At first glance, Chongqing is not the ideal location to set up a company expansion or start a supply chain.

Just look at a map and you’ll see it’s a far cry from the coast.

As Reuters reported:

Where Dalian’s geography made it a natural target for foreign investment from Japan and Korea, Chongqing is hampered by its location far up the Yangtze at the edge of the Three Gorges dam reservoir, and by the poverty and inaccessibility of its rural counties.

‘You just have to look at a map,’ said one foreign business executive whose company is planning investments there. ‘If you need something and it’s not in the Sichuan basin, it’s a pain,’ said the executive, adding that shipping by barge up the Yangtze from Shanghai was time-consuming and expensive.

But Richard Brubaker, who is managing director of China Strategic Development Partners and has a wealth of logistics experience, feels very differently.

In his Allroadsleadtochina.com blog, Mr. Brubaker noted the advantages of Chongqing logistics:

• Chongqing has all the modes feeding into it - river, rail, highway, and air.
• The city is definitely the water hub of southwestern China.
• Strong trucking firms exist already.
• China’s logistics industry is catching “go west” fever, as they realized they’re the ones needed to get out there (and Chongqing is nothing if not west).

So, you can get things in and out of Chongqing, but why would you want to?

Aside from the fact that the Pearl River Delta could be up the creek without a paddle, the same Reuters article noted that Bo Xilai has been heading up Chongqing’s economic efforts since last year.

The popular Chinese politician is currently secretary of the CPC Chongqing Municipal Committee.

Think Camelot comes to China.

According to Reuters:

‘There’s a feeling that this is a guy who is famous and he’s coming to little Chongqing,’ said a diplomat based in the city, who asked not to be named in accordance with embassy regulations. ‘He’s going to stir things up a bit. Already, there is an instant willingness (among foreign companies) to look at Chongqing that wasn’t there before.’

Reuters suggested that Mr. Bo could have a chip on his shoulder, not being made a vice-premier in Beijing.

But others like Dezan Shira & Associates have commented that Chongqing has long been the making of Chinese leaders, and that if FDI flows to into China’s inland regions as a result of Mr. Bo’s efforts “then a future tilt at the Premiership may not be ruled out.”

Even if Mr. Bo’s tenure is less glorious than anticipated, Chongqing’s economic wheels already are on a fast roll.

Reuters noted Chongqing’s economy grew 15.6 percent in 2007 over 2006, its fastest growth rate in a decade.

    Channel: Local Wisdom     |