China | Chongqing blazes economic trail as Bo scandal recedes

Chongqing blazes economic trail as Bo scandal recedes

March 2, 2016 1:41 PM (UTC+8)

 

(From Reuters)

By Sue-Lin Wong

The economic success of the metropolitan area of Chongqing in central China was in the balance following the jailing four years ago of its charismatic Communist Party chief Bo Xilai, a rising star in the political elite.

Workers process laptop accessories at a factory in Dazu, Chongqing Municipality.
Workers process laptop accessories at a factory in Dazu, Chongqing Municipality.

But the city has continued to thrive, a feat that has some lessons for other local governments and reflects a pragmatic streak in China’s leadership in allowing Bo’s Chongqing model, and his economic adviser, Mayor Huang Qifan, to survive his fall.

China is trying to transform its giant economy from one led by basic manufacturing to one more reliant on services and consumption, which the government expects to provide more stable growth in the future. A slowdown in growth and slumping stock markets in the past year have raised concerns among investors about Beijing’s ability to maintain stability while driving structural reforms.

Chongqing appears to have achieved that balance.

Unlike much of China, it didn’t shirk the hard decisions, opting early to cut overcapacity in its steel industry and investing heavily to move up the value-chain from lower-end manufacturing to electronics, biomedical products and high-tech equipment.

Under Bo, Chongqing became one of China’s fastest-growing regions, helped by a crackdown on corruption, corporate tax breaks, the pursuit of foreign investment, and rapid urbanisation and industrialisation.

And so it remains, chalking up growth of 11 percent in 2015, while the national economy slowed to a 25-year low of 6.9 percent. Read more

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