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Nation
Land of Abundance
Sichuan taps Belt and Road for overseas partnerships
By V. Apurva | NO. 35 AUGUST 31, 2017

A section of the highway in Ganzi Tibetan Autonomous Prefecture, Sichuan Province (XINHUA)
It has the sixth highest GDP in China, the largest potential for hydropower generation and is the gateway not only to China's west, but also to Southeast Asia's developing markets. It's also home to pandas.

But it's not enough, and Sichuan, a southwestern province of China, is on a mission to climb the GDP and development indicator rankings in the country, using the Belt and Road Initiative.

"The land of abundance" is already hard at work. In 2016, Sichuan recorded a GDP of 3.2 trillion yuan ($464 billion). That's a 7.7-percent growth on 2015. The total volume of imports and exports reached $49.33 billion; the auto sector output reached the million mark; 316 Fortune Global 500 companies have settled here.

"We are very high on the development rank in China and rank sixth in terms of GDP, but we can and will climb higher," said Xiao Yonggang, Deputy Director of the Protocol and Information Division of the Department of Foreign and Overseas Chinese Affairs of Sichuan.

Kan Zelan, an official with the Sichuan Provincial Development and Reform Commission, explained that Sichuan's primary, secondary and tertiary industries experienced profound transformations in 2016. It is the secondary and tertiary industries that contribute the most to the province's economy.

Statistics released earlier this year show growth in the secondary and tertiary industries was double the growth of the primary industry. "The proportion of the tertiary industry amounts to 45.4 percent, larger than the proportion of the secondary industry, meaning that the economic growth pattern of Sichuan has changed from a focus on industry to the joint orientation of service and industry," said a statement from the Information Office of Sichuan Provincial People's Government.

A section of power grid in Sichuan Province that transmits hydroelectricity (XINHUA)

Four priorities

According to Kan, the provincial government is now paying more attention to the secondary industry, particularly information technology (IT), power generation equipment manufacturing, the auto sector and food processing.

"In recent years, Sichuan has attracted many top IT companies, for example, Intel and Foxconn. The total volume of our IT industry is around $100 billion. Electricity generation is also an important part of the secondary industry," Kan said.

Located between the Qinghai-Tibet Plateau and the Sichuan Basin, the province has huge potential for generating hydroelectricity due to geographical advantages. "Sichuan is one of the largest provinces in China to produce clean energy, which is mainly from hydropower. Nearly all the equipment for power generation—hydro, wind, nuclear and solar—is manufactured in Sichuan. In terms of power generation equipment, the output has ranked No. 1 for seven years," said Kan.

Also on the list of priorities is the auto industry, which ironically was "lost" in 1997, when Chongqing was carved out from Sichuan as a municipality directly under the Central Government. "At that time, the auto industry was moved to Chongqing, so over the last 20 years, we have had to start from zero," said Kan.

In recent years, Sichuan has attracted automakers like Toyota, Volkswagen, Honda and Volvo, and now the annual output surpasses 1 million. The growth rate of the auto manufacturing industry has reached 14.2 percent, accounting for 6 percent of the province's industrial output. "We are among the most important auto production bases in China," Kan said.

Agricultural produce and food processing make up the final priority sectors for Sichuan. "The output in Sichuan can not only meet the demands of our people but help citizens in other provinces as well. We have to work on developing a modern transportation system to help sustain this economic and industrial development," Kan said.

Overcoming hurdles

The eighth century poet Li Bai, who lived during the reign of the Tang Dynasty (618-907), had famously said that it was more difficult to get into Sichuan than going into space.

Sandwiched between the Qinghai-Tibet Plateau to the west and mountains on the remaining sides, Sichuan's transportation network was once described as "complicated" at best. The region is also prone to earthquakes, an important factor to be considered in the design of infrastructure.

