Along with Shanghai, Tianjin and Beijing, Chongqing is one of only four directly administered cities in China. Chinese cities with this distinction enjoy a high level of support from the central government in Beijing. This means they receive benefits such as: increased autonomy in policy making decisions, tax breaks, tariff-free zones, increased economic stimulus, etc. all of which affect the economy of Chongqing.
Among these four cities, Chongqing is unique in that it is the largest by land area and the most populous. Its population of 31 million year-round residents are spread out over many distinct districts, including the built up cluster surrounding Yuzhong Peninsula, smaller urban clusters such as Wanzhou and Hechuan, rural river towns that benefitted from the flooding of the Yangtze River and mountain hamlets near the southern part of the city’s borders.
Along with more people moving to the city, during the past twenty years, Chongqing’s economy has grown rapidly. It’s per capita disposable income rise to 14,900 yuan in 2019, a 6.2% increase on last year. Chongqing’s GDP per capita has risen from 5,579 yuan in 1998 to a staggering 63,689 yuan in 2017. However, in recent years its growth rate has slowed substantially. Despite this, it is still growing and continues to attract business and investment alike.
Not only unique for its demographic shifts, Chongqing’s distinct geography shapes its economic fortune as well. Called “the city built on hills” by locals, the development of Chongqing was historically constrained by the ring of mountains surrounding it. Due to its mountainous topography and the fact that it is located thousands of kilometers inland from the sea, Chongqing’s only means of trade in the past was the Yangtze River. Nowadays, the economy of Southwest China benefits immensely from being connected to maritime trade by the dredged and widened Yangtze River, which is navigable year-round and provides the region with a steady flow of goods.
How Chongqing's Financial Sector Has Become A Beacon of Hope
After real estate scandals in 2008 and the subsequent dark years of Chongqing finance sector, many doubted that the city’s financial market could every recover. After mediation from the national government and a thorough shaking down, the city’s financial markets were cleaned of their scandals, but left in a dire situation. During Huang Qifan’s five years (2011-2016) as mayor of Chongqing however, the city’s financial sector has many an astounding recovery, ranking as the third city in China to set up a financial district, behind Beijing and Shanghai, and even in front of Shenzhen.
Huan Qifan’s first order of business was to collaborate with the national government to develop a sector of the city specifically designated for finance. The sector, just north of the Jialing River across from the Yuzhong Peninsula, is aptly called Jiangbeizui, or the “Area North of the River.” Jiangbeizui CDB is the only national strategic financial center in Central and Western China. A spectator for the opening of Shanghai’s Pudong CDB, some speculate that the mayor was influenced by that city’s design while planning Jiangbeizui CDB, which, like Pudong CDB, is right across a river from the historic downtown center of Chongqing.
The area has grown substantially since opening in the early 2010s. In 2019, there were already 216 financial firms that had set up shop in Jiangbeizui, more than 60 of which had international operations.
Some may wonder what attracted all these Fortune 500 companies to open in Chongqing. Besides the city’s many other qualities, tax breaks and favorable policies lent a helping hand in attracting investment in the city, especially by financial firms. Among other policies, one that may help companies thinking of expanding into Chongqing’s finance sector awards licenses to small-scale financial firms. This policy extends licensing benefits to smaller financial firms.
IT Industry Continues to Attract Electronics and Telecommunications Companies
At the end of August 2019, Chongqing held the China International IT Expo, which attracted mainly household names in the IT sector. In addition, the expo further solidified the city’s growing status as a Chinese IT hub.
Then in the beginning of September, Chongqing secured a deal with Singapore to develop telecommunication connectivity and further develop trade links. It also scored a deal with Baidu to develop artificial intelligence in the city. Then it scored on another deal with Huawei to develop AI and 5G kit.
The Breakneck Speed of Infrastructure Development
With the world’s longest network of high-speed rails, China has made astounding accomplishments in high-speed rail technology and expansion over the last twelve years. With China’s first high-speed rail opening only in 2007, the network has grown remarkably since, now covering most of China’s large cities.
In addition to improved connectivity between Chongqing and other cities, infrastructure development in Chongqing’s urban area has improved over the last fourteen years with continued expansions of the Chongqing Rail Transit. After opening line one in 2005, the network has grown rapidly to include ten lines today.
The increased expansion of high-speed rail, metro and highways in and around Chongqing is a boon to investment, business and the growth of the city’s economy. Through the increased connectivity that this type of infrastructure development brings, companies in the region can enjoy improved services, quicker deliveries, reliability transportation and a larger customer base.
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