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At the end of 2004 the Beijing Municipal Government promised that suburban and rural areas in Beijing would get at least equal attention in the city budget in 2005 as the city began focusing on development outside the inner city.

Now, the suburban economies are beginning to feel the lift provided by the economic development wave created by Beijing’s hosting of the 2008 Olympic Games.

At the end of the third quarter of 2005, all Beijing’s Olympic projects are under construction, just as they are in other of China’s 2008 Olympic cities.

To strengthen scientific economic development, the municipal government is supporting improvements in its “recycling economy,” pressing ahead with Olympic Games development in the broadest sense and is working to solve prominent problems and weak links in the development of the socialist market economy.

Under the “two axes, two belts, multiple centres” ideal expressed in the Beijing Urban Master Plan for 2004–2020, development in Beijing’s mountainous areas and agricultural plains is getting at least equal attention in 2005 as the city’s urban areas. Under the ideal, development in all areas will be optimized, smoothing differences in the rural-urban dichotomy and paving the way for a more reasonable approach to overall city development. This will make it possible to advance the “Two Shifts” (shifting the weight of city investment to suburban and rural areas and shifting to reliance upon the market economy and private investment in funding citywide economic development) and will make it possible to implement the “Five Inclines” (an emphasis on five key issues: the urban transportation system; infrastructural construction in suburban areas; improve public-health and health-education systems in rural areas; improve water conservation and address other relevant environmental issues; and emphasize modern, high-tech industries and services). The city’s overall development plan and its industrial development plans will be based on solid financial foundations and key projects will get government support and investment.

The total-fixed-asset investment of Beijing in 2005 is expected to top 285.7 billion yuan (US$35.27 billion), up by 13 percent over the amount achieved in 2004. Based on this investment scale, the municipal government will spend 17.5 billion yuan (US$2.16 billion), that is, 5.1 billion yuan (US$629.6 million) in non-commercial investment, 11.1 billion yuan (US$1.37 billion) in land leases, 800 million yuan (US$98.77 million) in urban infrastructure, 400 million yuan (US$49.38 million) in water conservation funds and 100 million yuan (about US$12.35 million) in social business costs.

The Five Inclines

The Beijing Municipal Government announced in 2004 that it would shift the ratio of urban-suburban investment in infrastructural construction from a 40:60 ratio in 2004 to a 50:50 ratio in 2005. A key aim of this shift was to increase Beijing’s overall urbanization, with a focus on “satellite towns” in suburban areas, renovation of “old towns” in the heart of Beijing, a citywide improvement in public services and utilities and the continuing development of important industrial development areas in and around the city. Roads of all kinds, public utilities, rail transport networks in and around the Olympic Games venues will get the attention they deserve. Key points of traffic congestion will be addressed and remedied. The government says it will also continue to renovate hazardous old houses in the inner city and clean-up inner-city neighbourhoods, with great attention given to urban houses that are too old to be safe for living and to cultural relics that are intimately related to these old areas of the city. All these endeavours are designed to alleviate security concerns, improve the city’s image and to optimize city services for the benefit of the city’s residents and visitors.

Promote “representative management”

This year, Beijing began relying upon “representative management” in all its government-sponsored public-welfare projects. This was first tried in the construction of pedestrian overpasses, bus stations and city roads. The government has also broadened the scope of banks allowing them to openly tender for construction projects funded by the government at a discounted interest rate. This practice has proved successful in the railway, city road and heating supply sectors. Moreover, government-sponsored industrial projects are being publicized to collect suggestions on how to manage specific projects. The government also strengthened the guiding role of industrial development planning and improved the development process of government-invested projects based on the sound collection and storage of data concerning projects, mature public bidding for those projects and well-supervised construction according to plans to ensure that they work as planned when the come into use. The emphasis here is on creating viable construction planning processes.

The city government began to grant franchises or exclusive operating licenses to operators of some qualified projects, such as in the supply of water, gas and heat, the treatment of sewage water and garbage, of toll roads and city traffic facilities. The city’s pricing systems for uses of infrastructure, water, electricity, gas, heating were improved, relying upon the practice of ensuring a return to city investment so the government can continually renew its supply of capital and ensure a return to investors so it can make new investments in these and other services.. All these efforts have advanced the establishment of investment and financing platforms and have greatly enhanced the integration of industry and capital.

