"For example, many IT products are light and relatively expensive. Even if they are delivered by air, the transportation cost still accounts for only a small portion of the sales revenue. By developing the IT sector, Chengdu has been able to overcome its traditional logistics disadvantage," he said.

Indeed, Chengdu has become a major center for IT manufacturing in western China, attracting giants such as Intel Corp, Dell, Lenovo Group Ltd, Foxconn and Compal Electronics.

Now, one out of every two of the laptop microchips made in the world is produced in the city. And two-thirds of the world's iPads come from Foxconn's Chengdu plant.

According to Chengdu Municipal Commission of Economy and Information Technology, the revenue of the city's IT industry was projected to surpass 300 billion yuan in 2012, becoming the largest sector in the city's industrial economy.

The automobile industry is Chengdu's second-largest sector, attracting major global brands such as Volvo, Toyota and Volkswagen. In 2011, revenue from this industry was 75 billion yuan, with the figure expected to reach 100 billion yuan in 2012.

But why is the city able to attract so many auto companies, although cars have higher logistics costs?

The official said Chengdu has managed to develop its own advantages in relatively high-end cars, and cars produced in the city were mainly sold in western China, thus cutting logistics costs.

Chengdu's various advantages have made it a magnet for foreign companies.

By October, 294 foreign-funded companies were operating in Chengdu, and its actual foreign direct investment had reached $6.54 billion, up 14.4 percent year-on-year, according to figures from the commission.

In 2012 alone, another 22 Fortune 500 companies began operations in the city, bringing the total number of such companies in Chengdu to 229.

"The focal point for investment used to be China's coastal area. Western China, represented by Chengdu, has now become a new focal point," said Tang.

zhengyangpeng@chinadaily.com.cn

(China Daily 12/21/2012 page15)