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Rising star of China's Communist Party bets on private enterprise

Chongqing chief Chen Min'er courts internet giants to spur growth

Chongqing Communist Party Secretary Chen Min'er has encouraged companies like Alibaba and Tencent to set up local bases. (Photo by Akira Kodaka)

CHONGQING -- Chen Min'er, one of Chinese President Xi Jinping's closest aides and the Communist Party chief of Chongqing, is calling in reinforcements to shore up the slumping local economy. The recruits: Private companies, including the country's internet giants.

Chen, who was named municipal party chief a year ago, is the first Chongqing leader to call for developing private enterprise since Wang Yang, who served as party secretary there from December 2005 to November 2007. The success of this approach has major implications for Chen's career prospects.

At an event late last month, Chen noted that promoting private enterprise has political, strategic, economic and social significance. He said the would encourage business development by removing the negative impact of predecessors Sun Zhengcai and Bo Xilai.

Wang, now chairman of the Chinese People's Political Consultative Conference -- the country's leading political advisory body -- had stressed that revitalizing the private sector was key to boosting Chongqing's economy to the same levels as the coastal provinces. He built Chongqing into one of the country's most popular tourist destinations by leaving redevelopment of the city center to private companies.

Wang actively helped individuals start businesses and increase investment in fields such as restaurants, retail and real estate. In this way, he changed the province's economic structure, which had relied on the military, steel and motorbike industries. He raised the province's gross domestic product growth to about 15% from 11% before he took office.

However, the development of private companies changed dramatically when Bo, who was once seen as Xi's rival, took the helm. Bo emphasized connections with foreign companies, which he forged when he was the Dalian municipal party chief and commerce minister. The province achieved high economic growth by concentrating on commissioned manufacturing from HP and other foreign companies.

Meanwhile, many business owners were arrested as a result of Bo's anti-gang crackdown. After Bo's downfall, Sun was sent to Chongqing to replace short-term leader Zhang Dejiang. Sun, who was seen as the likely successor to Xi, avoided adventures and continued Bo's policies. He looked for new sources of growth as the global PC market stalled, and he favored Beijing-based state-owned companies, among others, putting private businesses in a difficult position.

The private sector came under the spotlight again after Chen replaced Sun as Chongqing's party chief. Chen is from Zhejiang Province, where Chinese internet giant Alibaba Group Holding is headquartered and private companies have a major presence. When Chen was municipal party chief of Guizhou Province, he sought to nurture the data center industry, taking advantage of the province's cool weather.

Chongqing sits at the junction of the Yangtze and Jialing rivers.   © Reuters

Chen also attracted Chinese and global tech companies -- including Apple, Alibaba, Huawei Technologies and Tencent Holdings -- to the province. Guizhou always ranked among the country's top three provinces in terms of GDP growth when Chen was at the helm.

Chen has actively invited private internet companies since moving to Chongqing. He agreed with Jack Ma Yun, chairman of Alibaba Group Holding; Pony Ma Huateng, CEO of internet giant Tencent Holdings; Richard Liu Qiangdong, CEO of; and Xiaomi CEO Lei Jun to build bases for gathering big data in inland provinces and for smart manufacturing.

An executive of one Chinese internet giant said Chen is likely to become the next premier if his efforts are successful in Chongqing, adding that he saw investment in Chongqing as an important project to build a relationship of trust with Chen.

Unlike the ousted Bo and Sun, Wang is an economics expert who joined the Politburo Standing Committee last autumn after serving as party secretary of Chongqing and Guangdong provinces. He also played a key role in the U.S.-China Strategic Economic Dialogue as vice premier. Whether Chen can take a leaf from Wang's book to succeed in Chongqing will be key to joining the standing committee four years later.

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