From 2013 to 2015, Chongqing’s government spending on infrastructure and fixed assets amounted to RMB 4 trillion (US$600 billion), accounting for 94 percent of its total GDP in the same period. State investments behind Chongqing’s rapid growthĪs a municipality, Chongqing has benefited more from government policies than many other cities in mainland China. Aggressive state investments may have thrust the country’s manufacturing cities to the top but has also made them acutely vulnerable to the shifts in government priorities as well as global economic headwinds. In fact, examining the sudden changes in Chongqing’s economic growth story sheds light on the limitations of China’s model of development. But in short, the decline in GDP growth is mainly attributed to two factors: one, Chongqing’s economy slowed to receive massive state investments and, two, its traditional pillar industries performed poorly. What explains this sudden dip in Chongqing’s growth? This dramatically brought down Chongqing’s rank in the list of China’s 31 fastest growing regions – from being first in 2016 to 24th in 2018. Last year, however, Chongqing’s GDP growth rate slumped to six percent – far below its target of 8.5 percent and behind the national average of 6.6 percent. A large manufacturing base located by the Yangtze river in the midwest of China, Chongqing’s economy posted 15 consecutive years of double-digit growth beginning in 2002, reaching a high of 17.1 percent in 2010.
In 2018, Chongqing became China’s fifth city to generate over RMB 2 trillion (US$295 billion) in GDP – after Beijing, Shanghai, Guangzhou, and Shenzhen. China Briefing puts a spotlight on the city and examines how despite its recent economic performance (which may also explain China’s overall slowdown) foreign investors won’t be leaving yet. Chongqing’s declining growth rate has seen it drop to the bottom of the list of China’s fastest growing regions.
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