Chongqing rolls on

Chongqing rolls on

A city’s deposed leader had tried to be different. But was he?

Apr 28th 2012 | CHONGQING | from the print edition

• 
  

LIKE many local governments in China, Chongqing’s has an exhibition hall devoted to its dreams. Its scale models show an urban core sprawling outwards with thickets of new apartment blocks: cheap housing for the masses built at vast government expense. Bo Xilai, who governed the region’s 30m people, 5m of them in Chongqing city, made big spending on public works his hallmark. His purge was seen in some quarters as the result of a struggle between two competing models of governance: the “Guangdong model”, in which economic liberalism is matched with pragmatic decision-making, and the “Chongqing model”, emphasising the importance of state-owned enterprises (SOEs) and traditional socialist values. But the Chongqing model trumpeted by Mr Bo’s supporters was by no means unique to Chongqing. Nor is it dead.
In closed-door meetings and in veiled attacks in the media, Communist Party officials have been heaping opprobrium on Mr Bo and members of his family. Their aim, it appears, is to make allegations stick that the Bos were corrupt and that his wife was complicit in the murder of a British businessman. A New York Times report claiming that Mr Bo wiretapped phonecalls between China’s president Hu Jintao and senior officials visiting Chongqing reiterated the fact that Mr Bo is now politically finished. But many of his economic policies, though the subject of a bitter dispute between the two ideological camps, will probably prove resilient, for they are more in line with party doctrine, or at least common practice, than either camp admits.

In this section

• »Chongqing rolls on
• The monkey and the mouse

Mr Bo and his officials avoided using the term “Chongqing model” to describe the south-western region’s formula for securing such accolades as one of the fastest-growing provinces or provincial-level regions in the country (at 16.4% last year) and, more controversially, one of China’s happiest places (in some state-media surveys). But even after Mr Bo’s sacking on March 15th, government-owned bookshops in Chongqing continued to stock books that discuss the model and Mr Bo’s role in implementing it.
Liberal scholars in China have delighted in picking apart Mr Bo’s policies, which they characterise as a lurch back towards Maoism. Their harshest attacks have been on his attempts to revive “red culture” by encouraging the singing of revolutionary songs and on the brutal methods (if not the aims) of his crackdown on organised crime.
But state-controlled media have shown far more restraint. This might reflect differences among Chinese leaders over how to assess Mr Bo and his leadership of Chongqing. But it is also likely that even Mr Bo’s enemies in Beijing worry about launching an assault on his policies, for fear that it might encourage criticism of the central leadership’s own economic strategy. Much of Mr Bo’s approach took root under the leadership of his predecessor, Wang Yang, who went on to become party chief of Guangdong province (and champion of the Guangdong model). Mr Wang is widely expected to join the Standing Committee of the Politburo later this year (a spot Mr Bo coveted). Mr Bo’s chief economic strategist, Chongqing’s mayor Huang Qifan, was a strategist in both administrations. He remains in office and seems still to be engaged in policymaking.
Mr Bo’s strongest supporters are diehard Maoists and members of the so-called “new left” who believe that China has strayed too far towards Dickensian capitalism. But this group has projected onto Chongqing an image of communist rectitude that does not fit the reality of the region’s development nor Mr Bo’s own proclivities. As one foreign businessman put it, Mr Bo would “signal left but turn right”. Jiang Weiping, a Chinese journalist who was jailed for five years after writing articles critical of Mr Bo, and is now living in Canada, calls him an “opportunist”.

Take, for example, his much-touted admiration for SOEs. Mr Bo was quoted in 2010 by state media as saying that China should not import Western-style ways of doing business based on pure private ownership. “We need to have things that are state-owned,” he said. Mr Huang, the mayor, has boasted of a sixfold increase in the net value of state assets in Chongqing between 2003 and 2009. But the private sector has grown vigorously too. Its share of Chongqing’s GDP rose from about half in 2005 to more than 60% five years later, roughly the same as the national level.
One of Mr Huang’s strategies has been to lean on SOEs to boost the region’s coffers. Chongqing officials say local state firms have given 15-20% of profits to the government in the past five years, and that this will increase to 30% by 2015. Mr Huang has described the rate of contribution of SOEs to government revenue in Chongqing as the highest anywhere in China. Officials say this has enabled Chongqing to keep its business tax at 15%, compared with 25% elsewhere, and spend more on “people’s livelihood”. Though liberal economists in Beijing wince at Chongqing’s embrace of SOEs, they too have been calling for much higher payouts from them as a way of boosting funds for welfare.

Some Chinese economists wonder how long Chongqing can continue spending as much as it does without piling up crippling debts. The planning exhibition showcases Chongqing’s “ten big cultural facilities” (begun before the arrival of Mr Bo): lavish buildings of Pyongyang-style pomposity, including a “grand theatre” second only in size to Beijing’s. These have cost Chongqing a total of more than $1.5 billion so far. That is small beer, though, compared with the $7.6 billion spent by Mr Bo on a “Green Chongqing” campaign that has included mass tree-planting, in which some trees have ended up dead, locals say, because of the unsuitable climate.

But Chongqing’s spending is nothing unique. China is littered with wasteful “image projects” built by local chiefs. Central leaders may condemn some of Mr Bo’s extravagance, but they will tread carefully when it comes to his most conspicuous outlay: $15 billion for 800,000 apartments to be rented out cheaply to the poor. Chongqing’s rapid implementation of this colossal undertaking, beginning in 2010, led the central leadership to argue for similar projects nationwide. This was seen not just as a way of keeping the poor happy, but of shoring up China’s economy during the global downturn.

The scheme’s shortcomings are obvious in Chongqing, just as they are elsewhere. In one newly built cluster of apartment blocks a resident complains that a trip to the city centre takes two hours by bus. There are few shops, and many of the apartments are still empty, he says. At another new development, farmers nearby say they had to surrender their farmland to make way for construction and were not properly compensated.

Mr Bo may have talked like a leftist, but his tactics for getting work done fast and keeping the money rolling in would be familiar across much of China. He has bent over backward to court foreign investors. He offended his leftist allies by approving a multi-billion dollar chemical project involving BASF, a German firm. Much of Mr Bo’s economic strategy has been explicitly encouraged by the central leadership. In the end, in a party that prides itself on consensual, colourless leadership, it was Mr Bo’s highly visible efforts to boost his public image that hastened his undoing. Chongqing itself will carry on.