Beijing Pace: Ten Years of High-Speed Advances

2004/11/15

Beijing's economic growth over the past ten years is unprecedented. For well over ten years in a row, the annual growth of the local economy has exceed 10 percent, allowing Beijing's per-capita gross domestic product (GDP) to increase to 32,061 yuan (US$3,875) in 2003, a figure that fares well in comparison with per-capita GDPs for the world's middle-income countries and regions.

New Force of Beijing's Economy

Beijing's economic success is making things possible that were only imaginable a decade ago.

In October 2004, construction began on the monumental CCTV Tower just off the East Third Ring Road in the city's Central Business District (CBD), which lies within the city's Chaoyang District. The project is massive and controversial, but is expected to serve as a powerful visual force, a statement of Beijing's modernity, and an example of the city' s quest to set international standards - not just to follow them. It is bound to draw attention to the CBD, a new world financial centre.

The four-square kilometre CBD project began from scratch ten years ago and is destined to serve as a prime mover in China's capital city's economic development.

Beijing has established itself as a national centre for international exchanges and scientific and technological innovations, in addition to its being the country's national political and cultural centre. Since 1997, the "capital economy" development strategy has brought Beijing on the road to "new industrialization" The "capital economy," so to speak, is a knowledge-driven, technology- and capital-intensive economy. In this regard, the Beijing CBD and its speedy development is representative.

The CBD was first defined in the "General Plan for Urban Development in Beijing" approved by the State Council, China's central government, in 1993. In 1998, the Municipal Urban Planning Bureau declared in its "Beijing Downtown Area Controlling Detail Plan" the city would establish a CBD in Chaoyang District in an area of about 3.99 square kilometres. The CBD borders East Daqiao Road in the west and West Dawang Road in the east; and the Tonghui River in the south and Chaoyang Road in the north. On August 8, 2000, the Beijing Municipal Government's "No.82 Mayor Working Meeting" decided to accelerate the planning and construction of the CBD and established commanding organizations. Immediately after that the city began promoting the CBD during the First Beijing Chaoyang International Business Festival which opened on August 15. Afterwards, the Beijing Central Business District Administrative Committee was founded and the Forum on Development of Chinese and Foreign CBDs was held to draw international attention to the city's ambitious CBD plans. On April 28, 2003, a new avenue in the CBD, Guandongdian South Street, was opened to traffic. This marked a phase of rapid construction within the CBD. The physical face of the district began to change, and 3,000 foreign companies arrived to partake of the city's increasingly pro-business atmosphere. Seventy-percent of the city's foreign players have offices in or near the CBD, including foreign embassies residing in three embassy areas, more than 110 Top-500 enterprises, several five-star hotels with both domestic and foreign investments, and offices of the United Nations and other international organizations in China. The Beijing CBD, already secure in its physical appearance, has entered into a phase of substantive construction. Projects with a combined floor space of three million square metres are being built and should be completed by 2008.

More than 30 areas in Beijing have been designated to attract foreign capital and technologies alongside the CBD. These include the Beijing Development Area, a state-level development area, and the Zhongguancun Science and Technology Park, a most important high-tech development centre in China or "China's Silicon Valley" as it is dubbed outside the country. Both have become engines for the development of the local and national economies. While enjoying those policy privileges given to State-level development areas to attract foreign capital and technologies, the Beijing Development Area receives the same incentives as the ZSTP from the government for development and industrial application of high technologies. It is now home to 1,094 enterprises, whose capital investment totals US$4,145.95 million. The area focuses on developing pharmaceutical, IT and mechnical-optical-electronics integration industries, representing a new pattern of industrialization that generates high added value and is environmentally friendly.

The Haidian, Fengtai, Changping, Electronic City Science and Technology, and Yizhuang Science parks are collectively known as the ZSTP, which includes those areas in Beijing with intensive technological, human and information resources. As the first State-level high-tech development area, the ZSTP has grown at a rate of 30 percent or more during the past 10 years. At the end of 2003, there were 16,299 high-tech enterprises in the ZSTP. These generated 285.25 billion yuan (US$34.465 billion) in revenue for the year, accounting for 16.8 percent of the total value of the city's industrial output.

Urban Construction

Beijingers are proud of their city and its cultural heritage, yet too many of them in the past lived in shabby housing along narrow lanes without basic sanitation services. Many of these structures have been replaced by gleaming high-rise apartments. The lanes have become straight and broad streets. Urban subways or light rail now extend into once-remote precincts, thus narrowing differences between urban and rural life. During the past ten years, Beijing's investments in infrastructure have grown by more than 25.6 percent per year, about 22.5 percent of all permanent assets investments. Roadways were constructed, reaching 18,942 kilometres in length in 2003, with Tian'anmen Square as the centre and with urban ring-roads and radiating main roads as the framework of a more modern traffic network. During these ten years, rail-line and expressway lengths have doubled. Since the 1990s, rail construction has been regarded as a focus for Beijing's urban infrastructure development, while the construction of expressways, urban throughways and ring roads has been accelerated. There were 114 kilometres of urban rail lines in the city in 2003, nearly three times of that for 1994. There were 499 kilometres of expressways, double the 1994 total. Subway Line Nos. 5, 4, 10, and the Olympics Branch Line are being or will be constructed. With continual improvement of urban road and rail line networks, a modern, convenient urban public communication network is being formed.

