Province Introduction of China: Chongqin

Key Information

Introduction    
Chongqing, the fourth municipal city after Beijing, Shanghai and Tianjin, lies in the transitional area between the Qinghai-Tibet Plateau and the plain on the middle and lower reaches of Yangtze River. Jialing River passes through the city into the Yangtze River, lending Chongqing the name of “a city on rivers”. The city counts the Hubei and Hunan provinces as neighbors to the east, Guizhou to the south, Sichuan to the west and north, and Shaanxi to the northeast.  

Chongqing is also known as “a city of mountains”, as it is surrounded by the mountains. The Daba Mountains lie to the north, the Wushan Mountains to the east, the Wuling Mountains to the Southeast and the Dalou Moutains to the south. It has a humid subtropical monsoon climate, with little frost and frequent rainfall.  
 
With a population of 32.0 million residents and land area of 824,000 square kilometers, it is the youngest but largest and most densely populated municipal city. Its land area is almost 2.4 times that of Beijing, Shanghai and Tianjin. A large number of minorities live in this municipality, most of whom are Miao and Tujia.  
 
The megalopolis’ history can be traced back to at least 3,000 years when the State of Ba selected it as the capital from the beginning of the Shang Dynasty (1600-1100BC) to the close of the Warring States Period (476-221BC). Chongqing received its current name (which means “double celebration”) in the Song Dynasty (960-1279AD), when Emperor Guangzong renamed the city Chongqing Fu. It was selected as one of the “Historical and Cultural Cities of China” by the State Council.  
 
Chongqing is rich in mineral resources. 75 types of minerals have been discovered and 40 have yielded reserves. These include coal, natural gas, manganese, mercury, aluminum, marble, limestone and strontium. Its biological resources are also plentiful. It has more than 2,000 species of vascular plants, 380 animal species and 120 river fishes. 

The city enjoys a great cultural and natural heritage. The Three Gorges, the Dazu Stone Sculptures, the Ghost City in Fengdu, the Hot Spring Park, the Red Crag Memorial Museum, Baidicheng City in Fengjie and the Ba people’s hanging coffins have attracted many tourists.  
 
In June 2007, along with Chengdu (the capital city of Sichuan), Chongqing was selected by the State Council as a pilot reform city to narrow the gap between urban and rural areas. It follows in the footsteps of southern Shenzhen, eastern Shanghai’s Pudong New Area and Northern Tianjin’s Binhai New Area. 
 
Bo Xilai, the prolific former Minister of Commerce, was appointed secretary of the Chongqing Municipal Committee of the China Communist Party (CCP) in December 2007. He has pledged to transform the municipality into one of the foremost inland cities by leveraging on his expertise in foreign trade and foreign investment. 

Economic Overview




Chongqing has witnessed an average two-digit growth rate since 1997, when it was approved as the fourth municipality directly under China’s central government at the Fifth Session of the Eighth National People’s Congress on March 14, 1997. In 2006, the municipality’s economy edged up 12.2% year-on-year to RMB 349.2 billion, about 2.6 times the GDP in 1997.   
 






The value-added output generated from the agricultural sector decreased by 5.5% from 2006, dropping to RMB 42.6 billion due to a draught. Meanwhile, the industrial sector achieved RMB 150 billion value-added output, up 16.9% year-on-year, while the service sector gained RMB 156.5 billion, up 14% year-on-year.  
 
Figure 12.1.1 shows the GDP breakdown by sectors in 2006. The service and industry sectors lead the economy with contributions of 44.8% and 43.0% to the GDP. Agriculture, while important, contributes only 12.2% to the economy. 
  

 
Chongqing has increased investments in fixed assets, in a bid to accelerate the economic development and living standard of its people. In 2006, fixed asset investment exceeded RMB245 billion (US$31.2 billion), representing an increase of 24.9% over 2005.  
 
As a traditional industrial base of China, Chongqing injected RMB 75.5 billion into the industry and construction sector, 30% higher than the previous year and accounting for 30.8% of the total fixed asset investment received in 2006.  
 
