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A Charm Offensive in Chongqing

Reuters recently published an excellent article that discusses Bo Xilai’s placement in Chongqing as the new Communist Party boss:

“Chongqing residents are putting a lot of hope in Bo Xilai. ‘People feel the city has a new opportunity,’ said Xiao Zhou, 32, who works for a cosmetics company in the heart of the city. ‘They want to see Chongqing become as developed and as beautiful as Dalian is,’ he said.

Bo was previously Mayor and then Party boss in Dalian, and also served as Governor of Liaoning Province, Dalian’s home region. To the extent that local Communist Party bosses wield extraordinary powers in their feifdoms, it’s clear that Dalian has certainly made its mark internationally as a viable center for IT-outsourcing and R&D centers.

Chongqing, though, is rather a more difficult nut to crack:

“Per capita GDP rose 15.2 percent, but at 14,622 yuan ($2,030), it is still less than a quarter of Shanghai’s, and about half of that in Chengdu, Sichuan’s provincial capital and the city to which Chongqing is most often compared.”

And though Chongqing’s economy grew 15.6 percent over 2006, its fastest growth rate in a decade, according to the region’s Statistics Bureau, the region still saw a drop in Foreign Direct Investment (FDI) from 4.5% of the national total to 3% the last couple years, according to the Financial Times. In other words, despite the tens of billions of dollars Central Government has plowed into the region to promote its Go West program, the region has become less attractive to foreign investors.

Bo Xilai, by all accounts, is a very charming man. Beijing is apparently expecting him to dazzle foreign investors into wanting to sink their millions in the mountainous, fog-enshrouded region that defines Chongqing’s rough-and-tumble business environment.

But investors beware: when the fog lifts, and the sun comes out to reveal the true nature of the place, there’ll still be the dearth of transportation infrastructure, skilled labor, experienced managers and incorruptible officials that have made Chongqing a tough sell all along.

Bill Dodson
SUZHOU, China