City Bo built still has allure

PUBLISHED : Thursday, 26 April, 2012, 12:00am
UPDATED : Thursday, 26 April, 2012, 12:00am
 

'Bo Xilai might be corrupt, but he is a capable leader and is good to poor people,' said one Beijing taxi driver.

It's a 'but' that is often heard across the mainland these days in workplaces and coffee shops as people discuss the ousting of the former Politburo member and Chongqing party chief.

Bo's political career has been effectively snuffed out, but he still enjoys a good reputation for his economic management skills.

Then there are his campaigns to spruce up the southwestern municipality and help the poor find affordable accommodation. Indeed, if numbers say anything about a region's development, Bo can lay claim to being Chongqing's most outstanding leader.

Under his guidance, it made great strides in many areas, allowing it to top the mainland rankings for five major economic indicators last year, including economic growth.

The municipality's gross domestic product grew by 16.5 per cent last year, much faster than the national average of 9.2 per cent.

Chongqing registered even higher GDP growth in 2010 - 17 per cent compared with the national average of 10.3 per cent.

Bo has been known for his pro-business and market-oriented policies ever since he was mayor of the northeastern port city of Dalian in the early 1990s.

He went on to become governor of Liaoning province and then commerce minister before becoming Chongqing's party secretary in 2007.

Under his stewardship, Chongqing became the mainland's hottest investment destination, with the rapid upgrading of its logistics infrastructure and Bo's decision to slash corporate taxes to 15 per cent spurring many foreign and Chinese companies to set up operations there.

Annual foreign direct investment in Chongqing grew from US$1.2 billion in 2007 to US$10 billion last year.

Bo succeeded in turning it into a hi-tech manufacturing hub by luring multinationals such as HP and Foxconn. The municipality is on track to produce 100 million notebook and tablet computers in 2015, making it the world's largest production base.

Professor Ma Guoxian , director of the public policy research centre at Shanghai University of Finance and Economics, has studied Chongqing's development closely and visited several times.

'Most local cadres and ordinary citizens I met there said that Chongqing has made great strides in economic and social development in recent years under Bo Xilai,' he said.

He added that the rapid upgrading of the municipality's infrastructure had consolidated its position as western China's economic hub.

Ma said Chongqing had been more aggressive and ambitious than other regions in pursuing economic and social development.

On the hi-tech front, it plans to build China's biggest cloud-computing data-processing centre within three years. Turning to the environment, its forestry coverage grew by 2 per cent last year to 39 per cent - the fastest increase on the mainland.

Many poor people best remember Bo for his people-oriented policies that benefited those left behind by the mainland's economic boom.

For instance, Chongqing built 219,200 subsidised rental flats last year in the mainland's biggest subsidised housing project.

It also launched a scheme to give 1.3 million 'left-behind children' - the offspring of migrant workers who have moved elsewhere to find jobs - healthy lunches.

It has also spent 6.8 billion yuan (HK$8.3 billion) to build rural boarding schools for left-behind children and pioneered a scheme to grant migrant workers permanent residence.

More than 3.3 million rural residents will have been given urban residency, or hukou, by the end of this year, with another 7 million to follow.

'That is why most state media are toning down their attacks on Bo's economic and social policies despite continuing to attack his personal deeds,' Ma said.

Eric Li, a Shanghai-based writer and venture capitalist, describes Chongqing as the world's largest public policy innovation laboratory.

He sees the 'Chongqing model' as a possible answer to the 'middleincome trap' experienced by many rapidly-developing countries in the past, with growth stagnating and the gap between the 'haves' and the 'have-nots' growing wider. Professor Liu Kang, the director of Duke University's China Research Centre, said people needed to see the development model as a contradictory but viable experiment.

'The rapid GDP growth, the balanced social reform, including affordable housing, social welfare, medical care, et cetera, are worthy of serious study despite the fact they were backed by Bo,' Liu said.

However, Ma questioned the sustainability and economic efficiency of such rapid development, citing the fact that Bo had turned Chongqing from a medium-sized city into a mega-sized one, with its urban area expanding sixfold in a short time.

He also said that such rapid urbanisation would create as many problems as benefits for people.

Even more controversial is the city's borrowing- and spending-fuelled growth model, which many economists fear will result in serious bad debt for banks and possibly lead to a regional debt crisis.

One analysis says that the 10 major investment vehicles used by the municipality to fuel its growth have accumulated more than 346 billion yuan in liabilities.

Other estimates suggest that Chongqing's liabilities could total as much as one trillion yuan, equal to its annual GDP and far in excess of the central government's 20 per cent cap.

But state media have steered clear of criticising Bo's spree, perhaps because most regional counterparts have been doing the same thing.

Wu Si , editor-in-chief of the pro-reform journal Yanhuang Chunqiu, said the crux of the matter is where the money comes from and how the loans are repaid.

'The answer lies in whether you use 100 million yuan to produce 200 million yuan in economic results, or otherwise,' Wu said.

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City Bo built still has allure

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