Based on network flow analysis, Ulanowicz treated the average mutual information as a cardinal attribute of a developing network and developed the ascendency formula, offering a comprehensive way to quantitatively analyze the relationship between growth and development in an eco-economic system. A basic result is that C, “the development capacity”, serves as an upper bound on ascendency, where C=T×H,H is system diversity and T is the total system throughput.To investigate the development status of Chongqing city, we use Input-Output data from 1990 to 2006 to quantify the eco-economic system performance according to Ulanowicz′s ascendency formula. At the same time we use the extension of the I-O model to account for the discharged volume of industrial waste and the resulting situation of environmental quality based on the discharged volume of industrial waste.The change of environmental quality attributable to the structural effects and technological effects and the effect of scale on total system throughput. The results show that the system ascendency in 1999 was four times that of 1990, but the average mutual information decreased from 0.447 bits in 1990 to 0.342 bits in 1999, the discharged volume of exhaust gases increase by 1.1% and waste water increased 3.2% on average. The results show that Chongqing′s eco-economic system was on an unsustainable path from 1990 to1999. The system ascendency also increased by two times from 1999 to 2006. The corresponding material representation of the total system throughput was still rising from 1999 to 2006, but the yearly rate of increase dropped from7.40% during period of 1990-1999 to 3.91%. On the other hand, during the 1999-2006 period, the system ascendency gradually increases, rising from 0.342 bits in 1999 to 0.478 bits in 2006, with the volume of discharged exhaust gas reduced by 2.5% and waste water reduced by 3.7% on average. The results suggest that Chongqing′s eco-economy moved in the direction of sustainability during the period of 1999 2006. Taking into account the actual situation of Chongqing city, the most sustainable approach is to increase efficiency in resource utilization, strengthen the utilization of recycled resources, enhance communication and information sharing among industries in an impartial manner. Such measures can increase average mutual information, and can improve Chongqing′s development capacity.