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Luzhou is located in the southeast of Sichuan province and is the most westerly of the major Yangtze River ports. It had a population of 4.94m at the end of 2008, of whom 750,000 lived 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, it was one of China’s major national commercial cities, on a par with nearby Chengdu and Chongqing. Following the arrival of trains and air transport in modern times, the city has experienced a relative decline.

Many of Luzhou’s shopping and residential areas are still rundown. However, 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

Luzhou’s service sector is growing in strength, but the city is still seeing an exodus of workers to coastal cities. In 2008 more than 1.14m Luzhou residents left the city in search of work, of whom 955,000 left Sichuan province altogether. Most head for Guangdong, Zhejiang, Beijing and Shanghai.

Luzhou’s GDP increased 15.2 per cent in 2009 to reach Rmb58.76bn. Per capita GDP increased 14.5 per cent to stand at Rmb13,591. By the end of 2008 there were 464 enterprises operating in the city that had a sales revenue of more than Rmb5m a year.

Distilling is the leading sector, accounting for about half of the city’s economy. The sector achieved total sales revenue of Rmb25.22bn in 2009, an increase of 50 per cent year-on-year. Chemicals is another pillar industry, with Luzhou accounting for about a quarter of Sichuan’s entire chemical industry output value. The city contains the largest urea production base in Asia.

There are large reserves of coal, nearby, including high-quality smokeless coal. The area is also rich in pyrite and natural gas.

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. 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.

The provincial-level Luzhou ETDZ is located in the north of the city and has a designed area of 24.5 sq km, of which about 7.5 sq km has been developed so far. By the end of 2009 the zone was home to 276 enterprises, including famous names such as 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.

If you want to read more about Luzhou, its leading companies, major investment zones, transport network, port infrastructure and the logistics experience of FIEs in the city, click here to order an e-version of the city profile for £15. Alternatively, for information on all the major Yangtze port cities and much else besides, click here to buy Yangtze Transport: Accessing China's Interior for £85.
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