Mention Chongqing, a city nestled amidst mountains in southwestern China, most people immediately think of its hotpot cuisine, spicy dishes, and its nickname of “mountain city.”
However, this inland municipality has also emerged as a major hub for high-tech industries and a global leader in laptop production, contributing to one-third of the world’s laptop manufacturing output.
In the Chongqing Xiyong Comprehensive Bonded Zone, electronic materials from around the world and across the country circulate around the clock, making it a bustling hub of activity.
Since its establishment as the first comprehensive bonded zone in China’s inland regions in 2010, the Xiyong Comprehensive Bonded Zone has witnessed a growth of smart products and essential components.
A streamlined process
In 2011, six globally renowned notebook computer manufacturers have moved to Chongqing, including Quanta Computer Inc.
Among the global market for notebook computers, where annual production exceeds 100 million units, Quanta has the largest production scale, peaking at over 55 million units annually. Such production capacity requires not only high-speed production lines but also efficient customs clearance processes.
However, during the initial phase, when computer companies congregated in Chongqing, the traditional supervision process hindered laptop production efficiency.
“The materials used in surface mount technology, a crucial aspect of electronic assembly that involves mounting electronic components onto a Printed Circuit Board’s surface, are typically packaged in rolls,” said Liu Hongliang, a senior manager of Dafeng (Chongqing) Computer Co., Ltd, a subsidiary of Quanta.
These rolls contain various components such as diodes, transistors, resistors, and capacitors. One roll can hold as many as 4,000 components, while the largest roll accommodates up to 10,000 parts, Liu told China Media Group.
“Due to the sheer quantity and minuscule size of these components, traditional methods involving naked-eye counting or monitoring are insufficient,” he said.
The production of a laptop requires thousands of small components, and in the past, all these materials had to be registered in advance with customs within the Comprehensive Bonded Zone. This process requires companies to temporarily halt production within the specified timeframes and cooperate with customs inspections.
“It imposed a huge workload,” said Lyu Xiaohui, the company’s manager, noting that because the production never stops, the inventory of materials increased by thousands each day.
“For laptop production lines that operate under tight schedules and maintain high levels of precision in management, the traditional mandatory rules posed constraints on enterprise growth, and also presented persistent challenges for customs supervision,” said Lyu.
To address this challenge, Chongqing Customs has been refining its data models and bolstering computing capabilities. The aim is to shift the emphasis of oversight away from initial filing and review stages towards more targeted risk assessment in later stages.
On the basis of a filing database, companies operating within the Xiyong Comprehensive Bonded Area can now autonomously handle tasks such as registration, setting write-off cycles, self-reporting, and self-tax payment.
This supervisory system streamlines business processes and has been adopted and promoted throughout the nation.
“The management of the laptop industry itself is highly streamlined, with a strong emphasis on maintaining zero inventory,” said Wang Xiangyu, an official from Xiyong Customs, a subsidiary of Chongqing Customs.
From the moment the plan is released to the procurement of materials and components, and up to the start of production, all of these stages can be completed within a mere two to three days, he said.
“So there is a crucial demand for timeliness, necessitating customs policies to align with the rapid pace of business operations,” he added.
Enterprises can now align their production rhythm independently, without the need for constant interaction with customs. This grants businesses greater autonomy and reduces the necessity for manual reviews in bulk, thus facilitating uninterrupted production.
Advanced transportation and logistics
The laptop computer supply chain is quite extensive, encompassing thousands of components, as mentioned by Liu.
Every stage in the production of consumer electronics is interconnected, and even a minor delay in the arrival of materials can potentially disrupt the entire production process, so it requires high efficiency in logistics and transportation, he said.
Back in 2011, the Yuxinou (Chongqing-Xinjiang-Europe) railway, China’s first-ever freight train route to Europe, was put into operation. The railway was originally designed to transport laptops for local IT companies, facilitating the export of laptops from Chongqing to destinations in Central Asia and Europe.
In addition to its western route connecting to Europe, Chongqing boasts connections to Southeast Asia through the New International Land-Sea Trade Corridor and the China-Laos Railway.
Also, the International Aviation Network further enhances Chongqing’s array of overseas connectivity options.
Due to its advanced logistics and transportation, Chongqing has consistently dominated in laptop computer imports and exports over the past several years, with the volume of laptop computer imports and exports made up for over 65 percent of the city’s total foreign trade value.
In the first 11 months of 2022, Chongqing ranked first in the country in laptop exports, shipping approximately 52 million, according to the Chongqing Customs.