It is not every day that a Chinese mayor, accompanied by a retinue several dozen strong, arrives in London to promote his region. But Dai Xianglong, present mayor of Tianjin and former governor of the Chinese central bank, is no ordinary mayor. And as Mr Dai’s particular bailiwick is a key plank in China’s economic growth strategy, his words of wisdom are particularly worthy of attention.

“We have a lot of mayors in China,” a Chinese attendant at the mayor’s City media briefing told fDi, “but this one is different… he enjoys the blessing of the highest echelons of the party.”

The inference to be drawn was that the former governor of the People’s Bank of China has been tipped for the country’s very top job. Which perhaps explained the presence of his dark-glasses-wearing security staff standing conspicuous guard outside on Threadneedle Street.

Grand designs

But Mr Dai’s trip was to publicise the role that Tianjin New Coastal District (TNCD) is to have in the continued development of a powerhouse economy that chills the spine of the west. If the grand plan comes to fruition, Tianjin, in China’s north, will become a motor of automotive and high-tech production married with new standards of environmental efficiency and urban planning and bed-rocked in an innovative and business- friendly regulatory framework.

Already home to a major shipping hub, the region will, in short, exemplify why China should be both loved and feared by the west.

Flanked by translators, lieutenants and representatives of Tianjin’s Great and Good, Mr Dai explained that TNCD, situated at the hub of the Bohai Rim along the eastern coastline of Tianjin Municipality, is intended to be the third pole of China’s regional economy “after Shenzen and Pudong”, and to “trigger the third wave of China’s economic development and guide the northward movement of the gravity of China’s regional economy”.

Built on “scientific principles” and acting as a pilot for China’s national development, the plan is for the region to become a centre for research and development and applied technology, underpinned by manufacturing, producing 100 million mobile telephone headsets, one million cars and 100 million tons of ethylene a year, with 43% of the economy driven by high-tech industries by 2010.

The second task the mayor would be pursuing for his region is to develop it as a shipping and international logistics centre. Already, he said, Tianjin ranks as the ninth busiest port in the world, handling 240 million tons of freight cargo in 2005 – a figure he hopes to increase to a throughput of 300 million tons within five years. He is also trying to steal a march on other regions on the finance side.

At the end of 2005, the region established the Bohai Bank, the first commercial bank in China to admit a foreign shareholder (Standard Chartered Bank has a 19.99% stake), and the first nationwide commercial bank headquartered in Tianjin. Bohai intends to start rolling out branches across China as soon as it has established its first foothold.

Clearly, the blessing of China’s central government will be an essential ingredient in the region’s success. A planning strategy document seen by fDi notes that the National Development and Reform Commission (NDRC) regards Tianjin as “lagging behind… the Yangtze River Delta and the Pearl River Delta [and] its influence on the country’s economy is also relatively obscure”. The document adds that “instead of merely relying on itself, its future development will receive vigorous support from the central government”, which expects the TCND to “revitalise the economy of the circum-Bohai region”, and help the “sluggish north catch up with the vibrant south”.

Five-point plan

Underpinning this support are five policies intended by the State Council to give the area a head start: recognition of the region as “a pilot area for comprehensive reform”, establishment of the Dongjiang Bonded Port Area, implementation of financial reform, guarantees of more construction land, and a reduced tax bill for hi-tech enterprises within a designated 510 square kilometre area.

Maintaining good relations with the capital is mission critical. Work began on a high-speed motorway between Tianjin and Beijing last year, and Mr Dai was able to boast that by 2008, travelling between the two cities will take only 30 minutes, with three-minute intervals between the departures of each train.