A county in Ganzi Tibetan Autonomous Prefecture was the last county in the province to be made accessible by highways in 1984. "Since the reform and opening up, we have invested a huge amount of money in our transportation capacity building and infrastructure," Kan said.

Figures from 2008 tell the story: the length of highways in Sichuan then reached 224,000 km, over 26 times more than what was available 40 years earlier. According to the provincial development and reform commission, Sichuan now has 27 connecting routes including water and land routes. This comprises nine railways, 17 expressways and one waterway. "Because of the present comprehensive transport system, we can reach neighboring provinces from Chengdu, capital of Sichuan, in less than four hours," Kan said.

Sichuan boasts the fourth largest airport in China, the Chengdu Shuangliu International Airport, and the construction of another international airport is underway. "By 2019, when the first stage of the new one, Tianfu Airport, is complete, its throughput will be the same as Chengdu airport's. This comprehensive transportation system has helped bring change," said Kan.

Spreading wings

Against the backdrop of the industrial and economic development, Sichuan has also stepped up "reform and opening up," particularly with impetus from the Belt and Road Initiative. A rail line of China Railway Express, which originates in Chengdu, can reach Poland in just 12 days. Sichuan is expected to utilize close to $9 billion every year to foster foreign investment.

"Cooperation between Sichuan and developing countries will help us both. We hope to enhance exchanges and cooperation with other countries, especially developing countries. Exchanges, mutual learning and economic complementarity between developing countries play an important role in the economy," said Kan.

It is not only the government that is driving growth in Sichuan. The robust private sector has been quick to leverage the Belt and Road Initiative to expand across Asia, particularly to infrastructure-hungry Asian markets. The share of non-state activities in Sichuan's GDP rose from less than 50 percent in 2006 to 60.7 percent in 2015.

Take the China Railway Eryuan Engineering Group Co. Ltd. (CREEC), a leading survey and design firm, for example. It has completed over 100 projects in more than 40 countries in Asia, Africa and the Americas.

According to CREEC Deputy General Manager Zhang Xuecai, the company wants to expand abroad using the Belt and Road Initiative as a springboard. "We want to expand abroad, particularly to developing economies where we anticipate an urgent need for infrastructure. For example, Bangladesh," he said.

In 2016, CREEC completed a double-track railway line between Tongi and Bhairab Bazar in Bangladesh. This is a 53-km line which was approved in 2013. The company is working on another railway project in Bangladesh and hopes to spread out in other infrastructure sectors like highways, bridges and even energy.

The Tongwei Group is a similar example. Already among the world's largest suppliers of aquatic, livestock and poultry feed, Tongwei is diversifying across the globe. "We have already close cooperation in many countries and are seeking more opportunities, particularly in South Asia and Southeast Asia," said Hu Rongzhu, Vice President of the group.

Tongwei is a photovoltaic enterprise covering solar cell production and construction of terminal photovoltaic power stations. According to Hu, the clean energy sector is growing far more rapidly than the company's established businesses.

Poverty addressed

Sichuan is determined to meet its poverty alleviation targets by 2020. From 6.25 million people living in poverty in the province in 2013, the number has reduced to 2.27 million this year.

"The challenge now is that we have limited time," said Zhang Haipeng, Deputy Director of Sichuan Provincial Poverty Alleviation and Immigration Bureau. Sichuan received the highest grade of evaluation in the implementation of the Central Government's poverty alleviation work in 2016.

According to Zhang, leaders and government officials would be held accountable if the targets are not met. Inspections are held in 160 counties to ensure implementation of the policy.

"Several indices are checked and compared to ensure correct implementation. These include education, health and income. Officials found lax will be given a warning and if still no improvement is seen, they may even be removed," he said.

According to Zhang, poverty reduction is supported by industries in Sichuan, including IT, electricity generation, oil and gas, manufacturing, automobile and agriculture.

The author is an Indian journalist currently on a media fellowship in Beijing

Copyedited by Bryan Michael Galvan

Comments to zanjifang@bjreview.com

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