Invest in Chongqing: An Overview of the Business Hubs in Southwest China

Introduction

Located in southwest-central China, Chongqing city and provincial-level municipality is a bustling metropolis situated at the confluence of the Yangtze and Jialing rivers. With a rich history dating back to the Song dynasty, Chongqing has emerged in recent years as a leading river port, transportation hub, and commercial and industrial center in the upper Yangtze River basin, boasting a population of over 33.92 million, it is one of the most populated metropolitan areas in the world.

Business Environment

Chongqing’s thriving economy is driven by its robust manufacturing base, particularly in the machinery, metallurgy, chemical, textile, and food industries. The city is known as the largest industrial city and the land and water transportation hub of southwest China. In 2022, the city attracted foreign direct investment totaling EUR 1.564 billion, with top investors hailing from Hong Kong, the British Virgin Islands, the Republic of Korea, Macau, and Singapore.

Chongqing is home to diverse industries, producing a wide range of industrial products. Its manufacturing sector covers both light and heavy industries, with a strong focus on automobile and motorcycle manufacturing (FCA, Shineray, IVECO, Ford, Hyundai, Suzuki). The city also excels in the chemical industry, particularly in natural gas and pharmaceuticals (Shell, BP, BASF). Additionally, Chongqing boasts a vibrant high-tech sector, including electronics, IT, bioengineering, environmental protection, and new materials (HP, Ericsson, Toshiba, Foxconn). Other well-developed industries include equipment manufacturing, building materials, and food processing.

Investment Advantages

Chongqing offers numerous advantages to foreign investors. Its prime location as a transportation hub on the upper reaches of the Yangtze River, coupled with its well-connected highways, Chongqing Jiangbei International Airport, Guoyuan Port, the largest port on the upper reaches of the Yangtze River, and the China Railway Express to Europe, make it a strategic choice for businesses.

The city benefits from preferential policies from the central government, as well as additional incentives for Western Region Development, as one of the four municipalities directly under the central government. These policies aim to attract and support foreign investment in Chongqing. The Chinese government has also designated the Chongqing-Chengdu Economic Circle as a key area for economic development. Thus, it offers various policies, incentives, and support for foreign investment.

Chongqing is also home to a vibrant education system, with 65 colleges and universities and over 925,000 students. With approximately 267,400 graduates every year, the city serves as an important talent pool for western China. Additionally, Chongqing enjoys lower labor costs compared to cities like Beijing, Tianjin, Shanghai, Chengdu, Xi’an, and Wuhan, offering cost advantages to businesses.

Conclusion

With its favorable location, robust business environment, government support, abundant talent pool, and cost advantages, Chongqing presents an attractive investment destination for foreign direct investors. The city’s thriving industrial sectors, diverse manufacturing capabilities, and strong transportation infrastructure make it a promising hub for companies looking to expand their presence in China. By investing in Chongqing, businesses can tap into the city’s growth potential and capitalize on its dynamic market opportunities.

D’Andrea & Partners Legal Counsel have authored innovative publications exploring the intriguing investment regions across China, entitled the Invest in China Series, produced in order to provide foreign investors and businesses with more practical guidance on how to do business in the different regions of China, as each is so different and thus requires specific context of the economic and business environment.

The first edition of the series explores China’s Southwest in the practical guide Invest in China: The Southwest, which includes the provinces of Sichuan, Chongqing, Yunnan, and Guizhou, and is one of the most interesting and peculiar regions in its development, whether it be the draw of China’s long standing Western Development Policy, the expansive Belt and Road Initiative or the newly announced Chongqing-Chengdu Economic Circle. From emerging industries to established sectors, the guide outlines key sectors, promising growth areas, and investment trends, identifying the potential opportunities from a comprehensive market analysis.

Invest in China: The Southwest is available at our offices, and in both printed and e-book formats on the online store of ClassEditori, as well as on Apple iBooks, Amazon in which a number of the guides have been established as Best Sellers in a number of categories) and Google Play.

D’Andrea & Partners Legal Counsel are one of the few international law firms based in Chongqing, covering the entirety of the southwest region of China, if you have any inquiries regarding investing in the Southwest of China, please reach out to us at chongqing@dandreapartners.com and we’d be happy to assist with your inquiry.

The above content is provided for informational purposes only. The provision of this article does not create an attorney-client relationship between D’Andrea & Partners and the reader, and does not constitute legal advice. Legal advice must be tailored to the specific circumstances of each case, and the contents of this article are not a substitute for legal counsel.