I. Introduction to the Chengdu-Chongqing Economic Circle
Chengdu-Chongqing economic circle is located in southwestern China. The twin cities of Chongqing and Chengdu provide the driving force in the promotion of coordinated regional development. The economic circle was first proposed on January 3, 2020 and its detailed guideline was released on October 21, 2021. It aims to create a new economic growth zone in the western China region.
The Chengdu-Chongqing economic circle is another important regional development strategy, following the Beijing-Tianjin-Hebei region, the Yangtze River Delta and the Guangdong-Hong Kong-Macao Greater Bay Area.
Covering about 185,000 square km, the Chengdu-Chongqing economic circle consists of Chengdu, 27 districts (and counties) in Chongqing, and 14 other Sichuan cities. It takes up 1.9 percent of the country's total land territory. In 2019, the economic circle had a permanent population of around 96 million and a GDP of 6.3 trillion yuan (about 984.7 billion U.S. dollars), accounting for 6.9 percent and 6.3 percent of the national total, respectively.
Fig. 1 the Chengdu-Chongqing economic circle (Source: www.ichongqing.info)
In 1997, Chongqing, the traditional industrial powerhouse in southwestern China, became China's fourth municipality after Beijing, Shanghai and Tianjin. Covering 82,402 square kilometers and with a population of over 32 million, it is the largest of the four, even bigger in area than Ireland or the Czech Republic. Chengdu, capital of neighboring Sichuan province, boasts strong scientific research capabilities, fast economic growth and rich culture.
NEW GROWTH POLE
The master plan for the construction of the Chengdu-Chongqing economic circle aims to turn the Chengdu-Chongqing area into an economic circle with its own strengths and distinctive features as well as national impact, a key hub for scientific and technological innovation, a new area for reform and opening-up, a place with high-quality living standards and a new driver and an important growth engine of the country's high-quality development, according to the document.
The Beijing-Tianjin-Hebei region, the Yangtze River Delta and the Guangdong-Hong Kong-Macao Greater Bay Area, all in the country's east, have become the main drivers of China's economy. But the western region has lacked a national-level economic circle. The Chengdu-Chongqing economic circle is expected to drive the development of China's vast western region, and effectively solve the long-term problems of unbalanced and inadequate regional development in China.
"China's western region is the domestic market with the most potential. Only by activating this market of about 400 million people and promoting the rise of the western region can high-quality development be promoted across the country," said Tang Jiqiang, an expert with the Southwestern University of Finance and Economics.
For a long time, the weak transport infrastructure of the Chengdu-Chongqing region has been one of the main stumbling blocks in its development. To solve the problem, the two cities have invested heavily in transport infrastructure in recent years.
Developed transportation system is an important symbol of a world-class metropolitan area. It will also be the key to building the Chengdu-Chongqing economic circle.
HIGHLAND OF OPENING-UP
The intended reach of the inland Chengdu-Chongqing economic circle is not limited to China. By 2035, the economic circle will become an active growth pole and a powerful driver with international influence, the plan says.
As a new land-sea passage, China's southwest has a unique geographical advantage that helps it better connect with Europe, Southeast Asia and South Asia. Chongqing is the headquarters of the China-Singapore (Chongqing) Demonstration Initiative on Strategic Connectivity, which was signed in 2016. This initiated the New International Land-Sea Trade Corridor project in a bid to speed up the opening up and development of the western region. So far, the New International Land-Sea Trade Corridor, with Chongqing and Chengdu being the key operation centers, has expanded its reach to more than 300 ports worldwide. The corridor is a trade and logistics passage jointly built by Singapore and provincial-level regions of western China.
The two cities are also major providers of China-Europe freight-train services. The China-Europe freight trains from the two cities have made more than 3,500 trips so far this year, over 30 percent of the country's total. The freight service became a lifeline to help stabilize the global trade supply chain in 2020 when sea and air transport was severely disrupted amidst the COVID-19 pandemic.