Ten years of post and telecommunications development has established a public telecom network that employs optical-fibre, digital microwave, pre-programmed exchange, and mobile communications technologies that serve the city and connect it rapidly and easily to the rest of China and overseas countries. The public mail system has been improved with the addition of many new service outlets. There were 753 post offices in the city in 2003, ten times of that in 1949. The capacity of the city's phone exchange system had by 2003 increased to 8.374 million lines. Mobile and digital communications services were simply non-existent in the past. In 2003, there were 11.09 million mobile-phone users and fixed-line telephone services existed in 6.827 million households. Digital communications networks came into being; in 2003 the Internet was used by 3.98 million city households.

The city's capacity of water, electricity, heating, and gas supply, though strained at times, have improved constantly. Daily water supply capacity had grown to 4.29 million tons by 2003. The city's consumption of electricity reached 41.48 billion kilowatt-hours in 2003, including 7.05 billion kilowatt-hours for lighting in homes. Centralized supply of heat covered 250.18 million square metres in floor space. Some 4.06 million households were using liquefied or natural gas for cooking instead of coal as in the past, highlighting Beijing's success in reducing environmental pollution by encouraging the development of clean energy.

For Efficient, Pragmatic Government

In 2003, the Beijing Municipal Government reduced to 45 the number of its working departments, in response to a call of China's top authorities for building efficient and pragmatic government in China.

While strimming itself, the municipal government set up four new working departments through elimination or merger of old working departments for higher efficiency. These were the Municipal State-owned Assets Supervisory and Regulatory Commission, the Municipal Development and Reform Commission, the Municipal Bureau of Commerce and the Municipal Bureau for Industrial Promotion.

Thanks to the trimming, government organs and officials have become providers of services to investors. Best of all, "one-stop" services are now available across the city, and have won favourable comments. It used to take an investor weeks and even months to get something done, during which the investor had to travel from one government organ to another to have a huge stack of papers processed. "The guys sitting behind the desks were always apathetic, sometimes scary,?one private company owner told Business Beijing. "You had to 'beg' them to have the official seals stamped on your papers. The one-stop services not only lower the threshold and make conversations and manners pleasant, but also reduce the processing time."

All the eighteen districts and counties in Beijing have established one-stop service halls. In Dongcheng District, investors find that the time spent on having their papers examined has been cut by at least half. At the ZSTP, the time for processing of papers has been shortened by seven work days. In Haidian District, the procedures for industry and commerce registration take can now be completed in 24 hours.

The city is now busy streamlining the functions of its working departments for information sharing and even better efficiency. This comes in the wake of its success in reducing the number of matters subject to administrative examination and approval. According to city officials, matters subject to examination and approval by the municipal authorities are now 587 fewer than in the past.

Efficiency is gold. Over the past five years, direct foreign investment amounting to US$10.31 billion has been made in Beijing, 2.5 times as much as the previous five years. Local foreign trade exports totalled US$21.39 billion in value, more than double that of the previous five years.

Life of Beijingers

The living standard of city dwellers is no doubt a measure of a city's development level. The present conditions of Beijing residents' clothing, food, accommodations, and transportation vividly epitomize the fruit of Beijing's ten years of reform and opening.

The "clothing" of Beijing residents is counter to the "countrified" image that has been deeply rooted in people' minds, and embodies the ideas and courage of opening. Numerous international fashion shows demonstrate the unique fashion style of a city that has preserved the nation' traditional style, while absorbing various world styles. More individuals are now inclined to choose brand-name clothes and to visit fashion shows, which have become another source of recreational and entertainment activity. Beijing residents spent 20.16 billion yuan (US$2.44 billion) on "clothing" in 2003, 11.8 percent greater than the previous year' figure.

The height of cuisine for many Beijing residents is no longer restricted to "Beijing roast duck." A food culture featuring all kinds of cuisines is now the norm. Restaurants and snack bars are found everywhere in the city, serving food of all schools of Chinese cuisine, as well as Japanese, Korean, French and Italian food. There are also outlets of KFC, McDonald's and Friday's. Food courts have mushroomed in the city, and the best known are in Fangzhuang area and the famous Gui Street. In 2003, Beijing residents ate to the tune of 49.77 billion yuan (US$6.013 billion), which nearly doubled the figure of the previous year.

