Will Chongqing’s boom last after Huang Qifan quits as mayor?

Huang credited with helping to oversee rapid growth in the megacity which has topped China’s GDP expansion figures for over two years

PUBLISHED : Monday, 02 January, 2017, 6:09pm
UPDATED : Monday, 02 January, 2017, 11:51pm

Huang Qifan’s resignation as Chongqing’s mayor last week has raised questions over whether the economic model he engineered will continue and keep driving rapid growth.

Huang’s 15 years of service in the megacity earned him a reputation as a political survivor and a capable economic bureaucrat. It was Huang and his former boss Bo Xilai who created the “Chongqing model”, once seen as an example for growth for the rest of the country.

Domestic debate about the value of the model quietened after Bo was disgraced in 2012 and later sentenced to life in prison for graft and abuse of power. And even Huang did not draw attention to the model after Bo’s downfall.

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But the city weathered the ­political storm and remained the envy of many local governments for its stellar economic performance. It topped all provinces and cities for economic growth in 2014, 2015 and in the first three quarters of last year.

Chongqing has also maintained relatively affordable housing over the past two years under Huang’s management.

Home prices in the city of 30 million rose 6.5 per cent in November from a year earlier, compared with an increase of 26.4 per cent in Beijing, 29 per cent in Shanghai and 25.3 per cent in ­Tianjin.

“He is the real professional behind the Chongqing economic model … and one of the most capable economic managers in China,” said Henry Chan Hing Lee, an adjunct research fellow at the East Asian Institute at the National University of Singapore.

The formula for Chongqing’s expansion included centralising control of state-owned enterprises and land, rolling out the red carpet for foreign investment projects, letting farmers settle in urban areas more easily and forging closer links with the global economy. Under Huang’s tenure Chongqing launched a railway freight route to Duisburg in Germany so that products assembled in Chongqing could reach the European market faster.

Even after Bo’s fall, the local government’s management of the economy continued to attract cadres from other parts of the mainland to learn from the “Chongqing experience”.

Huang also leaves a legacy in the sensitive issue of the rural land management system.

In Chongqing, farmers are allowed to trade their idle land for cash, a bold scheme that helps farmers when they decide to move to cities. “The scheme benefits both the government and farmers, and deserves national extension,” Beijing Institute of Technology economics professor Hu Xingdou said.

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Huang started his early career in Shanghai and honed his skills while helping to develop Pudong district from a largely barren riverside swamp. Unlike other local officials who rarely speak out on national issues, Huang frequently commented on the nation’s economic problems. His record of getting things done and determination to make himself heard led to speculation that he might be promoted to high office. But, ­Huang, approaching retirement at 65, will be sidelined to the rubber-stamp National People’s Congress, according to sources.

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The Chongqing model has not been without its critics. Some argued the city was just pursing the state-led, debt-fuelled growth that is increasingly unsustainable. The city’s GDP expansion, while still in double-digits, has slowed from21.4 per cent in 2011 to 10.7 in the first three quarters of 2016.

The person in charge plays an important role in policy on the mainland and it is uncertain how Chongqing will continue with the successful formula.

There are also concerns that the economic growth, which also resulted in high levels of local debt, is sustainable.

Huang, too, appears modest about the city’s achievements. At the peak of the political fallout from Bo’s downfall in March 2013, Huang told the China Economic Weekly that he did not recognise the phrase the “Chongqing model”. “There’s no model ... only trials and exploration in reform,” he said.