a 25 percent

equity interest of this business, which

has been growing at a rate of 50 percent.

The acquisition of a domestic

packaging company prior to becoming

a foreign Chinese joint venture was

critical for its growth.

In Leshan, the delegation visited

three privately owned businesses. One

of these companies, Leshan-Phoenix

Semiconductor, is a joint venture with

USD500 million of investment, and

with an additional USD30 million

coming its way, it is undergoing expansion.

While many foreign investments

are tending toward being wholly owned

foreign enterprises (WOFE), the foreign

management team of this operation is

working successfully with its Chinese

partner and the local government, and

says it is determined to continue making

this joint venture work.

The delegation then stopped at

Mingxing Cable, a private Chinese

business funded by investment from

the eastern coastal region and was told

that Chinese private businesses are

much faster in identifying potential

business opportunities in Sichuan than

are foreign companies. It also visited Ji

Xiang Plantation Timber Products. Earlier

this year, CVC, a foreign venture

capital fund, acquired 85 percent of Ji

Xiang’s equity interest. The company

produces fiberboard and is the biggest

of its kind in Asia. Some 600,000 farmers

within a 100-kilometer radius are

engaged in planting fast-growing trees

in order to supply raw materials to this

plant, thus raising their incomes.

Chengdu is the economic center of

Sichuan and the region as a whole, and

it was here that the delegation visited

a number of high technology companies.

Aerotech, a precision metal fabrication

company, is a WOFE that has

experienced 300 percent growth during

the last three years. The team also

stopped at Agilent and at Intel.

Among the key messages brought

back by the delegation is that there is

no shortage of qualified engineering

technical staff in Chengdu. In fact, the

low turnover rate of technical staff at

the operations level, in contrast to the

high rates in eastern coastal regions,

makes Chengdu even more attractive

to investors. The recent decision by

U.S.-based high-tech company Conexant

to set up a design center in Chengdu

reinforces this point.

The delegation saw that aside from

industries focused on high value-added

products, much business in Sichuan

focuses on serving the regional market,

of which Chengdu is the hub. It was

also evident that foreign companies in

the service sectors, such as accounting,

real estate, insurance and logistics,

have started to move into Sichuan in

response to the current and expected

market demand. All in all, the trip gave

delegates many first-hand insights into

the commercial environment in Sichuan

and an opportunity to meet with

local officials and business

people.

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