The six emphases

The key projects of Beijing’s municipal infrastructure portfolio have improved the city functions and have provided convenience for city residents. Six emphases are highlighted in the planning of the city’s key projects this year: the Olympic Games venues and their support facilities; local projects on the list of State-level key programmes; large-scale energy, infrastructural and pillar-industrial projects; high-tech projects that could advance the technology of a whole sector; transdistrict projects important to the progress of Beijing’s economy and society; and key landmark projects. The selection guideline is: the priority of the key projects will now expand from mere infrastructural construction to Olympic Games-venue, and their support facilities, construction. For years, Beijing has focused first on district infrastructural construction in listing key annual projects. From this year on, the government centre on the overall start-up of Olympic construction and switch its attention to Olympic-venues and support-facility projects. The city government will also incorporate Beijing-centred, State-level programmes to enhance the synergistic effect of capital development in the Bohai Rim Region, which includes Beijing, Tianjin and Hebei Province and more, and reflect Beijing’s service to the central government and the whole country. In the meantime, the city government will regulate the structure of key projects and reduce the scale of ordinary property projects.

More Projects, More Investment Planned

The municipal government approved 60 key projects with 137 subsidiary projects in 2005, involving a total investment of 251.6 billion yuan (US$31.06 billion). In 2005, 87.94 billion yuan (US$10.86 billion) will be allocated, accounting for 30.8 percent of the planned total social-fixed-assets investment or 286.7 billion yuan (US$35.4 billion). Of the 137 subsidiary projects, there are 66 unfinished projects and 71 new projects. Plans call for the complete construction of 22 subsidiary projects.

To this point, three projects have been completed and 34 projects are under construction. Total investment during the first eight months of 2005 was 28.4 billion yuan (US$3.51 billion).

With the beginning of construction of the Beijing Technology University Gymnasium (where the Olympic badminton, rhythmic gymnastics, judo and taekwondo competitions are expected to be held), all the 11 new Olympic venues have broken ground. The Beijing Olympic Games in 2008 will require 31 sports venues (11 new venues, 11 expanded existing venues and 9 temporary venues); 41 independent training venues; 5 facilities related the matches. There will be 59 roads and 5 bridges needed for transportation around the Olympic venues and the clean-up of the environment surrounding the transportation routes and venues will be finished before an event takes place. Key projects related to the Olympic Games for 2005 include: 11 new sports venues, two expansions of existing venues, 5 temporary venues, 5 facilities concerned with sports events, 23 roads and one bridge. Projects under way include the 11 new sports venues, one expansion of an existing venue, one temporary venue, four facilities concerned with sports events and 13 roads.

Of the six key rail transportation projects for Beijing in 2005, construction has started on Beijing Subway lines No. 4, No. 5, Phase I of line No. 10 (including an Olympic branch), an express rail line to Beijing Capital International Airport and a Beijing-Tianjin rail transit line. Subway Line No. 4 is designed with 23 stations, one parking lot, and one depot. Construction has begun on 14 stations and 7 of 25 planned tunnel sections. Construction, so far, has used 10.37 percent of the total investment set aside for the project. Subway Line No. 5 is designed with 22 stations, 23 tunnel sections, one parking lot and one depot. Construction of 21 stations and 21 tunnel sections has commenced and 84 percent of total investment for the project has been used. Line No. 5’s rails are scheduled to be laid down in October 2005. Subway Line No. 10 will have 22 stations, 25 tunnel sections and one depot. The construction of 20 stations and 23 tunnels are underway and 29.82 percent of the project’s budget has been used. The control station for the Olympic branch of subway No. 10 is under construction.

The opening of Qinghua South Road relieved traffic on Baiyi Road and Xueyuan Road, and the opening of the western part of Lianhuachi Road in mid-October improved traffic along Fuxing and Fushi roads after two-years’ construction. Thirteen projects are still under construction, including the Jing-Ping Expressway (Beijing to Pinggu City and County). The second line of the Beijing-Tianjin-Tanggu Expressway is in its early stages of development, with construction scheduled to begin in the first half of 2006. The Northwest Sixth Ring Road (Xishatun-Zhaikou) is 84 percent complete.

Of five electricity projects, valued at nearly 10 billion yuan, two have been completed: the natural-gas-fuelled power generator of the Beijing No. 3 Heating Power Plant, and the burying of overhead wires at the Summer Palace. The natural gas power plant in the Beijing Economic and Technological Development Area (BDA) has been completed and two gas turbines are being installed. The overall construction is expected to wrap up at year’s end. Construction on natural gas pipelines associated with the Sixth Ring Road began on August 31 and 40 kilometres of pipelines are expected to be completed in 2005, adding 600 million–700 million cubic metres of natural-gas-transit capacity. The pipelines will eventually stretch 124 kilometres with an overall transit capacity of 1.4 billion cubic metres of natural gas per year. In 2005, there are also 16 projects concerning sewage treatment and water conservation in the mill, of which 11 projects are under way and 6 subsidiary projects are expected to be completed. The Beijing Gao’An Medical Waste Treatment Plant is undergoing structural construction of its main workshop with part of its accessory equipment already installed. An inverted-siphon project on the Beijing Yongding River section of the “South to North Water Transfer” is 95 percent complete.