There are other major infrastructure projects getting off the ground. In March, the regional administration announced the 10 existing projects it would be “accelerating” and 10 projects that it was going to kick-start with funds from 2007 onwards. These include expansion of the Tianjin international airport to a 5.6 million passenger/500,000 tons freight capacity by 2007, expansion at Tianjin Port, and a major land-reclamation project. Large-scale manufacturing projects include the relocation of Tianjin Soda Plant, the “core project of the Bohai Chemical Industrial Plant”, which on completion (scheduled 2007) is planned to churn out some 800,000 tons of joint alkali and 400,000 tons of methyl alcohol.

Other projects in the process of completion include a Rmb6.3bn ($787m) investment in an existing Toyota plant, which will increase output to 200,000 cars and 220,000 ZZ engines annually; a steel plant projected to produce annual output of 1.5 million tons of cold rolled stainless steel sheet; expansion of the Tianjin Pipe Corporation (with a projected output of 500,000 tons rolled pipes after completion); and the construction of nine modern textile units.

Projects due for imminent commencement include the grandly titled “One Million Ton Ethylene Project”, which will have a production capacity of – as its title suggests – one million tons of ethylene, in addition to 600 tons of hydro-cracked gasoline, and 600,000 tons of polyethylene. Several motorway projects and a 300,000-ton crude oil refinery are also in the early stages of construction. To help stoke such prodigious growth, the Beijing Power Plant, consisting of the construction of two one million KW coal-fired generating units, will generate some 11 billion KWH every year.

Despite, or because of, an apparent emphasis on the TCND’s domestic standing, Mr Dai is keen to foster good international relations – hence his multi-capital flesh-pressing jaunt around Europe. The strategy document proclaims that “the development of the TNCD was launched against the backdrop of economic globalisation”. It adds that as the “east gateway joins the hinterland cities of north and west China to the overseas market, it will collaborate closely with its north-east Asian partners and help China’s vast north-west region dive into the ocean of globalisation.”

UK opportunities

Mr Dai was anxious to press this point at his London briefing – and to flatter his UK audience. Already, he said, there was $500m-worth of UK investment in Tianjin, while UK-Tianjin trade was worth $900m in 2005. Traditionally, said the mayor, Tianjin was a manufacturing centre, conceding: “We do not have a lot of core technology.”

If the region were to realise its strategic aim of becoming a centre for R&D, it would take sizeable input from outside – in terms of both investment and expertise. Befitting his Threadneedle Street audience, he added that British assistance with the region’s financial reform programme would also be welcomed.

But economic growth has not been an unqualified success. In common with many of Chinese fastest growing regions, Tianjin has unacceptably high levels of air and water pollution, and cancer mortality rates are some of the highest in the country – in some areas, according to Chinese news agencies, as high as 2000 per 100,000 deaths compared with the national average of 70 per 100,000.

Smooth operator

The mayor’s strategy addresses, (though perhaps without removing) a number of other western concerns, such as whether, for example, China’s growth can continue at its giddy pace without a corresponding and negative effect on its own environment, and without fuelling global warming. The strategy is replete with the most up-to-date and politically correct catchphrases currently in use by regional and economic development policy planners: the relationship between economic growth and long-term development will be handled so as to reflect “co-ordination between economy, society, population, urban area, rural area, resources and environment”, while the overall plan stresses the concept of “putting people first”.

Dai Xianglong insisted that his plan was for the TCND to exceed the national GDP average while achieving a reduction in energy consumption of 20% – equal to energy consumption of two-thirds of the national average per Rmb10,000 of GDP. The worst polluting factories, he told fDi, “would be closed down”. He said that Tianjin was developing lithium-based “clean energy” and that despite the region planning the assembly of one million cars annually, it was encouraging and developing the use of electric-powered vehicles. Some Rmb30bn is being invested in state-of-the-art sewage management systems, and rates for water and other energy resources are to be hiked up “to encourage efficiency”. Looking after the environment, he said, “was one of the major tasks faced by any mayor”.

China watchers will observe closely as to how Mr Dai’s strategy for the TCDN unfolds. One day, after all, it may be rolled out on a much larger scale.

Printer friendly version

Email this to a friend