The Southwest


The region known as southwest China consists of Sichuan, Yunnan, Guangxi, and Guizhou Provinces as well as Chongqing Municipality. Historically, economic development in Southwest China has suffered 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 in significance both within China and in respect to the outside world. Chengdu, capital of Sichuan, has established itself as a major logistics hub in inland China and has attracted multinational firms such as Intel. Nearby Chongqing has major port facilities on the Yangtze River, a significant advantage in facilitating domestic trade.

Yunnan Province, bordering three Southeast Asian nations, has entered into political and economic development 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, also known as the Gulf of Tonkin, has become a nexus of trade between China and Vietnam and has caused the provincial capital of Nanning to rise in stature. Southwest China’s extensive links with Southeast Asia make it a region worth watching; China has key trade relationships with its southern neighbours, and arrangements such as the Greater Mekong Sub region (GMS) are poised to only grow in importance.

According to the Infrastructure Construction Project Plan for the Major Industrial Park in Guangxi North Gulf Economic Zone (2008-2010), North Gulf plans to build up a Nanning International Logistics Centre, which will be an international modern logistics zone and a comprehensive city zone serving the China-ASEAN Free Trade Zone.

Logistical Overview

Southwest China has always faced grave challenges in developing a first-class logistics operation. These problems result from the region’s geographic isolation and relative economic underdevelopment. Travel times between cities in the southwest—even ones as major as Chengdu—often dwarf those of journeys of similar lengths conducted elsewhere.

Government investment, coupled with the recognition that the region has important geopolitical uses, have led to an upgrade in southwest China’s logistics situation. A major logistics centre in Chengdu ranks among China’s most important, while the construction of a new airport—as well as continued investment in road and rail infrastructure—in Kunming indicates the growing economic stature of the Yunnan capital.

Elsewhere, Chongqing’s position as the Western nexus on the Yangtze River presents a significant advantage in the shipment of goods further east. In Guangxi Province’s Beibu Bay, deep-water port construction 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 in Nanning and Guilin.

When considered as a region, Southwest China’s vast improvements in intermodal transport should decisively end its historical isolation; if anything, ties to Southeast Asia promise to raise its profile within 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.