The government had funded 40 of 69 projects related to inner-city neighbourhood renovation projects by mid-August with an investment of 2.25 billion yuan (US$278 million), of which 1.3 billion yuan (US$160 million) came from the municipal government and 950 million yuan (US$117.3 million) from district authorities. The government has started 35 house-relocation projects. Of the 12 finished projects, 4,190 households and 111 businesses were involved and were relocated to new sites, covering a total area of 224,000 square metres. The Beijing Municipal Management Committee will work with other authorities to carry out unfinished projects throughout 2005.

Twenty-three industrial-development-promotion projects are planned, which relate to modern manufacturing, high-tech industrial parks, commercial exhibitions, market facilities and logistics. In addition to 18 projects under construction, 5 more will break ground this year. The office building and workshop decoration for the Benz production programme, funded by the Beijing Jeep Company, is near completion. Overall construction will conclude in October and an assembly line will go on stream in November. The expansion construction of Beijing Capital International Airport is under way and on schedule. The approval report of the cold-rolled-thin-steel line of Capital Iron and Steel Company (Shougang) was ratified by the State Development Reform Commission near the end of August and the project is expected to start construction at year’s end.

Of 17 social welfare projects for 2005, 5 are medical facilities, 10 are cultural facilities and two are legal projects. There are 13 such projects under construction and four more will begin construction by the end of 2005, including the renovation of Beijing Xiehe Hospital and the relocation of Beijing Ditan Hospital. The new exhibition hall at the Capital Museum is preparing its civil air defence system, fire fighting, security and an elevator systems for overall examinations. When the examinations are complete, the hall will be handed over for use as exhibition space. The Chinese Film Museum has almost finished a road project in its neighbourhood and is beginning decoration and equipment installation. All the construction is scheduled to be completed by the end of October when an exhibition honouring the 100^th anniversary of the Chinese film industry will be prepared. The office buildings of the Beijing People’s Procuratorate and the Supreme Procuratorate are scheduled to complete construction in October.

Phase I construction of the China Disease Prevention and Control Centre was started in December 2004 and the main structural construction of its general service block is still under way. The new China Central TV Station Tower (East Third Ring Road) is undergoing basic infrastructural construction. The major service building of Beijing TV Center (Jianguomenwai Avenue) has been topped off and is undergoing decoration and equipment installation.

A total of 4,220 households who used to live in the old districts and who have been displaced, have moved out of their old, unsightly houses to housing elsewhere. Construction of 1.766 million square metres of affordable housing was completed in 2005, up by 80.5 percent over 2004. Dongcheng, Xicheng, Chongwen and Xuanwu districts have completed 52.8 percent of their annual target in the task of cleaning out hazardous houses. In the meantime, pilot cultural relics projects in Sanyanjing, Yuhe, Yandaixiejie and the west part of East Qianmen have been inspected for project set-up and approval and remaining procedures are continuing. Experts are regulating the plan of the White Tower Temple. Qianmen area renovation began in June 2005 with the relocation of 800 households in East Qianmen and housing renovations began for households in its western area. The Meishi Street widening project of Dashila is nearly finished. Environmental work along Yuanliangwan, an urban block in Qianmen, is coming to an end. In combination with renovations along the North Axis Road, 349 households in Yandaixiejie have moved to new residences.

Six billion yuan (US$741 million) investment was planned for the construction of affordable housing in 2005 and 3.3 billion yuan, or more than half of the total had been used as of the end of the third quarter of the year. About 7.14 million square metres of housing had been built, up 5.5 percent year on year. About 1.77 million square metres of housing had been completed, up 80.5 percent year on year.

Investment in cultural relics districts, the renovation of hazardous houses and the construction of affordable housing totalled 10.01 billion yuan (US$1.24 billion) in 2005, accounting for 11.4 percent of the total investment in key projects. Eight thousand households have had their homes renovated in the six pilot cultural relics districts along the east supporting road of Qianmen Road, Meishi Street of Dashila, Yuhe, Sanyanjing, Yandaixiejie and the White Tower Temple. Construction of 7 million square metres of affordable housing will begin or resume in 2005. The newly constructed houses will cover 3 million square metres and at least 2 million square metres of houses will be completed. The major projects include Huilongguan, Tiantongyuan, Sanhua New Town and Chaoyang New Town.