SPECIAL REPORT

Chongqing express: A special report on gateway to western Chinese region

Development of the city - gateway to the western Chinese region - is expected to accelerate further, now that it is the site for the third China-Singapore government-linked project

The first time bank executive Victor Huang visited Chongqing to woo his girlfriend in 1994, he had to catch a ferry from eastern Nanjing, where he was studying, and travel 1,500km west through the towering gorges of the Yangtze River. He reached Chongqing six days later.

"Getting here is harder than getting to heaven, they used to say," said the 40-year-old Jiangsu native, paraphrasing an old idiom.

Today, that journey takes two hours by plane. The two cities are now connected by a highway that stretches to coastal Shanghai, while high-speed rail lines have cut the train journey to a quarter of the 50 hours it once took.

The reshaping of Chongqing as China's gateway to its western region began after it was designated in 1997 as one of the country's four municipalities. In an area 100 times the size of Singapore, thousands of kilometres of roads were paved, some of them tunnelled through hills, at great cost.

The efforts transformed the city from a backwater town with hillside-hugging diaojiao lou (stilt houses), single-lane roads and no traffic lights, into a metropolis with gleaming skyscrapers that illuminate the Yangtze River at night.

 

It is this same transformative power that Beijing and Singapore hope Chongqing can bring to China's west, where development has lagged behind that in richer coastal provinces.

Known for its mountains, mist and muggy summers, Chongqing was named last month as the site for the third government-linked project between China and Singapore, focusing on financial services, aviation, transport and logistics, and information and communication technology (ICT).

The project has created a buzz in Chongqing, according to a dozen Chinese and Singaporean executives, businessmen and residents of the city who spoke to The Straits Times recently.

"They picked the right place. Chongqing has the best conditions in China's west and the right people to do business," said Ying Li International Real Estate executive director Yang Xiaoyu.

Listed on Singapore's mainboard, Ying Li is one of several Chongqing businesses eagerly awaiting the project's implementation details.

  • CHONGQING

  • POPULATION: 33 million

    GDP (2014): 1,400 billion yuan (S$305 billion)

    GDP growth (2014): 10.9 per cent

    Size: 82,000 sq km

    Average wage: 3,995 yuan

    Singapore firms present: City Developments, CapitaLand, Mapletree, Surbana Jurong, DBS Bank

    MNCs present: BP, Hewlett-Packard, BASF, Ford, KPMG

Its office sits in Yuzhong, one of Chongqing's nine urban districts. Yuzhong and Jiangbei districts represent the city's most prime land, situated at the confluence of the Yangtze and Jialing rivers. Dotted with office buildings, malls and apartments, the districts buzz with activity throughout the day.

Ying Li, like other major companies in the city, has been invited to meetings by Chongqing officials to give feedback on what it hopes the project can offer.

China is letting firms based in Chongqing borrow offshore yuan from Singapore-based banks. Before, such initiatives excluded firms in sectors like real estate - and Ying Li has told officials it would like to see these curbs lifted.

The hope is that increased financing will spark further investment and growth in Chongqing's service and ICT sectors. It is already a leading manufacturer of vehicles, electronics and steel.

"ICT is a high-risk, high-return sector which requires capital, but a lot of funds is currently going to Beijing, Shanghai and Guangzhou. Hopefully that will change with this collaboration," said Mr Ma Zhaode, chairman of Chongqing tech start-up Miaoyin, which reported a turnover of 300 million yuan (S$65 million) in the past year.

While no details of the Sino-Singapore project have emerged yet, one part will likely centre on the Chongqing Liangjiang New Area, where an aviation, logistics and manufacturing hub is being planned around the airport.

Even before the project was announced, the government has been building infrastructure in this area, about a 45-minute drive north of the city centre.

Pointing to the six-lane boulevards in the new Longxing industrial area, local driver Wei Jianjun, 53, said: "Two years ago, there was little infrastructure here. It's come up very quickly."

In neighbouring Fusheng industrial area, one new road has been named "Hyundai Way", after a new 7.75 billion yuan Hyundai car plant which broke ground in June.

Besides building infrastructure, experts believe Chongqing's good governance and municipality status - which reduces bureaucracy - have allowed its growth to consistently outpace the national average.

"Look at how Chongqing went from zero to being a leading notebook manufacturer," said Mr Daniel Liao, who heads CDL China's operations in Chongqing, referring to how the city has in recent years attracted IT giants like HP and Dell to set up factories.

Today, close to half of the world's top 500 companies have set up operations in the city.

But numerous challenges remain. While the city houses the most number of foreign banks in western China, critics say financial institutions still lack transparency and international standards, hindering cooperation with outsiders.

Its wealthy centre also belies its large rural surroundings, where two-thirds of its 33 million residents live as farmers.

This makes building supporting satellite cities more difficult, while attracting talent remains a work in progress. Chongqing has fewer than 9,000 foreign expatriates, compared with 200,000 in Beijing and Shanghai, and about 34,000 in Guangzhou.

As for Mr Huang, who relocated to Chongqing this year as the general manager of OCBC China's branch in the city, the girl he travelled long distances to meet is now his wife.

"We're thinking about staying long term," said Mr Huang. "Chongqing is developing very quickly."

A version of this article appeared in the print edition of The Straits Times on December 15, 2015, with the headline 'Chongqing express'. Print Edition | Subscribe