Leading the Dragon from the Southwest: Chengdu-Chongqing City Cluster

17/06/2019

Among the 19 clusters included in China’s 13th Five-Year Plan, Chengdu-Chongqing city cluster represents not only the country’s gateway to the West but also one of the strongest economic engine and the privileged corridor of the Belt and Road Initiative

 

Since the launch of the 13th Five-Year Plan (13 FYP) in 2016, from two competing neighbors, Chongqing and Chengdu became one single cluster, to which China now owes its economic growth. As a dynamic production cluster, they are the Dragon’s gateway to the West and a privileged corridor of the Belt and Road Initiative.

The 19 city clusters included in China’s 13th Five-Year Plan have already attracted a large part of the Dragon’s population, and they account for more than 90% of the national GDP. The goal of city clusters is simple: to support the national economy, promoting the coordinated development of regions and participating in international competitions and cooperation.

Chongqing-Chengdu city cluster – also called Chengyu – has risen after that China’s rapid economic development led to a rise in internal regional disparity, especially between the rural hinterland and the coastal areas. Since 1999, the region has thus been the focus of many policies addressed on decreasing the development gap between the east coast metropolitan regions and the twelve provinces in the Western area.

 

Sitting in the upper reaches of the Yangtze River, the Chengyu city cluster is strategically located along the new Silk Road’s land route, taking advantage of development opportunities from the Belt and Road Initiative and the construction of the Yangtze River economic belt.

 

The Chengyu cluster consists of 15 cities – Chengdu, Zigong, Luzhou, Deyang, Mianyang, Suining, Neijiang, Leshan, Nanchong, Meishan, Yibing, Guang’an, Dazhou, Ya’an, and Ziyang – in the Sichuan province and the entire Chongqing municipality. Sitting in the upper reaches of the Yangtze River, the metropolitan region is located in Southwest China, at the intersection of the Yangtze River and the high-speed rail between Baotou in Inner Mongolia autonomous region and Kunming in Yunnan province.

It covers an area of 185,000 sq km and it is home to over 120 million people, almost 6.9% of China’s total. In 2017, the GDP of this cluster was $753 billion, contributing to about 6.2% of the country’s total while in 2018, both Chengdu and Chongqing ranked among the top 10 for total GDP among Chinese cities.

The area presents many advantages compared to other Chinese clusters such as fertile lands and rich resources, complete transportation systems, manufacturing, and finance industries. But above all, cities in Chengyu cluster share the cultural identity, as Chongqing was once part of the Sichuan province.

 

Chengdu-Chongqing City Cluster - china - cifnews

© 123rf. Chongqing. Chengyu city cluster is located at the upper reaches of Yangtze River, which is the junction of national strategy One Belt One Road and Yangtze River economic zone.

 

Created in March 1997 as a national-level municipality, Chongqing contains the largest area and population of any city region in China. Today, it is one of the main ports of the Yangtze River and one of the fastest developing areas of the country, driving the economic growth of central China.

During the construction period of the Three Gorges Dam, it grew by over 10%, one of the highest rates in the whole country and in 2016, the Municipality was one of the only three regions to achieve double-digit growth. With a population of almost 31 million, Chongqing remains primarily a manufacturing town with a focus on producing natural gas, chemicals, weapons, agricultural products, and motor vehicles or electronics.

Abundant reserves of minerals have helped the city to develop into a predominant center of aluminum and steel processing and a production base for green building materials. Moreover, Chongqing is China’s biggest natural gas chemical industry base and one of the most important bases of refining and coal-based chemical industries in the PRC.

IT and pharmaceutical companies represent the major types of businesses in the High and New Technology Development Zone. Here, the major foreign companies include Ericsson Communications and Nokia, along with Phillips, British Petroleum, Ford and Honda. The city is also China’s biggest motorcycle producer and exporter.

Chongqing’s financial institutions outnumber those of other cities in central and west China. More than 10 foreign banks, such as HSBC and Citibank, have set up branches here. Chongqing also serves as a pilot area for cross-border e-commerce and has attracted famous platforms like Alibaba and JD.com. It is also working to boost trade and exhibitions of bonded logistics, cloud computing, and big data technology, in addition to promoting offshore financial settlement.

