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Beijing CBD: Achievements and Challenges

They epitomize a world-class city’s sense of itself as a player on the world’s stage. They are modern or even ultramodern manifestations of global industrial, financial and cultural strength, where the world’s leading enterprises are found because of their quest for rapid, efficient communications and financial and other resources. People who congregate there can often be found seeking the best that life has to offer, and they often include the most highly valued business and commercial leaders in the world. They are central business districts or CBDs.

To mention just a few, their names are synonymous with all the above, but most of all they are associated with long historical periods of sustained success. These include Manhattan in New York, La Defence in Paris, Shinjuku in Tokyo and the Central CBD of Hong Kong, whose influences are felt around the business world every day.

And now, the Beijing Central Business District seeks to take its place among this elite group of special districts.

The Beijing CBD was approved by the State Council, China’s central government, in 1993 as a vital part of the Beijing Urban Master Plan 1991–2010. Under the Beijing CBD Regulatory Plan of 1998, a 3.99-square-kilometre area is designated as the Beijing CBD, bounded by Dongdaqiao Lu on the west, Xi Dawang Lu on the east, the Tonghui River on the South and Chaoyang Lu on its north.

After a decade, the Beijing CBD has emerged as the capital city’s economic and financial heart. Some 70 percent of the foreign-related resources available in the city are now pooled in the CBD or its surrounding areas. It is home to all the foreign embassies in China except two, the embassies of Russia and Luxemburg. Also based here are more than 60 percent of the more than 9,000 foreign companies operating in Beijing, as well as all the foreign chambers of commerce and the China offices of 23 international organizations. Of the top 500 trans-national corporations listed by the US FORTUNE magazine, 447 have a presence in Beijing. Among these, 114 operate from the Beijing CBD, which is also home to 167 international news organizations.

The Beijing CBD now stands firm on its own, but it had difficulties in the initial period of its development. 

In 2004, Nortel Networks, LG, Motorola, Ericsson, sina.com and some other large companies withdrew from the Beijing CBD and restarted their operations at Zhongguancun, Wangjing or other places, prompting a rumour that these companies were “escaping” from it as a result of alleged “conflict of interest” among areas designated by the Beijing Municipal Government for attracting foreign investment and technologies. Things were once so bad that the rumours found their ways into the daily headlines of major real estate media.

The fact is that among the world’s CBDs none has been totally free from difficulties. Take for example La Defence of Paris. La Defence was designated to function as the local CBC, as the national financial centre, but traditional manufacturing industries were the country’s predominant economic sector. Naturally, it would take time for La Defence to blend with France’s mainstream economic activities. So for the first eight years, La Defence kept losing money, and was once reduced to the verge of bankruptcy. Another example is the Shanghai CBD at Lujiazui in the Pudong New Area, where newly built office mansions once suffered high vacancy rates.

The experiences of the Beijing CBD seem quite dramatic, given the “escape,” real or exaggerated as the rumour spread. The fact, however, is that there were large companies seeking to get into the Beijing CBD while companies like Nortel Networks were withdrawing. Moreover, the Beijing CBD received a fresh boost in 2005 when the CCTV, China’s national TV network, laid the corner stone of its new headquarters there. The event, it is believed, will make the Beijing CBD more attractive to Chinese and international companies. 

For the Beijing CBD, challenges and opportunities exist side by side. Companies are increasingly keen to their operation costs, hence of the withdrawing of some from the Beijing CBD where rent and other expenses are higher than places like Zhongguancun and Wangjing. Meanwhile, the geographic and other advantages—better infrastructure, for example—enjoyed by the Beijing CBD remain attractive, which some companies believe can offset extra costs. This is especially true for trans-national corporations that are exceptionally keen to protect their corporate images.

The Beijing CBD now boasts clusters of high-end industries, and takes pride in being home to global or regional headquarters of international financial, cultural, media and service companies. By October 2007, 151 international financial and insurance companies had settled in the Beijing CBD and areas in its vicinity. To name just a few: Standard Chartered, Citibank, AnBang Insurance, and Generali China Life Insurance. Moreover, NASDAQ, the New York Stock Exchange (NYSE) and VISA International have their China offices in the Beijing CBD.

The Beijing CBD also features a highly developed cultural industry. “Newcomers”—those who have entered the Beijing CBD and its neighbouring areas over the past couple of years—include CCTV, Phoenix TV of Hong Kong, Beijing TV, The Wall Street Journal, CNN and the BBC. The English language China Daily, Radio Beijing Corporation and the Communications University of China are just some of the “old tenants” in this area. To sum up, the Beijing CBD has become the centre of wide-ranging cultural and media industrial activity. In October 2007, it was host to 1,460 companies involved in cultural and creative industries, accounting for 30.43 percent of the city’s total. These generated 19 billion yuan (US$2.59 billion) in total revenue in the first ten months of the year.

High-end business companies are leading the Beijing CBD’s development. In October 2007, there were 4,799 corporate entities in the area, 521 more than a year ago. These employed 135,000 people and contributed 4.51 billion yuan (US$615.22 million) in tax revenues to Chaoyang District. What merits special mention is that Price Waterhouse Coopers, CB Richard Ellis Group and some other international consulting corporations are now operating from the Beijing CBD. In the first ten months of 2007, high-end business companies paid 3.88 billion yuan (US$529.28 million) in local taxes, 84.9 percent of the total collected from the Beijing CBD by the Chaoyang District Government.

Despite all these achievements, there is a need to improve the Beijing CBD’s infrastructure, in particular its road system, as more and more companies are expected to come and settle. In 2007, the combined length of the roads there was 26.08 kilometres, including 8.80 kilometres of ten new roads. This means that the CBD’s road improvement plans were 62.8 percent fulfilled.

In October 2007, workers began building the 170-metre Yintai–Hanghua Underground Passageway, a vital part of the system, which goes beneath a section of the East Third Ring Road from east to west. The passageway is expected to ease the traffic burden of major road crossings including Guomao Qiao. Preparations are now under way to build three more underground passageways: the Caiyuan–Zhonghuan, Jiali–Guomao and Fuer–Jiali passageways.

A CBD worthy of the name is usually features a lively, “round-the-clock” environment with the very best in restaurants, accommodation, entertainment and all the services required by a 24-hour business and commercial environment. Some foreign CBDs are hives of activity from 8 a.m. to 6 p.m., but are virtually “deserted” during their “off” hours. Officials said they believe that the Beijing CBD should be developed in such a way as to be congenial to inner-city living, while serving the commercial and business purposes designated to it.

Answering questions at a press conference on December 19, 2007, Sang Xiaowei, deputy director of the Beijing CBD Administrative Commission, said that plans had been 50 percent fulfilled for construction of office buildings and 20 percent fulfilled for construction of residential structures. He said green spots have also been planned so that “the Beijing CBD won’t look like a sea of concrete structures.”