Down But Not Out

Despite a dramatic economic slowdown, Chongqing’s foreign businesses are undeterred

- Crystal Reid

A forest of skyscrapers blocks the mountain views from both sides of the emerald Yangtze River that snakes through Chongqing, a second-tier city of more than 30 million people in central-western China. From here, throngs of tourists clamber aboard cruise ships headed for the Three Gorges Dam, the world’s largest hydropower project and an undeniably awe inspiring feat of humanity harnessing nature.

The dam, more than 600 kilometres away in neighbouring Hubei province, has done more than put Chongqing on the bucket lists of domestic sightseers. It also supplies the landlocked city with unlimited green energy and allows oceangoing ships to access its river port. The dam’s completion, improvements in road and rail connections to the rest of China and beyond, and government initiatives to spur growth in western and central China have all led to a flurry of direct foreign investment over the past 20 years.

At one point Chongqing was one of the fastest-growing cities in the world, with double-digit GDP growth for 15 consecutive years from 2002, peaking at just over 17 per cent in 2010. In 2018, however, the city missed its 8.5 per cent growth target by a long shot, clocking up just 6 per cent, thus relegating it to the realms below the national average of 6.6 per cent. On a list of the country’s fastest growing regions compiled by China’s National Bureau of Statistics, Chongqing has dropped from first place in 2016 to 24th last year.

Of course, that still puts Chongqing on a par with 2018’s fastest-growing US state, Texas. But given China’s breakneck development, can Chongqing still claim to be a viable investment for foreign companies, especially compared to first-tier business havens such as Beijing, Shanghai and Guangzhou, on China’s affluent east coast?