UPS Puts Chengdu on the Global Map

By newsdoug on July 27, 2011

The interior city of Chengdu looks to be the next rising star on China’s tech map, receiving a major nod of recognition from global express delivery leader UPS (NYSE: UPS), which is adding the capital city of Sichuan province to its global express delivery map. (company announcement) UPS cites broader demand UPS spices up Chengdu with new service from that part of China, which has also seen neighboring cities like Xian and Chongqing grow quickly as China offers strong incentives for companies to set up shop in its relatively underdeveloped western interior. As a longtime tech writer, I’ve been particularly impressed with Chengdu, which seems to have a strong ability to attract some of the world’s top-tier technology names to the city with its abundance of college graduates, good transport networks and of course its tasty Sichuan food. Intel (Nasdaq: INTC) was one of the earliest players in the city when it set up a chip manufacturing plant there seven years ago, and Texas Instruments (NYSE: TXN) opened up shop in the city last year when it took over a plant from SMIC (HKEx: 981; NYSE: SMI). Most major PC players have also opened plants there in the last 2-3 years, including both Hewlett Packard (NYSE: HPQ) and Dell (Nasdaq: DELL), (previous post) along with Taiwanese contract manufacturer Hon Hai (Taipei: 2317). From an investor perspective, I wouldn’t be at all surprised to start seeing some interesting and dynamic tech firms coming out of this city, which offers not only a strong technology ecosystem, but also low costs and strong links to the rest of the world, which just got a little stronger with the addition of the city to UPS’ global map.

Bottom line: Look for interesting tech plays to emerge from Chengdu in the next few years, boosted by strong support from global players like Intel and logistics leader UPS.

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