This was an effort to restrict the high pollution and high energy-consumption industries. The fixed asset investment in the service sector jumped 19.5% to RMB 164.4 billion, accounting for over two thirds of the total.  
 
Areas that attracted the largest share of fixed asset investment included real estate, manufacturing, administration of water conservancy, environment&public facilities, logistics as well as electricity, water and gas production and supply. 

With a large population, Chongqing is an important consumer market in southwest China. In 2006, per capita disposable income of urban residents stood at RMB 11,570 (US$1, 389), an increase of 12.9% from 2005. Total retail sales of consumer goods amounted to RMB140.4 billion (US$17.9 billion) in 2006, up 15.4% from 2005.
 
 
Industry 
 



Automobile/Motorcycle  
Chongqing is the biggest auto and motorcycle production base in Western China. By the end of 2006, there were 24 car-makers in the city, including 10 auto assembly firms and 14 special-purpose vehicle manufacturing enterprises.   

In 2006, Chongqing produced 519,900 automobiles, with an increase of 23.3% over the past year. Of all the automobiles produced, 50.6% were sedans, representing an increase of 71.5% year-on-year. Meanwhile, the output of motorcycles exceeded 5.3 million units, up 25.7% year-on-year, accounting for 26.4% of China’s total motorcycle output.   
 
The backbone of Chongqing’s automobile industry is the Chang’an Group, China’s fourth largest car-maker. Its joint ventures in Chongqing include Chang’an Suzuki Auto Corp and Chang’an Ford Mazda.  
 
Chongqing Lifan, China’s second largest motorcycle maker sold 1.28 million motorcycles and 2.45 million engines in 2006. It also produced 8,500 sedans in that year. Other leading motorcycle makers include Loncin Group, Chongqing Jianshe Motorcycles, Jialing Industrial Co. Ltd and Zhongshen Industrial Group. 

The growth of the auto and motorcycle industry has accelerated the development of auto parts and accessories, which gained sales revenue of RMB 41.6 billion in 2006, 30.3% higher than the figure recorded in the previous year. There are 261 auto parts manufacturers, 42 of them with sales revenue above RMB 100 million.  
 
Metallurgy
The gross output from smelting and pressing of ferrous metals and nonferrous metals amounted to RMB 39.9 billion in 2006, accounting for 12.4% of Chongqing’s total industrial output value.The output of steel and steel products rose 31.1% year-on-year to 3.8 million tons and the output of aluminum soared 58.2% to 664,100 tons. The output of non-ferrous metals (excluding aluminum) increased 19% year-on-year to 132,800 tons.  
 
Chongqing Iron&Steel Co. Ltd, one of China’s oldest iron and steel producer, produced more than 3 million tons of steel in 2006, making it the largest steel maker in the megalopolis.  
 
Electronics
Chongqing is diversifying its industries and developing its high-tech sectors. In 2002, the value-added output of the electronics industry accounted for only 2.9% of the city’s GDP. With the government’s support, the electronics industry has been developing steadily. In 2006, the value-added output from this sector has reached RMB 20 billion, nearly 8 times the figure for 2002, accounting for 5.5% of the city’s GDP. 

To speed up the development of the electronics industry in Chongqing, the local government will invest a total of US$8 billion into Xiyong Micro-Electronic Park, a park focusing on chip production, electronic material production, solar cell and software development, in a bid to turn the park into the “Silicon Valley” of the city. HP has agreed to launch China’s fourth software base in this park. The founding groups, Kingdee and Huayang, are among the first to have done so already.
 
Petrochemical  
There are 207 enterprises producing petrochemicals, raw chemical materials and chemical products, which generated a total of RMB 6.4 billion worth of value-added output (including designated size and above enterprises) in 2006, up 4.9% year-on-year, contributing 7.5% to the total value-added output from the industry sector. Sinopec Fuling Chongqing Chemical Industry Co and Chongqing Chuandong Chemical Co. Ltd are two large chemical producers in the city.  
 
Electronic power, Gas&Water Production and Supply
Chongqing generated more than 7 billion cubic meters of gas and 27.5 billion kwh of electricity in 2006, representing an increase of 24.1% year-on-year and 16.5% year-on-year respectively. The industrial value-added output of this sector rose 10% year-on-year to RMB 8.4 billion, accounting for nearly 10% of the total value-added industrial output in Chongqing.

