The Asian Development Bank Study On Sustainable Urbanization In Metropolitan Regions Final Report : December 2007
Halcrow Group Limited in association with Tsinghua University, PRC and the UCL Development Planning Unit, UK
The Asian Development Bank Study On Sustainable Urbanization In Metropolitan Regions Final Report : December 2007
Halcrow Group Limited in association with Tsinghua University, PRC and the UCL Development Planning Unit, UK
Halcrow Group Limited Vineyard House 44 Brook Green London W6 7BY Tel +44 (0)20 7602 7282 Fax +44 (0)20 7603 0095 www.halcrow.com Halcrow Group Limited has prepared this report in accordance with the instructions of their client, the Asian Development Bank and the Government of the Peoples Republic of China, for their sole and specific use. Any other persons who use any information contained herein do so at their own risk.
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EXECUTIVE SUMMARY
Purpose of the Study 1
In line with the objectives of the 11th Five Year Plan, the National Development Reform Commission (NDRC) proposes to optimise urbanisation by adopting a new agenda to manage urban growth of metropolitan regions. This study assists the NDRC in this task. It recommends 9 strategies to achieve sustainable urbanisation in metropolitan regions in the People’s Republic of China (PRC) and forms part of the Asian Development Bank (ADB) TA 4702-PRC.
2
In consultation with the NDRC and the ADB, an agenda for change is proposed based on analysis of urbanisation trends and data, case studies of Wuhan and Chengdu Metropolitan Regions and a review of national and international best practices.
3
There is no universally agreed definition of a "metropolitan region". Different countries have varying interpretations, which creates confusion. Most definitions relate to an agglomeration of functions, which can be measured in terms of population, labour, socio-economic factors, market forces or functional characteristics, all of which are generally found in urban areas.
Urbanisation Trends and Issues 4
Analysis of urbanisation trends over recent years identified that the urban population and physical expansion of urban area will continue to increase in the foreseeable future. Best estimates are a 50% increase in the urban population and a doubling of current urban areas by 2020. The implications of this are :•
•
•
The great majority of the increase in the urban population will be previously rural residents who either migrate to the cities or are living in peripheral villages which will become incorporated into the main urban areas. Due to declining household size, the demand for new housing from the existing urban population will remain significant for the foreseeable future. Infrastructure networks (water, sewerage and roads) will need to be extended into the new urban areas. If these are concentrated in and around existing county towns, the facilities in these will need upgrading with appropriate linkages provided to the main urban centre. Infrastructure needs to be improved in villages that become enveloped by the expanding cities.
Asian Development Bank, Peoples Republic of China - Study on Sustainable Urbanization in Metropolitan Regions Draft Final Report, June 2007. Halcrow Group Ltd.
•
•
•
• 5
The development of improved and integrated public transport systems will be a priority as there is little precedent in the major cities of developing countries outside the USA (and Australia) for car-oriented urban transportation strategies. Financing of urban infrastructure by requisitioning land needs to be reappraised. It leads to inefficient provision of infrastructure, unnecessarily dispersed settlement patterns, premature loss of agricultural land, and social discontent. Already requisitioned land provides a major reserve which can accommodate a substantial proportion of future land demands. Additional land demands will come from the continuing central area redevelopment projects. The importance of these will however decrease over time. The current policies of "hukou" create inequality and interfere with labour mobility.
The government has recently made the creation of a harmonious society one of its foremost national development goals. In conjunction with the objectives to reduce the conversion of agricultural land, reduce pollution and generally improve environmental conditions, the priorities become: •
• •
• • •
Explicitly including the needs of migrants and rural residents on the urban fringe in the future urban policy, especially in terms of housing and education. Increasing infrastructure expenditure in rural areas within municipal boundaries. Re-orienting land conversion and development policy to maximise the use of under-developed land within the current urban boundary (as well as land which has already been requisitioned) in order to create a more efficient compact urban form and reduce the premature displacement of farmers. The development of intra-urban and intra-metropolitan public transport systems. Controlling pollution from industrial enterprises, especially SMEs, and Improving the treatment of wastewater and disposal of solid waste.
Case Studies of Wuhan and Chengdu Metropolitan Regions 6
Key issues were identified from an examination of both Wuhan and Chendgu Metropolitan Regions. These are listed below under subject headings. In most instances the issues are the same for both regions. However, in the case of Wuhan those that stem from interaction with other cities in the region are not so strongly experienced at the present time.
Asian Development Bank, Peoples Republic of China - Study on Sustainable Urbanization in Metropolitan Regions Draft Final Report, June 2007. Halcrow Group Ltd.
Institutional 1. Absence of mechanism to prepare and implement the policies mentioned below Strategic Planning 2. Uncoordinated and unplanned development within or between one or more local administrative areas that comprise the region. Land Use 3. Urban sprawl, leapfrogging and poorly serviced development in peripheral areas. 4. Under-utilisation of serviced vacant land and brownfield (derelict) sites. 5. Over requisitioning of land for projects/activities that may be unnecessary and inappropriate 6. Unacceptably long commuter journeys Economic Development 7. Absence of any consistent policy for the economic advancement of the entire region 8. Restrictions of the movement of labour (Hukou) are impacting on the availability of appropriate human resources 9. Competition among local administrations for economic activity results in wasteful investment and may prejudice land use and transportation planning objectives as well as clustering. 10. Local economies have to adjust/restructure as inefficient or heavily polluting State Operated Enterprises are either remodelled, relocated or phased out. 11. Potential advantages of clustered economic activity has not been realised. 12. The government is not giving sufficient attention to market/promote the region's products and services. 13. Business environment is unfriendly. Government is not facilitating private sector investment, especially small to medium sized enterprises. Infrastructure 14. Absence of any consistent policy for infrastructure investment within the region results in wasteful investment often with little synergy with other public or private endeavours. 15. Disparities between the range and quality of infrastructure or service provision across various parts of the region, especially in peripheral areas and outlying towns. 16. Infrastructure investments are prohibitively expensive. 17. Inefficient utilisation of infrastructure and services available in vacant or under-utilised land. 18. Duplication of investment into mega-projects. Transportation 19. Serious traffic congestion. Social Welfare 20. Unacceptable disparities in income and opportunities exist between various parts of the region 21. Sections of society are not able to access affordable housing. 22. Sections of society are not able to access social services. 23. Unnecessary requisitioning of rural land (for urban uses) displaces farmers who (for want of a livelihood) often become non-skilled urban migrants. Asian Development Bank, Peoples Republic of China - Study on Sustainable Urbanization in Metropolitan Regions Draft Final Report, June 2007. Halcrow Group Ltd.
Environment 24. Absence of holistic, systematic approach to the environment 25. Pollution of watersheds 26. Lack of integrated/coordinated approach for solid waste management 27. Competition over natural resources - loss of farmland, open space and green spaces within urban areas. 28. Deterioration of the environment due to the uncontrolled disposal of effluents from industrial activity and households. Finance 29. No region wide financial management 30. Development budgets are insufficient in relation to the scale of investments required 31. Poorly conceived projects, for activities that may not be required or appropriate, involving unnecessary land requisitions and incurring nonperforming loan liabilities 32. Development budgets are unequal among the local administrations and do not address investment needs and priorities, nor do they benefit from any cross-subsidies. 33. Insufficient sources of finance for the provision of social facilities (schools, clinics, etc.)
Lessons learned from International Experience 7
The following metropolitan regions were examined. • • • • • • • •
8
Sydney, Australia Randstad, Netherlands Vancouver, Canada Paris, France London, UK New York- New Jersey Tokyo, Japan, and Shenzhen, China 1
The lessons learned are summarised below :a) A metropolitan authority, responsible for strategic policy, is beneficial in most instances. However if local administrations are able to coordinate effectively an authority is not always necessary, for example in the metropolitan regions of Sydney and New York- New Jersey. b) A primary function of the metropolitan authority is to prepare an overall strategy (a vision) for the region. Such plans have been prepared for London, Paris and Vancouver Metropolitan Regions. c) Working with private sector trends is more likely to succeed than working against them. This principle underpins the approach of the Greater London
Shenzhen is not a metropolitan region by administrative definition, but it offers valuable lessons for management of complex urban problems
1
Asian Development Bank, Peoples Republic of China - Study on Sustainable Urbanization in Metropolitan Regions Draft Final Report, June 2007. Halcrow Group Ltd.
Authority and the policies of the Regional Council of the Paris Metropolitan Region. d) Provision of strategic level infrastructure (roads, rail, water and solid waste disposal) can be more efficient if managed by a regional agency such as London Transport in London, Translink in Vancouver, and Syndicat des Transports d'Ile de France (STIF) in Paris. e) Urban growth can be structured by appropriate policies and major investments in projects such as satellite towns and rapid inner regional rail services, for example the 5 satellite towns of the Paris Metropolitan Region. f)
As shown in Vancouver, shortage of available land need not be a constraint to city development and can be resolved with policies to encourage more compact development of higher densities whilst maintaining high standards in quality of life.
g) Clustering of economic activities has been successfully implemented in Tokyo, Paris and Randstad Metropolitan Regions. Successful clustering of economic activity can be achieved over time if the right policy and investment framework is established to offer an attractive place to invest and live. It also requires the government and local administrations to consult closely with the private sector and the creation of a business friendly environment. h) All metropolitan regions have to solve the problem of traffic congestion. Their experience demonstrates that this has to be tackled in a comprehensive, multi-dimensional manner and ultimately must include measures to restrict the use of the private car (congestion charges), such as in London. However, complementary improvements to alternative means of transport (public transport) must be instigated as part of an overall transportation strategy. i)
In all regions, environment requires a cross cutting approach that operates at a strategic level throughout the region. Often this is best achieved by establishing an environmental agency at the metropolitan level.
j)
Taxes and charges to finance region-wide authorities enables them to operate with a minimum of subsidy while assisting in the implementation of policy objectives.
Recommendations 9
Taking into the account the general characteristics of Chinese cities, the rate at which they are growing and the nature of their administration (often comprising many authorities whose jurisdictions may not coincide with the extent of urbanisation) it is recommended that a metropolitan authority is established to guide and control development at a strategic level. Existing local authorities can continue to operate (although some adjustment to their boundaries may be beneficial) providing that their activities comply with policies, regulations and procedures to achieve strategic objectives.
Asian Development Bank, Peoples Republic of China - Study on Sustainable Urbanization in Metropolitan Regions Draft Final Report, June 2007. Halcrow Group Ltd.
10 Strategic objectives should be clearly explained in a Vision Statement for the region. This should be prepared through a process of intensive consultation with all concerned stakeholders ( including local administrations, the private sector and all sections of society) and will operate as a guiding agenda for shaping development as well as rectifying aspects considered to have a negative impact. 11 The Vision should seek to utilise the driving force of the private sector, and work to bring better solutions, rather than attempting to reverse or frustrate established trends. Nevertheless efforts must be made to attain and maintain both sustainable and inclusive development by the introduction of policies, regulations and procedures to tackle key issues. In addition, policies are required to safeguard the environment and ensure that all citizens are able to participate freely with equal opportunities. 12 To achieve strategic objectives, 9 strategies are suggested : institutional, strategic planning, land use, economic development, infrastructure, transportation, social welfare, environment and finance. 13 Strategies should comprise integrated sets of policies that are consistent with each other and fully coordinated with those of other strategies. The table below summarises recommended policies for each strategy in relation to the key issues mentioned earlier. There are 64 policies in total. Although metropolitan regions in China differ according to their size, location and economic characteristics, it is felt that most policies will apply (to a lesser or greater extent) to all. 14 Many policies could be applied without the need to establish a metropolitan authority, in smaller regions perhaps, but this is not recommended as the nature of strategic planning across and between two or more local administrations appears (from the conclusions of this study) to require a degree of authority that is presently missing. 15 Finally, the role and function of a Metropolitan Authority is to guide and control the activities of local administrations, rather than to execute all actions itself. However certain strategic activities, such as main roads and rail, water, waste disposal and some environmental aspects, may be better managed at the regional level. Either the authority can do this itself or establish regional agencies to oversee or operate these. Such agencies are commonly found in most metropolitan regions, in particular, for transport, water and the environment.
Asian Development Bank, Peoples Republic of China - Study on Sustainable Urbanization in Metropolitan Regions Draft Final Report, June 2007. Halcrow Group Ltd.
Key Issues and Policy Responses
Responsibility
Instrument
State
Legislation
INSTITUTIONAL Absence of mechanism to prepare and implement the policies mentioned below •
Establish a metropolitan authority with strategic responsibility for the entire region.
•
Revised boundaries of administrations (if necessary) to encompass urban conurbation and other regional attributes.
State and Local Administrations
Legislation
•
Clearly demarcate roles, functions and jurisdictions between the metropolitan authority and subordinate administrations.
State and Local Administrations
Legislation
•
Define operation and funding procedures (see finance) on the understanding that the plans and programmes of subordinate administrations will comply with the guidance and directions given strategic plans (see below).
State
Rules and regulations
Establish a means for liaison between the administrations that comprise the region (for example a committee of representatives from the administrations supported by an executive to prepare the strategies).
Administrations within the region
Agreements
OR
Clearly define legal status and functional responsibilities of the liaison committee in relation to the administrations, and the means to enforce committee decisions. This is not recommended and may undermine the preparation and implementation of policies recommended below. STRATEGIC PLANNING Uncoordinated and unplanned development within or between one or more local administrative areas that comprise the region. •
Establish a metropolitan vision for sustainable development with clearly stated aims and objectives.
Metropolitan Authority, Local Administrations
Document based on extensive consultations
•
Prepare strategies to realise aims and objectives (of the vision). This should include a land use/management strategy prepared in association with similar strategies for transportation, economic development, infrastructure, socio-welfare and
Metropolitan Authority, Local Administrations
Document based on consultation data and
Asian Development Bank, Peoples Republic of China - Study on Sustainable Urbanization in Metropolitan Regions Draft Final Report, June 2007. Halcrow Group Ltd.
Key Issues and Policy Responses
Responsibility
environment. •
Require that land use and development plans of subordinate authorities accord with the strategic land use/management plan.
Instrument
analyses Metropolitan Authority, Local Administrations
Regulation and enforcement
Metropolitan Authority, Local Administrations
Document based on consultation data and analyses
LAND USE Urban sprawl (low density, poorly serviced development in peripheral areas) •
Prepare a land use/management strategy, which among others will include policies listed below.
•
Introduce zones to phase development over time and to coordinate development with a programme for the extension and upgrading of infrastructure networks/services
Metropolitan Authority
Regulations
•
Formalise the rights of Village Collectives and introduce standards for compliance with strategic plan requirements (If appropriate re-classify rural land as urban in line with the lessons learned in Shenzhen).
State, Metropolitan Authority, Local Administrations
Legislation, regulations
•
If appropriate, target selected peripheral areas as growth poles (satellites) and coordinate their priority development with other strategic plans (economic, transport and infrastructure in particular)
Metropolitan Authority, Local Administrations
Coordination financial incentives and other appropriate means
Under-utilisation of serviced land •
Establish zones which specify appropriate densities.
•
Introduce measures to encourage development of infill areas and vacant land (see finance policy 55)
Metropolitan Authority
Regulations
Metropolitan Authority, Local Administrations
Regulations, penalties and incentives
Metropolitan Authority, Local Administrations
Regulations, penalties and incentives
Over requisitioning of land for projects/activities that are unnecessary and inappropriate •
Projects of a specified size (area) should accord with strategic plans, and receive Metropolitan Authority approval, before land is requisitioned for construction.
Asian Development Bank, Peoples Republic of China - Study on Sustainable Urbanization in Metropolitan Regions Draft Final Report, June 2007. Halcrow Group Ltd.
Key Issues and Policy Responses
•
Estimate future land requirements and prepare a programme for further requisitioning in relation to land already available. Prohibit additional requisitions in zones with abundant vacant or under-utilised land.
Responsibility
Instrument
Metropolitan Authority
Document based on consultation data and analyses
Unacceptably long commuter journeys •
Decentralise jobs to locations closer to residents (see economics and transport)
Metropolitan Authority, Local Administrations & Private Sector
Coordination financial incentives and other appropriate means
Metro Authority, Local Admin & Private Sector
Document based on consultation data and analyses
Metropolitan Authority, Local Administrations
Regulation
Metropolitan Authority, Local Administrations
Coordination financial incentives regulations & other appropriate means
Metropolitan Authority, Local Admin and
Consultations and appropriate
ECONOMIC DEVELOPMENT Absence of any consistent policy for the economic advancement of the entire region •
Prepare a economic development strategy which will among others include the policies listed below.
Restrictions of the movement of labour (Hukou) are impacting on the availability of appropriate human resources •
To facilitate labour flow, relax Hukou regulations between the administrative units that comprise the region (see policy 45 of social welfare strategy).
