CHONGQING -- A slowdown in traditional industry has Chongqing looking to tap energy resources and establish itself as a logistics hub for Chinese President Xi Jinping's international Belt and Road Initiative, in order to sustain the inland municipality's remarkable economic growth.
Years of success
Chongqing became China's fourth direct-controlled municipality 20 years ago -- Beijing, Shanghai and Tianjin are the others -- a designation that upgrades the area to provincial status.
Last year, Chongqing's gross domestic product grew 10.7%, dwarfing China's overall 6.7% increase and trailing only Tibet among provinces, direct-controlled municipalities and autonomous regions. Chongqing ranked first for two years through 2015, and its per-capita GDP surpassed the national average in 2014. The municipality has achieved a 15-year streak of double-digit growth in local GDP.
Migration from villages to city centers has provided cheap labor and buoyed consumption. Chongqing offered support by making it easier for villagers to acquire urban residency status and by providing low-priced public housing. The area's urban population rose from 31% in 1997 to 63% in 2016 -- higher than the 57% national average.
Chongqing has achieved its original aspiration of serving as a model of how to close economic disparity between cities and villages, as well as coastal areas and inland regions.
Foreign companies that opened factories here, such as HP, helped Chongqing achieve roughly one-third of global production for personal computers. But that output peaked in 2014, and trade value sank to two-thirds over the next two years.
Shift toward energy, infrastructure
Sun Zhengcai, the municipality's Communist Party secretary, on June 5 visited shale gas development sites in the territory about 100km from central Chongqing to encourage the managers overseeing the operations. He urged following Xi's lead to create new economic development by taking advantage of the Yangtze River.
As Chongqing enters its third decade as a direct-controlled municipality, Sun possesses a keen sense of urgency, says an official of a foreign company doing business in the municipality. Chongqing this year aims for local GDP growth of around 10%.
Sun seeks to revitalize industry via the energy sector, supported by abundant shale gas reserves, as well as the automotive industry, which will foster broad ties to other businesses.
Chongqing also envisions itself as a logistics hub that connects the Belt and Road to the economic zone along the Yangtze River. It recently opened a direct cargo transportation route to Singapore that combines rail and water routes.
To compensate for the slowdown in PCs, the municipal government also is increasing public works construction. Chongqing will invest about 30 billion yuan ($4.39 billion) to build a new terminal at a local airport, as well as spend 100 billion yuan for subway networks. Fixed-asset investment grew nearly on par with GDP in 2016, highlighting a deepening economic dependence on investments.
But Chongqing also serves as a focal point for Communist Party power struggles. Bo Xilai, who became the Chongqing party secretary in 2007, was once considered a rival for Xi but was ousted in 2012. Sun has worked to wipe out Bo's influence since, though the party's central committee still cites lingering legacies tied to Bo. One example would be He Ting, the vice mayor and head of the Public Security Bureau of Chongqing who recently faced discipline.