 Chongqing city | |
| Currency | RenminbiChinese Yuan |
|---|---|
| Statistics | |
| GDP | 2.036 trillion (nominal; 2018 est.) |
| GDP rank | 6th (2019) |
GDP growth | 6% (2018) 6.3% (2019) |
GDP per capita | $10,720 (nominal; 2019 est.) |
GDP by sector | Agriculture: 6.9%Industry: 44.1%Services:49% (2019) |
| Unemployment | 2.96% (2018) |
Main industries | car manufacturing,electronics manufacturing, information technology,iron,steel, mining, export, Infrastructure building |
All values, unless otherwise stated, are inUS dollars. | |
Theeconomy of Chongqing, China, has developed rapidly since it was separated from theSichuan and became acentrally-administered municipality in 1997.[1] In 2019, it was the sixth-largest Chinese city economy and ranked as China's third-largest municipal economy.[2] In China's overall layout,Chongqing is also important for connecting China's underdevelopedwestern region with its more advancedeastern region,[3] as well as promoting the economy of the mid-lower reaches ofYangtze river and the central western region.[citation needed]
In 2011, Chongqing's gross domestic product exceeded 1 trillionYuan (US$158.5 billion)[4] and in 2018, Chongqing's gross domestic product was estimated to be 2.036 trillionYuan (US$0.29 trillion).[5] From 2002 to 2017, Chongqing maintained a two-digit GDP growth rate for over 15 years, with the peak growth rate of 17.1% reached in 2010.[6] According to theWorld Bank, on aGDP per capita basis, Chongqing'sGDP per capita was less thanUS$600 when Chongqing became acentrally-administered municipality in 1997.[1] By 2019, it has grown to be 75,828Yuan (US$10,720).[7] According to the Ministry of Human Resources and Social Security, theregistered unemployment rate in Chongqing was 2.96% by the end of 2018, with its lowest recording being 2.9% in 1997 and the highest being 4.120% in 2005.[8][9]
Chongqing engaged in the process of upgrading its current economic structure followingChinese Communist Partygeneral secretaryXi Jinping's nationwide economic reform announced in 2015.[10] The goal forChongqing specifically, and for other parts of China in general, is to balance out the city's excessive industrial output that is not met by the city's weak domesticconsumption,[3] which only accounted for approximately 50% of its GDP in the first three-quarters of 2019.[3] Under this new structural reform, Chongqing has set up development zones to help with attracting foreign investors and the growth of more advanced Manufacturing industries, such as theelectronics industry.[6] Examples of these development zones include the Chongqing High Tech Industrial Development Zone, and the Xiyong Microelectronic Industrial Park.[11] By 2017, the 41 municipal development zones and 5 state high-tech zones had been set up inChongqing.[6]
Chongqing also has established special business zones. For instance, theJiangbeizui CBD is a large central business district is being constructed in the centre of the city of Chongqing, which was due to be completed in 2018.[12] It aims to attract financial institutions to become afinancial center in the future.[13]New North Zone is also an economicadministrative zone in north Chongqing, which covers a land area of 130 square kilometres (50 sq mi) and was established in 2002 to include Chongqing Economic and Technological Development Zone, Chongqing High-Tech Industrial Development Zone and Chongqing Export Processing Trade Zone.[14]
In ancient China, theChongqing-Sichuan basin initially possessed a self-sustaining agricultural economy, due to the surroundingnatural barriers (e.g. theQinling Mountains and the Ba Mountain) and weak transportation.[citation needed] This form of traditional economy was challenged bySustainability issues, such asecological degradation andclimate change.[citation needed] After the construction ofShudao, a complex road system that overcame the natural barriers, Chongqing successfully connected with China's powerful Central Plains regime and initiated cultural and political communication.[citation needed] Chongqing was also finally able to promote the economy by using its extensive resources to trade with these dominant regimes.[citation needed]
Meanwhile, the core cities of China's western region were initiallyXi'an beforeSui andTang dynasty, andChengdu afterTang andSong dynasty.[citation needed] It is only after theMing andQing dynasty, during which the ports in theYangtze river were put in use, did Chongqing become the regional economic and trade centre.[citation needed] Along withSichuan, Chongqing used the Yangtze river as the golden waterway to connect China's inner west region with the coastal region in the east.[15] Cities and city groups in the adjacent area, such as the Chengdu-Chongqing city group,Yunnan andGuizhou also acted as the vasthinterland for Chongqing.[citation needed] They provided material resources,labour and agricultural products after shipping in the Yangtze river was commenced, which enabled Chongqing to develop its economic and initiate the process of modernisation.[citation needed]
The modern development of Chongqing's economy has generally mirrored China's own development trajectory.[1] Its industrial foundation was laid mostly between 1938 and 1945, when factories moved inland from the coastal regions.[15] After the proclamation of thePeople's Republic of China in 1949, Chongqing undertook further industrial development due to extensive resources found in its vicinity, such as iron and coal.[15]
Chongqing was a major recipient of China's investment in industrial capacity during theThird Front campaign.[16]: 298 During the 1960s and the 1970s, it was used as an industrial base for military-related industries and the production of heavy mechanical equipment.[15]