Competition among local administrations for economic activity results in wasteful investment and may prejudice land use and transportation planning objectives as well as clustering. •
Coordinate operations of local administrations by adoption of a policy for the location of economic activities and link these with strategies for land use, transportation and infrastructure, as well as programmes for social welfare.
Local economies must adjust/restructure as inefficient State Operated Enterprises either remodel, relocate or phase out. •
Consult with SOEs and if necessary take appropriate actions to renovate, relocate or redevelop sites using various incentives including grants and loans.
Asian Development Bank, Peoples Republic of China - Study on Sustainable Urbanization in Metropolitan Regions Draft Final Report, June 2007. Halcrow Group Ltd.
Key Issues and Policy Responses
Responsibility
SOEs
Instrument
actions
Potential advantages of clustered economic activity has not been recognised or realised •
Discuss and agree clustering concepts with the business community. Identify appropriate locations in line with other strategies, in particular land use, infrastructure and transport.
Metropolitan Authority and Businesses.
Educate local administration about clusters
The government is not giving sufficient attention to market/promote the region's products and services. •
Adopt a joint approach to outward marketing to promote the collective comparative advantages of the region.
•
Allocate funds (from regional budgets) to assist business in research and development.
Metropolitan Authority, Local Administrations
Advertising marketing, trade fairs & other
Metropolitan Authority,
Grants and subsidies
Business environment is unfriendly. Government is not facilitating private sector investment, especially to SMEs. •
Ensure that comparative advantages also have competitive advantages by streamlining bureaucratic procedures and smoothing the public face of production chains.
Regulation State, Metro Authority, Local and procedural reviews Administrations
INFRASTRUCTURE Absence of any consistent policy for infrastructure investment within the region results in wasteful investment with little synergy with other public or private endeavours. •
Prepare an infrastructure investment strategy and link to other strategies. Among others this should include policies listed below.
Metropolitan Authority, Local Administrations
Document based on consultation data and analyses
Disparities between the range and quality of infrastructure or service provision across various parts of the region, especially in peripheral areas and outlying towns. •
Assess needs and identify priority areas for upgrading and extension of strategic infrastructure and service networks.
Metropolitan Authority
Document based on consultation data and analyses
•
Assist the administrations of priority areas to improve local services by using regional funds as grants and
Metro Authority, Local
Regulations and
Asian Development Bank, Peoples Republic of China - Study on Sustainable Urbanization in Metropolitan Regions Draft Final Report, June 2007. Halcrow Group Ltd.
Key Issues and Policy Responses
Responsibility
Instrument
subsidies.
Admins
procedures
Infrastructure investments are prohibitively expensive. •
Facilitate private sector investment/involvement in the financing and operations of infrastructure through appropriate Public Private Partnership (PPP) modalities.
Metropolitan Authority, Local Administrations & Private Sector
Regulations and procedures
•
Review norms, standards and costing assumptions.
Metropolitan Authority, Local Administrations
Review
•
Limit the practice of land requisitioning as a means of raising funds for projects.
Metropolitan Authority, Local Administrations
Regulations and procedures
Inefficient utilisation of infrastructure and services available in vacant or under-utilised land. •
Phase the extension of infrastructure systems to match the spatial progression of physical development, and
Metropolitan Authority, Local Administrations
Regulations and procedures
•
Introduce incentives/penalties to ensure that vacant serviced land is developed (see finance policy 55)
Local Administrations
Tax regulations and incentives
Metropolitan Authority, Local Administrations
Regulations and procedures
Duplication of investment into mega-projects. •
Joint approval of locations for mega-projects in line with land use and other relevant strategies.
TRANSPORTATION Serious traffic congestion. •
Prepare a transportation strategy which among others should include policies listed below
Metropolitan Authority, Local Administrations
Document based on consultation data and analyses
•
Prepare an integrated package of proposals to, upgrade and rationalise road network, limit the use of private vehicles (congestion charges) and improve public transportation.
Metropolitan Authority, Local Administrations
Regulations penalties incentives and procedures
Asian Development Bank, Peoples Republic of China - Study on Sustainable Urbanization in Metropolitan Regions Draft Final Report, June 2007. Halcrow Group Ltd.
Key Issues and Policy Responses
•
Coordinate land use and transportation strategies to improve private and public transport services to and from major work place concentrations.
Responsibility
Instrument
Metropolitan Authority, Local Administrations
Coordination
Metropolitan Authority, Local Administrations
Document based on consultation data and analyses
Metropolitan Authority
Programmes
Metropolitan Authority, Local Administrations
Coordination
SOCIAL WELFARE Unacceptable disparities in income and opportunities exist between various parts of the region •
Prepare social welfare strategy which among others will include the policies listed below
•
Target skill training (to meet shortfalls in available labour) to the unemployed and disadvantaged.
•
Subject to the requirements of other strategies, locate growth poles and economic clusters in an effort to redress inequality
Sections of society are not able to access affordable housing. •
Oblige real estate developers to include a proportion of low cost accommodation in residential developments, or pay the equivalent for others to provide it.
Metropolitan Authority, Local Administrations
Document based on consultation data and analyses
•
Encourage the supply of affordable rental units.
Metropolitan Authority, Local Administrations
Regulations incentives and procedures
•
Initiate housing associations to operate as intermediaries for the poor within the housing market.
Metropolitan Authority, Local Administrations
Regulations incentives and procedures
•
Support rights of village collectives to market land (providing the intended use accords with the land use strategy).
Metro Authority, Local Admin
Regulations incentive,proc edure
Sections of society are not able to access social services. •
Oblige real estate developers to include social facilities in developments, or pay the equivalent for others to provide them.
Metropolitan Authority, Local Administrations
Regulations incentives and procedures
•
Relaxation of the Hukou system within the regional jurisdiction.
Metropolitan Authority, Local Administrations
Regulations incentives and procedures
Asian Development Bank, Peoples Republic of China - Study on Sustainable Urbanization in Metropolitan Regions Draft Final Report, June 2007. Halcrow Group Ltd.
Key Issues and Policy Responses
Responsibility
Instrument
Metropolitan Authority, Local Administrations
Regulations incentives and procedures
Metropolitan Authority, Local Administrations
Document based on consultation data and analyses
Metropolitan Authority, Local Administrations
Regulations incentives and procedures
Metropolitan Authority, Local Administrations
Document and regulations, penalties and procedures
Metropolitan Authority, Local Administrations
Regulations, penalties and procedures
Unnecessary requisitioning of rural land (for urban uses) displaces farmers who (for want of a livelihood) become non-skilled urban migrants. •
Requisitioning of farmland should be justified in relation to strategic land use plan.
ENVIRONMENT Absence of holistic, systematic approach to the environment •
Prepare environmental strategy plan, which among others should contain the policies listed below
Pollution of watersheds •
Introduce land use restrictions in water catchments supported by local management and enforcement mechanisms.
Lack of integrated/coordinated approach for solid waste management •
Prepare waste management plan, to include measures to reduce and re-cycle waste, collection and sanitary disposal.
Competition over natural resources - loss of farmland, open space and green spaces within urban areas. •
Prioritise natural resource areas to be preserved and incorporate measures to protect them within all strategies. Ensure that measures are consistent with local support.
Deterioration of the environment due to the uncontrolled disposal of effluents from industrial activity. •
Closure of polluting process/activities, or the introduction of measures to reduce their impact to within acceptable standards.
Metropolitan Authority, Local Administrations
Regulations, penalties and procedures
•
Relocation of polluting activities to more appropriate locations.
Metropolitan Authority, Local Administrations
Regulations, penalties and procedures
•
Monitor the activities of Town and Village Enterprises and if appropriate re-classify rural land as urban (in line with the lessons learned in Shenzhen) and
Metropolitan Authority, Local
Regulations penalties and
Asian Development Bank, Peoples Republic of China - Study on Sustainable Urbanization in Metropolitan Regions Draft Final Report, June 2007. Halcrow Group Ltd.
Key Issues and Policy Responses
introduce pollution controls.
Responsibility
Instrument
Administrations
procedures
Metropolitan Authority, Local Administrations
Document and related regulations and procedures
FINANCE No region wide financial management •
Prepare financial strategy plan which among others should generate regional revenues and include policies listed below
Development budgets are insufficient in relation to the scale of investments required •
Widen the tax base and introduce more effective taxes to generate regional own source revenues. Property tax has clear advantages, especially if mounted on GIS systems that capture other urban management information. Higher taxes could be levied on vacant or under-developed serviced land to encourage a more compact urban form.
Metropolitan Authority, Local Administrations
Regulations and procedures
•
Review cost recovery systems for existing infrastructure and utility services and adjust user charges accordingly.
Metropolitan Authority, Local Administrations
Review and procedures
•
Consider the introduction of "user pays" principal across the board, for all services, and move towards sustainable financial management.
Metropolitan Authority, Local Administrations
Regulations and procedures
•
Unless the means to meet liabilities are assured, minimise loan financing of projects and issuance of municipal bonds.
Metropolitan Authority, Local Administrations
Procedures
•
Encourage the private sector to contribute funds through appropriate Public Private Partnership modalities.
Metropolitan Authority, Local Administrations
Regulations incentives and procedures
Poorly conceived projects, for activities that are often inappropriate, involving unnecessary land requisitions and incurring non-performing loan liabilities •
Projects exceeding a specified cost should accord with strategic plans, and require Metropolitan Authority approval, before land is requisitioned for construction. (See policy 14)
Metropolitan Authority, Local Administrations
Regulations, procedures and penalties
•
Government banks and financial institutions should seek the confirmation of the Metropolitan Authority before issuing loans (in excess of a specified sum) for financing projects of the local administrations.
Metropolitan Authority, Local Administrations
Regulations, procedures and penalties
Asian Development Bank, Peoples Republic of China - Study on Sustainable Urbanization in Metropolitan Regions Draft Final Report, June 2007. Halcrow Group Ltd.
Key Issues and Policy Responses
•
Lending criteria for project loans should be reviewed and more commercial principles applied.
Responsibility
Instrument
Metropolitan Authority, Central Banks
Banking reform
Development budgets are unequal among the local administrations and do not address investment needs and priorities. •
Introduce regional taxes to generate revenue that can be redistributed among the administrations to compensate and balance any inequalities.
Metropolitan Authority, Local Administrations
Legislation, Regulations and procedures
Metropolitan Authority, Local Administrations
Legislation, Regulations and procedures
Insufficient sources of finance for the provision of social facilities (schools, clinics, etc.) •
Introduction of standard development impact fees to generate revenue for the funding of infrastructure and social services associated with new developments.
Risks 16 There are risks that the policies above will not have the desired impacts. For an individual policy there is a risk of failure because it was poorly conceived and not properly coordinated with other policies (which may conflict with its intention). These risks will be minimised if policies are prepared as a integrated package that responds to objectives shared across all sectors. There is also a risk that policies fail because they were not the product of adequate consultations involving all stakeholders. These risks are reduced if strategies are thoroughly discussed with all concerned and supported by a strong degree of ownership. The recommendation to prepare a Vision Statement at the outset, followed by 9 sector strategies, provides a broad platform for consultations that should overcome this risk. Risk of failure also arises if the means to implement policies are missing, either because the necessary institution is absent or the existing institutions have not the mandate or capacity to manage and enforce the policies. This risk is one reason why it is recommended to establish a metropolitan authority. 17 Policies may not have their intended impact unless the real reasons that underlie and explain key issues are correctly addressed. This risk can occur if government sees its role too narrowly, and limits its actions to those within the traditional Asian Development Bank, Peoples Republic of China - Study on Sustainable Urbanization in Metropolitan Regions Draft Final Report, June 2007. Halcrow Group Ltd.
public sector ambit. More innovative approaches are required, that delve into people's attitudes and behaviour and seeks to make them more sustainable. These risks can be minimised by exploring issues in more detail to be sure that policy responses are both appropriate and complete. More analyses may be necessary as this study had neither the time or resources to undertake this level of detail. To this extent all recommendations are provisional. 18 The recommendation to establish a metropolitan authority incurs a risk of yet another layer of government when the general approach should be to free up the economy, encourage investment and reduce wasteful bureaucracy. This was the justification used to abolish the Greater London Council in 1982. However it was subsequently realised that there is role for a regional institution to manage aspects of governance that have region-wide implications, providing that :•
the responsibilities of this authority are limited solely to strategic issues and management, and
•
these do not conflict or overlap with the roles and responsibilities of subordinate administrations, and most importantly,
•
the subordinate administrations support the metropolitan authority, preferably through mechanisms of elected representation.
Finally, the most important pre-requisite for minimising risk is political commitment.
Asian Development Bank, Peoples Republic of China - Study on Sustainable Urbanization in Metropolitan Regions Draft Final Report, June 2007. Halcrow Group Ltd.
Contents 1
2
3
4
5
Introduction 1.1 General Overview 1.2 Purpose of the Study 1.3 Study Objectives 1.4 Study Outline Approach, Definitions and Concepts 2.1 Methodology 2.2 Definitions 2.3 Metropolitan Region Delineation Concepts 2.4 Metropolitan Types 2.5 Administrative Structure of China in relation to Metropolitan Regions
1 1 1 4 4 6 6 9 16 20 23
The Challenge: Urbanization, Trends and Future Prospects 3.1 General 3.2 History of Chinese Urbanisation 3.3 Historical Estimates of Chinese Urbanization 3.4 Future Urbanization Scenarios 3.5 The Components of Urban Population Growth 3.6 The Physical Expansion of Chinese Cities 3.7 Spatial Features of Urban Expansion 3.8 Physical and Social Infrastructure 3.9 Financing Urbanisation 3.10 Implications of Future Urbanization
26 26 28 31 36 44 48 55 64 70
Wuhan Metropolitan Region Case Study 4.1 Review Process 4.2 Overview of the Wuhan Metropolitan Region 4.3 General Characteristics of the Wuhan Metropolitan Region 4.4 Characteristics of the Municipalities 4.5 Population and Urbanisation 4.6 Sectoral Studies – Urban Economy 4.7 Urban Poverty 4.8 Land Use and Land Supply 4.9 Sustainable Transport 4.10 Environment 4.11 Governance and Management 4.12 Finance 4.13 Summary
73 73 75 77 83 91 99 100 103 108 113 114 117
Chengdu Metropolitan Region Case Study 5.1 Introduction 5.2 Population and Urbanisation
119 122
Asian Development Bank, Peoples Republic of China - Study on Sustainable Urbanization in Metropolitan Regions Draft Final Report, June 2007. Halcrow Group Ltd.
