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Chengdu, Chongqing expected to join Yangtze River Economic Belt

SHEN YANXIN and JI WENBO | 2021-06-03 | Hits:
(Chinese Social Sciences Today)

Skyline of Chongqing Photo:CFP

The Chengdu-Chongqing economic circle and the Yangtze River Economic Belt (YREB) are two development strategies China is implementing to improve regional economic planning and to promote regional coordinated development. In October 2020, the Political Bureau of the CPC Central Committee reviewed the Planning Outline for the Construction of Chengdu-Chongqing Economic Circle, and recommended adherence to the concept of integrated development, to improve the regional cooperation mechanism. The world today is undergoing changes unseen in a century, and integration of the Chengdu-Chongqing economic circle with the YREB is quintessential for the high-quality development of China’s economy. 
Coordinated positioning
In the 1980s, the central government put forward the strategic concept of “one line, one axis”. One line refers to the coastal line and one axis refers to the Yangtze River. The Outline of YREB Development, published in March 2016, proposed a “one axis, two wings, three poles and multiple points” pattern to make full use of the involved waterways, highways and city clusters. In January 2020, the central government deployed a Chengdu-Chongqing economic circle development plan that supports the region to become a key economic center in China. 
Taking up 21% of China’s total land area, the YREB region covers 2.05 million square kilometers, connecting 11 provinces and municipalities including Hubei  and Sichuan provinces, Chongqing, Shanghai, and beyond, with a population and economic total of more than 40% of the country.
Geographically, along the YREB, the Chengdu-Chongqing economic circle sits on the upper reaches of the Yangtze River. It is adjacent to the Middle Yangtze River Economic Zone represented by Wuhan, and  corresponds with the Yangtze River Delta. Therefore, deep integration into the development of the YREB is necessary for the construction of the Chengdu-Chongqing economic circle.
Balancing development
Currently, there are multiple challenges in the coordinated development of the YREB and the Chengdu-Chongqing economic circle, such as the imbalanced regional development, imperfect regional cooperation mechanisms, a development bottleneck linked to the Yangtze River waterway, the grim ecological environment, and the arduous task of industrial transformation and upgrade.
The first step is to prioritize development above all else, to facilitate an industrial gradient transfer. There are significant differences in the spatial economic development levels between the eastern and western regions along the YREB. The lower reaches enjoy higher economic developmental levels. Comparatively speaking, the Chengdu-Chongqing economic region, located in the upper reaches of the Yangtze River, is in an economic catch-up stage. There is an economic basis for the industrial gradient transfer along the YREB. There is huge room for coordinating development of the Chengdu-Chongqing economic circle and the Yangtze River Delta area, which will directly affect the overall YREB. The economic circle is geographically at the intersection of many national strategies, and therefore it must be seamlessly integrated into these strategies, such as the Belt and Road Initiative, the YREB, and the development of western regions.
At the same time, the Chengdu-Chongqing region is located at the intersection of the horizontal axis of the Yangtze River passage and the longitudinal axis of the Baotou-Kunming passage within the “Two- Horizontal-Three-Vertical-Axes” spatial structure of national urbanization. Therefore, it is necessary to effectively overcome geographical disadvantages and strengthen the construction of outward transportation, energy infrastructure, and information communication infrastructure. The economic circle should make use of the western region’s link to the Belt and Road Initiative, promote the new land-sea corridor to deepen the two-way connection of land and sea. As such, the economic circle will be integrated deeply into the global supply chain and value chain. The economic circle should conform to the rules of economic globalization and international industrial transfers, and expand the export-oriented industrial economy.
Secondly, construction of the Chengdu-Chongqing city clusters must increase its pace. Urban cluster development is an important strategy for China’s economic and social development within the 14th Five-Year Plan (2021–2025) period, and the construction of a Chengdu-Chongqing economic circle is an essential part of that strategy. The region should embrace this opportunity to form a new type of urbanization with Chengdu and Chongqing as the center.
The region must promote high-quality economic development of the western region by developing the economic circle, which in turn will support the country’s high-quality economic development. The region should take the Yangtze River Delta urban cluster as a reference, and actively direct Chengdu and Chongqing to transform and upgrade, and to realize the reasonable spillover of production factors, allowing peripheral small and medium-sized cities to restructure resources, to differentiate urban layouts and the division of labor, and start on the path of development with distinctive features.
At present, in the construction of the economic circle, the “Chengdu-Chongqing dual-core drive” mode is dominant, and the Chengdu-Chongqing agglomeration effect is powerful. It is inevitable that developmental imbalances in nearby cities such as Neijiang, Zigong, Suining, Nanchong, and Guang’an, will occur. Therefore, it is necessary to avoid this “siphon effect” when constructing the Chengdu-Chongqing economic circle.
