The development of the Beijing-Tianjin-Hebei cluster offers an opportunity to advance the whole region, rather than simply reallocating regional interests.

 

The Politburo of the Central Committee of the Communist Party of China approved plans on April 30 for the coordinated development of the Beijing-Tianjin-Hebei region, consolidating the project as a national strategy.

The strategy aims to relieve pressure on Beijing and boost development of its surrounding regions. Its approval will pave the way for the government to promote economic and spatial restructuring in the region and improve management of Beijing’s population. According to the plans, priority will be given to traffic management, environmental protection, energy security, industrial upgrades and public services.

Approval of plans has ushered in positive developments, including the extension of Beijing’s subway network to Hebei Province and collaboration on customs clearance procedures between Beijing and Tianjin Municipality starting on July 1. The Beijing-Tianjin-Hebei integration has subsequently entered a new development period.

Wu Liangyong, an academician with both the Chinese Academy of Sciences and Chinese Academy of Engineering, proposed the idea of building a “big Beijing” as early as 2001. In 2004, the National Development and Reform Commission (NDRC) organized a team from Beijing, Tianjin and Hebei Province to discuss key issues of the integration that subsequently resulted in the Langfang Consensus. Beijing pinpointed the integration in its overall plans in 2005. Coordinated development of the region was then included into the 11th Five-Year Plan (2006-2010), and the NDRC officially started to compile plans for developing the Beijing-Tianjin-Hebei metropolitan area the following year. In March 2011, the 12th Five-Year Plan (2011-2015) was released with the goal of building a “capital economic circle.”
 

Real progress toward this end was made in 2013 when Chinese President Xi Jinping emphasized the importance of the integration and coordination of Beijing, Tianjin and Hebei Province. Xi held a symposium on the coordinated development of the capital and its two neighbors in 2014 in a bid to balance development, the environment, population and resources.

Great opportunity
There is a saying that the Beijing-Tianjin-Hebei integration is virtually distributing the capital’s fortune to Tianjin and Hebei Province with little benefit to Beijing.

“This is definitely wrong,” said Zhao Hong, vice-president of the Beijing Academy of Social Sciences, adding that the strategy aims to break boundaries between the three regions, give full play to their special advantages and gradually narrow the development gap to ultimately promote the fundamental transition of China’s development mode.

“The integration between the capital and its neighboring areas started relatively late,” said Cong Yi, deputy dean of the Economics School at the Tianjin University of Finance and Economics, noting that gaps between the three regions continue to be stark.
 

In order to advance integration of the three regions, many industrial enterprises moved out of Beijing during the 1980s and 1990s. However, due to an overall lack of planning and conditions for implementation, these enterprises only moved their headquarters and production departments out of the capital, leading to the loss of experts.

“Integration requires realizing an adjustment of the capital’s functions rather than issuing improper administrative orders,” said Zhao. He also noted that it is difficult to forcibly move some institutions and enterprises out of Beijing unless there are favorable conditions, such as optimal traffic infrastructure, in neighboring areas.
 

International experience shows that high-quality elements and resources are clustered in big cities during their initial development, triggering an agglomeration effect. But with the extension of industrial chains, the service function of big cities covers larger areas and benefits more people.
 

“Development of the Beijing-Tianjin-Hebei cluster means that  resources are agglomerating and spreading,” said Zhou Liqun, executive deputy dean of the Binhai Development Research Institute at Nankai University, noting that the strategy beckons as a great opportunity to develop the whole region, rather than simply reallocating regional interests.

Political and economic gaps
There are some barriers to the coordinated development of Beijing, Tianjin and Hebei Province, said Zhao. First, the strategy lacks a sufficient national coordination mechanism.
 

“Both Hebei Province and Tianjin have always been subordinated to Beijing in resource allocation and administrative concertation. The disparity in political and economic position influences deeper cooperation and coordination,” said Tian Xuebin, deputy director of the Beijing-Tianjin-Hebei Integrated Development and Innovation Center at the Hebei University of Economics and Business, adding that it is necessary to break the boundaries of administrative systems to realize true coordination of the three regions.
 

Second, there are also lingering institutional barriers. For example, in recent years Beijing has cooperated with cities and development zones in Hebei Province, yet they have nonetheless faced hurdles, including how to calculate GDP and share taxes. 
 

One of the most troubling issues is traffic integration. “The one-hour traffic circle still has yet to be formed in Beijing and its neighboring areas,” said Zhao, adding that in some developed countries, there are traffic systems that efficiently handle large traffic volumes and connect central cities with neighboring ones.
 

“In the long term, the chief factor restricting the coordinated development of the Beijing-Tianjin-Hebei integration is the lack of clear functional orientation,” said Liu Gang, deputy dean of the Binhai Development Research Institute at Nankai University, adding that the premise for the integration is regional repositioning of functions.

Dependence on market mechanisms
People are accustomed to comparing development of the Yangtze River economic belt and Pearl River Delta economic zone with the Beijing-Tianjin-Hebei integration, and attributing the relatively poor integration in Beijing and its neighboring areas to the role of the capital. However, Zhao rejects such views as utterly unscientific.
 

“There are some factors leading to the lagging of the Beijing-Tianjin-Hebei integration, including the underdeveloped private economies and poor natural conditions,” said Zhao.

Zhao also emphasized that development of the regional economy and resource allocation within the region should depend on market mechanisms rather than administrative orders. He said the government should create fundamental conditions that give full play to market mechanisms, including the planning and construction of a traffic system and innovation of public service policies.
 

In addition, a host of chambers of commerce, alliances and associations will emerge during the process of regional cooperation. “Cultivating different kinds of market organizations will promote coordinated development of the region, and the government should accordingly prioritize the transition of its functions,” said Zhou.

Delegating capital functions
Society has always paid attention to the positioning of the capital. Xi reiterated his view on many occasions that it is essential to step up integration of the Beijing-Tianjin-Hebei region to delegate some of the capital’s functions to other regions and further develop the heavily populated region.

“In order to give full play to the capital’s functions, core functions must be strengthened. These include Beijing’s status as the center of the nation’s politics, culture, international communications and technological innovation, as well as delegating some non-core functions including the elimination of the low-end market,” said Zhao.

In terms of industrial layout and transition, Tian pinpointed the following regional priorities: Beijing pays more attention to developing high-tech and new service industries; Tianjin focuses on advanced manufacturing and strategic emerging industries; and Hebei Province gives priority to regular manufacturing and agriculture.
 

“The biggest advantages of Hebei Province are its land and human capital, which will make it play a more significant role in the industrial transition. It can attract enterprises headquartered in Beijing or Tianjin to build their production bases there,” added Tian.
 

“Beijing should cooperate with its neighboring areas to create a global innovation platform. The research and development department of each enterprise should be set up in Beijing and the production department should be established in its neighboring areas, commonly creating a chain and cluster of innovation,” said Zhao.
 

Liu hinted that the development of public services, including educational, medical, cultural and physical services, will attract experts in each field. “To improve integration, Hebei Province and Tianjin should strengthen their capabilities to provide good public services,” added Liu.