26
73
119
5.3 5.4 5.5 5.6 5.7 5.8 5.9 5.10 5.11 5.12 5.13 6
7
8
Population and Urbanisation Projections Chengdu Physical Expansion and Land Use Land Use Implication of the Urbanisation Scenarios Urban Economy Urban Poverty Sustainable Transportation Environment Institutions and Management Introduction of a New Metropolitan Regional Management Municipal Finance Summary
Case Study Comparisons and Summary 6.1 General Comparisons 6.2 Sectoral Comparisons 6.3 Key Issues for Wuhan Metropolitan Region International Good Practice 7.1 Introduction 7.2 Sydney Metropolitan Strategy 7.3 RANDSTAD Metropolitan Region, The Netherlands 7.4 Vancouver Regional Governance 7.5 Paris Metropolitan Region 7.6 Greater London Authority (GLA), UK 7.7 New York-New Jersey Metropolitan Region 7.8 Tokyo Metropolitan Region 7.9 Shenzhen, China Sustainable Metropolitan Regions – Agenda for Change 8.1 Overview 8.2 The Agenda for Change 8.3 Institutional : Establishment of a Metropolitan Authority 8.4 Strategic Vision 8.5 Land Use/Management Strategy 8.6 Economic Strategy 8.7 Infrastructure Strategy 8.8 Transportation Strategy 8.9 Social Welfare Strategy 8.10 Environment Strategy 8.11 Financial Strategy 8.12 Risks 233
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126 128 135 138 146 147 151 155 156 157 159 160 160 160 164 168 168 168 170 173 178 186 193 195 201 206 206 206 207 209 210 212 215 216 217 218 220
List of Figures Figure 1. Report Methodology .........................................................................................................6 Figure 2. London Metropolitan Region – 32 Boroughs........................................................15 Figure 3. Sydney Greater Metropolitan Region.....................................................................15 Figure 4. Defining Metropolitan Regions Step 1 ....................................................................18 Figure 5. Defining Metropolitan Regions Step 2 ....................................................................19 Figure 6. Defining Metropolitan Regions Step 3 ....................................................................19 Figure 7. Defining Metropolitan Regions Step 4 ....................................................................20 Figure 8. Types of Metropolitan Regions ..................................................................................21 Figure 9. Governance of Land Use Management in China ...............................................24 Figure 10. Comparison of Urban Population Estimates, 1970-2000 ................................30 Figure 11. Expansion of the Built-up Area in Guangzhou, 1990-2000 ............................54 Figure 12. Economic Growth and Decline of TVEs .................................................................60 Figure 13. The growing size of the Chinese Urban Informal Sector.................................61 Figure 14. Hubei Province and Wuhan.........................................................................................74 Figure 15. The Wuhan Metropolitan Region ..............................................................................75 Figure 16. Comparison of Wuhan and Chengdu with other metropolitan regions in terms of GDP per capita and Urbanization Rate in 2004........................................................76 Figure 17. GDP Per Capita and Urbanization Rate of Nine Cities within the Wuhan Metropolitan Region in 2003 (10 thousand Yuan, %)...............................................................77 Figure 18. Wuhan Master Plan 1996 - 2020 ..............................................................................79 Figure 19. Urban Growth of Wuhan 1989 – 2002 ....................................................................79 Figure 20. Comparative Urbanisation in and around Wuhan City 1989-2002..............80 Figure 21. Urbanization of Wuhan, 1950-2005 .........................................................................84 Figure 22. The variations in GDP Employment Elasticity (sector-specific) in Wuhan during 1997-2005 ....................................................................................................................................95 Figure 23. Trends of emission of key pollutants and GDP growth in Wuhan ............ 108 Figure 24. Eutrophication of major lakes in Wuhan.............................................................. 109 Figure 25. Chengdu Metropolitan Region ................................................................................ 121 Figure 26. Land Supply in Chengdu by County, 2006......................................................... 129 Figure 27. Comparison of land supply and land leased...................................................... 130 Figure 28. Spatial Distribution of Towns and Cities in Chengdu Metropolitan Urban Region 132 Figure 29. Chengdu Metropolitan Urban Region, Comparison between 1978 and 2002 133 Figure 30. Chengdu: Industrial Structure and Employment Structure in 2005.......... 143 Figure 31. Chengdu: Railway Transport Network Plan, 2035.......................................... 151 Figure 32. Water quality of monitored river sections in Chengdu in 2005................... 152 Figure 33. Constraints in the Metro Vancouver region (mountains, ocean, U.S. border and agriculture land reserve) ............................................................................................ 173 Figure 34. Greater Vancouver Densities (2006 Census, Statistics Canada) ............. 173 Figure 35. Density and Restricted Developable Land ......................................................... 174 Figure 36. Metro-Vancouver and Translink ............................................................................. 175 Figure 37. Translink Revenues..................................................................................................... 176 Figure 38. Metro-Vancouver Revenue and Expenditure .................................................... 177 Figure 39. Paris Metropolitan Region......................................................................................... 179 Asian Development Bank, Peoples Republic of China - Study on Sustainable Urbanization in Metropolitan Regions Draft Final Report, June 2007. Halcrow Group Ltd.
Figure 40. Figure 41. Figure 42. Figure 43. Figure 44. Figure 45.
Administration of Paris Metropolitan Region ..................................................... 180 London Waste Authority Areas ............................................................................... 191 New York-New Jersey Population and Employment Statistics.................. 193 Organisation of Tokyo Mertropolis (City) ............................................................ 198 Shenzhen’s Districts.................................................................................................... 202 Control Lines .................................................................................................................. 203
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Introduction
1.1
General Overview
1.1.1
This Draft Final Report presents urbanisation trends and data, case studies, their analysis and findings to underpin recommendations on policies and guidance to achieve Sustainable Urbanization in Metropolitan Regions in the Peoples Republic of China (PRC). The report’s outcomes propose an agenda for change to improve the planning and management of impacts of rapid urban growth through innovative metropolitan regional planning. Building on an evaluation of two metropolitan regions – Chengdu (Sichuan Province) and Wuhan (Hubei Province), drawing on best practice and in conjunction with the National Development and Reform Commission (NDRC) and the Asian Development Bank (ADB), mechanisms have been developed and prioritised to guide policy and actions across economic, social, ecological, built, financial and management environments within regions to achieve more sustainable patterns of development and economic growth particularly between and within interlinked urban areas.
1.1.2
This report has been prepared by Halcrow China Limited, in association with Tsinghua University, PRC and the University College London - Development Planning Unit, UK, in accordance with Clause 2 (i) of their contract COS260-091 with the ADB to undertake TA 4702-PRC: Study on Sustainable Urbanization in Metropolitan Regions, People’s Republic of China (PRC).
1.2
Purpose of the Study
1.2.1
The promotion of a sustainable urban development at regional level has a vital role to play in achieving more sustainable patterns of urban development and the prudent use of finite resources in the PRC. The need for action has never been more apparent: urbanization is a mega-trend in Asia2. Between 2000 and 2025, the urban population of East Asia (including South East Asia) is expected to increase by 500 million or 65%; in comparison, the total population increase will be only 17% signifying substantial rural to urban migration. Virtually all of the predicted urban growth will locate in cities and their environs and it is anticipated that the majority of this growth will occur in the PRC, centring on medium-size cities
2
ADB Evaluation Study; Urban Sector Strategy and Operations; June 2006
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and areas surrounding the large metropolitan regions3. Current projections indicate that by 2025, no less than half the population of the PRC will be urban. 1.2.2
Accommodating these levels of urban growth in a sustainable manner is one of the major development challenges in the coming decades. China’s increase in urban population has been accompanied by an even faster physical expansion of Chinese cities – the total built up area has more than doubled between 1990 and 2003. The pattern of urbanization has however changed during this period to one dominated by ‘rural urbanization’ consequent upon the development of Town and Village Enterprises in the late 1980s and 1990s4 to one of major expansion of the major cities through the creation of development zones and construction of urban infrastructure to cater for large scale inner city redevelopment and the influx of Foreign Direct Investment (FDI) into manufacturing and other sectors5.
1.2.3
Current projections indicate an urban population of around 765 million by 20206, implying an average annual increase of approximately 15 million – equivalent to the current population of Beijing or Shanghai. The Chinese Government recognizes these trends as well as the contribution that urbanization can make to economic growth and poverty reduction and has made sustainable or “healthy” urbanization one of the key development priorities of the 11th Five Year Plan7. A principal feature of the strategy is the continuance of the government’s pro-active approach to urbanization in providing the land and services needed to support future urbanization before the population and development arrives; this is in marked contrast to the situation in other countries which struggle to provide for the current urban population and which have few, if any, pro- active policies.
1.2.4
While the achievements in terms of poverty reduction, economic growth and urban development have been exceptional, the rapid pace of Chinese urbanization has not been without problems. These include inequalities in
3
Douglas Webster, and James Raphael, Report on Human Settlements 1996, Oxford: Oxford University
Press (1996). 4
Zhu Y., 2001, The Transformation of Townships into Towns and their Roles in China’s Urbanization:
evidence form Fujian Province, Paper given at 24th IUSSP General Population Conference, SalvadorBahia, Brazil. 5
Wang Q., (2002); Land Use Change in the Zhugiang (Pearl River) Delta of China using Remote Sensing, GIS and Stochastic Modelling, Journal of Environmental Management, Vol. 64; 6
United Nations, 2004, World Urbanisation Prospects, 2003 Revision, New York.
7
Yang W., 2000, China’s Urbanisation Strategy: Priorities and Policies, paper presented at Workshop on China’s Urbanisation Strategy , World Bank/ Ministry of Construction/ State Development Planning Commission, Beijing. [en.townsfuture.com/e_version/knowledge/urban.pdf].
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the compensation paid to farmers whose land is requisitioned, the lack of municipal control of land held by village collectives which has led to considerable unregulated urban development, excessive land requisitioning to raise finance for infrastructure development (according to one estimate, over 40% of declared development zones are lying vacant), duplication in land use activities within several neighbouring cities irrespective of market demand or local technical or professional skills base, the mismatch between land designated on an approved land use plan for development and where it is actually constructed, the development of poorly serviced ‘urban villages’ (chong zhong cun) whilst providing housing for many urban migrants are often taking on the appearance of urban slums, increasing traffic congestion but limited traffic management strategies and adverse environmental impacts particularly related to solid waste management, air and water pollution8. 1.2.5
In turn, the NDRC wishes to respond to positive and negative trends through policy initiatives which will develop and steer a revised strategy for urban sector growth moving from a city response into regional co-ordination in appropriate circumstances. For groupings of urban areas having synergies and potential clustering advantages there has not yet been a pro-active planning mechanism to co-ordinate growth, to foster increased economic synergies and better manage the environmental consequences of urban development and thus trigger balanced growth across urban centres in metropolitan regions.
1.2.6
The main purpose of this TA therefore is to assist the NDRC in developing good practice policy and guidance on the sustainable development of metropolitan regions in the PRC, and consider how best this might be guided through appropriate instruments to instigate this agenda for change. The TA focuses on eight key factors currently impacting upon and resulting from rapid urbanization in the PRC namely (i) the urban economy; (ii) urban poverty; (iii) rural migration (iv) land supply and land use; (v) sustainable transportation; (vi) environment; (vii) finance; and (viii) institutions and governance. It is in exploring how these factors can be addressed and better managed at a metropolitan regional scale than just at an urban level with which this study’s outcomes are focused.
8
Numerous reports in the international press have mentioned this issue; see particularly http://www.iht.com/articles/2006/01/20/news/china.php and Guardian, 21-1-06 which quotes the Prime Minister; World Bank/ Development Research Council, China, (2005), China: Land Policy Reform for Sustainable Economic and Social Development. An Integrated Framework for Action. World Bank; China Daily, www.chinadaily.com.cn/english/ doc/2006-01/14/content_512289.htm; Zhu J., 2004, Local Developmental State and Order in China’s Urban Development during Transition, International Journal of Urban and Regional Research, Vo. 28, no. 2.
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1.3
Study Objectives
1.3.1
Based on the above, the key objectives of this Report are to:
• • • •
•
1.4
Increase understanding of the current characteristics, positive and negative, of Chinese urbanization; Define the characteristics of Metropolitan Regions and the role they can play in sustainable urbanisation in the PRC; Assess the efficacy of current instruments related to regional urban development, management and environmental protection; Provide guidance on how these instruments can be improved within the context of a coherent strategy, both through research and analysis carried out in nominated metropolitan regions and the garnering of international experience through a literature review and through a study tour; and To develop, in conjunction with NDRC, an agenda for change to progress metropolitan regional planning, to improve the management of the consequences (intended and unintended) of urban growth and to provide relevant and appropriate mechanisms in a Chinese context to implement strategies and actions to drive forward this new metropolitan regional agenda. Study Outline
The remainder of this report consists of: 1.4.1
Section 2 briefly outlines the methodology, reasons for the approach adopted, provides definitions and considers the rationale for delineating Sustainable Metropolitan Regions.
1.4.2
Section 3 examines urbanization scenarios for the PRC to 2020 based on a range of population projections. This chapter also addresses the implications of these scenarios with regard to urban economies, land use, economy, urban poverty and employment.
1.4.3
Sections 4 and 5 explore the practicalities, issues and opportunities of urbanization within the two case studies of Wuhan and Chengdu in their currently “loosely” defined metropolitan regions. Urbanisation scenarios are progressed in light of Section 3 and the underlying assumptions of the scenarios are defined. These case study reviews are based on information made available and supplemented by visits to the cities and meetings with a range of key officials. The impact of urbanisation within these metropolitan regions is explored across a range of factors both with regard to the present situation and urbanisation projections to 2020.
1.4.4
Section 6 compares the two case studies and identifies a context for a policy framework and change both in regard to the case studies and for
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metropolitan regions throughout the PRC. 1.4.5
Section 7 builds on the issues identified from Section 6 and identifies domestic and international good practice which address the key issues, based on the experience of other successful global metropolitan regions, and sector policy analyses. The good practice summarised identifies critical strategic policy options for appropriate government policy intervention and guidance at the regional level.
1.4.6
Section 8 sets the agenda for change to achieve more sustainable urbanisation in metropolitan regions in the Chinese context. This section addresses policies and actions needed to drive forward metropolitan regional planning. It provides recommendations and priorities emanating from this TA to assist the NDRC to address the metropolitan regional planning challenges ahead and instigate innovative and healthy sustainable urbanisation patterns within a metropolitan regional context across the PRC.
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2
Approach, Definitions and Concepts
2.1
Methodology
2.1.1
The approach adopted in this TA reflects that set out in the Terms of Reference as adapted through discussions and data reviews. This study therefore explores and evaluates four inter-related parts beginning with an analysis of urbanisation trends, to devising urbanisation scenarios to 2020 to analysing the implications of urbanisation across employment generation, social services, water, energy, infrastructure, transportation, finance and governance sectors (Part A). Urbanisation scenarios for two case study regions – Wuhan and Chengdu are developed (based on national urbanisation scenarios) and likely impacts across key factors - urban economy, urban poverty, rural migration, land use and land supply, sustainable transportation, environment, governance and finance sectors. They are emanating from this analysis national and international best practice examples are provided to assist with devising policy options to better manage metropolitan regions together with providing guidance on their roles, functions, and operation (Part C). The final component focuses on policy responses applicable in the Chinese context and provides a framework within an agenda for change highlighting prioritised mechanisms to guide sustainable urbanisation through metropolitan regional authorities (Part D). The inter-relationship of the study approach is outlined in Figure 1 below.
Figure 1.
2.1.2
Report Methodology
A fuller explanation of the approach is outlined below providing reasoned justification on assumptions made, explanations as to why emphasis has
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been placed on some urbanisation issues over others, and background as to why particular approaches have been taken – especially given the aims and objectives of this study. Briefly the approach taken for each of the four components involved the following: 2.1.3
Part A. Formulation of Urbanisation Scenarios: To set a context and gain an understanding of the strong relationship between government policy intervention and urbanization throughout the history of the PRC, a review of urbanization in its historical context is provided. Building on this a range of population and urbanisation projections is reviewed and, given their different outcomes, underlying assumptions are evaluated. This has been prepared cognisant of the statistical issues related to Chinese urbanization9 and, in particular, the difficulties of measurement (e.g. whether area-based or registration/ employment-based), the inclusion/ exclusion of temporary migrants and the changes of urban area definitions over the last 35 years. In formulating national urbanisation scenarios based on the range of projections, consideration has been given to alternative migration scenarios as all the indications are that urbanization will continue in the future irrespective of the level of economic growth. In undertaking the sub-national projections for the two case study regions, particular attention is paid to the intercensal population changes and growth rates in the different administrative entities making up the metropolitan regions of Chengdu and Wuhan. These projections have been disaggregated to reflect the changes in population by its three components: natural increase, migration and reclassification.
2.1.4
It should be noted that while the scenarios provide a measure to evaluate the impact of urbanisation on urban clusters within metropolitan regions it must be recognised that the pace of development will occur in a dynamic and changing environment influenced by a range of socio-economic factors not all of which will be governed by national Government policy. It is the management of change triggered by urbanisation with which the study outcomes are focused.
2.1.5
Part B. Implications of Urbanisation Scenarios: In progressing the urbanisation scenarios for Chengdu and Wuhan metropolitan regions the implications and demands of the alternative scenarios are evaluated on specific topics of urban economy, urban poverty, rural migration, land use and land supply, sustainable transportation, environment, governance and
9
Heilig G. 1999, Can China Feed Itself? A System Evaluation of Policy Options, Austria, International
Institute for Applied Systems Analysis (IIASA) - NB. This source contains a wide range of charts, data and references on population].
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finance. These are important issues and considered the most critical in gaining an insight into the impacts of urbanisation to 2020, if continued within the existing policy framework and current trends. 2.1.6
A comparison of the two case study metropolitan regions is provided to address similarities and differences and opportunities for improved intervention into current urbanisation issues particularly where crossboundary and intercity initiatives would have a positive impact on management and outcomes.
2.1.7
Part C. Policy Options: This task has focused on three principal activities: 1] Reviewing recent experience of the effectiveness of urbanization policies and interventions in China; 2] Reviewing international experience of the application of regulatory (e.g. planning policies), direct interventions and fiscal instruments to manage and control urban growth; and 3] Discussions with senior NDRC officials to debate those actions which are most applicable in the China context. With regard to points 1] and 2] there are many examples of good practice in China and internationally for managing urban growth and its consequences however it is those which are applicable to a regional metropolitan planning scale which are accentuated. The focus, given urbanisation issues in China, is on examples of ‘good practice’ urban development including land use planning, fiscal instruments (e.g. development impact fees) and governance (institutional arrangements and accountability). Special focus has been given to alternative methods of finance both with regard to current problems with municipal finance and more sustainable practices that need to be adopted by metropolitan regional authorities.
