Raffles City, a landmark complex resulting from cooperation between Chongqing and Singapore, is located at the Chaotianmen Wharf in Southwest China's Chongqing Municipality. (Photo/Chongqing Daily)

Chongqing - Chongqing has shifted from land-driven infrastructure growth and traditional electronics assembly to a dual-engine model powered by advanced manufacturing and logistics corridors, according to its 2025 economic and social development communiqué recently released by the city’s Statistics Bureau.

According to the communiqué, the city's GDP surpassed 3.3 trillion yuan (approx. 477.4 billion U.S. dollars), representing a year-on-year increase of 5.3%. While the headline growth figure appears steady, a comparison of key metrics highlights a significant structural change: total fixed-asset investment actually decreased by 0.7%.

The fact that the economy maintained a 5.3% growth rate despite a reduction in total spending indicates that the primary forces driving the city’s expansion have changed.

For over a decade, Chongqing’s growth was supported by two core pillars. The first was a government-led land and infrastructure financing model that utilized land reserves to secure construction funds, leveraging credit and social capital to fuel the real estate and construction industries.

The second was the traditional laptop manufacturing sector, which relied on a vertically integrated 'brand + contract manufacturing + supply chain' model to become a global hub for low-end assembly and components, leveraging low labor costs and favorable policies.

The year 2025 brought pressure as both traditional drivers slowed simultaneously. Real estate development investment dropped 14.7%, value-added in the construction industry fell 1.1%, and the manufacturing of computers and electronics declined 4.4%, with the overall electronics sector growing by only 0.6%.

Amidst these challenges, the emergence of new growth drivers has become critical. While overall investment saw a slight dip, the flow of capital shifted markedly, with industrial investment rising 8.5% and investment in industrial technical upgrades surging 19.2%. This indicates that capital is moving away from real estate and toward factory modernization and production line upgrades.

Industrial performance reflected this shift. Value-added for large-scale industrial enterprises grew by 5.9%, led by the new energy vehicle (NEV) sector, which saw a 17% increase in value-added and a 36% jump in output.

The city’s logistics corridors also provided essential support. The New International Land-Sea Trade Corridor reported a 30% increase in container volume and a 25% rise in cargo value.

These tangible gains in advanced manufacturing and trade corridors have effectively filled the gap left by the contraction in real estate and traditional electronics.

However, this transition has also impacted profit margins. While industrial value-added grew by 5.9%, total industrial profits fell by 3.7%, with manufacturing profits declining 4.7%, suggesting that intense market competition is tightening margins despite higher output.

The transition from land-leveraged growth to manufacturing-led growth also affects public sentiment. This new form of growth is built on tangible productivity rather than financial leverage, and its impact on household wealth may take longer to manifest.

According to the communiqué, Chongqing’s per capita disposable income grew by 4.7%, but per capita consumption expenditure rose only 2.2%, while the Consumer Price Index edged up just 0.1%. This suggests that as the wealth effect from real estate fades, residents are becoming more cautious with their spending.