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LuzhouLuzhou is located in the southeast of Sichuan province and is the most westerly of the major Yangtze River ports. It has a population of 4.84m, of whom 1.5m live in the urban area. A city whose history can be traced back more than 2,000 years, Luzhou was once an important commodity distribution centre for a huge region that encompassed Sichuan, Guizhou, Yunnan and Chongqing. In the Song (960-1279) and Ming (1368-1644) dynasties, salt was transported from Luzhou to neighbouring Yunnan and Guizhou provinces. Following the arrival of trains and air transport in modern times, the city has experienced a relative decline.
Much of the city still has a rundown feel, but increasing prosperity – attributed largely to rising wages in the farm and service sectors and remittances from migrant labourers – has ushered in an era of greater vibrancy, and the air is thick with dust from construction sites.
Luzhou’s service sector is growing in strength, but the city is still seeing an exodus of workers to coastal cities. Around 1m Luzhou residents left Sichuan province in 2007 in search of work. Most head for Guangdong, Zhejiang, Beijing and Shanghai. A large proportion of their earnings are sent home in the form of remittances.
Luzhou’s GDP increased 15.3 per cent in 2007 to reach Rmb40.38bn, its highest rate of growth since 1985. By the end of 2007, there were 405 enterprises operating in the city that had a sales revenue of more than Rmb5m a year.
Distilling is the leading sector. A listed company with a history of more than 400 years, Luzhou Laojiao is one of China’s leading wine and liquor producers. The liquor is made from a special red sorghum produced in southern Sichuan. Chemicals are also important, with Luzhou accounting for about a quarter of the province’s entire chemical industry output value. Lutianhua Group is Asia’s largest producer of urea and a significant producer of synthetic ammonia. Its urea output in 2007 stood at 1.42m tons.
The region has large reserves of coal, including reserves of high-quality smokeless coal. The area is also rich in pyrite and natural gas. Natural gas was first exploited in Luzhou in the 1950s, and the city’s natural gas pipeline is connected to Sichuan’s main pipeline network.
Luzhou is also an important domestic production centre for hydraulic-pressure truck cranes and excavators, with Sichuan Changjiang Engineering Crane being a prominent manufacturer. Terex Corporation of the US, acquired a 50 per cent stake in the company in 2006. Luzhou’s manufacturing capacity in engineering machinery is second only to Shanghai’s among the cities along the Yangtze.
Labour costs in the city are low, although they have risen in tandem with higher living costs. Labour availability, however, is one of the biggest problems facing investors. Each year, tens of thousands of people leave the city in search of better jobs in coastal provinces. English-speaking managers with a few years of experience are hard to find, and even harder to retain.
Transport shortcomings are another concern. The city’s expressway and railway connections to southern seaports are still not in full operation, while the number of air routes is limited. It takes about three hours to drive from Luzhou to either Chongqing or Chengdu. Infrastructure in the local ETDZ and chemicals zone needs further improvement, while the costs of land, power and water are higher than in neighbouring cities such as Nanchong, Neijiang, Yibin and Mianyang.
On the positive side, the local government is helpful in facilitating the integration of expatriates into the local community; an English-speaking deputy mayor is reported to be very approachable.
The provincial-level Luzhou ETDZ is located in the north of the city and has a designed area of 16 sq km, of which about 4 sq km has been developed so far. The zone is home to Luzhou Laojiao, Torch Chemical Plant and Luzhou Cigarette Factory.
Located on the southern edge of the Sichuan Basin, at the confluence of the Yangtze and Tuojiang rivers, Luzhou is the only Category Two port in Sichuan province. It has a large chemical industry base and is one of the most westerly of the significant commercial ports on the upper Yangtze. It is situated in the Longmatan district on the north bank of the Yangtze, 14km east of the city centre.
Luzhou’s container terminal, which opened in 2003, is situated just 150 metres from a privately-owned crude oil terminal. Road and rail connections are poor and there is limited scope for future expansion.
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