2.1.8
Part D. Policy Framework: This crucial task has relevance for all cities in China and not just Chengdu and Wuhan. It builds on an evaluation of the findings from Part C. A range of policy instruments within the context of a coherent strategy designed to achieve the overall objective of sustainable development of Chinese Metropolitan regions is presented. The policy framework presents tools that promote improved information and transparency in urban development issues and decisions, economic incentives and regulatory policies (i.e. related principally to land use planning and environmental control) and alternatives for municipalities than relying on land requisitioning as a source of finance. This is one of the notable features of Chinese urban policy today as well as being a key factor in the provision of generally improving and high standard urban environments as well as a catalyst in attracting FDI.
2.1.9
The policy framework would be directionless unless overarching metropolitan regional management structure is provided. As such the approach taken has been to set out interlinked but prioritised actions to establish a clear agenda to achieve metropolitan regional authorities. The agenda for change addresses both criteria for assisting with defining the role
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and function of metropolitan regions on which intercity co-operation can be achieved but also management mechanisms and policy interventions necessary to establish and operate metropolitan regions. The agenda sets out a new planning approach addressing regional management, sustainable policy and financing. 2.2
Definitions
2.2.1
This study concentrates on two key interlinked topics – sustainable urbanisation and metropolitan regions. To provide a context to the use of these terms throughout the study their meaning is clarified below.
Sustainable Urbanisation 2.2.2
The 11th FYP outlines the need for healthy urbanisation which in this report is aligned with sustainable urbanization. The World Commission on Economic Development (1987) identified that urban sustainability is crucial to global sustainable development: “Sustainable urbanization emphasises the balance between environment, ecology, society and economic efficiency in the course of urbanisation. It goes beyond the narrow scope of simply bringing the rural population into urban areas – beyond the development of individual sustainable cities. It is to bring about the harmonious development of urban and rural areas and that of different regions. China’s large population base, high proportion of rural population, energy shortage and fragile environment are all critical factors to be considered in establishing a pattern of sustainable urbanization. Sustainable urbanisation must adhere to the basic national policy of environment protection and resource saving, sensible but intensive use of land and water resources, and protect/ enhance ecological, historic and cultural environments”.10
2.2.3
In the context of the above definition sustainable urbanisation within this report is defined as urban development which allows for economic growth, but is strongly associated with environmental and social considerations, such that development does not lead to environmental degradation whether through pollution or loss of natural resources, or social deprivation for current and future generations.
Definition of Metropolitan 2.2.4
The dictionary definition of "metropolitan" is a large city, including its surrounding suburbs, and other neighbouring communities. It derives from
10
China’s Sustainable Urbanization, Issues paper prepared for the 2005 CCICED Annual General Meeting
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the Greek word "metropolis" meaning mother city. A metropolitan area typically refers to a large population centre consisting of a metropolis and its adjacent zone of influence. One or more large cities may serve as its hub or cores. These need not be physically connected by continuous built-up development, distinguishing the concept from conurbation, which requires urban contiguity. In a metropolitan area, it is sufficient that central cities together constitute a large population nucleus within which all constituent parts have a high degree of integration. Defining Metropolitan Regions 2.2.5
In practice the definition and parameters of metropolitan areas vary considerably from country to country, in both official and unofficial usage. Sometimes they are little different from an urban area, whereas in other cases they cover broad regions that have little relation to the traditional concept of a city as a single urban settlement. Metropolitan statistics should therefore be treated as interpretations rather than as hard facts. Of the many definitions, perhaps the most appropriate is the metropolitan region as the catchment for labour, or, the typical limit for commuter journeys to and from the principal city or cities that form its core.
Rationale for Metropolitan Regions 2.2.6
As cities grow and interact strongly with other settlements in their hinterlands, the potential advantages of unified management of key elements and economies of scale become increasingly attractive (e.g. for transport systems, trunk infrastructure, municipal services, environmental management, comprehensive marketing). Even without direct policy intervention, unified management actions across cities and urban centre boundaries can aid in establishing mutually beneficial urban development responses and hence buy-in to metropolitan regional cooperation. This can lead to unified management at the regional level which is holistic in integrating planning specialities and addressing problems created by metropolitan fragmentation.
2.2.7
It is clear that understanding the reach of metropolitan regional boundaries and strategic functions is not simple and there have been many attempts to try to define the notion of what constitutes a metropolitan region. The most notable attempts have used: • • • •
Population threshold Socio-economic factors Market forces, Functional characteristics.
These are briefly considered below: 2.2.8
Population and Number of Metropolitan Regions in China - There is no
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absolute definition of a metropolitan region by population size as much depends on national population levels, local geography and economic activity. A recent World Bank publication defined a metropolitan region as one that “contains at least 1.5 million people within its economic hinterland” and on this basis suggests that “there are over 150 Chinese metropolitan regions, overwhelmingly concentrated in the eastern half of the nation, largely corresponding to the overall distribution of China’s population” 11. 2.2.9
11
The top 20 largest metropolitan areas in the world are shown in Table 1, classified by the manner in which they have been defined. Population figures given by different sources for the same metropolitan areas can vary by millions due to differing interpretations of what constitutes metropolitan. For example, in the Canadian census a metropolitan area comprises one or more adjacent municipalities situated around a major urban core where the urban core has a population of at least 1,000,000. In India, the Census Commission defines a metropolitan city as one having a population of over 4 million. (Mumbai, Delhi, Chennai, Kolkata, Bangalore, Hyderabad are the six cities that qualify). In UK, various conurbations are considered to be metropolitan areas (or Metropolitan Counties) irrespective of their populations. ther research has based the definition on population density analysis (using 2000 Census data) and a travel distance of 50km from the centre. Using this definition “there are 53 metropolitan regions in China anchored on cities with over one million non-farming residents…They hold almost 370 million people”. This research indicates that after the very large regions of Shanghai (17m), Beijing (14.5m) and Guangzhou (13.7m) there is a second tier of 11 regions with 5 to 10 million, a third tier of 20 regions with 2 to 5 million and 19 smaller regions with 1 to 2.5 million12.
Ibid
12
Leman E, Metropolitan Regions: New Challenges for an Urbanizing China, World Bank/PEA Symposium, Brasilia, 2005.
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TABLE 1 : TOP 20 METROPOLITAN AREAS (1) Rank City 1 Tokyo
Population 35,197,000
Country Japan
Type Major Metropolitan Area (M.M.A.), as defined by the Statistics Bureau Metropolitan area (zona metropolitana), which includes several municipios Urban agglomeration[2]
Km2 13,500
18,333,000 Brazil 18,196,000 India 16,800,000 People's Republic of China 15,048,000 India
2
Mexico City
19,411,000
Mexico
3
18,718,000
United States
4 5 6
New York CityNewark São Paulo Mumbai Shanghai
7
Delhi
8 9
Kolkata Beijing
10
Pop/Km2 2,607
7,815
2,484
8,680
2,156
Metropolitan area (região Urban agglomeration Metropolitan area as defined by study (3) Urban agglomeration
8,050 4,360 3,920
2,277 4,173 4,286
1,480
10,168
Urban agglomeration Metropolitan area as defined by study (3) Urban agglomeration[4]
1,780 7,860
8,021 1,756
Jakarta (Jabodetabek)
14,277,000 India 13,800,000 People's Republic of China 13,215,000 Indonesia
1,360
9,717
11 12
Buenos Aires Dhaka
12,550,000 12,430,000
Argentina Bangladesh
Urban agglomeration[5] Metropolitan area (megacity)
3,680 1,600
3,410 7,769
13
12,298,000
United States
Urban agglomeration[2]
4,320
2,847
14 15
Los Angeles/ Long Beach/Santa Ana Karachi Rio de Janeiro
11,608,000 11,469,000
Pakistan Brazil
3,530 5,000
3,288 2,294
16 17 18 19 20
Osaka-Kobe Cairo Lagos Manila Moscow
11,268,000 11,128,000 10,886,000 10,686,000 10,654,000
Japan Egypt Nigeria Philippines Russia
Urban agglomeration Metropolitan area (região metropolitana) Urban agglomeration[6] Official metropolitan area[7] Urban agglomeration Urban agglomeration[8] City Proper[9]
2,070 1,310 640 640 1,080
5,443 8,495 17,009 16,697 9,865
Notes :1. World Urbanization Prospects, 2005 revision -- Table 12. 2. Data refer to the urbanized area (UA), that is, contiguous territory that meets minimum population density requirements. 3. 2000 population figure for metropolitan area (See table 36 of Chapter 5). 4. Data refer to the functional urban area, that is, contiguous areas which are consistently urban in character as indicated by levels of population density, economic functions and facilities. 5. Data for Buenos Aires refer to Gran Buenos Aires 6. The Statistics Bureau of Japan has provided the list of cities, towns and villages included in the urban agglomerations associated with the city of Osaka-Kobe for each census year from 1960 to 1990. The agglomeration of Osaka consisted of the densely inhabited districts of Osaka, 35 cities surrounding Osaka, Kobe and six cities surrounding Kobe. 7. Consists of the Governorate of Al-Qahirah (Cairo) and the cities of Al-Jizah (Giza) and Shubra al-Khaymah (Shubra-El-Khema). 8. Data refer to Metro Manila 9. The data include communities under the authority of the Town Council.
2.2.10
The limitation of the above definition, and associated attempts to simply apply similar notional travel distances for all metropolitan regions in China, is that it does not recognise that effective metropolitan regions in China will depend upon the specific needs of each metropolitan region, having many differing roles and forms, interventions and solutions.
2.2.11
The challenge in demarcating the boundaries and structure of ‘metropolitan-
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regions’ in China lies in accurately capturing the extent and patterns of social and economic interactions that occur within them. The difficulty lies in trying to model systems of interaction that are constantly changing.”13 This is particularly relevant in the China context given rapid economic growth and rapid urbanisation. 2.2.12
Socio-economic Definitions - The most commonly accepted reason for defining a metropolitan region is the economic advantages it can offer compared with the independent actions of the smaller government units within it, and to the opportunities for social interaction. This definition is illustrated by the following examples14: “The concept of [the] City-Region.….covers not only the commuting hinterland of the city but also the whole area which is economically, socially, and culturally dominated by the city.” Davoudi, 2003. “City-Regions constitute dense polarised masses of capital, labour, and social life that are bound up in intricate ways in intensifying and far-flung extra-national relationships. …an outgrowth of large metropolitan areas—or contiguous sets of metropolitan areas — together with surrounding hinterlands of variable extent which may themselves be sites of scattered urban settlements.” Scott, 2001.
2.2.13
In China, NDRC has also provided an economic description of a metropolitan region as “an urban spatial form to provide opportunities for frequent business activities within a certain distance, which is piloted by one or several mega cities, associating with some middle and smaller cities15.” This definition is characterised by a high degree of coordination and frequent business interactions.
2.2.14
Market Definitions - An alternative way of looking at the same situation is the ‘market definition’ which generally describes a metropolitan region in terms of the relationship between where people live and where they work. They include: • •
Labour Markets - territories from which enterprises can, on a daily basis, draw workers; Retail Markets - territories over which consumers will travel to buy goods and services;
13
Leman E, Metropolitan Regions: New Challenges for an Urbanizing China, World Bank/PEA Symposium, Brasilia, 2005.
14
Source: Rodriguez Pose, A. The City Regions Approach to Economic Development
15
. Ma, Kai (ed.), A supplementary Reader for The 11th Five-Year Planning Outline of the National Economic and Social Development of the People’s Republic of China (Beijing: Beijing Science and Technology Press, 2006), p. 525. In Chinese.
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• •
Housing Markets - areas within which households are prepared to live while still working for enterprises in the region; and Land Markets – territories within which enterprises are prepared to locate to reap agglomeration benefits of localization, urbanization and regionalization.
2.2.15
Functional definitions – These definitions tend to emphasise the importance of transport and other infrastructure in providing the spatial framework which links settlements of different size and economic significance into a single entity. In some cases, single-function metropolitan regions are defined by the requirement to deal with subjects such as solid waste or wastewater management (e.g. USA Special Districts), or landfill sites.
2.2.16
A more comprehensive ‘functional definition’ provided by the United Kingdom Government defines a metropolitan region as a “…..functionally inter-related geographical area comprising a central, or Core City, as part of a network of urban centres and rural hinterlands. A little bit like the hub (city) and the spokes (surrounding urban/rural areas) on a bicycle wheel.”16
Delineation of Metropolitan Regional Boundaries and Functions 2.2.17
In reality, the above ‘definitions’ (population, socio-economic, market-based and functional) are all descriptions of the nature of metropolitan regions and are therefore applicable, to a lesser or greater degree, to all regions. The question of whether one works better than another, is not relevant, because they are simply different ways of looking at the same thing. They do not describe alternative ways of managing metropolitan regions as all are an essential part of the functional entity.
2.2.18
Most of the literature on metropolitan regions is descriptive, and descriptive only of selected systems within the region. Those which contain prescriptive elements deal with one or more systems (for example better governance, economic incentives or alternative tax and revenue regimes) all of which are important; but they do not assist with starting to define boundaries within which development and management actions would improve particularly for the larger common good. For this reason this study focuses on a pragmatic ‘how to do it’ approach, to delineating a physical boundary which is drawn in such a way that the various systems operating within it can function successfully. This is progressed in Section 2.3 below.
2.2.19
It should be noted that most metropolitan regions which are governed as such have gone through a process of boundary delineation. In most cases the boundaries have been defined simply by amalgamating a number of
16
Office of the Deputy Prime Minister (responsible for regional development), 2005
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smaller local government units in their entirety. In this way the outer boundaries of the new additions are adopted as the outer boundary of the metropolitan area and changes in administrative jurisdiction are kept to a minimum. London (see Figure 2), one of the case studies reviewed in this project, changed several times before arriving at the present agglomeration of 32 separate boroughs 17 . The same is true of the Paris Metropolitan Region which comprises 8 departments which in total constitute the administrative region Ile de France. Figure 2.
London Metropolitan Region – 32 Boroughs
Figure 3.
Sydney Greater Metropolitan Region 2.2.20
There are examples of metropolitan regional boundaries changing to meet new circumstances, usually related to the expansion of one systems beyond the original boundary. In the Sydney Greater Metropolitan Region, another case study of this project, five large formerly separate regional government units (each containing many local sub-units) amalgamated and adopted their joint outer boundaries as the limits of the metropolitan area to be governed for specific purposes.
17
Webster’s World Bank case study says 14 boroughs but he confuses boroughs with the grouping of the 32 into the 14 constituencies which elect members to the Greater London Assembly
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Significantly the new Sydney Metropolitan Plan include linkage to adjoining regions to improve economic synergies, as well as to recognize other metropolitan regional economic advantages (see Figure 3). 2.2.21
In the China context, and in light of the need to address issues regarding sustainable urbanization, the delineation of metropolitan regional boundaries should examine various vital functions where common good can be attained. These might include, as a preliminary but not exclusive check-list: • •
• • • •
• • •
strategic metropolitan planning, encompassing growth and development strategies; integrated transport planning and construction relating to high volume modes (major highways and rapid transit) which will have a major impact on the economy and other aspects of life in the area; traffic management; strategic planning and construction of other elements of trunk infrastructure; formulation and strategic aspects of implementation of a broad land use, and land release, strategy; environmental services, including for example, service threshold populations and service areas and locations for solid waste landfill sites or incinerators, and the same for sewage treatment plants18; flood prevention; designation of recreation or park reserves which serve more than a local area; and identifying the locations of major marketable assets which have a physical dimension, ideally covering both tourism and the attraction of inward investment.
2.2.22
If a metropolitan region is to be managed as a unified viable entity, it is necessary to delineate the boundaries within which a responsible authority will exercise some form of jurisdiction. This must not only take into account the region’s social and economic attributes and aspirations but it must also recognise physical limitations, operational thresholds and the various urban systems which are essential to successful management. See Checklist in Box 2.1.
2.3
Metropolitan Region Delineation Concepts
2.3.1
Metropolitan regional planning deals with the efficient placement of land use activities, infrastructure and settlement growth across a larger area of land than an individual city or town. Our research in Asia and other parts of the
18
Locations for these must normally be determined by a higher authority, as local jurisdictions rarely wish to receive the solid or liquid waste output of others
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world shows clearly that Metropolitan Regions have many differing roles and forms, and may be defined in various ways and that when considering the definition of a metropolitan regional approach it is essential to consider two key principles: •
Assessment of the functional relationships between settlements, such as journey-to-work patterns, or land uses within the area affected by the same strategic planning issues or issues which differ from or cross multiple administrative boundaries. This includes consideration, for example, of how the strategic planning process can assist not only in creating and sustaining the economic competitiveness of a city or a cluster of towns but in spreading the benefits of a prosperous city to a wider area; and
•
The definition should be based upon a clearly recognizable “strategic policy deficit” which cannot be adequately addressed by general national policies or local/ municipal policies on their own.
