26th June 2012
Since the dismissal of Bo Xilai (“Bo”), from his role as Communist Party of China (“CPC”) Committee Secretary of Chongqing, in March 2012 and the subsequent instatement of Zhang Dejiang (“Zhang”) as his replacement, the working level government apparatus has continued to function smoothly. Zhang is the Vice Premier of the People’s Republic of China and member of its Politburo, and his assignment to Chongqing has served to underscore the importance of the municipality to the central government.
On 22 June 2012, at the fourth party congress meeting, the 13 members of the Chongqing standing committee were selected. The standing committee will run the municipality for the next five years. Zhang was reconfirmed as party secretary, as was Mayor Huang Qifan. Mayor Huang is considered by many to be responsible for the successful development of the Special Economic Zones, previously in Pudong Shanghai and currently in Liangjiang New Area, Chongqing. As such, his position on the standing committee is expected to provide stability and continuity to the implementation of the municipality’s plans. Fan Zhaobing, the head of the municipal united front work department, and Liu Guanglei, the top official overseeing law enforcement retained their seats on the standing committee. In contrast, Xu Ming (the senior official supervising Chongqing’s Liangjiang New Area) and He Shizhong (Chongqing's propaganda chief) failed to retain their seats on the standing committee.
Zhang has previously emphasized that it will be “business as usual”, and that the government will continue to attract investments into Chongqing. Speaking in March 2012 to a delegation led by the head of Taiwan's Acer Group, Wang Jen-tang, at a technology expo, Zhang declared, "Chongqing has achieved remarkable economic and social development since becoming a municipality. One valuable lesson we have learned is that we need to stick to reform and opening up... Chongqing will diversify and optimize its policies to improve its opening up... We will improve our business environment, streamline investment procedures, improve service quality and protect the legitimate interests of investors."
The continued development of foreign investment in Chongqing has been left unaffected by the recent reshuffle, as foreign investors have shown their willingness to continue investing in the prospering Chinese municipality. Yang Yi, a spokesman for the State Council Taiwan Affairs Office confirmed that the city’s party committee and government have clarified and strongly affirmed that they will continue developing their policy of opening up. Chongqing’s continued economic development is best illustrated through the hi-tech fair hosted in April 2012 which attracted 2,100 businesses, government agencies and research institutions from across China and from over 30 foreign countries. Chongqing also signed cooperation agreements with foreign partners on smart grids, green materials, clean coal and industrial robots, among others. Furthermore, the city continues to boast impressive growth figures: the municipality’s economic output topped RMB 1 trillion (USD 160 billion) for the first time in 2011, up more than 16 percent year on year. The Bloomberg’s 2012 Global Cities Index and Emerging Cities Outlook report highlighted Chongqing as one of the cities with High Potential and most likely to improve in global influence, just behind Shanghai and Beijing. The High Potential category was characterized by the following strengths: gross domestic product growth, middle class growth, infrastructure improvement, and improvement in ease of doing business.
It is within this context that Aktis Group continues to align its investment strategy with the central and local governments’ resolve to encourage the development of affordable housing, small and medium-sized enterprises (“SMEs”) financing and tourism sectors. Danny Yee, managing director of Aktis Capital Advisory, affirmed that “it’s business as usual after Bo’s downfall. [Aktis Group] is concentrated in sectors like domestic consumption which preceded Bo’s emergence, and our strategy is to focus on areas that don’t get affected by short-term events”. Aktis Group’s continued strong presence in Chongqing is best illustrated through an onshore investment fund management company, Chongqing Aktis Investment Fund Management Company, which secured a 5 billion Yuan (HK$6.101 billion) fund in accordance with the Chongqing Tourism Bureau to invest in tourism projects focusing on the municipality. The government of Chongqing has pledged to contribute up to 5 percent of the fund, while Aktis Capital Advisory has been raising the remaining amount from both domestic and foreign investors. Additionally, as of May 2011, the Chongqing Aktis Investment Fund Management was granted the right to establish private equity funds under Chongqing’s Qualified Foreign Limited Partnership scheme along with seven other institutions.
Aktis Group believes that Chongqing will continue to show stronger growth than the coastal cities. However, in the next two to three years, it is likely that its GDP percentage growth will reduce from mid to low teens, a trend which would be consistent with the general forecast of a slowdown in average GDP across China.
"Foreign Investment in Chongqing Unaffected." Chinadaily.com.cn. N.p., 20 Apr. 2012. Web. 26 June 2012.
"Life Moves on in Chongqing". Chinadaily.com.cn. N.p., 17 Apr. 2012. Web. 26 June 2012.
Shih, Toh Han. "Business as Usual in Chongqing, Aktis Says." South China Morning Post [Hong Kong] 07 May 2012: n. pag. Print