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A City for a New Era

To understand the strategic importance of the plan behind setting up the Xiongan New Area, NewsChina interviewed Zhang Junkuo, Deputy Director of the Development Research Center of the State Council

By Wang Quanbao Updated Jan.27

Through three years of efforts, the shifting of Beijing’s non-capital functions has been effective and swift in practice,” said Zhang Junkuo, Deputy Director of the Development Research Center of the State Council, and part of an expert team for the integration of the Beijing-Tianjin-Hebei development scheme, to the reporter during a recent interview.  

The “non-capital” functions of Beijing in most cases refer to relatively low-end economic sectors and public sectors that are comparatively polluting and energy intensive, but also low in technology and efficiency. According to the plan for Beijing-Tianjin-Hebei region – also known as Jing-Jin-Ji – four non-capital functions will initially be relocated outside of Beijing.  

In the first category, 1,341 enterprises listed as high investment, high energy consumption, high pollution, low efficiency and low technology, have been required to move out of Beijing since 2013, according to statistics from the Beijing municipal government. For the second category, since 2014, 370 wholesale markets, which included over 60,000 wholesalers and employed some 210,000 staff, have been closed. The third category involves the education and health sectors. Schools and hospitals were relocated, college student recruitment was streamlined, students were transferred to suburban campuses and hospital functions were extended to suburban areas or even into Hebei Province.  

Yet progress in the fourth prong of the strategy, to relocate certain administrative, governmental services and enterprise headquarters has been much slower, Zhang believed. “The major reason is the yet-to-be clarified supporting policies [of the central government],” Zhang said.  Shifting some of Beijing’s non-capital functions is indeed part of the measures to cure its “urban ills,” such as traffic congestion and air pollution, as well as to collaboratively develop and integrate Jing-Jin-Ji. The establishment of the Xiongan New Area is taking place against this backdrop.  

NewsChina: China announced plans to establish the Xiongan New Area in April as part of measures to integrate and develop Jing-Jin-Ji. What is the significance of the decision? 
Zhang Junkuo: In my opinion, there are four major reasons behind the decision. They are: to solve urban ills, to release regional ecological and environment pressure, to promote the development of Hebei and narrow the economic gap between regions, and to create a new economic momentum for future development. These four major issues are critical and interrelated in the overall development of the whole region.  

From the perspective of balanced development, the Xiongan New Area is an important part of the urban city of Beijing. For decades, Beijing has adopted an expansive model of urban design. However, in the future, this expansion of the central area should be restricted. A main urban area and satellite areas should be adopted in any new plan for the special urban structure. The Xiongan New Area will be one of two planned major satellite areas along with Beijing’s sub-center in Tongzhou district.  

According to the current project plan, the Xiongan New Area will be a future destination for central government organizations, enterprise headquarters, financial institutes, universities and academic research institutes.  

In a word, to promote integrated development is not only a solution to existing problems, but will create a new economic engine in the new era.  

NC: What’s your view of Xiongan as another new area of national significance after the Shenzhen Special Economic Zone and the Shanghai Pudong New Area? 
ZJK: After four decades of development, China’s Reform and Opening-up, along with its modernization process, are at a critical moment. On the one hand, the per capita GDP of China has surpassed US$8,000, which allows China to rank as a middle-income country despite the significant distance [of per capita GDP] from developed countries. On the other hand, the old development models which were effective during the previous decades are hardly able to continue amid the new development stage and the changing environment. To avoid the middle-income trap, our country is in urgent need of changing its development model through deepened reform. To promote sustainable economic development and an upgrade of the economic structure, the central government has mapped out a holistic plan. So far, the key is to implement top-down strategic planning.  

Thus, it is understandable that the significance of the setting up of the Xiongan New Area will be a creative economic transformation.  

NC: What strengths does the Xiongan New Area have in its new mode of development? 
ZJK: First of all, the region enjoys better science and technological resources. There are a total of over 400 scientific research institutes within Beijing and there are 513 in the whole region, accounting for over 35.8 percent of the total number of such institutes in the more modernized eastern part of China. In addition, the whole region has a larger talent pool. According to the latest national census, 14.6 percent of people have a university degree, 4.5 percent higher than the average national level.

Secondly, there is a better system and favorable policies. With the central government dedicating Xiongan as a major strategic step for the integrated development plan, the nation will devote its efforts, including material and policy resources, to promote its success.  

Thirdly, the favorable space and geographical position of Xiongan will allow fast transportation for commuters between all three.  

NC: What are the likely difficulties or challenges ahead? 
ZJK: The first obstacle so far is the unbalanced situation of talent supply and demand. The scientific and technological research achievements in Beijing focus on high-end manufacturing, which does not accord with the industrial demand from Hebei Province. At the same time, despite the high demand from Hebei and Tianjin for creative achievements, the development stage of the region restricts its capability in gathering high-end technological transfers.  

The second is the yet-to-be attained overall environment for further development. The gathering of creative elements requires solid conditions, including infrastructure, industrial equipment and various service facilities, as well as soft conditions, including systems, policies and a social and cultural environment. The formation of such an environment requires time and patience. In the beginning, there are definitely obstacles.  

The third is the weak foundation of development. There is neither rich history nor cultural heritage, and no strong industrial basis in Xiongan. In 2016, the total GDP of the three counties inside Xiongan was merely 20 billion yuan (US$3 billion), and the per capita GDP is less than 28,000 yuan (US$4,200), half of the national average. Traditional manufacturing industries, including textiles, plastics and food processing, dominate the region. Most of the surrounding area is occupied by underdeveloped rural villages.  

NC: What do you suggest for the creative development of Xiongan? 
ZJK: The great expectations also underline the difficulties. Thus the overall plan should be clarified before action, which includes four major aspects.  

The first is sound management of the relationship between the government and the market. Creative development cannot be made without government. Yet the major role of the government should be to provide a favorable environment, to cultivate and foster a market mechanism to attract and gather various creative elements. Otherwise, the efficiency and sustainability of innovative development can hardly be secured.  

The second is to optimize the role of encompassing non-capital functions and being a pilot zone for creative development. I believe the key point is to promote noncapital functions to transform and upgrade, so as to adapt to the goal of the new area’s construction and layout, and to improve its urban function to be more appealing to newcomers.  

The third is to manage the self-innovation and cooperative innovation with surrounding regions. More emphasis should be put on coordinated innovation in the whole Jing-Jin-Ji region. The three areas should map out individual development plans, taking into consideration interaction with each other and fulfilling their complementary roles. Efforts should be made in providing a sound environment to attract talented science and tech people from Beijing to Xiongan. It also needs to enhance its industrial development through making good use of Tianjin’s advantageous manufacturing industry, to achieve industrial transformation and upgrade, as well as ecological restoration and environmental preservation.  

The fourth aspect is to handle the relationship between new industry development and promoting transformation and upgrades of traditional industry. Both new and traditional industries are important for the present development plan. In Hebei in particular, where there are more traditional industries, the transformation potential is huge.