Sichuan capital to Benefit as investors look inland

Started in the 1960s, the third-front construction project was a government initiative to build an inland industrial base secure from foreign attack.

"Back then, a lot of strategically important factories with advanced technologies moved inland, including areas around Chengdu, and they never returned to coastal regions," Sun said.

This view is echoed by Tom Rafferty, China analyst of the London-headquartered research group the Economist Intelligence Unit, who added that Chengdu's history as a base for military research and development in the pre-reform era also helped the city build a labor force with good IT skills.

Rapid growth of technology companies in Chengdu has made some observers forecast the city's potential to become a Silicon Valley of China, but Sun believes it is too early to draw such a conclusion.

"Chengdu's advantage is in high-end manufacturing," Sun said.

Services industries

In addition to high-tech industries, services are also fueling Chengdu's growth, Sun said. These range from financial services to back office support.

Sun says that Chengdu's location and workforce make it ideal for hosting back office support functions of multinational companies, allowing them to better access China's inland consumers. Examples of such functions are human resources and logistics management, he said.

Rafferty added that the city must work on cultivating managerial-level talent in order to smoothly realize its goal of increasing its competitiveness in high-tech industries.

"Improving the city's tertiary education resources will need to be a priority in the coming years," Rafferty said.