AfterChina's economic open-up in 1978, Chongqing received significant growth inforeign direct investment, which grew from an annual average of US$74 million between 1979 and 1996, to an annual average of US$267 million from 1996 to 2000 and an annual average of US$358 million from 2001 to 2005.[citation needed]
Since the 21st century, Chongqing has been included in several major economic development strategies. In itsOne Belt and One Road (OBOR) initiative, China aims to connect Asia economically with Europe, Oceania, and other countries inEurasia through two major routes,[17] the inland "Silk Road Economic Belt" and the overseas "Maritime Silk Road".[17] Chongqing, as an inland city, is considered to be an important logistics centre in the initiative's overland route.[1] Its role is to facilitate the creation of a corridor of trade and commerce between China, Africa and Europe.[1] For example, the transcontinental Chongqing-Xinjiang-Europe International Railway joins Chongqing andDuisburg in Germany to provide low cost transportation for exports from China or cargoes from Europe.[18] The government of Chongqing is also planning to strengthen and expand this transportation network to achieve broader coverage of nearbyAsian cities, mainly those that can be reached in four hours of flight time, such as Singapore and Hong Kong.[18] This new updated transportation network is called the Asia-Xinjiang-Europe transportation route, which would allow European shipments delivered by the Chongqing-Europe Railway to be efficiently distributed to other surrounding Asian cities.[18] According to Li Muyuan, Secretary General of the Intermodal Transport Branch of China Communications and Transportation Association, the introduction of the Asia-Xinjiang-Europe route will allowChongqing to connect the overland silk road economic belt with theMaritime Silk Road and achieve integration of the two separate trade routes.[18]
Chongqing also benefits fromthe Chongqing model, which is a series of socio-political and economic policies introduced by the formerparty secretary Bo Xilai andmayor Huang Qifan.[19][20] The Chongqing model's political aspects focused mainly on ideology campaigns promotingMaoism and the style ofparty leadership,[19] while the economic aspects were concerned with urbanisation and attractingforeign direct investment (FDI) through low corporatetax rates andsubsidies for foreign business, as well as investments in infrastructure.[19][20] To achieve these goals, the government of Chongqing used means such as the distribution of over 3 million newHukou status to migrant works from rural areas, which granted them education, social security and access to the urban health care system.[20] It was also accompanied by large spending on the construction ofcheap housing, which had aggregated to 15 billion Yuan by 2011, andland reforms.[19][20][21]
Another major economic reform which impacted on Chongqing's economy was theWestern Development Plan. Chongqing, Chengdu and Xi'an are the three main cities included in theWest Triangle Economic Zone, a regional bloc created as part of theWestern Development Plan to stimulate growth in China's less developed western regions.[22][23] This development plan focused on several western geographical regions, including Chongqing and Chengdu in the upperYangtze River Economic Belt.[22][24] Its main contribution to Chongqing's economy was with regards to prioritisingFDI and inducing large revenues increase infixed asset investment, which grew more than seven times since 1999 to 2009 and from 2013 to 2015 the sum of Chongqing's overall investment on fixed assets aggregated to 4 billion Yuan.[22] It was also these infrastructure investments that stabilised Chongqing's economy during the2008 financial crisis, unlike China's coastal cities which suffered from plunging exports.[3]
According tothe World Bank, Chongqing'sprimary economic sector made up approximately 22% of its total GDP in 1996 and approximately 8% in 2016.[1] This decrease in the contribution of the primary sector to Chongqing's economy may be attributed to its growing rate of urbanisation, which increased from 30% in 1997 to 62% in 2016.[1] This subsequently caused the lack of arable land.[1] By the end of 2018, the total value of Chongqing's primary industry amounted to 137.827 billion Yuan and occupied approximately 6.8% of its total GDP.[25]
Chongqing'smanufacturing industry has maintained similar weight in its overall GDP composition over the years. Its total value contributed to 43% of its total GDP in 1996, 46.3% in 2014 and approximately 44% in 2016,[1] but the structure of this sector has changed dramatically. In the 20th century, it was dominated byheavy industries which demanded extensive resources, such assteel production and infrastructure building.[15] While the percentage of GDP contributed by the manufacturing sector has remained relatively stable, the structure of this sector has indeed changed dramatically over the years. Chongqing has been transitioning from traditional industries to more modern and high-tech industries.[26]
This has caused severe damage to itsnatural environment. Chongqing recorded the highest amount ofacid rain in China during the 1990s, and less than 6% of theindustrial waste was treated in the same period.[1] By investing inincentive packages and employing cluster strategy, Chongqing successfully transitioned into theelectronics andcar manufacturing industries.[1] It has become the biggestautomobile manufacturing base in China, with total production exceeding three million cars in 2016.[3][27] Chongqing also manufactured 58 million laptops in the same year, comprising one third of the world's total laptop production output, along with 280 million mobile phones.[1][27]