Box 2.1 : Checklist of some strategic functions which have a Metropolitan wide spatial dimension (Please note that specific interventions and solutions will depend on the needs of each region, and the list is not exhaustive). Land Resources i.e. land available and suitable for urban development within the metropolitan region (See also Urban Land Capacity and the “Sequential Approach” to land release in Chapter 7).This may also include the various role’s settlements play, for example some may be administrative, with others based upon manufacturing or transport – recognising the strength of “synergy” between settlements rather than individual self interest. Set regional “policy” and zoning which encourages a mix of housing values and communities. Strategic elements of major infrastructure such as: -power generation facilities and transmission line reserves -potential sites for development of renewable energy resources -flood defences, (e.g. Resist development in flood plains or along earthquake faults). Transportation patterns, especially those related to journey to work. For example, the designation of transportation corridors using hubs and spokes and considering major new infrastructure Region serving facilities, such as hospitals, airports, rail terminals. The designation of essential nuisance land uses locations such as the location of solid waste incinerators and/or landfills; and the delineation of the catchment areas which they can serve efficiently (based on population thresholds and population density where relevant) Wastewater collection and treatment facilities (with similar delineation of threshold areas) and the disposal routes for treated effluents Water catchment areas or watercourse protection zones High value horticulture, agriculture, forest or green space areas (to achieve sufficient control to prevent these from being built upon in the short term desire to raise revenue) Areas of outstanding natural value, either as ecological reserves, landscape settings or as potential major recreation areas which will serve more than a local area Mineral resource management, including -control of development to avoid sterilisation of mineral resources by building over them
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-protection/ controlled utilisation of resources vital to a particular industry/ economic base - recycling -environmental management to protect the surrounding areas from adverse impacts such as dust levels, noise, off-site traffic etc -setting conditions for final site restoration e.g. future landfill sites, recreational sites and agricultural land Sites of cultural heritage assets and any buffer zones which may be needed to ensure their protection. Locations of any other major marketable assets, notably tourist assets. Sites which could potentially have a major negative impact and therefore need to be placed under high level metropolitan regional control, for example industrial sources of water or air pollution.
2.3.2
In searching for perspectives to understand and manage metropolitan regional settlement forms, and rather than trying to simply apply a single universal definition, the question of defining a metropolitan region is best viewed as process which can be applied to any urban agglomeration but which will enable the recognition of important specific local characteristics (i.e. specific interventions and solutions). The key steps in such a process would be as follows:
2.3.3
STEP 1: Identify the contiguous built up urban area and any separate built areas which might be expected to be part of the metropolitan region (Figure 4). Given the scale of Chinese cities, the minimum population would probably be of the order of 1.5 million, although many Chinese metropolitan regions, as indicated above, will be very much larger than this.
Figure 4.
Defining Metropolitan Regions Step 1
Contiguous built up area Urban Centre
2.3.4
STEP 2: Identify the main centers (existing and future where possible), and the major transport links (also present and future) between them (Figure 5). This will include major highways and high volume rapid transit systems. It will be part of the strategic planning process.
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Figure 5.
Defining Metropolitan Regions Step 2
Major Transport Routes
2.3.5
STEP 3: Identify other functions which have a spatial dimension (see checklist below), and which are best managed at the metropolitan scale or have a metropolitan scale impact, and define the areas which they cover (Figure 6). The functions determined to be of strategic and metropolitan significance would be mapped, to determine metropolitan regional boundaries which follow their combined outer limits.
Figure 6.
Defining Metropolitan Regions Step 3
Major Recreation Area Nature Reserve Wastewater Treatment Landfill Site Polluting Industry
2.3.6
STEP 4: Extend the boundaries to cover the whole of any local jurisdiction which falls partly within the preliminary boundary but the need for this depends on the functions to be covered and the legal composition of the metropolitan authority (Figure 7), if there is to be one.
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Figure 7.
Defining Metropolitan Regions Step 4
Local Government Unit Boundaries Metropolitan Region Boundary
2.4
Metropolitan Types
2.4.1
Metropolitan boundaries are elusive. Often the term metropolitan region is used as a collective description for a group of administrative jurisdictions that cover the urban area(s) together with its/their rural hinterland(s). Figure 8.1 illustrates the administrative structure and hierarchy common to most Chinese cities. The municipal area can be large and include within it the central city and outlying towns, counties or prefectures. Each of these further subdivide into village administrations. Within the central city, the administration divides into districts within which there are communities. While the municipality has overall responsibility for planning the various subordinate administrations often operate independently thus creating problems of coordination.
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Figure 8.
Types of Metropolitan Regions
Figure 8.1 : Adminstration boundaries within typical municipal area
Municipality Central City City Districts Communities Town, County or Prefecture City Village
Urban Area
Figure 8.2 : Metropolitan Area of Type A
Figure 8.3 : Metropolitan Area of Type B
Metropolitan Region defined by Municipal Boundary
Figure 8.4 : Metropolitan Area of Type C
Metropolitan Region defined by Urban Area
Figure 8.5 : Metropolitan Area of Type D
Metropolitan Region defined Association of Cities/Municipalities
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2.4.2
The Competition for FDI between adjoining urban centres and settlements is fierce. Mayors compete for inward investment for economic activities, particularly those which are favoured by the existing fiscal system, such as manufacturing. Fiscal disparities thus exist between cities in loosely defined or undefined regions and mechanisms to transfer fiscal resources between regional urban centres remains unclear. Similarly vertical management functions within metropolitan areas (between districts, counties and municipalities) bare no correlation with the spatial scales at which services should be delivered19.
2.4.3
The need for a comprehensive strategy, that can operate as a common agenda, would be an obvious benefit for all administrations that comprise the metropolitan area. However this is no easy task in the Chinese context. In instances where the metropolitan area comprises a single city, all of which lies entirely within the jurisdiction of a single municipality, the task is to ensure the participation and ownership of all subordinate administrations, as shown in Figure 8.1 (for a typical municipality). Metropolitan regions of this kind may be classified as Type A, and would include (as examples) Beijing, Shanghai and Tianjin. Due to the fact that most municipal jurisdictions in China are much larger than their urban areas (overbounded) Type A metropolitan regions may be regarded as typical, as shown in Figure 8.2.
2.4.4
As growth of Type A metropolitan regions continue there will come a point in time when the urban area expands beyond municipal boundaries into adjacent administrations, as shown in Figure 8.3. The choice then is to :• • •
adjust the municipal boundary to encompass the urban area, or introduce some arrangement whereby the core municipality and adjacent administrations liaise on policy issues, or establish a higher order authority, responsible for managing the metropolitan region. In matters of regional policy, the municipality and adjacent administrations are subordinate to this metropolitan authority.
The difference between Type A and B is merely a function of time. Ultimately all metropolitan regions of Type A will become B, unless circumstance arise as shown in Types C and D 2.4.5
The tendency for two or more cities in close proximity to merge into a single conurbation results in an administration shared between two or more municipalities, a large number of towns, counties or prefectures, and a much larger number of villages. This is illustrated in Figure 8.4 and is the principal
19
Metropolitan Governance in China: Priorities for Action in the Context of Chinese Urban Dynamics and International Experience, World Bank, Beijing, September 2006
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criteria for the classification of metropolitan areas under Type C. The Changsha - Zhuzhou - Xiangtan Metropolitan region is a good example of Type C. 2.4.6
In other instances, metropolitan regions may be defined as an association of cities/ municipalities that are physically separate although reasonably close. This is shown in Figure 8.5 as Type D. The difference between Type D and other types is merely a matter of scale and the basis used to define a metropolitan region. Wuhan is an example of Type D. The principal city or core (Wuhan municipality) comprises three former independent cities that merged together (as in Type C) and latter were given the status of a single municipality. The remainder of the region includes the outlying cities of E'zhou, Huangshi, Hunaggang, Xianning, Xiaogan, Tianmen and Qianjiang, which are separated by substantial distances (100s of kilometres) of nonurban countryside within an overall area of some 57,800 square kilometres. Metropolitan regions of this kind may be useful to plan and coordinate strategic infrastructure of a mega nature, such as airports, ports, main rail lines and motorways. Regions of this scale are generally not useful unless there is some degree of interdependence and mutual benefit to all the participating cities. As will be discussed later in Chapter 4, there is some doubt if the Wuhan metropolitan region qualifies as Type D. It might be better managed as a Type A, comprising Wuhan municipality alone.
2.4.7
Although the physical characteristics of metropolitan areas may not vary greatly between the types identified above, the distinction is important at administrative and policy levels
2.5
Administrative Structure of China in relation to Metropolitan Regions
2.5.1
Land use planning and land resource management involves many administrations. Responsibility at the State level is shown in Figure 9. At the regional level, governance is strictly hierarchical with five main tiers: state, province, prefecture, county, and township. Cities can be found at prefecture or county level. In the former case, they will include, within their boundaries, a number of (urban) districts, which essentially function at the same level as counties.
2.5.2
There are also four provincial level city entities – Beijing, Shanghai, Tianjin, and Chongqing. Provinces, which have a high degree of autonomy, are entrusted with the mandate of governing all aspects of social and economic affairs in their jurisdictions through subordinate branches and offices of ministries and bureaus at the provincial level and below. Under this administrative setting, subordinate branches and offices are accountable to both the ministries and bureaus to which they belong and the government of provinces where they are located.
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2.5.3
Since the 1980s, municipalities20 have become increasingly responsible for their own affairs with central government retaining few functions. 21 City governments, whether municipalities or county level cities, are thus responsible for the great majority of services within their jurisdictions, including education, health, infrastructure, economic, and physical planning, land administration, urban management, social services, security, welfare, environmental protection, revenue generation, and financial management. However, although prefecture level cities have responsibilities outside their immediate municipal boundaries, increasingly their activities are being concentrated within these boundaries. Similarly, county level cities are increasingly becoming autonomous from the prefecture center and answering to the provincial level authorities.22 Cities are, however, bound by directives and regulations from higher, provincial-level authorities in the case of prefecture-level cities and the province in the case of counties in rural areas. They also have a duty of fulfilling the objectives of various line ministries and bureaus.
2.5.4
Given the multiplicity of administrations, coordination for the preparation and implementation of metropolitan plans is a critical issue. In general, the degree or scale of problems likely to be experienced ascends in difficulty from the single municipality of Type A, through Types B and C, to the most complex, in the form of associations of cities as typified in Type D.
Figure 9.
Governance of Land Use Management in China The State Council
Ministry of Agriculture
Ministry of Land and Resources
Agriculture production planning and market management
Land rights and Legislation . Land use planning and resources protection
Ministry of Finance
State Forestry Bureau
Ministry of Construction
City /village planning and construction real estate management
Ministry of Water Resources
Surface water management Flood and drought control and Prevention
National Development and Reform Commission
State Administration of Taxation
Ministry of Commerce
State Environmental Protection Administration
Provincial government
All the Functions of The ministries and bureaus
Source: Halcrow Group Ltd, 2006, Sustainable Development of the Urban Fringe in East Asia, for the World Bank
20
In this section, we use ‘municipality’ to describe any city level administration.
21
Functions retained by the state or state-owned corporations include the police, telecoms, power generation and distribution, harbours and airports, SOEs and the like. 22
ADB, op. cit.
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2.5.5
Box 2.2 below summaries the administrative system and its conflicts with respect to metropolitan management. Box 2.3 that follows summarises some of the latest administrative reforms that support the development of economic zones and metropolitan regions.
Box 2.3 Regional development policies The national 11th FYP proposed that development of city clusters should be the major form in promoting urbanization. While a comprehensive policy framework has not been developed nationwide, experiments of pilot policies have been implemented in some regions. Various economic special areas and development areas have been established, where are allowed to practise preferential and new policies by the central government. Except for Shenzhou Special Area and Shanghai Pudong New Zone, Tianjin Binhai New Zone, and the Comprehensive and Coordinated Urban and Rural Reform Pilot Zones of Chengdu and Chongqing were subsequently approved by the central government. • The policy reform on land release, infrastructure construction, taxes reduction, foreign investment, international trade, diversified investment forms and private enterprises is regarded as the most important factor to the success of Shanghai Pudong New Zone; • Given preferential policies on comprehensive reform, taxes reduction, independent research & development, financial reform and land release, Tianjin Binhai New Zone become a new engine for the development of Beijing-Tianjin-Hebei metropolitan region; and • Chengdu and Chongqing were approved in June 9, 2007, by the State Council as two national pilot areas to experiment and develop comprehensive policies to coordinate urban and rural development. They are regarded as Chinese new special areas and expected to accelerate the development of the Chengdu-Chongqing economic area and that of the whole west-central areas in China.
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3 3.1 3.1.1
3.2
The Challenge: Urbanization, Trends and Future Prospects General This chapter examines possible scenarios for future urbanisation in China. The chapter begins with a historical account of modern Chinese urbanization, including a review of past urban growth which is followed with a discussion of what to expect into the future, i.e. the urbanization scenarios. The key components of Chinese urbanisation (both demographic and spatial) are then discussed, with an emphasis of how policy has shaped Chinese cities of today, and will continue to do so into the future. Future trends and the implications that policy-makers need to take account of when planning ahead for sustainable metropolitan regions are discussed. History of Chinese Urbanisation
3.2.1
Urbanization and urban growth23 in China over the past 50 years has been characterised by major fluctuations, which have been determined largely by the changing policy context.
3.2.2
With the establishment of the People’s Republic of China (1949), a Sovietstyle command system of planning was introduced based on rapid industrialisation with a focus on heavy industry. During this period, there was a high rate of compulsory migration, with 30 million rural people moving from country to towns. The introduction of the registered permanent urban residence, or “Hukou” in 1958 (see Box 3.1) began to regulate the flow of rural migrants. Even so, during the Great Leap Forward (1958-1960) another 30 million rural migrants moving to industrial towns. By 1960 the urbanization rate had jumped to 19.3% (220 cities) compared to 15.4% (176 cities) just three years earlier. Additionally, following the Sino-Soviet split, the Chinese government embarked on a policy of dispersing industrial establishments across central and western parts of China to make them less susceptible to outside attack.
3.2.3
During the Cultural Revolution (1966-1976) there was a further radical shift in policy, with the forced dispersal of urban populations, especially youths and intellectuals to rural areas, creating a dip in urbanization rates (17.9% in
23
These two terms are sometimes confused. ‘Urbanisation’ refers to the proportion of the population that is categorised as urban. ‘Urban growth’ refers to the growth of the urban population.
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1978). By 1979, as the country began its transformation to a socialist market economy, Deng Xiaoping introduced the one-child policy to reduce overall population increase leading to a period of reduced birth rates which is with us to this day. The 1980s were associated with the massive development of the town and village enterprises (TVEs) 24 leading to “rural industrialization”. The hukou system however continued to restrict rural urban migration. Urbanisation in this period was therefore largely characterised by the transformation of rural settlements into small industrial towns, essentially urbanisation without migration. 3.2.4
3.2.5
In the early 1990s, this process continued but was increasingly accompanied by large flows of rural migrants to the fast expanding towns and cities on the eastern Box 3.1 ‘Hukou’ – household seaboard. Policies were registration system however put in place to “control large cities’ expansion, whilst In 1958 ‘The PRC Statute for Hukou came into place, promoting the development of Registration’ categorizing all people as ‘agricultural middle and small cities and population’ or ‘non-agricultural towns” (State Council, 1980; population’, and requiring all levels of “Urban Plan Law”, 1990). The Government to diligently control the flow urbanization rate reached of rural people to urban areas 25 . The Hukou system determines an individual’s 26.4% by 1992. right to live in an area, and claim basic The next phase of urbanization social services such as education and Acting like an essentially started in 1992 with subsidized housing. internal pass system, the Hukou system Deng’s visit to Shenzhen in has effectively controlled rural to urban 1926. The best characterisation migration. There has been a relaxation of the policy change is that the of the Hukou system and greater ‘brakes were off’. Local population mobility in recent years. In governments at all levels were 2001, the State Council allowed for the Hukou to be completely open at countyurged to promote economic level cities and designated towns. growth, every attempt was Millions of rural people can now enjoy made to attract FDI, and hukou benefits such as access to education and restrictions were reduced to employment in urban areas. Further make it easier for the rapidly relaxations are very likely in the near expending manufacturing future as suggested in the latest National Urbanization Policy of NDRC. sector to obtain the labour that it needed. By 2000, China had 660 cities with an estimated urban population of 460 million. Today the hukou system continues to have an impact on urbanisation and the formation of functioning metropolitan regions as
24
TVE employment grew by over 12% annually during the second half of the 1980s
25
see Li et al, 2003:28
26
See especially Gittings J., 1996, Real China, Chapter 10. The Guangdong Experience, Pocket books, London.
