Chongqing is launch pad for China’s westward liftoff


By Sherry Lee

Those who haven’t been to Chongqing are likely unaware that the former wartime rear area has now morphed into a major metropolis packed with people. Daytime Chongqing is awash with the hubbub of investor activity. Of the world’s top 500 companies, 161 have an established presence here. Acer founder Stan Shih’s iD SoftCapital Group held its annual shareholder’s meeting in Chongqing last month. Also in late October, American authors and China trend-watchers John and Doris Naisbitt launched their new book in Chongqing. And Acer recently revealed that Chongqing will be the home of its second Chinese base, including a new global IT manufacturing center. By night, the real estate and consumer frenzy that has overtaken Chongqing becomes even more apparent. Amid the dazzling lights of the Hongya Dong along the banks of the Jialing River, customers pack into the hotpot shops. Looking down at the twinkling city lights from atop one of the towers of the luxury Sincere apartment complex, where a square meter of floor space currently goes for about 20,000 renminbi, one gets the feeling of standing in a Mid-levels penthouse on Hong Kong’s Victoria Peak. This building just went on the market and has been snapped up, with 40 percent of buyers non-local, mostly from Shanghai, Wenzhou and Taiwan. Chongqing is building upward, and there are now an estimated 6,800-plus structures of six floors or higher in the city. In 2000, the city’s GDP stood at just a little over 100 billion renminbi but is this year expected to reach 780 billion renminbi, a more than six-fold increase over the past decade. What prompted the transformation over those ten short years that made Chongqing so red hot this past year? And what is the deeper narrative behind that metamorphosis? A Battle with Nature Chongqing had actually adopted something of a “remedial” market approach, employing government policy to prop up and strengthen the local economy before opening up avenues of free market competition. Situated at the confluence of the Yangtze and Jialing Rivers, Chongqing sits at an average elevation of 400 meters above sea level, but the topography varies wildly. Transportation can be a big headache, as traveling between the north and south sides of the rivers involves having to take either an aerial cable car or river ferry.

The problems this topography posed for the city’s development can be hard to imagine. Building a kilometer of highway here costs an average 80 million renminbi, while a kilometer of comparable highway in Shanghai costs just 30 million renminbi.

“It’s not that people in Chongqing are idiots,” Chongqing mayor Huang Qifan, a former economic planner for the Shanghai Municipal Government, explains to CommonWealth Magazine. “It’s just that for a hundred kilometers of highway here, you’ve got 60 kilometers of tunnels and bridges, and building them raises costs.” Over the past decade, however, Chongqing has managed to expand its highway network from 100 km to about 2,000 km and its railroad network from 500 km to 1,500 km.

But it’s not just about building bridges and paving roads. These transport networks have established a distribution system to carry goods out of China’s vast interior.