Chengdu-Chongqing Economic Circle: Sum Bigger than Parts
Oct 26-2020
China’s top leadership reviewed a master plan for the coordinated development of Chengdu, capital of Sichuan Province, and Chongqing on October 16th. In a media interview on this historic event, Prof. Zhou Qiren of the NSD suggested that the two-city economic circle should explore ways to break free from administrative shackles in their resource allocation.
Formerly a part of Sichuan province, Chongqing was made a municipality directly under the Central Government and has since experienced fast growth thanks to the removal of some administrative constraints. Though the sum proves to be bigger than the parts, so far the development of the two cities still follows the underlying logic of relying on administrative mobilization and power for resource allocation. Yet things are different now, characterized by the sheer complexity and wide geographical reach of economic activities that cannot just be facilitated through the expansion of administrative areas. Rather, a more flexible coordination mechanism is required for effective resource allocation. Fundamentally, Chengdu-Chongqing economic circle is a market circle, not an administrative circle. Therefore, the city government governments should serve market expansion and enable the market to play a more decisive role, said Prof. Zhou.
Rather than confining themselves to making plans in their offices, government officials should emulate entrepreneurial spirit and solicit ideas and inputs from the people and the market. They should investigate and map out the existing connections and barriers between the two cities, including those of urgency. As an example, Prof. Zhou suggested looking into the inter-city lorry traffic bottlenecks and expanding the transportation links between the Chengdu Plain and Chongqing as well as the areas along the Yangtze River and even Southeast Asian and Indian Ocean markets.
Chengdu and Chongqing are tasked with pulling the regional economy along. That doesn’t mean relentless expansion of the cities to absorb more and more areas. Instead, Prof. Zhou recommended learning from Shanghai and Shenzhen, whose density of resources makes them not only competitive worldwide but also powerful enough to have trickle effects on neighboring areas.
Will the progress of the economic circle be dampened by the misery of globalization? Even though the incumbent US president touts de-globalization, there still exists significant space for maneuver, said Prof. Zhou. China has declared that it will adopt an even higher level of opening up to cope with trade protectionism. By adhering to such an opening up strategy, the Chengdu-Chongqing economic circle still has ample room for development.