The consumer price index (CPI) for housing rose to 101.6 in 2003. Dangerous and worn house reconstruction and economically affordable housing construction initiated since the 1990s enabled many residents to say goodbye to the low, ramshackle housing in which they have spent most of their lives and to move into roomy buildings. In 2003, Beijing finished 23.204 million square metres of residential construction, among which 3.631 million square metres were tailored for medium- and low-income families. The living space for urban and rural residents of the city averaged 18.7 square metres per capita.

By 2003 the total length of roads in Beijing had increased to 5,500 kilometres. Meanwhile, urban rail lines had significantly reduced the time spent by people having to commute between their homes and work places. The total length of urban rail lines came to 114 kilometres in 2003. Roads of about 110 kilometres were rebuilt or broadened the same year. Cars sell well in Beijing, which used to be known as a "city of bicycles."

Large numbers of supermarkets, convenience stores and chain-retail outlets are now found in residential compounds. In June 2004, there were 4,997 chain stores in the city. As consumer markets improved, the scale of commodity circulation greatly increased. In 2003, Beijing reported 191.67 billion yuan (US$23.16 billion) in retail sales of consumer goods, a year-on-year growth of 16.3 percent. The disposable income of urban and rural residents averaged 13,882.6 yuan (US$1,677); and for rural residents, it was 6,496.3 yuan (US$785). In 2003, the Engel coefficient for urban and rural residents was 31.7 percent; automobiles, houses, and digital products had become hot consumer items for residents, and the content of consumer purchases greatly changed. In 2003, more than one million cars were sold in Beijing, including 656,000 sold to individual citizens. From January to September 2004, average monthly sales of automobiles rose to 38,000.

Beijing has constantly improved its social security system. By 2003, 4.485 million people had been insured against old age, and 4.361 million had been covered by the city's medical insurance system. People insured against industrial injuries numbered 3.066 million and those against unemployment, nearly 2.43 million.

Beijing Olympics

The eyes of the world fell on Beijing when, on July 13, 2001, the International Olympic Committee awarded Beijing the right to host the 2008 Olympics. In August 2003, the logo for the 2008 Olympics made its debut. The Chinese-style seal embodies the traditional culture of China and stimulated renewed, worldwide interest in Chinese culture.

On June 9, 2004, millions of Beijing residents witnessed another historical moment. The Athens Olympic Torch was passed from one of 148 torchbearers to another as they ran through the lanes and streets for eight hours over a 55-kilometre course. Thousands of people lined both sides of the streets, showing their expectations for the 2008 Beijing Olympics. This was followed by the Athens Olympics and the outstanding achievement of Chinese athletes with their 32 gold medals and 65 total medals, which stoked Olympic passions.

The people's embrace of the Olympic spirit aided the development of Beijing's sports cause. At the same time, a desire for individual health and exercise swept the city. The Beijing Sports Team is working in 28 sports involving more than 1,000 athletes.

Beijing has supported a well-received "civil Exercise Project." In 2003, the total investment on the "civil Exercise Project" reached 170 million yuan (US$20.54 million); 7.686 million people took part in exercises; and there were 3,811 tutorial stations for morning and evening exercises. Forty-eight stadiums and 23 gymnasiums doubled their number in the city over the past ten years.

Olympic-specific projects are now fully under way, and a number of new and modern stadiums and gymnasiums are being constructed on a tight schedule. Under the principle of being economical in its Olympic preparations, Beijing is now optimizing designs and partially adjusting its Olympic stadiums and gymnasiums, improving present facilities that can be used, and postponing the completion date of some stadiums and gymnasiums to control construction costs and maintenance costs of stadiums and gymnasiums. The construction of stadiums and gymnasiums will be basically completed in 2007.

The Olympics has brought new opportunities for Beijing's economic development. As hinted by the slogan "new Beijing, Great Olympics," Beijing's will to strengthen its economic development has captured the world's imagination. At the same time, guided by the three themes of "Green Olympics, High-tech Olympics, and Cultural Olympics" in preparation, Beijing is accelerating its construction pace. On the base of the presently available stadiums and gymnasiums, Beijing will reconstruct, continue to construct, and newly construct 37 stadiums and gymnasiums and 59 locations of complimentary training fields for the 2008 Olympics.

During 2008 Olympics, China will embrace other cultures. The Olympic spirit will be deeply rooted in this land of 9.6 million square kilometres and will spread among the hearts of our 1.3 billion people. At the same time, Beijing's economy will take off at an amazing speed.



	Article featured in Business Beijing, November 2004 Publication sponsored by Information Office of the Beijing Municipal Government, Beijing Municipal Bureau of Commerce, Development & Reform Commission of Beijing Municipality, China Council for the Promotion of International Trade (Beijing Sub-Council)