Bloomberg News

Ousted Bo’s ‘Chongqing Model’ Outpaced Peers: Chart of the Day

March 15, 2012

Bo Xilai, whose policies lured billions of dollars in foreign investment and thousands of jobs to China’s most-populous municipality, leaves a legacy of economic growth that outpaced rivals’ after he was sacked as Chongqing’s highest official.

The CHART OF THE DAY tracks growth in per-capita economic output against the other municipalities -- Beijing, Shanghai and Tianjin -- and neighboring Sichuan province. The lower panel shows electricity output gains were also faster in Chongqing, where Bo, the son of one of the founders of the People’s Republic, took the helm in December 2007. Figures are based on government data compiled by Bloomberg in percentages using Dec. 31, 2006 as a starting base.

“Under Bo, Chongqing was really identified as a destination for investment in western China at a time when lots of foreign investors were looking for places with cheaper labor,” said Victor Shih, author of “Factions and Finance in China: Elite Conflict and Inflation” and a professor at Northwestern University in Illinois.

At the same time, he campaigned to revive the songs and slogans of Mao Zedong and headed a corruption crackdown that led legal experts including He Wiefang, a professor at Peking University, to complain of rights violations.

Bo's ouster, reported yesterday, followed an incident involving one of his top lieutenants, Chongqing’s former police chief, Wang Lijun. Wang is under investigation after he spent a night last month in the U.S. consulate in neighboring Chengdu, prompting speculation that he was seeking asylum.

The so-called ``Chongqing Model'' emphasizes state-led investment, with development zones, transportation links and incentives to lure businesses. Hewlett-Packard Co. (HPQ), Ford Motor Co. (F) and Coca-Cola Co. (KO) have operations there. Economic expansion in Chongqing, which is in the center of China, was 16.4 percent last year and 17.1 percent in 2010.

To contact Bloomberg News staff for this story: Kevin Hamlin in Beijing at khamlin@bloomberg.net

To contact the editor responsible for this story: Paul Panckhurst at ppanckhurst@bloomberg.net


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