After the overall frenzy in the A-share market gradually cooled down, a new craze emerged in mainland China surrounding the concepts of “Sichuan-Chongqing” and “Western Strategic Shift.” Rumors started circulating about a large-scale “Sichuan Demolition” and a plan for “a thousand factories in Guangdong to relocate to Sichuan,” which were tied to wartime relocations. The official response to these rumors was ambiguous, leading to speculations among investors and the public.
According to various media reports, while the Shanghai and Shenzhen 300 Index saw a volatility of less than 3% last week, the “Sichuan-Chongqing Concept Stocks” stood out with over thirty related stocks hitting the daily limit, including Sichuan Chengu (601107.SH), Sichuan Changhong (600839.SH), and Sichuan Luqiao (600039.SH). Hong Kong-listed tea drink company ChaBaidao (02555) also saw its stock price surge by nearly 80% last week due to its headquarters being located in the provincial capital of Chengdu, Sichuan.
An analysis in Hong Kong’s “Sing Tao Daily” on the 21st indicated that the sudden hype around Sichuan concept stocks was driven by online rumors of a massive “demolition” activity taking place in the region. Reports suggested that Chengdu alone was said to be involved with hundreds of thousands of households affected by the demolition, with many claiming to have received millions of yuan in relocation compensation. The speculations around the “Sichuan Demolition” were tied to expectations of benefiting numerous listed companies within the area due to the economic opportunities arising from such activities.
The article pointed out that the so-called “Sichuan Demolition” rumor was rooted in a certain logic. According to related online posts, the government is currently promoting the “Western Strategic Shift.” This strategy aims to shift the economic, cultural, and political focus gradually to the southwest inland regions of China to mitigate risks of potential missile attacks on the southeastern coastal areas during wartime. With Sichuan’s geographical advantages and its proximity to the “Belt and Road” network, it has become a favored destination for such strategic movements, necessitating the need for clearing significant urban land for future institutional, corporate, and industrial developments.
From this perspective, Sichuan stands to gain not just from a one-time demolition activity but also from substantial future policy dividends, explaining why relevant concept stocks have been experiencing heightened trading activities.
On the 15th of October, a widely circulated map of demolitions in Chengdu showed multiple areas undergoing demolition activities, with reports of some netizens claiming substantial compensation through these activities, leading to them being dubbed as the “Second Generation of Demolition.”
On the 16th, mainland media “Haibao News” reported that a recent investigation comparing the images circulating on social media platforms with official government documents confirmed the existence of relevant demolition projects. However, these demolitions were not sudden developments as rumored but rather ongoing processes over the past year or longer.
Representatives from the Chengdu Municipal Housing and Urban-Rural Development Bureau refuted the rumors, stating, “We know these are all rumors, none of it is true.” Officials from the Chengdu Municipal Planning and Natural Resources Bureau emphasized that all land requisition and demolition operations would be publicly announced on the official website, including detailed compensation policies. They dismissed claims of individuals receiving exorbitant compensations as baseless.
Nevertheless, the authorities refrained from categorically denying the rumors regarding the strategic shift of economic, cultural, and political centers to the southwest inland regions in case of a war outbreak.
The aforementioned commentary in “Sing Tao Daily” suggested that while the rumors around large-scale demolitions in Chengdu or the migration of Guangdong enterprises to Sichuan might have some elements of truth, they were also likely being exploited in stock market operations for individual gains, using the national strategic discourse as a cover.
Interestingly, during the same period last week, rumors were also circulating on various social media platforms about “1,500 companies in Guangdong relocating to Sichuan.”
An article from the public account “Muxin” mentioned that prominent companies like TCL Group, Lenovo, Xiaomi, Gree Electric, Changhong Electronics, Haier, and Huawei, totaling 1,500 enterprises, would embark on a massive migration to Sichuan from Huizhou.
Furthermore, news spread across major online platforms about the relocation of ten major enterprises from Guangdong to Sichuan, including TCL Group with a workforce of 68,000 people, HeCoTae Electronics with 35,000 employees, Zhengwei International Group with 20,000 workers, Gree Electric with 7,000 employees, and Weihua Holdings with 6,500 employees.
On the 19th of October, the “Guangzhou Daily” reported, “Rumors debunked: 10 major factories in Guangdong will not move to Sichuan,” without specifying the names of the companies refuting the claims, attributing the statement to “related individuals from one of the companies mentioned in the online posts.” The Guangdong authorities did not issue an official denial.
Netizens on social media platforms raised questions, expressing concerns about the delayed response to debunk the rumors, with some mentioning discussions among parents about war preparations, including factory relocations as part of the reasoning. Some sarcastically suggested relocating to Sichuan to wait for earthquakes.
Commenting on the situation, current affairs commentator Li Lin told “Epoch Times” that whether it’s the rumors of large demolitions in Chengdu or the migration of Guangdong enterprises to Sichuan, the underlying implication points to a scenario where if Xi Jinping were to take action against Taiwan, the coastal cities would suffer, possibly leading to the relocation of the capital to inland provinces like Sichuan, signaling unfavorable developments. Local authorities might shy away from publically debunking such rumors, and companies would also refrain from confirming or denying them independently.
Radio Free Asia reported that scholar Tian Qiguang, who studies the Third Front construction strategy, mentioned in an interview that initially he thought the news of Guangdong companies migrating to the southwest was false. However, he later discovered that the State Council of the CCP did indeed entertain such thoughts. He criticized this warlike mentality, stating that it exacerbates international tensions and could potentially end up as a “white elephant project.”
The so-called Third Front construction was a large-scale national defense, technology, industry, power, and transportation infrastructure project initiated by the Chinese government starting from 1964. The construction aimed at preparing for military conflicts and ensuring self-sufficiency in times of war and scarcity.
Tian Qiguang denounced this war-mongering mindset within the CCP, likening it to historical instances like the Third Front construction following the Zhenbao Island Incident in 1969. He perceived this thinking as provocative and potentially leading to unfulfilled endeavors with adverse consequences.