Trade Resources Policy & Opinion China Regional Development - Big Plan, a Little Fuzzy

China Regional Development - Big Plan, a Little Fuzzy

FROM the damming and diverting of mighty rivers to the building of huge new cities from the ground up, China's government does not shy away from grand schemes. The Communist Party's highest decision-making body has now signed off on another one: the integration of the capital, Beijing, with the nearby port city of Tianjin and much of the surrounding province of Hebei in a "co-ordinated development programme".

The idea had been under quiet consideration for years, but after the Politburo announced on April 30th that it would move forward, extravagant claims quickly followed. It could turn the region into a "Chinese version of the Rhine-Ruhr", one of Germany's most populous and productive areas, said Xinhua, a state-run news agency. Other reports likened the potential effects to the "powerful boost" enjoyed by Los Angeles when, decades ago, it incorporated nearby counties. An economist at Peking University said it would be "earthshaking" for the region's population of more than 100m and bring "tremendous economic progress in north-eastern China by 2050". According to the finance ministry, the project will attract 42 trillion yuan ($6.8 trillion) in investment over the next six years alone.

The decision to go ahead was taken at a meeting chaired by Xi Jinping, China's president and the Communist Party's leader. Reports in state media often link his name with the plan. Compared with his predecessors, Mr Xi has amassed firmer control over the sprawling bureaucracy, and his support is likely to help to push the project through.

Much integration between Beijing, Tianjin and Hebei has already occurred, thanks notably to the building of good-quality roads and high-speed rail since the 1990s. But co-ordination has been patchy. Beijing has been struggling to improve its air quality, even as industries upwind in Hebei spew noxious fumes in its direction. A much poorer place than the capital, Hebei is not keen on closing them. Greenpeace, an NGO, says up to 85% of heavy industry in the province is exceeding emissions caps set by the central government. But officials say the new plan will give priority to environmental protection, as well as improving public services and regional transport, and making the region more attractive to foreign business.

A report by the European Union Chamber of Commerce in China has a mixed assessment of the likely impact. Although the plan may improve transport links to Chinese ports and bring benefits such as unified customs arrangements, it will probably also result in a "whole gamut of problems" for the environment, not least the depletion of the region's already stressed water supplies, the authors conclude. Much of Beijing's water comes from Hebei reservoirs, but it is not enough. The city now takes 2m cubic metres of water each day diverted from the Yangzi River basin in the south.

Some elements of the scheme are clear. Beijing is building a new airport, at an estimated cost of 80 billion yuan just north of the Hebei border (see map). It will play a large role in regional integration. Management of Hebei's two main airports, one in the port city of Qinhuangdao and an international one in the provincial capital, Shijiazhuang, is to be transferred to airport authorities in Beijing. Other goals are vaguer. Officials have said that "non-essential" administrative functions will be moved out of the capital, but they do not specify which. Some enterprises are to be moved from Beijing to Tianjin or Hebei. Details of this are to be announced soon, officials say.

Officials have made clear that they do not want poor people flocking into Beijing from the surrounding countryside. Of the city's 21.5m residents (including those in satellite towns), 8.2m are already migrants; many Beijingers resent having to share health care and education resources with so many outsiders. "Integration" does not mean all are welcome in the capital.

Source: http://www.economist.com/news/china/21652344-capital-and-its-neighbouring-areas-are-told-co-operate-more-big-plan-little-fuzzy
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Big Plan, A Little Fuzzy
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