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The Chongqing Model and the Future of China Case Solution & Answer

Since opening to the global economy in 1979, but especially since its entry into the WTO in 2001, China’s economy grew at a rate of about 10% per year for attracting FDI and promoting exports. After the financial crisis that began in 2008 and the fall in demand in the U.S. and Europe, China’s growth has begun to decline, and the vulnerability of the economy has come to light. It became clear to many in the growth strategy of China who came to China from 1978 to the present day was not feasible and that the country needs a new strategy to address regional disparities in the country, to stimulate domestic consumption and create a less vulnerable to the growth in global demand contractions. Exactly at this time, between 2007 and 2012, the provincial municipality of Chongqing, in southwest China Mountain has become the fastest growing city in China, with an average GDP growth of over 15%. Chongqing growth was the result of a series of economic and social policies that had been known as the “Chongqing model”, a controversial reform package promised growth of the benefits of public and private sector more equitably shared by all citizens. However, critics have found the suspect and dependent political model of public companies and investment by debt. When the country’s leading city was publicly fired after a sensational murder scandal, the new leaders of the region and even new leaders of China, they had to weigh the “Chongqing model.” Would it be a sign of a new path to prosperity of the post-WTO China?
by
Meg Rithmire
Source: Harvard Business School
36 pages.
Date Posted: December 5, 2012. Prod #: 713028-PDF-ENG
The “Chongqing model” and the future of the solution for China

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