Chongqing Is the Fourth Heat

The state-run Global Times has some not really inside information on the12th five-year plan.

China’s regional economic development during the next five years may focus on setting up a new city group as the fourth economic growth pole.

China has three city groups as economic growth poles: the Yangtze River Delta, the Pearl River Delta and the city groups around the Bohai Sea. The fourth pole is expected to achieve a balanced and coordinated regional development around the country.

The China Development Report 2010, which came out in September 21, referred to eight city groups as the main areas for development, including Hadaqi (Harbin, Daqing and Qiqihar in Heilongjiang Province), Changji (Changchun and Jilin) in Jilin Province, the central Shannxi Plain, Chengdu and Chongqing.

By the way, the next city group being considered is Chongqing. Chongqing’s Liangjiang development zone is already largely touted as the next in line after Shenzhen, Shanghai Pudong, and Tianjin TEDA, which basically match up with the three city groups mentioned in the article. But I’m honestly unimpressed with the idea of a big Chongqing development zone.

There seems to be a mistaken impression in China that the Pearl-river delta and the Yangtze river delta grew with a wave of a magic wand and a whole lot of government capital, but the reality is that those areas developed largely due to geographic reasons. Yes, the tide of capital helped, but what really helped was the infrastructure connecting Chinese manufacturers to shipping routes that link to Western markets. Already Tianjin Binhai’s development has underwhelmed, and I find it hard to argue that Chongqing, a city whose claim to fame isthat it was inaccessible to Japanese armies, is going to be easily turned into a booming part of national or international economy.

On the other hand, developing infrastructure around Wuhan could easily connect Central China’s massive rural population with the increasingly pricey coastal labor markets, and would be an ideal place to begin a move inland of China’s development. But the Chinese government has had a long history of fondness for the Chengdu-Chongqing region, with extensive tax breaks in place to lure Western companies to Chengdu, and with Liangjiang already in place I doubt there will be any surprises.

I mostly expect the government to throw a lot of money into developing that city in the mountains, only for market forces to quietly ignore them.

More on the 12th five-year plan once the full details come out.