Services
The service sector plays a more important role in Chongqing’s economic development. In 1996, the total output from the service sector accounted for 35.9% of the city’s GDP, while the figure rose to 44.85% in 2006. In its eleventh 5-year plan, Chongqing has set goals to boost the development of its modern service industry.
















Wholesale&Retail
Chongqing is the wholesale and retail center of Southwestern China. The total wholesale and retail trade surged 31.2% year-on-year to RMB 20.9 billion in 2006. The retail industry is quite competitive, with 170 department stores and 248 supermarkets, and growths of 65% year-on-year (up 115.6% year-on-year respectively). The value-added output from the wholesale and retail sector amounted to RMB 31.4 billion by the end of 2006, accounting for 8% of the city’s GDP. Chaotianmen market, with sales revenues above RMB 10 billion, is a leading wholesale center in Southwestern China. Its products include garments, plastic products and textiles.  
 
Carrefour from France, Wal-Mart from the U.S., Metro from Germany, B&Q from Britain and Gome from Beijing have tapped into the market. In addition, Chongqing General Trade Group and Chongqing Department Store Co. Ltd are the two largest local retailers.  
 
Logistics  
Chongqing is the logistics center in West China due to its convenient transportation infrastructure. The Yangtze River and the Jialing River weave through it, making it a large inland port along the upper stream of the Yangtze River. It is also the intersection point for three railways, including the Chengdu-Chongqing railway, Chengdu-Guiyang railway and Xiangfan-Chongqing railway, and two expressways - namely, the Chongqing-Behai Expressway and Chongqing-Zhanjiang Expressway.  
 
The logistics industry maintained an average growth rate of 16.7%, higher than the growth rate of the city’s GDP. By the end of 2006, there were more than 700 logistics firms with a combined realized value-added output of RMB25.2 billion, accounting for 7.2% of the total GDP generated in this city.

 
Chongqing Airport Development Zone aims to set up a 48-hour logistics center through which goods are able to reach major cities around the world within 48 hours.  
 
Banking  
Chongqing’s banking sector kept a steady growth in 2006. By the end of 2006, there were 5,004 bank branches and outlets with total assets exceeding RMB605.9 billion. The non-performing loan ratio was reduced to 6.44%. The balance of RMB and foreign currencies increased by 16.8% to RMB558.7 billion in 2006, while the total deposit balance of RMB rose to RMB552 billion at the same growth rate.  
 
By the end of 2006, there were 4 foreign banking institutions with considerable presence in the city. The total asset of overseas lenders amounted to RMB 2.2 billion and the total loan balance hit RMB1.5 billion. Foreign banks have won permission to operate RMB-dominated currencies. Bank of Asia, HSBC, the Bank of Nova Scotia from Canada and Allied Commercial Bank from the Philippines have tapped the Chongqing banking market.  

Foreign Trade&Foreign Investment
Chongqing has maintaind a steady growth. In 2006, the total volume of foreign trade hit a record US$5.47 billion, with an increase of 27.4% over the past year - 3.6 percentage points higher than the national average growth rate. The import value climbed 19.5% year-on-year in 2006, while export volume jumped 33% year-on-year. Equipment is the key imported product, accounting for more than 62.5% of the total import value.
 
A breakdown of the top imported goods in 2006 includes mechanical and electrical equipment (US$873 million), vehicles, aircraft, ships and related transportation equipment (US$449.8 million), minerals (US$181.4 million), optical and medical instruments, clocks and musical instruments (US$178.8 million), and base metals and related products (US$159 million). 

As Chongqing is one the main manufacturing bases in western China, the exports of machinery and electrical appliances are an important export source for this city. The total value of exported machinery and electrical appliances increased 44.2% year-on-year to US$2.26 billion, representing more than two-thirds of the total export value. Other major exported goods include base metals (US$337.8 million), chemicals (US$305.8 million), construction materials (US$169 million) and textiles (US$125.7 million).  
 
