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Valuable Advice from Investors on Chongqing's Development

By JIEYU WANGTAN, KAILONGICHONGQING|Oct 10,2020

On September 29, Chongqing held an investment project promotion, at which 150 investment projects of all types were promoted to China’s top equity fund management organizations. What should Chongqing do to optimize the business environment and make the best of investment opportunities to boost high-quality economic and social development? Heads from China’s top eight investment agencies shared their insights.

Chongqing Jiangbeizui Central Business District.

Government and market give full play to their respective roles

CDH Investments: We want to talk about Chongqing’s advantages from the perspective of investment and discovery of project investment opportunities; we have

known this from previous engagement with some districts/counties and enterprises in Chongqing. We are willing to cooperate with the city and seek out common development opportunities that are in line with Chongqing’s development strategy and, at the same time, can satisfy our demand for making a profit as a market investor. This promotion indeed offers us a good platform to find projects and opportunities.

Our next move is twofold. First, we will maintain close engagement with relevant parties better to understand fields and space for investment in Chongqing. Second, we will organize investment teams to Chongqing regularly to provide whatever support relevant Chongqing parties need for better matchmaking and execution around investment.

Focusing on “Key & Core Technology plus Digital” is reaping benefits brought by the era

IDG Capital: This promotion has gathered plenty of projects, and most of them are good opportunities for investment, especially in Chongqing. Mixed-ownership reforms in State-owned enterprises are supported by equity fund investment organizations and Chongqing alike. So, this is quite a golden opportunity. Chongqing’s mixed-ownership reforms in department stores have been gotten off to an excellent start, and we hope to invest in more enterprises with good prospects in Chongqing and help them go public.

From the perspective of investment, every era has its own dominant technology, and in the case of the current Fourth Industrial Revolution, it is Key & Core Technology plus Digital. Therefore, Chongqing must make a concentrated effort around this theme. As far as we’re concerned, Chongqing should continue to align itself with World Bank standards, build a world-class business environment at a faster pace, and create an atmosphere that is more supportive of venture capital investment.

Investment promotion entails efforts in the investment environment

Legend Capital: Chongqing is working hard to develop businesses that can lead the way in some market segments. We hope in the foreseeable future, Chongqing’s enterprises can occupy a leading position in NEV and electronic information, at least in China and even all over the world at large. If successful, this will boost Chongqing’s upstream and downstream industrial chain and draw more enterprises to Chongqing. We like Chongqing’s development atmosphere, which is in line with our investment standards. Next, we will conduct further discussions with Chongqing on investment.

Successful investment promotion entails advanced hardware, abundant resources, preferential policies, and a stable and level playing ground. As a result, Chongqing must beef up efforts in system building and investment environment construction if it wants to develop a new competitive edge in investment promotion. Discrimination in its all forms should be eliminated while treating all investors on the same footing encouraged. Meanwhile, enhancing soft and hard strength should go hand in hand and optimize the environment and services. So far, Liangjiang New Area is home to industry leaders like BOE Technology Group Co., Ltd., and Chang’an Automobile and upstream and downstream enterprises that support their development. This speaks volumes about Chongqing’s sound hardware and software conditions for investment.

Beef up efforts around the Western (Chongqing) Science City

CICC: China International Capital Corporation Limited (CICC) is a leading investment bank and agency in terms of professionalism and international influence. As far as we’re concerned, Chongqing’s economic and social development should focus on two aspects. First, efforts should be stepped up from top to bottom, especially in big data intelligence and with the Western (Chongqing) Science City as the key fulcrum to build a comprehensive implementation framework. In particular, on the development of scientific research centers, alignment between scientific research and industrialization, and construction of scientific research institutes in universities, a system conducive to the introduction of scientists and their research should be built to help bring in scientists who can potentially advance the commercialization of research achievements or have interests in working in this field.

Second, efforts should also be ramped up from the bottom to top with a specific focus on optimizing financial ecology. As Chongqing positions itself to become an international financial center in China’s interior, more than 40% of Chongqing’s foreign trade is carried out with ASEAN. Notably, most of Chongqing’s foreign trade is from vertical e-commerce, whereas the Yangtze River Delta’s focus is on business-to-consumer e-commerce. As the Internet moves into the business-to-business era, vertical e-commerce will flourish. It will even thrive better than expected if some improvements can be made in data and financial infrastructure.

Advise to build a national application scenario center

Hillhouse Capital: Chongqing needs to further strengthen the promotion and application of local medical research, including medical devices and biomedicine, in local hospitals. Boasting great advantages in core components of life sciences and medical devices, the city should create its own application scenarios and build itself into a national application scenario center to attract more medical technology enterprises. Besides, its state-owned enterprises and military industry system have trained a great many talented people. It is a good sign that some technical professionals started their own businesses recently, and the city should help them allocate resources, innovate, and develop their own businesses.

Talented personnel as a paramount resource

Sequoia Capital: Capital is important for corporate development and project advancement, but excellent professionals are paramount, so attracting talent is the key.

Chongqing should introduce enterprises and make them establish their second headquarters in the city. In this way, talented persons, including some senior executives, will also be attracted to the city, and they might be the potential chief executive officers of startups. What’s more important is that Chongqing needs to help inexperienced young people through relevant training to obtain market opportunities and carry out the transformation of scientific research achievements to make them the new force of innovative enterprises.

Moreover, with competitive advantages in business, living, and policy environments, Chongqing should attract a group of high-end professionals like overseas returnees to start businesses and settle down in the city.

Patience and endurance essential for developing enterprises

Oriza FoFs: Chongqing should pool strength to carry out major undertakings. When formulating industrial development plans, Chongqing should first carry out an insightful overall design and integrate and coordinate resources; otherwise, it would result in inefficiency and unnecessary waste. Developing small companies requires a long-term devotion facing high risks compared with bringing in big ones, but big ones are all built from the ground up. Some regional authorities lack patience with developing enterprises, and they are wrongly eager for quick success and instant benefits. They should take their time to build a favorable business environment.

Intermediary services as the essential infrastructure for the venture capital investment environment

China Renaissance (CR): Intermediary agency services are the essential infrastructure for improving the venture capital investment environment, which is significant for bolstering government investment and project construction. Many of the projects promoted by Chongqing today are of great value, but their large

investment and financing needs cannot be met by these eight

institutions’ fund investment. Despite these institutions’ top-ranking strength nationwide, their annual investment volume is limited. Therefore, the key to meeting these needs lies in further optimizing Chongqing’s venture capital investment environment and improving its business and service environments. It is suggested that more efforts be made on the infrastructure construction of intermediary services.

CR will then cooperate with Chongqing to establish its affiliated branches so that it will truly take root and blossom in the city and contribute to the city’s infrastructure construction of venture capital investment.

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