Chengdu benefits from China’s One Belt, One Road strategy

When Chinese President Xi Jinping launched his One Belt, One Road (OBOR), or New Silk Road, initiative — a ploy to lash China to Eurasia and Africa using a ribbon of newly developed trade routes — politicians and investors across the world took out maps and began to chart new opportunities.

So did China’s city-level officials. In Chengdu, the capital of Sichuan province, city planners have focused on becoming China’s largest western transport and logistics hub.

Chengdu finds itself at the centre of a number of China’s economic development strategies. After painting its aims with a broad brush, Beijing leaves the details of these plans to lower-level officials and planners. Bright ideas and contributions are rewarded with funding, preferential policy and promotions.

One Belt, One Road, a trade and foreign policy initiative, includes plans to revive the routes that made up the old Silk Road as well as to spread economic growth inland away from the east coast. The plan dovetails with a second initiative, the Yangtze River Economic Belt, which will build up transport and trade along China’s longest river.

Chengdu wishes to become a buckle between the internal and external belts. “[We] have the advantage of linking two grand national plans,” said deputy head of the local planning ministry, Liu Xinhui, when launching the city’s new development strategy last October.

“It is the only city in western China that will have two airports and has the opportunity to become a logistic hub between the One Belt, One Road and the Yangtze Economic Belt,” he said.

Providing a blueprint in keeping Beijing’s vision will help Chengdu receive a chunk of the Rmb4.7tn ($705bn) for infrastructure and transport announced by the authorities in May — the largest state stimulus package to be announced since the global financial crisis.

But the city faces stiff competition. Chengdu is not the only burgeoning metropolis in western China, and it must jostle with its neighbours for a leading place in these sweeping macroeconomic strategies.

“Every city is launching new projects as part of One Belt, One Road,” says a government worker who promotes the city’s culture abroad. “Compared with Xi’an [an ancient Chinese capital], Chengdu has less history as a trade hub; compared to [nearby municipality] Chongqing, it has less economic and political clout.”

Expanding transport routes is the planners’ solution, but they face an uphill battle. Treacherous mountain terrain surrounds the city. In ancient times, moving to Chengdu meant consigning yourself to a backwater and the city still struggles with that reputation.

Chengdu remained relatively isolated until very recently. Locals can easily recall 30-hour train journeys in crammed carriages that snaked their way across China to Beijing.

Then, in 2008, a powerful earthquake razed the town of Yingxiu in Wenchuan just 80km away from Chengdu, sparking a national debate about the region’s shoddy construction and impassable roads. Despite rescue efforts, 69,000 people died and 18,000 were never found. In response, Sichuan and its capital received a quarter of the Rmb4tn infrastructure stimulus package released by Beijing after the financial crisis. New highways, runways and railway made Chengdu accessible.

High-speed rail to the capital now takes only 14 hours. Passenger flow at Chengdu Shuangliu International Airport has more than tripled in the past 10 years, and the airport is nearing its capacity of 50m passengers per year. British Airways, KLM and United Airlines operate direct flights from Chengdu to London, Amsterdam and San Francisco.

Chengdu’s tourism industry is booming. Official statistics show the city was visited over 190m times in 2015, bringing in Rmb204bn in revenue.

To ensure its position as the door to western China, Chengdu’s planners hope to soon double the city’s flight capacity by building a second international airport. Ground broke for the Rmb71bn project in May, and completion is slated for 2020. If all goes to plan, Chengdu will become the third city in China with two international airports after Beijing and Shanghai.

Passenger transport aside, Chengdu also plans to keep expanding the capacity of cargo routes in and out of the city. Opened in 2013, a freight train runs directly from Chengdu to Lodz, Poland, taking 12-14 days. The city signed a memorandum of understanding with DHL, the logistics operator, earlier this year to improve the line’s speed and efficiency.

Such efforts did not prevent the total value of goods traded in and out of Chengdu to fall below $40bn in 2015 — the lowest annual value since 2011.

But there are signs that the planners’ work has not gone unnoticed in Beijing. On a state visit to Poland to promote the One Belt, One Road initiative this June, President Xi Jinping and his Polish counterpart Andrzej Duda met a train arriving from Chengdu on the platform in Warsaw.

Source: Financial Times

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