Chongqing has attracted a large number of multinational companies to set up business there, including ABB, Sony Ericsson, Honda, and Coca Cola. The year 2006 saw a significant increase in foreign direct investments. The utilized amount of FDI has grown at a record high of 40% to US$700 million, 44.6% of which floated to the industrial sector and 55% to the service industry. The manufacturing, real estate and finance sector received the largest share of FDI. Actualized FDI in the manufacturing and financial sectors added up to 99.7% and 879.3% separately in 2006. Hong Kong continues to be the top overseas investment source for Chongqing. Investors from Hong Kong have inked 72 contracts in Chongqing, which amounted to US$421 million by the end of 2006. In addition, the actualized FDI from Hong Kong rose 29% to US$261 million. Other overseas investors are the U.S., Japan and Singapore. Table 12.1.1 shows the major trade partners and the values of imports and exports. 
 


The Chongqing government currently encourages foreign investment in infrastructure, traditional Chinese medicine, hi-tech industries and modern services.  

Major Development Zones
There are several development zones in Chongqing. Two of the main ones are Chongqing Economic and Technological Development Zone, and Chongqing High-Tech Industry Development Zone.  
 
Chongqing Economic and Technological Development Zone (CETZ)
Established in 1993, CETZ was the first state-level development zone in west China. By the end of 2006, it had attracted 447 investors from 22 countries to invest there. The total investment amounted to US$3.53 billion and the actualized foreign investment exceeded US$1.13 billion. Ford from the U.S., Metro from Germany, Ericsson from Sweden, Honda from Japan and Fiat from Italy have set up operations in CETZ. The zone’s GDP has maintained a two-digit growth rate for years, with GDP hitting RMB11.04 billion in 2006, up 51.93% year-on-year.  
 
CETZ consists of two parks, South Park and North Park, which covers an area of 9.6 square kilometers and 83.7 square kilometers respectively. IT, biotech and pharmaceuticals, autos and motorcycles, chemicals and new materials, food processing, and textiles have formed the six pillar industries in this zone. It is targeted to have an industrial output of RMB80 billion by 2010.  
 
Chongqing Hi-Tech Industry Development Zone
Chongqing Hi-tech Industry Development Zone, one of five pilot reform development zones in China, was approved as a state-level development zone in 1993 by the State Council. It occupies an area of 73 square kilometers. More than 4,000 enterprises have been established there, including 300 from Japan, the U.S., Germany, France, Hong Kong and Taiwan. Major industries in the zone include IT, biotech and new medicines, new materials and mechatronics. In 2006, the gross output value of the zone stood at RMB 52 billion, with a value-added output of RMB11 billion. Chongqing Export Processing Zone, with a designed area of 2.8 kilometers, was set up in the North Park of CETZ in 2001. The total export and import value of the zone has surpassed US$300 million, while total investments amounted to nearly US$500,000 by the end of 2006. The central government has designated it as one of the seven export processing zones that will launch pilot projects to establish themselves as bonded logistics centers. It has also received regulatory approval to operate technological development and maintenance services.  

Major Districts in Chongqing
There are a total of 19 districts in Chongqing province. Table 12.1.2 shows the districts’ GDP, population and land area. The table also presents the districts in order of GDP.   
 






















  
 
Education
Chongqing has good educational foundation, which has proven advantageous for the city’s development. By the end of 2006, there were 38 regular institutes of higher education with 405,118 enrolled students. Chongqing University and Southwest University are the two key national universities in Chongqing.  

Important Travel Information
Time taken to travel from Chongqing to the following destinations:  
- Beijing
- Kunming
- Guangzhou
- Shenzhen
- Shanghai
- Xi’an
- Haikou
- Wuhan
- Nanjing
- Hangzhou
- Tianjin
- Qingdao
- Changsha
- Bangkok
- Hong Kong
- Seoul  2 hours 10 min
1 hour
1 hour 45 min
1 hour 40 min
1 hour 55 min
55 min
1 hour 45min
1 hour 15 min
3 hours 25 min
3 hours
1 hour 20 min
2 hours 10 min
1 hour
2 hours 50 min
1 hour 50 min
3 hours 35 min