 

Chengdu chongqing city cluster - tourism - cifnews

© AirChina.cn. Chengdu Shuangliu International Airport. Among the cities in China, Chengdu has leapfrogged over Guangzhou and Shenzhen to become one of the top three sources of outbound Chinese tourists.

 

On Chongqing’s western border, Chengdu, instead, serves as the historic capital of the Sichuan province. Although it is known around the world for its abundance of pandas and spicy cuisine, Chengdu is also one of the richest and most populous cities in China. Home to 10.6 million people, it is the sixth largest city by population and eighth in terms of GDP.

Its international airport is one of the busiest in the PRC and the city also hosts a direct train to Europe, thanks to which thousands of trains have reached the Old Continent from the Middle Kingdom so far.

Chengdu has the most successful economy of any city in mainland China, considering factors such as employment growth, foreign investment, and high value-added industries. Plus, it is a high-tech industrial center. Indeed, half of Apple’s tablet computers and half of the world’s microchips used in laptop assembly are produced here.

Therefore, Chengdu is not only the historic, cultural, and economic capital of the Sichuan province but it now also complements the Yangtze Basin-oriented role of Chongqing, successfully attracting major transnational corporations specialized in hi-tech projects, such as Microsoft, Intel, and Motorola.

Similar to Chongqing, the city’s High-Tech Industry Development Zone focuses on electronics, IT and pharmaceuticals and more than 200 firms including Alcatel, Intel, and Siemens have set up facilities in the area’s special technology districts. Today, Chengdu ranks third in China’s technology-related sales revenue from its parks, after Beijing and Guangdong.

 

Chengdu-Chongqing City Cluster - 13th five year plan - cifnews

© National Development and Reform Commission, The PRC’s 13 Five-Year Plan (Beijing, 2016). City clusters in the PRC as planned in the 13th Five-Year Plan.

 

According to the 13 FYP, the Chengdu-Chongqing city cluster will guide integrated and coordinated industrial development, with different areas playing their unique roles on shared resource platforms.

Just think about Chengdu pilot tests that allowed the first community of residents to use 5G technology or the 5G autopilot bus trials in Chongqing, which marked the city’s first driverless bus trial in a 5G network environment. These tests in the Chengyu cluster have been crucial for the national 5G coverage project.

In the last four decades, urbanization in China reached extraordinary results, especially compared to other areas in the world. In 1978, when Deng Xiaoping’s policy of “reform and opening-up” was launched, the urban population was just over 171 million. But since then, hundreds of millions of people were lifted out of poverty, and the urbanization ratio changed from about 19% to about 59% between 1978 and 2018, an increase of 1% per year on average.

 

Urbanization in the PRC has been both a trend and a proactive policy. Rural residents migrated to the big cities for job opportunities created by industrial policies and by the creation of special economic zones that attracted billions of dollars in foreign investments for export-oriented manu­facturing.

 

City clusters have been part of the PRC’s urbanization strategy since the 2006 National Urban System Plan and then they have been includ­ed in the National New-type Urbanization Plan and the 13 FYP. The main goals were to improve the distribution and layout of urban areas and population, as well as the management of natural and economic resources, by organizing city cluster development along east-west and north-south corridors.

Although the Chengdu-Chongqing area is actually classified as a medium-sized cluster, it is expected to join the ranks of the three Chinese world-class city clusters soon. The Chengyu city cluster is, therefore, set to launch the industrialization, urbanization, and opening-up of west China while building an appealing living environment with sustainable development. It is also expected to become the fourth pillar of China’s economy, following the Yangtze River Delta, Pearl River Delta, and Beijing-Tianjin-Hebei regions, becoming the inland growth engine and diversifying the country’s economic growth.

The area thus intends to keep exploring innovation-driven development, to build a more open economy at regional and international levels, to better integrate urban and rural development, while also promoting green development through environmental protection, and the harmony between human and nature. A harmony that the “panda town” and the “land of abundance” never ceased to pursue.

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