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summarised in the Box below. Box 3.2 Impact of the Hukou system on Urbanisation and Metropolitan Regions Strict urban-rural dual household registration system restricts population migration; Restricting scale of large cities, and encouraging development of medium-sized and small cities. The implementation of the policy has led to a special trait of Chinese urbanization: decentralized and dispersed city clusters and fragmented city system. It also hampers the desired emergence and transformation of metropolitan regions in China; Some provinces/municipalities, including Hebei Province, Shandong Province, Jiangsu Province, Hunan Province, etc., have launched reform programs of the household registration system. This control of labour mobility also impedes industrialisation and economic growth.
3.3
Historical Estimates of Chinese Urbanization
3.3.1
Historical estimates of urbanization in China are fraught with problems. Firstly, the Census is conducted only once every 10 years, and during nonCensus periods, public security departments collect information on the registered population based on domicile registration and acquire information on the floating population based on registration of temporary permits. In times of rapid urban growth, this makes it difficult to estimate actual trends.
3.3.2
Secondly, the classification of cities and towns has repeatedly changed over the last 50 or so years (see Table 1). This complicates analysis in two ways: firstly it means that there are sudden increases in urban population due to new towns and cities being created; secondly, boundary changes mean that today most cities in China include large rural populations27. For this reason, scholars tended to rely on the non-agricultural population, as defined by hukou registration, as the best indicator of the urban population.
3.3.3
Relying on the non-agricultural population as the basis for estimating urban population however became increasingly untenable after 1990 due to the flow of rural migrants who were often excluded, or ignored, when it came to making urban population estimates. Thus in 1990, migrants were included if only if they had been resident in urban areas for more that 1 year.
To cite but one example, Beijing in 2003 is estimated to have a total population of about 12 million, 3.3 million (28%) of which are rural, i.e. with rural hukou.
27
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Pro-urban
Anti-urban
Table 1 present
Changing Definition of Cities and Towns in China, 1955 to
Year ‘Designated city’ 1955 100,000 population or less than 100,000 if it achieves city status if important if economically important (i.e. large industry) 1963 As above
‘Designated town’ Designated town – 2,000 or 50% share of non-agricultural population
Designated town – 3,000 or 70% share of non-agricultural population, or 2,500 if 85% population is nonagricultural. All seats of county level Government; small towns with less than 2,000 non-agricultural population with sparse population can qualify; and xiang-level communes can qualify if more than 2,000 non-agricultural population.
1984 Regional economic centre with / 86 more than 60,000 non-agricultural population, and GNP over 200million Yuan. Town in strategic location (i.e. mountainous region, border etc), a county with 500,000 non-agricultural population, autonomous prefecture seat with non-agricultural population under 100,000 etc. 1993 Reclassification of country level, with different designation of county-level and prefecture-level cities. Minimum no-agricultural population of 60,000. GDP and basic infrastructure requirements relevant (i.e. water coverage).
Source: see Liu S., Li X., Zhang M., (2003), Scenario Analysis on Urbanisation and RuralUrban Migration in China, IIASA, and Austria.
3.3.4
Chinese statisticians have become increasingly aware of these major historical inconsistencies and for the 2000 Census, the government defined ‘urban’ as including (a.) temporary migrants resident in towns and cities for at least 6 months; and (b.) all residents of towns and cities where the population density exceeds 1,500 per sq. km. The resultant estimate of the urban population in 2000, is around 460 million, and this estimate is now generally relied on as the basis for deriving future projections. Interestingly, this figure is very similar to the UN projection of 456 million, indicating an urbanisation level of around 36%28.
3.3.5
Looking back from 2000 to establish earlier urbanisation trends is however difficult owing to the definitional changes described previously. The Table 2 and Figure 10 below have been prepared to compare alternative historical estimates of China’s urban population from 1970 to 2000.
This may still be an under-estimate as it will exclude residents of rural parts of cities and towns who are not engaged in agriculture.
28
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Table 2
Alternative Estimates of China’s Urban Population, 1970 to 2000
Derivation
1970
1975
1980
1982
1985
1990
1995
Population of towns and cities1
150,000
180,000
195,000
210,000
380,000
600,000
870,000
Non agricultural population of towns and cities2
100,000
110,000
120,000
145000
190,000
210,000
280,000
300,000
Official3
150,000
167,540
191,400
210,000
250,940
301,950
351,740
459,060
UN4
144,537
161,439
196,220
230,661
246,074
317,016
382,308
456,527
All China (official)
830,675
987,050
2000
1,058,510 1,133,680 1,211,210 1,265,830
Sources: 1 and 2. Liu S., Li X., Zhang M., (2003), Scenario Analysis on Urbanisation and Rural-Urban Migration in China, IIASA, Austria; 3. China Statistical Yearbook, various years; 4. UN, World Urbanisation Prospects – 2003 Revision, New York, 2004.
Figure 10.
Comparison of Urban Population Estimates, 1970-2000
900,000
000s
800,000 700,000
Pop of tow ns and cities
600,000
Non agric pop of tow ns and cities
500,000
Official estimates
400,000
UN
300,000 200,000 100,000 0 1970 1975 1980 1985 1990 1995 2000
3.3.6
The Figure above clearly shows the divergence of the total population of towns and cities form alternative estimates of the urban population. It also shows close agreement between official Chinese and UN estimates. Unsurprisingly the non agricultural population series shows lower estimates as it excludes the rural urban migrants.
3.3.7
Table 3 below shows the urbanisation and average annual growth rates derived from Table 2 using the official and UN series.
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Table 3
Urbanisation and Urban Population Growth Rates, 1970-2000
Indicator Urbanisation Rate Average 5 year growth rates Average 10 year growth rates
Source Official UN Official UN NAPTC** Official
1970 18% 17%
1975 18% 18% 2.2% 2.2%
1980 19% 20% 2.7% 4.0% 2.7% 2.5%
3.1% UN * 1982-1990 growth rate as 1982 was the census year. ** Non agricultural population in towns and cities
1985 24% 23% 5.6% 4.6%
1990 26.6% 28% 3.8% 5.2%
1995 29% 31% 3.1% 3.8%
2000 36% 36% 5.5% 3.6%
4.7%*
4.3%
4.9%
3.7%
Source: Derived from Table 2.
3.3.8
There is little difference in the urbanisation rates between the two series. On the other hand, there are significant differences in both the 5 and 10 year growth rates, and especially so for the crucial 1990 to 2000 period. The official estimate implies an average annual increase of China’s urban population of 16 million while the UN estimates imply an annual increase of 14.3 million. The official rate is almost certainly an overestimate as the 1990 definition of urban population was more restrictive than the one used in 2000.
3.3.9
An alternative estimate can be obtained by using the growth rate from the official 1982-199529 urban population estimates, i.e. 4%, and then using this rate to back-project the 2000 urban population of 460 million. This gives a 1990 urban population of 311 million, roughly midway between the official and UN estimates contained in Table 2. The associated level of urbanisation is 27.4% compared to 26.6%. It implies an average increase in China’s urban population of just under 15 million.
3.4
Future Urbanization Scenarios
Future Urbanisation Levels 3.4.1
29
In 2000 the global urban population was 2.9 billion which is expected to increase to almost 5 billion by 2030. By that time East Asia will become home to around 30% of the world’s urban population and will have increased by over 80% to almost 1.5 billion. This increase averages 22 million annually for the next 30 years. Based on UN estimates by 2020, China’s urban population will have almost doubled from over 450 million in 2000, to around
A 1% sample survey was conducted in this year.
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766 million, representing an urbanization rate of around 54%. The implied annual increase in the urban population is around 15 million, similar to that estimated for the 1990-2000 period. In turn this implies a reduction in the urban growth rate which reflects the continuing decrease in the overall population growth rate. By contrast, the rural population will decrease from 820 million in 2000 to 660 million in 2020. 3.4.2
In addition to UN estimates, the Consultants have reviewed no less than 17 other urbanisation projections, from both international and domestic sources, including the State Council, the Ministry of Construction (MOC), the China Urban Planning Association and the World Bank. These projections are summarised in Table 4. It should be noted that these projections are all based on the future rate of urbanisation. The advantage of this approach, which also underpins the UN projections, is that takes account of the rate of increase of the overall population; this is not the case, if projections are based on urban population growth rates.
3.4.3
It has not been possible to research the methodologies used in these projections although it is understood that they all are based on the 2000 urban population estimate of 460 million. Conversely, it is not known which ones take into account the change in urban definitions between 1990 and 2000. Those that do not are likely to be on the high side as they will overestimate the 1990-2000 change in urbanisation level. Those by Li et al take this into account as do those by the UN. Some of the projections are also economic based underpinned by assumptions of continued real GDP growth of 5.5% to 10% annually up to 2020.
Table 4 Summary of Urbanization Rate Projections (2005-2020) SOURCES Domestic sources State Statistics Bureau, 2006 Research and Development Centre of State Council Population Census Office, State Council Li S., et al. (IAASA, op. cit.).
2005
30
2020
43.0*
Low Medium High
China Urban Planning Association (Zhou30) Research on directives and policies of urbanization process with Chinese characteristics
2010
Low Medium High
42**
48
60.0
43 39 40 41
50.5 42 43 45
61.4 48 50 55
41
46.5
57.0
42 43 43
47.5 48.9 50.3
56.8 60.1 62.0
Zhou Yixing is the vice director-general of China Urban Planning Association, former professor of Peking University.
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Research team on the nation’s intermediate- and long-term science and technology development planning, urban development and urbanization
Medium
42
47
57.0
High
43
51
66.0
43 40.5
49.2 44.9
60.0 53.2
Wang Mengkui 31 UN Population Division, 2005 * Figures give urban population as percentage of total population. ** Figures in italics are derived through interpolation.
3.4.4
What is clear from all the population projections is that there is an assumption that urbanization will continue to increase. This seems inevitable. Firstly there is no historical precedent, apart from anti-urban period of the Cultural Revolution and the repressive Khmer Rouge regime in Cambodia of the same period for countries urbanisation levels to decline. Secondly, in all likelihood, China’s economy will continue to expand rapidly fuelled by continued influxes of FDI and the increased purchasing power of its population. Thirdly, the potential for the rural population to accommodate significant increases in population is severely limited – current per capita land holdings had decreased to 3.2 mu (0.21ha) per rural labourer, and 1.3 mu per rural capita in 1995; in many parts of the more densely populated parts of the country, the per capita average holding is less than 0.5 mu (335 m2). In 2003, average urban incomes were over 3 times average rural incomes. Given these facts there will be pressure for continued migration irrespective of the future rate of urban economic growth.
3.4.5
Table 5 summarises the projected urbanisation levels presented in Table 4. Median and averages for the 4 lowest and 4 highest urbanisation levels in each year are shown. We have included 2005 projections in this Table as there is currently no surveys have been undertaken since the 2000 Census.
Table 5
Summary of Projected Urbanisation Levels 2005
2010
2020
Average of 4 lowest projections
40%
44%
52%
Median
42%
47.5%
57%
Average of 4 highest projections
43%
51%
63%
Source: Table 4.
31
Wang Mengkui, Important Issues of China’s Intermediate- and Long-term development, China Development Press, 2005,4.
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National Urbanisation Projections to 2020 3.4.6
A range of national urban population projections can be obtained by applying the different urbanisation levels to projections of the national population. Table 6 below compares national population projections prepared by the UN and the government. There is little difference between these projections and thus it is considered reasonable to take the average.
Table 6
National Population Projections
Projection
Source
Government
China State Family Planning Commission's project on "Future Development and Fertility Policy in China", 2000.
2005
2010
2020
1,310
1,351
1,424
th
Government
11 Five Year Plan
UN
World Urbanisation Prospects, 2003 Revision
1,360
Average
1,322
1,365
1,429
1,316
1,358
1,427
0.6%
0.5%
Average Annual Growth Rate
3.4.7
In Table 7, the urbanisation levels and national population projections from the preceding Tables are combined to provide alternative projections of the future urban population.
Table 7 Year
na
National Urbanisation Scenarios National Population (Millions)
2005
1,316
2010
1,358
Scenario
Urbanisatio n Rate %
Urban Population (Millions)
Average Annual Increase (Millions)
Low Medium High Low Medium High Low
40% 42% 43% 44% 48% 51% 52%
526 553 566 598 652 693 742
13.2 18.6 21.2 14.4 19.8 25.4 14.4
Medium
57%
813
16.1
High
63%
900
20.7
2020 1,427
% Increase Over 2000 Urban Population 14% 20% 23% 30% 42% 51% 61% (34%)* 77% (47%) 96% (63%)
* Percentage increase over 2005 medium estimate. Source: Consultants’ Estimates, derived from preceding Tables.
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3.4.8
Based on Table 7, the current (2005) urban population is likely to range between 526 and 566 million. By 2010, the range will be between 600 and 700 million. In 2020, by which time the annual increases will be decreasing, the range is from 750 to 900 million.
3.4.9
Are any of the above projections more or less likely than the others? There are countervailing tendencies which increase the likelihood of both the lower and higher projections. Reasons why the lower projections are more realistic are: • • •
•
Current projections of the World Bank, the ADB and the UN are all concentrated at the bottom end of the ranges shown. The lower projections are more consistent with the observed annual increases in urban population between 1990 and 2000, c. 15 million. The higher projections imply a major increase in the current level of rural – urban migration, given that the rate of natural increase is already very low and decreasing. The low projection implies an increase of 282 million in the urban population between 2000 and 2020. An accepted estimate is that there are 150 million surplus rural labourers 32 . Natural increase could account for around 60 million which still leaves a substantial shortfall (but see next section). The lower projections are more consistent with a reduction in the overall economic growth rate – something which is likely to occur as 10% annual increases in real GDP are unlikely to be sustainable over a 25-30 year period.
3.4.10
On the other hand, there are grounds for considering that the higher projections are more realistic. In the first place, China is far less urbanised in comparison to other countries with similar GDP per capita (PPP basis). Excluding small countries and island states, of 13 countries with per capita GDP levels within 25% of China’s, only one, Sri Lanka has a lower level of urbanisation, and only one, Bosnia and Herzegovina, has an urbanisation level below 50%. The average urbanisation level for these countries (which include the Philippines, Ukraine, Colombia and Morocco), the median urban level is 63%33. This indicates that there is considerable ‘scope’ for China to increase its urbanisation level.
3.4.11
The other two reasons why the ‘high’ projection is by no means unrealistic relate to the exceptional influence that government policy has had on urbanisation in China. The two most important policies are hukou and the
32
Although a recent report considered that the number was only 70 million.
33
If the comparison is done on the basis of nominal (not PPP) GDP per capita, four other countries become comparables. Three of these, Indonesia (47%), Syria (51%), and Egypt (43%) have higher urbanisation levels while one, Democratic Congo is lower (32%). [Consultants’ Analysis]
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one child policy. Hukou regulations have gradually been relaxed and many commentators foresee further relaxations, especially given the Chinese government’s new goal of creating a harmonious society. Already migrant children are being granted access to education, which was previously denied, in some cities. This could increase the number of ‘family’ migrants thereby increasing the urban population significantly. 3.4.12
Relaxation of the one child policy is not imminent. Recent press announcements imply a new crackdown on households with more than one child and comment on the ‘flouting’ of the policy by affluent sections of the urban population who are increasingly willing to pay the fines resulting from having a second child. Yet other reports have commented on the increase in dependency ratios as the population ages creating problems of labour supply34 and support for the aged – which is already a major issue in Japan and Korea, Asia’s most developed countries. For the latter reasons, relaxation of the one child policy seems inevitable in the longer term.
3.4.13
Overall, as changes to hukou and the one child policy are likely to be gradual rather than immediate. Their impact is thus likely to be felt in the period after 2020. For this reason, the urban population increase in China over the next 15 years is considered more likely to be nearer the lower range of the projections. Irrespective of which projection proves to be the most accurate, China’s urban population will increase substantially in years to come. This is the crucial, and incontrovertible, message from these projections.
3.4.14
As will however be seen in following sections, there are several factors other than the simple numerical increase in the urban population which will heavily influence the future planning and expansion of the country’s cities and metropolitan regions.
3.5
The Components of Urban Population Growth
3.5.1
Chinese Government policy is highly influential not only on the scale of urban population growth and resultant urbanization levels, but also on the characteristics of this urbanisation, namely the demographic components of this growth and the physical expansion of towns and cities. These two factors are discussed below.
3.5.2
There are three basic ways in which the urban population can increase: through natural increase, through migration and, often neglected in the literature, through reclassification. The relative proportions of these will exert a major determinant on the future planning and characteristics of Chinese
34
See previous footnote.
