The Southwest General OverviewThe region known as southwest China consists of Sichuan, Yunnan, Guangxi, and Guizhou Provincesas well as Chongqing Municipality. Historically, economic development in Southwest China hassuffered from the region’s mountainous terrain and distance from China’s prosperous coastal region.Since the announcement of the ‘Go West’ policy in the late 1990s the region has grown insignificance both within China and in respect to the outside world. Chengdu, capital of Sichuan, hasestablished itself as a major logistics hub in inland China and has attracted multinational firms suchas Intel. Nearby Chongqing has major port facilities on the Yangtze River, a significant advantage infacilitating domestic trade.Yunnan Province, bordering three Southeast Asian nations, has entered into political and economicdevelopment agreements with the Association of Southeast Asian Nations (ASEAN).To the east of Yunnan, Guangxi Province contains Southwest China’s only sea coast. Beibu Bay, alsoknown as the Gulf of Tonkin, has become a nexus of trade between China and Vietnam and hascaused the provincial capital of Nanning to rise in stature. Southwest China’s extensive links withSoutheast Asia make it a region worth watching; China has key trade relationships with its southernneighbours, and arrangements such as the Greater Mekong Sub region (GMS) are poised to onlygrow in importance.According to the Infrastructure Construction Project Plan for the Major Industrial Park in GuangxiNorth Gulf Economic Zone (2008-2010), North Gulf plans to build up a Nanning International LogisticsCentre, which will be an international modern logistics zone and a comprehensive city zone servingthe China-ASEAN Free Trade Zone. Logistical OverviewSouthwest China has always faced grave challenges in developing a first-class logistics operation.These problems result from the region’s geographic isolation and relative economicunderdevelopment. Travel times between cities in the southwest—even ones as major asChengdu—often dwarf those of journeys of similar lengths conducted elsewhere.Government investment, coupled with the recognition that the region has important geopoliticaluses, have led to an upgrade in southwest China’s logistics situation. A major logistics centre inChengdu ranks among China’s most important, while the construction of a new airport—as well ascontinued investment in road and rail infrastructure—in Kunming indicates the growing economicstature of the Yunnan capital.Elsewhere, Chongqing’s position as the Western nexus on the Yangtze River presents a significantadvantage in the shipment of goods further east. In Guangxi Province’s Beibu Bay, deep-water portconstruction continues apace, positioning itself as an important conduit in trade with nearby
Vietnam. Guangxi also plans to make significant improvements to its two largest airports, located inNanning and Guilin.When considered as a region, Southwest China’s vast improvements in intermodal transport shoulddecisively end its historical isolation; if anything, ties to Southeast Asia promise to raise its profilewithin China considerably. Key Dynamics The rise of multilateral political agreements such as GMS presage increased economic activity between southwest China and Southeast Asia. Initiatives like the pan-Asian road network and the Kunming-Singapore rail line illustrate the growing importance of the Sino-SE Asian relationship Chengdu’s potential as the economic powerhouse of inland China. Intel’s decision to base a major production facility in the Sichuan capital—a decision it made after public prevarication— indicates, in a sense, that Chengdu has arrived. Chongqing’s rise as an inland financial capital and the de-facto Western terminus of Yangtze River trade. Beibu Bay’s position as the nexus of Sino-Vietnamese trade, a relationship that has continued to grow in importance.