Date
26 September 2017
Chongqing, formerly under the jurisdiction of Sichuan province, is the best example of how a city can benefit from the elevation of its administrative status. Photo: GlobeImages
Chongqing, formerly under the jurisdiction of Sichuan province, is the best example of how a city can benefit from the elevation of its administrative status. Photo: GlobeImages

Urban legend tells tale of race for city status

Rumors are red rags to Chinese stock market bulls. The latest example came this month when stock prices of many Xiamen-based counters roared by more than 4 percent in just a few hours on June 20. Xiamen Port Development (000905.CN) even hit the daily gain limit.

The rally was fueled by nothing more than hearsay – a rumor that the State Council has picked Xiamen to be the country’s fifth municipality to join the elite company of Beijing, Shanghai, Tianjin and Chongqing. The proposal would put the city under direct central government control and — so the rumor went — had already been submitted to the National People’s Congress for approval.

China maintains rigid and sophisticated hierarchies for all sorts of institutions and this includes its cities. There are altogether eight levels for cities across the country and the most prestigious title is without doubt zhixiashi (直轄市), or a directly controlled municipality, a region on par with a province. Below that are the mainland’s 15 sub-provincial cities, a category that covers most of the nation’s first and second-tier centers like Guangzhou, Shenzhen, Chengdu, Ningbo and Xiamen.

The higher the city ranking, the greater the power for municipal officials so many local cadres lobby Beijing to elevate the status of their centers. Given that the central government hasn’t responded publicly to the Xiamen rumors, the city’s attempts at advancement may have failed. But at least for local cadres, there’s no harm in keeping the rumor mill running.

As with other kinds of social climbing, membership of this club has its privileges. In this case it includes a more flexible land quota for urban development, a formula set annually by the Ministry of Land and Resources depending on the city’s administrative level and population. The top four zhixiashi get bigger quotas than other cities, reportedly 10,000 hectares on average, while those lower down on the ladder are usually told to set aside less so they can preserve farmland for food security.

Another advantage is greater legislative power. State Council-gazetted “large cities” can enact administrative rules and ordinances for their own regions, a tool that can make a big difference to places like Wenzhou. Despite being a barometer of China’s private economy, Wenzhou does not have “large city” status and so cannot launch local legislation to liberalize financial and fundraising restrictions — something many of its squeezed smaller businesses could benefit from as they try to weather a credit crunch, according to Xinhua.

Chongqing, however, reflects the benefits of elevation. Chongqing was hived off from Sichuan province and made into a zhixiashi in March 1997 after it was chosen to spearhead China’s go-west drive. One of the instant blessings was the sharp surge in the city’s disposable fiscal income because it no longer needed to hand over a chunk of change to the Sichuan provincial government. On top of that, Chongqing’s party chief has a place in the Communist Party’s Politburo — something that cannot be said for his Sichuan counterpart.

– Contact the writer at [email protected].com

SK

EJ Insight writer

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