Deep integration
The Chengdu-Chongqing economic circle must actively integrate into the “one axis, two wings, three poles, and multiple points” developmental pattern along the YREB. In this pattern, “multiple points” refers to prefecture-level cities outside the three major urban clusters, which play a supporting role. In accordance with the resources and environmental carrying capacities, those cities should continuously improve their urban functions, cultivate advantageous industries, build distinctive city characteristics, and strengthen economic ties with central cities to promote regional economic development.
To accomplish this, the leading role of innovation as a driver is vital. An important strategic position in the YREB is an innovation driven zone that leads the country’s transformation. In order to deeply integrate into the development of the YREB, the Chengdu-Chongqing region must first combine their cities’ respective innovation advantages to build an integrated innovation system. It is necessary to coordinate the development of the industrial chain and the innovation chain continuously through the establishment of an industrial technology innovation strategic alliance. In the context of promoting supply-side structural reforms, the region must establish a linkage mechanism connecting technological services with industrial restructuring, to build itself into a science and technology innovation center.
Next, urban layouts of innovation chains and industrial chains should be coordinated. The region should strengthen the basic roles of coordinated innovation chain and service chain layouts, highlighting the spatial function layout and coordinating manufacturing industry clusters and technological services industry clusters.
The Chengdu-Chongqing region is positioned to be the fourth economic growth pole in China, which makes the region the fourth manufacturing pillar in the country. Chengdu and Chongqing must cooperate in developing industry clusters. Meanwhile, a demonstration zone for the integrated development of an industrial internet for the Chengdu-Chongqing region should be collaboratively developed. By employing information technology, the region can transform traditional industries, actively promote digital industrialization, and develop a digital economy.
The joint construction of a Chengdu-Chongqing industrial system will reduce losses due to competition, cashing in on industry transfer opportunities along the YREB. The region should highlight complementary regional advantages, build a comprehensive industrial chain, and use economies of scale to hedge against the loss of competition caused by industrial homogeneity.  
In addition, the Chengdu-Chongqing region can coordinate the development of central cities and peripheral cities through functional city zoning. From a regional development standpoint, the region is entering a development stage focusing on city clusters. In order to become a new growth pole, obeying objective laws is vital. Over the years, pillar industries in Chongqing and Chengdu have seen homogenous market competitions, and the two cities need to improve substantially in regard to urban coordination and cooperation mechanisms, spatial development strategy coordination, and unified market construction. Furthermore, there is no intermediary hub city of considerable scale between Chongqing and Chengdu. In the construction of a Chengdu-Chongqing economic circle, there should be a clear division of functions between central cities and peripheral cities. As two major central cities, Chengdu and Chongqing need to emphasize the leading role of innovation, boost headquaters economy, and lead in productive services provision. In this way, not only would homogenous market competition be avoided, but also coordination and complementarities among cities could be enhanced. Therefore, the competitiveness of the economic circle would be increased.
The region should also realize possible positive correlation effects of the siphon phenomenon. Through functional zoning, policies can coordinate development of central cities and suburban regions during the construction of the Chengdu-Chongqing economic circle, laying a foundation to break central cities’ siphon effect. To achieve positive correlation effects of the siphon, this region can focus on its comparative advantages, optimize the business environment, and take a development path with distinctive characteristics in line with its actual developmental conditions. 
First and foremost, the surrounding small and medium-sized cities should speed up their interconnection and actively integrate themselves into the economic circle’s central cities. Those cities on the periphery must further upgrade their infrastructure, actively integrate themselves into central cities’ functional zones, and make well-rounded preparations to undertake industrial transfers and the division of labor from central cities. 
After this, small and medium-sized peripheral cities should promote industrial development with their distinctive characteristics, and actively support the development of the Chengdu-Chongqing economic circle and the YREB. Those cities should also focus on their own core competitiveness, explore their own comparative advantages, and develop unique characteristic industries. Those cities can seize the opportunity to upgrade industry, undertake the industrial transfer of smart manufacturing from Chengdu and Chongqing, and extend the industrial chain that supports smart manufacturing industry in the region. 
Finally, small and medium-sized cities in the periphery should enhance their urban qualities and cultivate their position as the backyard garden of central cities in the economic circle.
Shen Yanxin and Ji Wenbo are from the Institute of Contemporary China Studies at the Chinese Academy  of Social Sciences.


Edited by MA YUHONG