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cities in the future. The crucial question is therefore who made up the approximately 15 million annual increase in the urban population over the last 20 years? Natural Increase 3.5.3
From the 1950s to 1970s, fertility rates in China were high. However, with the introduction of the one-child policy in 1978, fertility rate along with birth rates have declined considerably. Current projections foresee a continuation of these trends over the next 20 years, assuming that is that the one child policy is maintained. Table 8 shows the evolution of the rate of China’s rate of natural population increase since the 1950s. From this, it is possible to estimate the contribution of natural increase to the growth of the urban population in the 1980s and 1990s.
Table 8
Rates of Natural Increase, 1950-2000
Rate of Natural Increase
19501960
19601970
19701980
19801990
19902000
2000-2020*
1.7%
2.4%
1.9%
1.5%
1.0%
0.6%
Contribution to urban population increase* Millions % of urban population increase
12,841
27,709
29,267
30,660
32,903
56,000
36%
70%
57%
25%
24%
16%
* Excluding natural increase of migrant population. Source: Consultants’ Calculations based on UN op. cit. except * Table 7.
3.5.4
The results of the calculations shown in Table 8 are revealing in that they clearly identify the different phases of Chinese urbanisation: rapid expansion due to migration in the 1950s, highly restricted growth and high fertility in the 60s and 70s, followed by decreasing natural increase and high migration in the 1980s and 1990s. The implications for the future are also stark – over 80% of the projected increase in the urban population will come from migration (including reclassification, see below), i.e. it will consist primarily of previously rural residents.
Rural Urban Migration 3.5.5
As is evident from Table 9, the importance of migration as the prime determinant of urban population increase is now much greater than it has been since the 1950s as a result of both the gradual relaxation of the hukou system and increasing demand for labour. Until recently however data on migration to Chinese cities has been limited; indeed until 1990, migrants tended to be excluded from statistics of urban population. Although this situation has changed since 1990, the situation is far from clear and there are many, sometimes contradictory, of how many migrants have been
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accommodated in towns and cities. Table 9
Estimates of Rural Migrants, 1984 – 2002
Year
Number (million)
Source
1984
20
IIASA, op. cit.
1990
50
1990 Census, quoting Professor Lin Fude of Institute of Population research. cited by Francesco Sisci, The Straits Times, 22 September 2000
1993
62**
1995
70**
1996
72**
Wang D., Cai F. and Gao W., 2005, Globalisation and Internal Labour Market Mobility in China: New Trends and Policy Implications, ABERU Discussion Paper 15, Monash University, Australia citing Ministry of Agriculture data.
1997
77**
2000
100
2001
90 (80)**
Consensus estimate, cited in GHK (for DFID), Urban Poverty in China. Wang et a., op. cit.
** These are based on rural household surveys and should thus be more reliable. Figure in ( ) excludes rural-rural migrants.
3.5.6
The problem is exemplified by the published 2000 Census data on hukou status of residents. A total of 152 million residents (c. 12% of the national population) are resident in areas different from where those where their hukou is registered. In terms of urban migration, there are two issues. Firstly, this is a gross, not a net figure. In other words, it will for example include both migrants from Shanghai to Beijing and from Beijing to Shanghai, even if the numbers of each type of migrant is the same. It thus represents a significant over-estimate of the net migration. Secondly, it includes both urban-urban and rural-rural migration, which again means that it will further over-estimate net rural- urban migration.
3.5.7
Li et. al. undertook some detailed analysis of migration data from the 1990 Census and the 1995 1% sample household survey. Key findings were: •
•
From 1985-1990, almost half of total migration was rural-urban, a third was inter-urban, 13% was rural-rural and 4% was urban-rural. In contrast for the 1990-1995 period, the proportion of rural-urban had decreased to 36% while the rural-rural proportion had increased to 24%; the proportions for the other two categories remained essentially unchanged. From 1982-1995, total rural urban migration amounted to 44 million. Migration at the end of the period was overwhelmingly to cities whereas in the mid-1980s, almost half was to rural towns. This change reflects the increasing importance of the development or new urban based industry and service sector employment relative to TVEs. Migration was however lower in the 1990-1995 period, averaging 2.4 million annually compared to 1985-90 when it averaged 3.3 million.
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•
3.5.8
The temporarily registered population (TRP), i.e. recent arrivals, increased by around 6 million from 1999 to 2000. In 2000, the number of registered migrants in cities was 90 million.
Li et al. also provide information on the characteristics of rural-urban migrants35: •
• •
•
• •
They are concentrated in the younger working age groups: almost half are aged 15-34 years compared with 31% of the urban population and 34% of the rural population. However 19% are aged under 15 years which is higher than the equivalent proportion of the urban population, 17%. This shows both the latent demand for education from migrants and the different outcomes of the one child policy in urban and rural areas. Most migrants are males but the difference is not large – the overall sex ratio is 106 (males to females) while for migrants it is 109. Migrants are better educated than the rural population as a whole but less well educated than the urban population. Two thirds of migrants are self-employed or work for private enterprises. In contrast, over 70% of urban residents are employed by government or other publicly owned enterprises36. The average income of migrant households in 1999 was RMB9,450, 18% lower than urban households but 33% higher than average rural household incomes37. Two thirds of migration was intra-provincial. Two thirds of net inter-provincial migrants identified in the 1990 Census were located in just four locations – Beijing, Tianjin, Shanghai and Guangdong. Another 14% were found in Jiangsu and Liaoning. In 1998, over 82% of inter provincial migrants were located in the eastern coastal provinces.
Reclassification 3.5.9
Urbanisation through reclassification essentially means urbanisation without migration. It can happen in a number of ways. • • •
•
35
A change in the definition of what constitutes an urban area. The extension of the administrative limits of an urban area. The transformation of a hitherto rural settlement into an urban one through the implantation of industrial and commercial enterprises so that the economic character of the location changes, i.e. rural industrialisation. The absorption of peripheral rural settlements by expanding urban area.
Information derived from analysis of 1999 survey of rural migrants by other experts.
36
Although the importance of the construction sector is mentioned, the proportion of migrants working in this sector is not given.
37
Figures are not comparable to the per capita incomes mentioned previously.
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• 3.5.10
The transfer of residents from rural to urban hukou.
All the above have occurred extensively in China. The first two are observed in the rapid increase in the total population of towns and cities but no not contribute to an increasing urban population unless they are associated with any of the last three.
The Relative Importance of the Different Components of Urban Growth in China 3.5.11
To illustrate how natural increase, reclassification and migration have contributed to urban population growth in China from 1984 to 2000, we have estimated the proportions of total urban growth attributable to each of these components using previously presented information. The methodology essentially involves the successive subtraction of the natural increase and migration components from the total increase in urban population; the residual is the reclassification component. The results are contained in Table 10.
Table 10
Estimates of the Components of Urban Growth, 1982-2000
Urban Growth Components
1982-1990
1990-2000
Millions
%
Millions
%
90
100%
150**
100%
27
30%
32
27%
Attributable to migration (including natural increase of this population)
24* (30)
27% (33%)
42* (50)
28% (33%)
Attributable to reclassification (including transfers of hukou registration)
39 (33)
43% (37%)
54 (46)
45% (40%)
Increase in urban population Attributable to natural increase
** Using 1990 estimate of urban population using 2000 definition of 310 million. Sources: Consultants’ Analysis of data in Tables 2, 8, 9 except * Li et al. and ; We have excluded the increase due to the creation of new cities, as do the overall urban population estimates for 1990 and 1982.
3.5.12
The above estimates highlight the importance of reclassification as the most important single factor in Chinese urban growth over the last 20 years, accounting for 40-45% of the increase in China’s urban population growth. Although high, these proportions are not unrealistic. In the 1980s, there was rapid rural industrialisation due to the TVEs. In the 1990s, this process continued although often as a result of export oriented enterprises but was overtaken by the absorption of peripheral settlements as a result of the accelerated physical expansion of China’s cities which started in the second half of the decade (see next section). The high importance of reclassification also reflects the densely populated rural settlement pattern surrounding many of the largest cities which means that cities cannot expand without incorporating large numbers of existing rural settlements. The same process has been observed in Indonesia and is currently evident in Vietnam.
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3.5.13
In numerical terms, on an annual basis, out of an average annual increase of 15 million, 6-7 million rural people were given ‘urban status’ or became physically encompassed within existing towns and cities, without actually moving; and the urban areas accommodated another 4-5 million rural migrants. The importance of reclassification helps explain how the Chinese urban population has expanded so rapidly without the proliferation of slums seen in many other Third World cities.
Policy and Implications 3.5.14
Given continued decreases in the rate of natural increase, the importance of migration and reclassification as the dominant components of urbanization will continue for the foreseeable future – together these components are expected to constitute over 80% of urban population increase up to 2020. This is also supported by the current and emerging policy.
3.5.15
The 11th Five Year Plan promotes continued urbanisation and fostering of agglomeration and metropolitan structures as highlighted in Box 3.4. The NDRC’s current urbanization strategy (Box 3.5) which reflects the 115th Five Year Plan also implies continued reclassification of the population by suggesting the removal limits on the scale of large cities, and an end to the division between rural and urban areas. This strategy also promotes a more relaxed attitude towards issuing residency to villagers in urban centres, and the gradual phasing out of the hukou system. Secondly, the State Councils ‘Guidelines on Promoting the Reform on Hukou Management System at Small Cities and Towns’ (2001) has already allowed for hukou to be completely open at county-level cities and designated towns, if applicants can provide their own accommodation and can secure non-agricultural jobs.
3.5.16
The likely impact of these policy directives on migration and reclassification, and potential responses that may be required into the future are shown in Table 11. The main implications are two-fold. Firstly, continued migration will increase the demand for urban jobs, land, housing, urban services and infrastructure. On the other hand, reclassification will reduce the demand for new land as residents of rural communities will become urban (i.e. includes being granted urban hukou). This adds to the urban population without creating the same demands for new infrastructure although substantial upgrading will be required as rural infrastructure, even in villages close to major cities, is generally inferior to that in the main urban area.
3.5.17
It is also evident that the scale and nature of reclassification will depend to a large extent on policies relating to future urban densities (which will influence the number of villages incorporated) and the development of new towns (which will influence the transformation of existing less peripheral settlements but will maintain agricultural areas as ‘greenbelts).
3.5.18
Finally, most recent policy direction was given by the Chinese Communist
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Party at the 17th National Party Conference in 2007. This clearly promotes further urbanisation and the promotion of development priority zones and better economic integration beyond administrative boundaries, again advocating reclassification as a precursor to urbanisation increases. 3.5.19
These three boxes summarising key policy directives are followed by a diagram illustrating the Impact of Key Policy Directives on Migration and Reclassification.
Box 3.4
11th Five-Year Plan
The Five-Year Plan mainly aims to arrange national key construction projects, manage the distribution of productive forces and individual sector’s contributions to the national economy, map the direction of future development, and set targets. The reference points of 11th five-year plan regarding metropolitan regions mainly include: Steer urbanization: encourage rural population settle down in medium-scale cities and small towns; mega cities should adjust industrial structure aiming to develop efficient economic measures to control the booming of urban population Promotion of rational spatial pattern of urbanization: promote urbanization in a major form of city clusters; gradually develop economically efficient and environmentally sustainable urbanization spatial pattern, which is framed by coastal area and Beijing-Guangzhou and Beijing-Harbin railway as vertical axis, Yangzi river and Lanzhou-Lianyungang railway as horizontal axis, several city clusters as nodes, and permanent farmland and ecological functioning zones as buffer areas. The regions where city clusters are emerging should continue to play promoting and radiating roles, strengthen collaboration between cities, and enhance the overall competitive capacity of city clusters; The regions have developing potentials for city clusters should strengthen regional planning, promote various functions of the core city, and develop intensified land use, sufficient employment supply, economic centralization and appropriate distribution of population; The regions haven’t been prepared for developing city clusters should focus on promote the development of current cities, counties and towns, aiming to form the centres of local economy, population and public service. Strengthen management of urban planning and construction: planned urban size and spatial allocation should comply with local resource and environmental capacity, geological and physical constraints, as well as with local economic development, employment potential, infrastructures and public services. Improve institutional mechanism for urbanization: accelerate institutional breakthrough of the dual urban-rural system; develop and improve policies on tax, land release, administration and public service in relation to urbanization development; improve division and management of administrative districts; reform the urban-rural fragmented employment institutions, deepen the reform on household registration system, and eventually establish unified household management system among urban and rural areas.
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Box 3.5. China’s National Urbanization Strategy The NDRC has developed an urbanization strategy for China, which clearly links urbanization with modernization, economic development and employment growth. This strategy is of national importance as it th recognises that urbanisation is one of the key development priorities of the 11 five year plan. To promote the development of city groups towards a sustainable metropolitan region is also highlighted. The NDRC criticises the dysfunctional layout and scale of metropolitan city structures, viewing this as a critical impediment to development. It also criticises the unclear functional hierarchy and duplication of functions between towns and cities throughout the country. The lack of central business areas in Chinese cities, and the high residential densities in city centres are other crucial problems inhibiting modernization. Poor urban management systems, particularly at the local and provincial levels, are other obstacles to sustainable urbanisation. The NDRC links urbanization to social and economic development problems within China. By absorbing millions of farmers into the secondary and tertiary sectors, and reducing inefficient farming practices, urbanization is seen as key to tackling low agricultural production, solving employment problems, improving farmer’s living standards thereby increasing domestic demand. China’s Urbanization Strategy requires that all levels of government commit to the drive towards urbanization, as a prerequisite for modernization. Diversification of town and city function, and creation of an urban hierarchy system is now being prioritized. Through plans and policies the State is responsible for creating cities and towns of varying size and complementary functions, including world cities, regional centres, constructing new cities, and re-designing areas with a high density of towns. The development of small towns should be accelerated, redefining the function of administrative and market towns, and promoting those with economic potential to be bolstered to medium size cities. New cities should also be developed throughout the central and western region to address slow economic development and low population densities. Within areas with high concentrations of towns and cities, such as the Pearl River Delta and the Yangtze River Delta, and also the Beijing-Tianjin region, (those three areas are most likely to develop into a metropolitan region) the objective is to plan for intra-regional infrastructure, including rail links, airports etc, to enhance the economic competitiveness and efficiency of these regions, subsequently also attracting a population increase from rural areas. Aligned with urbanisation is a reduction in the impediments to population mobility and labour flow, thereby reducing rural-urban disparities. The NDRC also recognises that current policy and institutional structures in China reflects an anti-urban sentiment that needs to be adjusted in order to fulfil urbanization objectives. Specifically, the clear division between urban and rural areas discourages urbanization and has reduced the scale of large cities. Secondly, the NDRC argues that the concern over ‘urban’ social problems, and the loss of farmland, is unwarranted and inhibits economic development through urban growth. Targeted policy changes include revision of the Urban Planning Law to eliminate the control on the scale of big cities; the creation of a Planning of Nationwide Urbanization Strategy to promote a cross-administrative-area regional town framework, along with cohesion between various planning departments responsible for water, environmental protection, economic development and communications. There is an urgent need to also make proper adjustments to administrative boundaries in Chinese cities and towns. The present system of urban hierarchy promotes the growth of cities and towns designated as political centres with various regions and counties, rather than those which demonstrate positive growth trends. In fact this bureaucratic constraint limits the outward growth of many emerging urban centres based on their hierarchical designation. This has attributed to duplication of infrastructure investment, excessive land conversion & environmental degradation. As part of the urbanization strategy, following market based principles, in terms of infrastructure investment, development is prioritized, including mobilizing foreign funds, and private sector investment in construction, operation and maintenance of infrastructure. For land leasing procedures, the urbanization strategy suggests that land leasing should be practiced through open bidding procedures, standardizing land transfers in packages. Finally, in the interests of allowing a smoother flow of the rural populations, and reducing the rural-urban divide, the urbanization strategy promotes the longer term introduction of ID cards, a more relaxed attitude towards issuing residency to farmers in urban centres, and the gradual phasing out of the domiciliary system - proposals which have significant implications for the Hukou system. Source: Mainly derived from Yang W., 2000, China’s Urbanisation Strategy: Priorities and Policies, paper presented at Workshop on China’s Urbanisation Strategy, World Bank/ Ministry of Construction/ State Development Planning Commission, Beijing.
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Box 3.6 Reference of the Report on the 17th National Congress of the CPC
Some key points in the report given by President Hu Jintao on the 17th National Congress of the CPC regarding the development of metropolitan regions are: •
A mechanism for urban and rural areas and for different regions to have balanced and interactive development and a layout of development priority zones will be basically in place;
•
The proportion of urban residents will notably increase;
•
In compliance with the laws governing the market economy; work beyond administrative divisions to form a number of close-knit economic rims and belts that will provide a strong impetus to the development of other areas;
•
Taking a path of urbanization with Chinese characteristics, promote balanced development of large, medium-sized and small cities and towns on the principle of balancing urban and rural development, ensuring rational distribution, saving land, providing a full range of functions and getting larger cities to help smaller ones; and
•
Focusing on increasing the overall carrying capacity of cities, form city clusters with mega cities as the core so that they can boost development in other areas and become new poles of economic growth.
