The Biggest (And Getting Bigger) City You’ve Never Heard Of

Deep inside China, the city of Chongqing is growing so fast that maps are out of date the moment they’re printed. Even for a country busting at the seams with development, Chongqing is exceptional—it’s the world’s fastest growing city.

From just 200,000 people in the 1930s, the city’s population has ballooned to 32 million and there are no signs of slowing – the metropolitan area absorbs an additional 1 million people every year.

Like many other places in China, this high-speed transition has overwhelmed infrastructure and the very idea of “city planning.” An article about Chongqing in the latest issue of Foreign Policy magazine likens the city’s growth to “a railroad car hurtling down the line at the same time that attendants scramble to hitch on the wheels and lay the track.”

Speaking of laying track, $1.5 billion is to be spent on the city’s light-rail system and  $1.2 billion on other rail lines this year, Foreign Policy writes. On top of that key infrastructure outlay, $2.3 billion is going to highways and a massive project is under way to double Chongqing’s airport capacity to 30 million passengers by 2011 and 70 million by 2020. Financing for these and other projects is a mix of government and foreign investment.

On the jobs front, the local government slashed corporate tax rates to 15 percent (the national rate is 25 percent) to woo foreign corporations. That appealed to Hewlett-Packard, which is setting up shop in the area.

The “Chongqing model,” as it is called, has quadrupled the city’s GDP since 1998 to $86 billion. Currently, the city’s per capita income is only $3,300 a year, well below Beijing’s $10,000 level.

Chongqing’s robust weapons, motorcycle manufacturing and chemicals factories aren’t cheap-labor exporters to the developed world. Nearly 90 percent of the industrial goods produced in Chongqing are kept in the country.

This is a good example for the Beijing government to point at as it works to transition China from an export-led economy to one built on domestic consumption.

Read more about investing in the China Region.

Read “Chicago on the Yangtze” from Foreign Policy Magazine

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About Frank Holmes 263 Articles

Affiliation: U.S. Global Investors

Frank Holmes is CEO and chief investment officer of U.S. Global Investors, Inc., which manages a diversified family of mutual funds and hedge funds specializing in natural resources, emerging markets and infrastructure.

The company’s funds have earned more than two dozen Lipper Fund Awards and certificates since 2000. The Global Resources Fund (PSPFX) was Lipper’s top-performing global natural resources fund in 2010. In 2009, the World Precious Minerals Fund (UNWPX) was Lipper’s top-performing gold fund, the second time in four years for that achievement. In addition, both funds received 2007 and 2008 Lipper Fund Awards as the best overall funds in their respective categories.

Mr. Holmes was 2006 mining fund manager of the year for Mining Journal, a leading publication for the global resources industry, and he is co-author of “The Goldwatcher: Demystifying Gold Investing.”

He is also an advisor to the International Crisis Group, which works to resolve global conflict, and the William J. Clinton Foundation on sustainable development in nations with resource-based economies.

Mr. Holmes is a much-sought-after conference speaker and a regular commentator on financial television. He has been profiled by Fortune, Barron’s, The Financial Times and other publications.

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