Chongqing- Recently, the research team of the Hong Kong Trade Development Council (HKTDC) released research on Chengdu-Chongqing Economic Circle, which provides a reference for Hong Kong investors to develop in Southwest China Sichuan Province and Chongqing Municipality.
The HKTDC is a statutory body established in 1966 to promote, assist and develop Hong Kong's trade. The research introduced professional studies from three aspects: manufacturing industries and scientific research, service industries and logistics, and consumer market and social development.
The city view of Chengdu and Chongqing. (iChongqing file photo)
GBA can expand into much larger markets
The direction of development of the Chengdu-Chongqing economic circle is to bring in more research and innovation factors not only to strengthen existing local industries but also to contribute to China's evolution into an innovative country.
Therefore, the development of manufacturing industries and scientific research in the Chengdu-Chongqing region will encompass in-depth cooperation in vital national strategies such as the integrated development of the Beijing-Tianjin-Hebei region, the Guangdong-Hong Kong-Macao Greater Bay Area (GBA) and the Yangtze River Delta (YRD) region. This region will establish a more comprehensive, safe, and reliable regional industry chain and supply chain.
For Hong Kong investors, the Chengdu-Chongqing region has relatively complete industrial chains, efficient logistics capabilities, adequate human resources, and stable power supplies. As such, the area is worth considering as a destination for expanding production capacity or industrial transfer.
Moreover, the area is also a vital hub for China's electronics, equipment, automobile, energy, agriculture, and pharmaceutical industries. These industries will receive more resources under favorable national policies.
The development of the GBA requires the in-depth integration of the industrial chains and markets in Guangdong and Hong Kong. Suppose companies can bring some of their research processes to the Chengdu-Chongqing region, linking up the area with Guangdong and Hong Kong. In that case, they can expand into much larger markets.
Chengdu Hi‑Tech Industrial Development Zone. (Photo provided to iChongqing)
HK companies can provide services to local businesses
Under the Master Plan for the Construction of the Chengdu-Chongqing Economic Circle, the Chengdu-Chongqing area will be built into a center of excellence for modern services. Hong Kong, one of Asia's foremost centers for services and logistics, has excellent scope for cooperation with the Chengdu-Chongqing area.
The Master Plan emphasizes coverage and suitability in developing the service sector in the Chengdu-Chongqing economic circle. The development goals are to create more economic value-added grant support to the transformation and upgrading of the manufacturing industry and expand economic and trade ties with other regions.
Guoyuan Port is becoming the center of Chongqing's inland international logistics hub. (Photo provided to iChongqing)
Hong Kong service industry players can capture the opportunities in the Chengdu-Chongqing area by providing services to local businesses. For instance, Hong Kong financial institutions can offer wealth management services to local high-net-worth individuals, while Hong Kong business consulting firms can provide consultancy services on environmental, social, and governance to local enterprises.
Meanwhile, Hong Kong companies can also offer international services to businesses in the Chengdu-Chongqing economic circle. Currently, enterprises in that area trust Hong Kong as an entrepot for their exports.
In 2021, the value of goods exported from Chongqing and Sichuan to Hong Kong totaled 73 billion yuan (about 10 billion U.S. dollars) and 48.4 billion yuan, up 69.6% and 18.5% year on year, respectively.
The Chengdu-Chongqing area can serve as an essential partner in logistics, so Hong Kong should provide more high-end logistics services, such as cold chain, electronics products, and luxury goods logistics, to the area.
A promising consumer market full of potential
The Chengdu-Chongqing region is a promising consumer market full of potential. It has a population of more than 96 million and has shown a higher growth rate than the national average in recent years in terms of GDP, household income, and total retail sales of consumer goods.
Peoples Liberation Monument in Jeifangbei Central Business District, Chongqing. (Photo provided to iChongqing)
The two places also emphasize urban renewal, night-time economy, first-store economy, and experiential consumption. Chongqing and Chengdu have been named among the top 10 influential night-time economy cities for three years, with Chongqing ranking first.
The enhanced spending power in the Chengdu-Chongqing region brings extensive opportunities for Hong Kong investors. Consumers will generate greater demand for mid-to-high-end goods and services. Hong Kong companies could regard the region as a strategic location for setting up the first offline brand outlets, launching new products, and experimenting with new retail concepts.
The Hong Kong Special Administrative Region government has deepened official cooperation with the Chengdu-Chongqing region in recent years. With the drive of the Chongqing, Sichuan, and Hong Kong governments, the Chengdu-Chongqing economic circle will offer more and more opportunities to Hong Kong and foreign investors.