From Nation pages 11 & 13, issue no. 345, Dec 10th 2007
Translated by Ren Jie
Original article: [Chinese]

On November 30th, Bo Xilai, member of China's politburo and son of a former vice-premiere, was appointed chief of the Communist Party committee in Chongqing municipality. He replaces Wang Yang, who will become the party chief of Guangdong province. The latter is a fierce proponents of reform and opening up, and using private business to fuel economic growth.

In China, party provincial committee secretary or party chief is the highest in hierarchy for a province, in charge of determining the direction of policy, implementing party guidelines and arranging the annual budget for a given region.

Bo Xilai Comes to Chongqing
At his inauguration, aside from stressing his intent to adhere to the highest standards of discipline and work ethic, Bo Xilai noted that he will absolutely not permit nepotism in government.

City residents told the EO that they hope the former head of the Ministry of Commerce will bring into play his 20-plus years of both political and trade experience, and kick-start reform in Chongqing. A poll from a popular Chinese website showed that the three issues Chongqing residents most wanted Bo to deal with were economic development, corruption, and improving the education system.

His relationship to the Ministry of Commerce has already proved useful. As early as October 23, the Ministry and the Chongqing government signed a memorandum of economic development for Chongqing. Chen Jian, vice-president of the Chongqing Association of Trade and Commerce, told the EO that just a few days ago, nine foreign ambassadors joined a meeting to discuss the future development of Chongqing's trade.

Wang Yang Takes the Helm of Guangdong

Bo's predecessor, Wang Yang, on the other hand will become the Secretary of the Party's Guangdong Provincial Committee. Previous to that Wang was known as the"child mayor" of Tongling in Anhui province, a post which he took up when he was 33. In Chongqing, Wang strongly supported the development of the private sector, and was tolerant of "non-standard situations" of the nascent private economy, which is the same as the policy executed by Zhang Dejiang in Guangdong.

In 2003, after premier Wen Jiabao took his post, Wang was moved from his position as the vice-director of the State Planning Commission to become deputy secretary of the State Council, where he took part in drafting the eleventh five-year plan. When he worked in Chongqing in the post Bo has now assumed, he championed economic growth by encouraging private business, and emphasized tolerance and leniency during this initial period of what he called its "non-standard" development.

While mayor of Tongling, Wang launched a discussion about more free thinking in Tongling, which attracted national attention. Before leaving Chongqing, he demanded all cadres to be bold, to attempt new ideas, and brave new responsibilities. Wang has since said that innovation is the soul of Guangdong.

It is expected that fifty-two-year-old Wang will push "innovative thinking" in order to keep Guangdong in the front rank of rapidly developing provinces.

Challenges in Guangdong
After SARS struck in 2002, while Zhang Dejiang was the Guangdong provincial party chief, the GDP of Jiangsu and Shandong caught up to Guangdong, closing the gap to less than a few hundred million yuan. In 2003 and 2004, Guangdong's fixed asset investments were worth half of Jiangsu's and Shandong's.

In 2004, Guangdong's GDP was on top again, and Zhang Dejiang proposed to develop the private economy-- the same strategy that he used successfully in Zhejiang province.

As a result, from 2003 to 2006, the private economy developed rapidly in Guangdong-- adding five percent to GDP, and enrapturing other provincial leaders eager to attract investment.

At that time, Guangdong was in economic transformation— moving from an extensive, heavily natural-resource-dependent growth mode, to one more dependent on technology and innovation. In 2005, Zhang Dejiang said that the province's ability to make such a transition would decide its economic fate. He emphasized on encouraging startup—and thus private—businesses.

With this backdrop, some high-tech firms like Huawei and Zhongxing intensified operations in Guangdong under an umbrella of preferential treatment. That year, most of China's patent applications came from Guangdong.

But not all growth has been focused internally. In the end of 2003, Zhang Dejiang proposed a pan-pearl-river-delta trade net that would connect the economies of nine provinces with Hong Kong and Macao more tightly.

It is Guangdong's response to losing it's comparative advantage after the sudden emergence of the Shanghai-Bodong and Beijing-Tianjin-Tang'gu economic areas.

But this is not all that Guangdong faces. Locals often refer to the "problems of 20 million" to discuss the province's challenges. First, Guangdong has 20 million peasants who have lost land in the process of economic transformation, but have not yet been integrated in new industries. Second, there is a labor surplus of 20 million—immigrants from all over China who settle at the lowest strata of society in Guangdong, and are constant concern for the city's public security apparatus. The third" 20 million" problem refers to those populations living in impoverished areas around the Pearl River Delta.

Wang is familiar with them. In his one-hour acceptance speech delivered at his inauguration, he repeatedly mentioned "innovation" and "reform and opening up". He emphasized that Guangdong took its first steps during reform and opening up, and now soars because of it; thus only more innovation and deeper reform and opening up can help Guangdong secure a bright future.