Governments of western provinces should offer more policy incentives to attract coastal enterprises, such as tax breaks and easier access to financing. It is also necessary to accelerate infrastructure improvements, such as transportation system and power grid. Despite its proximity to the Three Gorges Power Station, Chongqing is coming under the growing pressure of power shortages.

The widening urban-rural gap is another challenge facing Chongqing, so it is urgent now to break the social system barriers and repair the social safety net for migrant workers. This will also add an extra incentive for the farmers to spend more.

The service sector is also becoming a new growth engine in Chongqing. Its catering sector is well-known across the country and the exhibition industry is also gaining steam as the city comes under the global spotlight.

Manufacturing Upgrades

Wenzhou, the boomtown of China's private economy, learned a painful lesson from last year's financial crisis. As Western consumers hunkered down in their opposition to unnecessary spending, many exporters, mostly small and medium-sized enterprises (SMEs), began spilling red ink—or worse, declared bankruptcy. Shoe manufacturing used to have a foothold in Wenzhou, with more than 5,000 companies in 2005. That number has since dwindled to 2,000.

Dim prospects have left manufacturers no other option but to restructure themselves and sharpen their competitive edge. Many introduced advanced technologies to improve product quality while others enhanced energy efficiency to cut costs.

While manufacturing remains a pillar industry, Wenzhou has taken steps to diversify into other emerging businesses, like solar power, semi-conductor lighting and bio-pharmaceuticals. The city's service sector grew a robust 11.5 percent year on year in 2009, an indication of internal economic vitality.

Wenzhou's entrepreneurs are well-known for their market-based and innovative business models, traits that will help them stand out among intense competitions.

Aside from this, over 2 million people from Wenzhou have moved overseas, leaving their desolate hometown to earn a living abroad but weaving a tight marketing network for companies back home. This may help pave the way for Wenzhou's private enterprises to secure a firm footing abroad.

SMEs across China share a common ailment—a lack of access to bank lending. In Wenzhou there is around 1 trillion yuan ($146.4 billion) in private capital flowing about with speculative intentions. It is suggested that policymakers deepen financial reforms and provide a legal environment for private capital to finance SMEs' growth.

Boosting Creative Idustry

Li Wuwei: Vice Chairman of the 11th CPPCC National Committee and Director of the Institute of National Economy under the Shanghai Academy of Social Sciences

With China-made products spreading worldwide, China has become the biggest manufacturing country. Now we have more and more voices for the transformation from "Made in China" to "Created in China."

This actually is a boost to many industries through upgrades in science and technological innovation. Only in this way can we increase the added value of the products and decrease their negative effects on things like the environment.

The creative industry plays an important role in this process. Creative industries focus not only on creation and innovation, but also the integration of technologies, products and culture. In addition, creative industries can evolve into other industries to further promote innovation and increase added value to other industries—thus boosting the innovation throughout the economy.

In 2009, for instance, our country's GDP increased by 8.7 percent, while creative industries increased by over 17 percent. These industries have indeed contributed much to our economic growth. However, this develops much faster in the big cities than in other parts of China.

We should, therefore, balance the development of creative industries in different places of China while combining local conditions and characteristics with the appropriate industries. Besides, the government should increase the investment in creative industries as well. Non-profit organizations play a very important role in this regard, too.

Turning Tech Into Products

Science and technology are crucial for the transformation of China's economic development model. In the past several years, science and technology in China have developed very fast with many more papers issued in top international-level magazines—and more investments in the science studies and research.

But many products are more technology-oriented—not market-oriented. Thus they are consequently not so competitive since costs are high yet are not always immediately practical. Many of the researchers, rather, close their doors before considering market demands. For some products, in fact, they only produce samples, and neglect to make mass production.

In my opinion, to solve the above problems, we have much to do. First, we should develop a market-oriented technological innovation system. We should endeavor to determine why our products fail to enjoy strong market sales—a big concern of the Central Government. We should also speed up the reform on the evaluation and prize system of science and technology, while encouraging more breakthroughs in this field. At the same time, we should give younger people more opportunities and encouragement.

Private Dynamism

To transform the economic development model is both a challenge and opportunity for the development of private enterprises. The challenge lies in three points: The first is how to develop a long-term view instead of just focusing on short-term interests. The second is how to break the bottleneck of the development of our private enterprise—including attracting talent, technology and capital. The third is how to properly deal with the relationship between the environmental protection and profit making.