Chongqing's economy has experienced an increasing trend in the contribution of itstertiary industries, from composing 35% of its total GDP in 1996 to 48.3% in 2016 and 52.3%.[1] in 2018. By the end of 2018, the total worth of Chongqing's services was 1,065.613 billion Yuan (US$150.32 billion), a slight increase from 956.403 billion Yuan (US$134.91 billion) in 2017.[28] FollowingChinese Communist Partygeneral secretaryXi Jinping's supply side reform, Chongqing has given more support to its service industries to rebalance the economy fromfixed asset investment-dominated development toconsumption and services,[3] by placing the focus onsoftware information services and thedigital economy industry.[4]
In modern China, Chongqing has undertaken several major economicreforms. The first one was Chongqing's industrial restructuring which focused on the manufacturing industries, such as car manufacturing, following the Western Development Strategy.[11] This was characterised by major state-led investments and the bankruptcy of state-owned enterprises in the heavy industries.[1][3] In 2018, approximately 20% of Chongqing's industrial output was attributed to themanufacturing of cars.[3] The rapid growth of its manufacturing industries is facilitated by Chongqing's geographical advantage of being located in the intersection of the Yangtze andJialing River, which provides cost efficient waterway transportation for the export of manufactured goods to the global market.[1] This was further aided by the completion of theThree Gorges Dam in 2008, the biggest hydropower station in the world, which has dramatically increased the river's shipping capacity and the dam's annual ship lock throughput reached 101 million tonnes in 2018[29]
Another major economic reform for Chongqing isParamount leaderXi Jinping's current "supply side structural reform", which aims to eliminate excessive productive capacity in theindustrial sector and focus ondomestic consumption and theservices sector.[10][30] For Chongqing, as a result of China's 4 trillion Yuan stimulus package in the2008 financial crisis, Chongqing engaged in massive spending on infrastructure and largely expanded its industrial productive capacity.[10] This is coupled with the massive state funding from theWestern Development Strategy,[22] resulting infixed asset investment becoming the main driver of Chongqing's economy. By 2017, fixed assets investment had contributed to approximately 90% of its total GDP.[3] This has hence caused doubts regarding the ecological and economic sustainability of this model of development.[1][22] The onset of thisindustrial restructuring has also negatively impacted on Chongqing's economy. Starting from 2017, Chongqing's GDP development rate had been consistently falling, from initially 9.3% in 2017, to 6.6% in 2018 and 6.3% in 2019.[3]
In response to the new reform, Chongqing has offered preferential policies, such astax breaks and visa pathways, through various industrial zones to attract foreign investors and develop specific industries.[11] These industries mainly include emerging manufacturing, such as the manufacturing of new materials,cloud computing,artificial intelligence, as well theelectric cars industry.[3][6] In total, the aggregated value of these emerging manufacturing industries increased by 13.1% in 2018.[4] During the same period, the total value of the city'shigh-tech industries, predominantly theelectronics andsoftware development industries, grew by 13.7% year on year.[4] This rapid increase in electronics manufacturing has incentivised a number of multinational corporations from the same industry, includingIBM,Inventec andHewlett-Packard to invest in Chongqing.[6] According to a white paper by CCID Consulting, a top Chinese think tank, the Yangtze river region has become the number one cluster in China in terms of the advanced manufacturing industry.[31] It has also produced 32% of China's top 500 companies in the advanced manufacturing industry.[31]
With regards to the risks of investing in Chongqing, as noted by the southwest branch of theEuropean Chamber of Commerce in China, Chongqing's business environment for foreign investment is largely limited by its poorrule of law, insufficient communication with government authorities and unpredictable policies.[3][32] It was found in a survey by the European Chamber of Commerce that more than a third of foreign companies experienced poor enforcement of their contracts, such as delayed or uncompleted payments, by bothstate owned and private enterprises.[3][32] These violations of business contracts are usually further encouraged by the lengthy Trial process in Chongqing, which would lead to private negotiations outside the court.[3] It has been suggested by the chamber that, for Chongqing to transition into a true internationalmetropolis, "Chongqing will need to take a multifaceted approach to resolving inefficiencies in the business environment".[3][32]The World Bank has also pointed out that Chongqing will face othersocioeconomic challenges during its economic reform and transitioning into a global city, including the fast depletion of Land reserve due to a rapid urbanisation rate, the balance between environment and economic progress and a downsizing labour force due to anageing population.[1]
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Note: The People's Republic of China claimsTaiwan as its 23rd province, butTaiwan and its associated islands are controlled by theRepublic of China. See alsoPolitical status of Taiwan. | |