"With the help of the China-Europe freight-train service and the new international land-sea trade corridor, the Chengdu-Chongqing region will grow into a major supply chain hub for the Belt and Road countries and regions," said Tang.
"The economic circle will help build a smoother and more efficient international logistics corridor for western China, which can also boost the economic recovery of Europe and the Association of Southeast Asian Nations (ASEAN) in the post-COVID-19 era, and facilitate global trade and investment," said Ji Shouwen, a professor at Beijing Jiaotong University.
Liu Zimin, a professor at Southwest University, said the building of a new engine for regional development and a highland for opening-up in the southwest is a reflection of China's new opening-up pattern, which features the interconnection of the land and sea, and mutual support between the east and west.
The potentiality of this area of China is still to be discovered, the launch of the Chengdu-Chongqing economic circle opens up many more opportunities, said Massimo Bagnasco, vice president of the European Union Chamber of Commerce in China Executive Committee (EUCCC) and chair of the EUCCC's Southwest China Chapter Board.
2. Master Plan for the Construction of the Chengdu-Chongqing Economic Circle
The positioning promoted in the Master Plan suggests that the Chengdu Chongqing region will have a decisive role to play in China’s economic, technological, livelihood and opening up development in future.
In terms of development objectives, the Chengdu-Chongqing Economic Circle aims to build itself into a strong twin-city economic circle with distinctive characteristics by 2035. Besides joining the ranks of cosmopolitan cities and fully developing their leading position as world-class advanced manufacturing clusters, the urban system of coordinated development in large, medium and small cities within the Economic Circle will also be further improved. Infrastructure connectivity is expected to greatly enhance the livelihood of local people. In order to achieve these objectives on schedule, the Chengdu-Chongqing Economic Circle plans to achieve major progress in the following areas by 2025:
· Dual-city-led spatial development pattern. The regional driving power and international competitiveness of Chongqing and Chengdu – as China’s leading cities -- will be greatly strengthened. The development of small and medium-sized cities and county seats will accelerate, and an urban pattern of co-ordinated development with small, medium and large cities and small towns sharing their complementary advantages, and engaging in the rational division of labour with beneficial interaction will take shape. The permanent population urbanisation rate is projected to reach about 66%.
· Greatly improved infrastructure connectivity. A multi-level rail transit network will be completed, including routes branching out from Chongqing and Sichuan in all directions. Chongqing and Chengdu will be within a one-hour traffic circle. The Economic Circle’s position as an aviation hub will become more prominent. The upper Yangtze shipping centre and logistics centre will be completed. New infrastructure standards will be much improved and energy supply further ensured.
· A modern economic system. R&D investment will reach about 2.5% of GDP and the contribution rate of scientific and technological progress will reach 63%. A relatively complete regional industrial chain and supply chain will take shape with the vigorous development in the digital economy. A western China financial centre will be established, and modern services will have a much stronger competitive edge.
· More abundant fruits of reform and opening-up. Institutional transaction costs will be greatly reduced, and the business environment will be among the best on the mainland. The level of collaborative opening-up among major open platforms, such as the Chongqing and Sichuan pilot free trade zones, will be significantly improved.
· Great improvements in ecological and livability levels. Prominent environmental issues will be effectively brought under control. Ecological collaborative supervision and the regional ecological compensation mechanisms will be further improved. The percentage of days with good air quality in cities at and above the prefectural level will reach 88%.
The central, Chongqing municipal and Sichuan provincial governments will work closely together to implement the planning principles and development objectives. The Master Plan points out that the Chongqing municipal and Sichuan provincial governments bear primary responsibility for constructing the Chengdu-Chongqing Economic Circle. The two governments will discuss plans and carry out various tasks through mechanisms such as the Chongqing-Sichuan joint party and government meeting. They will also map out their own plans for city clusters development. The central government will strengthen communication with the Chongqing and Sichuan governments, and will take responsibility for formulating Economic Circle land and spatial planning, as well as implementation plans for the multi-level rail transit system, comprehensive transport development, construction of the western China financial center and technology and innovation center, ecological and environment protection, the Bashu Cultural Tourism Corridor, and so on.
