West China town favored by German manufacturing giants

Yongchuan is a little known place in southwest China. However, a cluster gathering German manufacturing giants is taking shape there.

Schwabische Werkzeugmaschinen GmbH (SW), a German manufacturing company, recently opened a new factory in Yongchuan of Chongqing Municipality, a new step after building a factory in the city of Suzhou, a relatively developed city in east China's Jiangsu Province years ago.

The Suzhou factory is SW's first plant outside Germany.

The company focuses on precision multi-spindle machining centers for machining production of metal workpieces.

Many believe that the location of SW's new branch in Yongchuan is unexpected, as the landlocked district is less attractive, not only because of its geographic position but also a smaller economy compared to more prosperous areas in eastern China.

However, SW is not the first German enterprise turning eyes toward Yongchuan.

Several world-leading machinery producers, including German machinery producer EMAG Group and Liebherr Group, have also set up plants in Yongchuan over the past few years, which is rare to see in such a small town in west China.

It is the great market potential of western China and the unique advantages of Yongchuan luring more and more global enterprises, said Markus Schmolz, managing director of SW.

Schmolz said the Yongchuan factory aims to become SW's manufacturing, assembling, service and sales center in western China.

SW has a lot of carmaker clients in western China, which compels SW to expand the investment in the western regions, said Schmolz, adding that since the implementation of the Belt and Road Initiative, infrastructure including ports and logistics in western China have been improved significantly, which also helped unleash the potential of China's western regions.

SW saw the growing demands of high-end numerically-controlled machine tools in China. The SW's total orders from China exceeded 70 million euro in 2018, 16 times more than the amount in 2010, according to the company.

Led by the leading manufacturers, an industrial cluster of high-end numerically-controlled machine tools and components is taking shape in Yongchuan. So far, the production of high-end numerically-controlled machine tools in Yongchuan accounts for one-third of the entire output of Chongqing.

Patricia Ruf, member of the board of Liebherr-International AG said that, through building a new plant in Yongchuan, the company can localize their assembly and production, and provide better services for their clients in the western regions.

Other elements making Yongchuan a favored investment destination for global enterprises include its new strategic location and talent advantages.

Sitting between Chongqing and Chengdu, two metropolises in western China, Yongchuan is just a start or a stepping stone.

Governments of Chongqing Municipality and Sichuan Province have decided to further develop the Chengdu-Chongqing city cluster, the largest city cluster in western China, which consists of 42 cities, districts and counties in Sichuan and Chongqing, with a population of around 100 million.

While based in the city cluster, global enterprises are able to go farther westward.

As a vocational education base, Yongchuan has about 130,000 students studying in vocational colleges, who will be cultivated for high-end manufacturers with the help and cooperation of international enterprises and institutes.

Schmolz said he saw good facilities, infrastructure, development planning and talents in Yongchuan.

The Yongchuan Development and Reform Commission said the district is negotiating with eight German enterprises for investment, and the district pledges to cultivate more manufacturing talents and improve the services to attract more high-end companies to settle in.