3. the Development of the Chengdu-Chongqing Economic Circle in Recent Years
The Chengdu-Chongqing economic circle achieved a gross regional product of 77,587.99 million yuan in 2022, up 3% from last year, which accounted for 6.4% of the gross domestic product and 30.2% of the gross regional product of the western region, according to a report on the development of the Chengdu-Chongqing Economic Circle for 2022 (hereinafter referred to as “the report”) jointly released by Chongqing Municipal Bureau of Statistics and Sichuan Provincial Bureau of Statistics on April 2, 2023.
In 2022, the added value of the primary industry in the Chengdu-Chongqing Economic Circle reached 646.955 billion yuan, making up 7.3% of the country's total, up 4.2% from last year and 0.1 percentage points higher than the national level; the added value of the secondary industry was 2,989.058 billion yuan, accounting for 6.2% of the country's total, up 3.8% from last year and fair to the national level; the added value of the tertiary industry was 4,122.786 billion yuan, accounting for 6.5% of the country's total, up 2.2% from last year. The ratio of the three industries is 8.3:38.5:53.2, with the secondary industry accounting for 0.3 percentage points higher than the previous year and the tertiary industry making up 0.4 percentage points higher than the national level.
In 2022, Sichuan and Chongqing focused on the development of key industries such as automobiles and electronic information and accelerated the construction of advanced manufacturing clusters. The industrial enterprises above state designated scale in the two regions recorded 7,704.412 billion yuan in revenue, up 3.9% from last year, and reported 591.646 billion yuan in total profit, up 6.3% from last year and 10.3 percentage points higher than the national level.
The flourishing new consumption is a major highlight of the development of Sichuan and Chongqing in 2022. According to the report, Sichuan and Chongqing focused on promoting the development of international consumption centers in Sichuan and Chongqing with “Bashu” characteristics, achieving a total retail sales of consumer goods of 3,446.014 billion yuan in 2022, which accounted for 7.8% of the country’s total. In particular, the new type of consumption represented by online consumption has been developing steadily. Besides, the online retail sales of goods achieved by the two regions reached 237.722 billion yuan, up 15.6% from last year.
Sichuan and Chongqing also supported feature services and pushed forward the development of financial organizing system, market system, service system, innovation system, open system, and ecological system in 2022. The Renminbi deposits of financial institutions in the two regions reached 14.57 trillion yuan, up 11.1% from last year; the balance of RMB loans was 13.16 trillion yuan, up 12.3% from last year. Both Sichuan and Chongqing offered strong financial support in various fields such as infrastructure, industrial development, and scientific and technological innovation.
According to the major economic rankings of China Integrated City Index 2022 (hereinafter referred to as the Index), Chengdu and Chongqing are among the top 10 cities. Compared to 2021 rankings, Chengdu moves from 6th to 5th, and Chongqing declines from 7th to 8th. The Chengdu-Chongqing Economic Circle is driven by quasi-first-tier regional center cities and has served as one of the pillars of China's socioeconomic development. In 2022, the Chengdu-Chongqing Economic Circle contributed 7.4 percent of China's population, and 4.7 percent of China's exports which grew by 5.1 percent year on year. Thanks to inland waterway shipping, the Chengdu-Chongqing Economic Circle represented 0.5 percent of China's container throughput.
In 2022, the Chengdu-Chongqing Economic Circle hosted 4.9 percent of the companies and 2.6 percent of IT companies listed on the four major stock exchanges. In terms of innovation and entrepreneurship, in 2022, the Chengdu-Chongqing Economic Circle took 4.6 percent of the grated patents in China and accommodated 3.9 percent of the companies listed on the ChiNext board in Shenzhen and the Growth Enterprise Market in Hong Kong. It represented 3.9 percent of companies listed on the NEEQ and hosted 3.8 percent of China's unicorn companies.
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Edited by Bao Lianying
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