Table 11: Impact of Key Policy Directives on Migration and Reclassification Key Policy Directives
Consequence
Resultant Impact
NDRC urbanization strategy
Continued Reclassification, hence urbanization
Adds to the urban population without creating the same demands for new land or infrastructure (physical or social).
Continued migration
Increased number of migrants in urban areas
17th National Congress of the CPC
‘Guidelines on Promoting the Reform on Hukou Management System at Small Cities and Towns’ (2001) NDRC urbanization strategy.
3.6 3.6.1
Potential Policy Response Na.
Policy to address migrants and low income housing Policy to address increased provision (and financing) of urban services and infrastructure
The Physical Expansion of Chinese Cities Chinese cities have considerably expanded their physical areas since 1990 to accommodate the rapid increases in the urban population. Between 1990 and 2003, the total built up area of Chinese cities increased by 120%,
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meaning that Chinese cities now cover over double the area that they did in 1990 (Table 12). The average rate of increase between 1990 and 2000 was 5.7% - substantially greater than the estimated rate for the urban population, 4%38. Since 2000, the rate of increase has been even higher at 8% annually, around double the rate of population increase. 3.6.2
As a direct consequence, the densities of Chinese cities have declined dramatically in recent years. In 1990 Chinese cities were some of the most densely populated in the world. Parts of Shanghai and Guangzhou had densities exceeding 120,000 persons per sq. km 39 . From 1990 to 2000 however, Shanghai’s density more than halved from an average of 28,600 persons per square kilometre to 13,400 in 2000. During the same period Tianjin dropped from 23,000 to 10,500 persons per square kilometre; the comparable figures for Guangzhou were 17,000 and 13,40040 . Table 13 shows current average densities by city size class in China.
Table 12. Physical Expansion of Chinese Cities, 1990-2003 Surface Area of Built 2 District (km )
Annual Rate of Increase ( %)
1990
12,856
1995
19,264
8.4 %
1998
21,380
3.5 %
1999
21,525
0.7 %
2000
22,439
4.2 %
2001
24,027
7.1 %
2002
25,973
8.1 %
2003
28,308
9.0 %
1990-2000
5.7 %
2000-2003
8.1 %
1990-2003
6.2 %
Annual Growth Rates
Source: China Statistical Yearbook 2004, Beijing, 2005.
38
See China Statistical Yearbook 2004, Beijing, 2005.
39
East Asian urban densities exceeded 15,000 per sq.km, compared to 7,000 in Latin America and 5,300 in Europe in 1990.
40
Sources: Demographia, 2005, Source Book of World Urbanisation, downloaded from www.demographia.com; Angel S., Sheppard S., Civco D. (2005); The Dynamics of Urban Growth, Transport and Urban Development Department., World Bank, Washington; Bertaud. A. and Malpezzi S, 2003., "The Spatial Distribution of Population in 48 World Cities: Implications for Economies in Transition" , Centre of Land Research, University of Wisconsin (data relates to main city areas only.
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Table 13. Densities of Chinese Cities, 2000 Densities (persons per square kilometer) Population
Under 7,500
7,5009,999
10,00014,999
15,000+
ALL
Median
0.5-1 million
19
18
18
4
59
6,500
1-2 million
4
8
10
3
25
10,000
2+ million
0
0
8
3
11
13,500
95
9,500 (10,300)*
ALL
23
* Average weighted by population size.
26
36 Source:
10 Consultants’
Analysis
of
Demographia.com database.
3.6.3
The current average density of larger (over 500,000) Chinese cities is around 10,000 although the densities of the largest cities are substantially higher.
3.6.4
Despite this sharp decrease, the densities of Chinese cities remain much higher than those in most of the rest of the world. Densities in US cities are around 4-8 times less 41 ; in Europe they are less that half. Even in Asia, densities in Japan and well developed cities such as Kuala Lumpur and Bangkok are much lower (Table 14). The Table also shows the relatively few, exceptions: Indian cities, Seoul, Manila and Jakarta. Virtually without exception, urban densities have decreased over the last 10 years.
3.6.5
There are several reasons why urban densities have declined including decreases in household size, rising household incomes leading to increased space standards and thus suburbanisation, improved transportation which extends the employment catchment area, redevelopment of previously residential central areas for business and commercial uses. While the relative importance of these will vary from country to country, the dominant trend in most countries is one of suburbanisation associated with improved transportation and increasing incomes.
3.6.6
How densities evolve in the future will determine the amount of land needed to accommodate future projected population growth. Assumptions regarding future densities are thus crucial in projecting future urban land demands. Table 15 establishes some indicative land demand projections based on
41
The wide range results from the different ways of calculating densities, e.g. whether based on built up areas only, administrative boundaries or the area within a contiguous boundary. It is often difficult to assess on what basic densities have been calculated and hence to assess the comparability of the information.
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assumptions about current and future densities. The base premises are: a city with a current (2005) population of 5 million; a 15 year planning horizon to 2020; and an increase in population based on the median projections which essentially imply a 50% increase in population up to 2020. Table 14. International Urban Densities Persons square km. City/ Region
per
1990
2000
Manila
31,600
26,300
Jakarta
12,700
10,500
Significant decrease
Bangkok
5,800
6,450
Increase
Kuala Lumpur
7,100
6,200
Significant decrease
Seoul
23,000
16,700
Major decrease
Japan
na
4,800
na
ALL South/Central Asia (mostly India)
17,980
13,720
Major decrease
Latin America
6,955
6,785
Little change
Europe
5,270
4,345
Significant decrease
2,790
2,300 (1,150)*
Significant decrease
Other developed (mostly USA)
Change Significant decrease
* Lower estimate is for contiguous urban area; most others exclude non-developed areas. Sources: Démographia, Angel, et al., Bertaud. A. and Malpezzi S.
3.6.7
Three future density scenarios are examined. Scenario 1 – 15,000 per sq. km. - essentially represents a ‘no change’ situation for larger cities. Scenario 2 - 10,000 per sq. km. – implies a decrease of around 30% to the average for Chinese cities today (and of a few other large Asian cities). Scenario 3 – 6,000 per sq. km. represents a decrease which would result in large Chinese cities having densities comparable to several major Asian and Japanese cities today.
Table 15. Indicative Land Demand Projections Additional 15 year land requirements (sq. kms.) and increased city radius (kms)
Current Situation Density (persons per sq. km.)
Area (sq. kms)
Radius (kms)
15,000
333
10.3
10,000
500
12.6
Scenario 1: Future density: 15,000
Scenario 2: Future density: 10,000
Scenario 3: Future density: 6,000
Additional land
Additional radius
Additional land
Additional radius
Additional land
Additional radius
160
2.2
420
5.2
920
9.7
250
2.8
750
7.3
unlikely
Source: Consultants’ Estimates.
3.6.8
Taking into account, the world wide trend of decreasing densities, and the strong policy regime with its emphasis on high density multi-storey apartments (see below) and the continued preoccupation with reducing the
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conversion of agricultural land (see below), the most likely of these scenarios would be future urban densities for the major cities of around 10,000 per sq. km., i.e. lower than Korea but higher than virtually everywhere else. 3.6.9
3.7 3.7.1
42
Summarising, if current densities are around 15,000 per sq. km., and population increases by around 50%, a city of around 5 million people today will have to increase its area by 125%, 420 sq kms. over the next 15 years. It should be noted that this increase could be accommodated by extending the urban radius from 10kms by 15 kms. in every direction. There is thus no theoretically no need to drastically expand the principal city into its hinterland42. This is not to say that there will not be physical constraints to such a strategy nor that requirements to concentrate development around major transportation axes nor that the development of new towns will not prove to be more appropriate in many circumstances. Spatial Features of Urban Expansion The massive spatial expansion of Chinese cities has been made possible because of the national government’s highly proactive approach to urbanisation since the 1990’s. The extent of this involvement is virtually unique in developing countries today; only Korea and the city states of Singapore and Hong Kong (previously) have attempted to control urban development to the extent that the Chinese government has done over the past 10-15 years. Table 16 summarises the most important spatial characteristics of recent Chinese urbanisation in relation to their policy catalysts. The remainder of this section then describes key features of each concentrating on the reasons for their evolution, their functions, their unintended consequences and the resultant future policy implications.
The equivalent figures for a city of 10 million are 14.5 kms and 23 kms.
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Formal Sector – State led
Table 16. Spatial Features of Current Chinese Urbanization Characteristics
Policy Catalysts
City Centre Redevelopment relocation of existing urban populations to peripheral resettlement areas to make way for CBD’s.
Mandate to modernize cities
Planned development zones; suburbs, ‘new towns and special economic zones
National policy to promote urbanisation and economic growth.
Economic restructuring (Closure of SOE’s and advancement of service sector economy).
Privatisation of Housing (Real Estate Law) Land Requisitioning powers of State.
Informal Sector – Village Collective led
Rural Urbanization Development of rural land by village collectives for urban and industrial uses in direct association with enterprise. In-situ urbanisation.
High density informal settlements on residential village land, often on the periphery of the city. Known as ‘urban villages’ (chong zhen cun)43
Restrictions of land conversion (including Basic Farmland Regulations) Promotion of economic growth, but in some areas urban land is in short supply, so authorities turn a ‘blind-eye’ to informal activities. No official policy to provide housing for migrants, yet continual relaxation of Hukou.
City Centre Redevelopment 3.7.2
Since the mid 1990s, a major thrust of China’s urban policy has been to modernize its cities to provide land for central business districts, new industries, retail, financial and commercial space. This has involved the relocation or removal of obsolete SOE’s and the demolition of sub-standard areas of traditional housing and walk up 1950s and 1960s tenement blocks. These have been replaced by office blocks, shopping malls, modern apartment blocks, widened roads, parks and riverside walks.
3.7.3
The impact of these policies is evident to even the most casual visitor in
43
In Beijing, these urban villages in the peri-urban areas are believed to house over 1 million migrants.
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virtually every Chinese city from Shanghai to small county towns in Western Sichuan. The scale of the resultant relocation of population is also considerable. Upwards of a million people have been relocated in both Beijing and Shanghai44; virtually all the traditional housing in Tianjin has now been removed. Similar relocations will be found in most other cities and they will continue for the foreseeable future as the Government makes good its long-term commitment to modernising its cities. In 2002 the government declared that there were 150 million m2 of ‘old or unsafe housing awaiting renovation’ 45 which is equivalent to some 4-5 million housing units and between 10% and 15% of the current number of urban households. 3.7.4
The implications are important as it will mean further demands for land on the urban periphery, and increased suburban densities, whilst core urban densities will continue to be reduced. It also implies continual economic restructuring within the city as industry and residents are relocated to make way for commercial and business uses.
Planned Development Zones and Suburbanisation 3.7.5
Municipal authorities in China are mandated by Central government to provide land for urban expansion to support the National Urbanisation Strategy (See Box 3.5). Through a set of administrative processes that are unlike those of any other country, municipal authorities requisition land from village collectives and resettle or compensate the villagers, and then convert this formally rural land to urban in accordance with its urban plans. This procedure facilitates the provision of infrastructure and the planned and orderly expansion of cities and towns.
3.7.6
These development zones become occupied by industry, commercial developments or residential estates, often for households relocated due to central city redevelopment. These suburban estates are increasingly evident in most Chinese cities46. On the demand side, they have flourished because of the privatisation of housing, the development of the residential real estate market, the increased availability of mortgages, and massive increases in urban disposable incomes which enable many urban households to increase their space standards. Most are however high density consisting primarily of multi-storey apartments meaning that densities remain high. This unique high density urban form is most comparable to Korea, although in Korea
44
See http://www.china.org.cn/english/2005/Apr/124652.htm.
46
A comparison of current core and suburban densities of Chinese cities suggests that suburbanisation has become more prevalent in some parts of the country than others. In Guangzhou and Beijing the suburbs contain 78% and 50% of city population respectively, whereas in Tianjin where there has been much less urban expansion, the suburbs accommodate only 30% of population.
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greenbelts are imposed to control the growth of large cities. It is very different from the much lower density housing estates seen around cities such as Bangkok, Jakarta and Kuala Lumpur. 3.7.7
These zones are generally well-planned, with high standards of infrastructure provision and a full range of facilities in the larger residential areas providing an attractive location for FDI, as well as good quality living environments. As Bertaud 47 has recently pointed out, development zones are preferable to incremental development by small land owners or largescale land assembly by private developers (as occurs in India).48 Thus, in many ways, the development zone approach provides a sustainable example of urban expansion which is not peculiar to China.49
3.7.8
They do, however, have some major shortcomings. The first relates to the perverse financial incentive to over-requisition 50 , leading to high vacancy rates, premature loss of agricultural land, over-investment in infrastructure and unproductive competition between development zones located in close proximity to one another. In 1997 it was estimated that the requisitioning process had created over 4,000 ‘development’ zones with a combined land area of over 12,400 sq. km., equivalent to almost 60% of the total built up area in that year. In 2004 the Government announced that over 2000 planned development zones, involving around 70 percent of the requisitioned land, had been cancelled.51 Nevertheless, China still had over 7,000 development zones covering almost 39,000 square kilometers – well in excess of the country’s total built-up area. 52 . A more recent study estimated that over 40 percent of these development areas are still vacant53.
3.7.9
The second shortcoming relates to the impact of the requisitioning process
47
Bertaud A., 2006, Urbanization in 2 Towns in Sichuan Province: Land Use and Land Pricing Issues, unpublished report for World Bank Sichuan Urban Development Project, revised version
48
It is also worth noting that residential development in the USA also frequently involves substantial tracts of land constructed by single developers. In the UK, by contrast, since the new towns program finished in the 1970s, development has been largely on small sites; in the near future however, much larger land development schemes (which would equate to development zones in the Chinese context) are planned to accommodate the high demand for housing in the South East. 49
This approach is essentially the same as used in the West and Korea for the development of new towns and large new residential communities.
50
This relates to the need for cities to finance their services using locally generated resources. (see next section).
51
http://www.china.org.cn/english/2004/Apr/92687.htm
52
Cao Desheng, 2004,China Daily, 24-2-2004
53
World Bank/Development Research Council, China, (2005), China: Land Policy Reform for Sustainable Economic and Social Development. An Integrated Framework for Action. World Bank.
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on the farmers who lose their land and livelihood. This has been a major factor in the large increase in mass demonstrations in the last few years. The impoverishment of existing occupiers and the lack of any prior consultation processes especially when they lose land 54 (but retain their housing) and are not absorbed into urban labour markets, allied to the extent of over-requisitioning, has not gone unnoticed. In 2006, continuing and increasing protests related to land requisitioning led to the Prime Minister declaring that the country risked committing ‘a grave historic error.’55 The issue of farmers’ impoverishment is now firmly recognized as one of the most critical issues facing the country. 3.7.10
The third important shortcoming of the development zone process is that, to date, the accommodation provided is targeted at middle and upper-income groups with minimal provision for lower-income groups, and especially migrants. Yet urban housing in China appears to be increasingly unaffordable - in Beijing, 70 percent of households cannot afford the cheapest properties on offer.56
Rural Urbanization and Industrialization 3.7.11
Rapid urban expansion has not only occurred through planned development zones. In some parts of the country, particularly Eastern and Southern Provinces such as Zhejiang and Guangdong, the requisition land quotas specified annually by provincial governments have been insufficient to meet the demand for development land. Village collectives have addressed this gap by informally developing their own land for industrial purposes usually through joint venture arrangements with enterprises. Village collectives in some parts of the country have therefore been instrumental in expanding the cities, and facilitating in-situ urbanisation, much as occurred during the TVE period. It is estimated that 50% of land developed in Guangdong was on village collective land57 . Figure 11 which compares developed land areas in the Pearl River Delta in 1990 and 2000, clearly shows the importance of this informal, quasi-legal, collective-based rural industrialisation process.
3.7.12
As restrictions on land development are not always in tune with market demand, some village collectives have developed more land than they are supposed to, leading to a loss of ‘basic farmland’. In the interest of
54
For a detailed case study of a probably all too typical land requisitioning process, see Luo X. and Shen J., 2004, Cross-border Urban Growth: the Case of Jiangyin Economic Zone in Jinggyang, Paper presented at Asian Studies Association of Australian, Canberra. 55
Guaridan, 21 January 2006.
56
Browne, 2006, op. cit.
57
WB /DRC, 2005
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promoting local economic development, some authorities have turned a ‘blind-eye’ to this practice58 In addition to loss of farmland, there are also legitimate concerns regarding uncontrolled pollution and disorderly planning. Policy responses related to development on Village Collective Land are rapidly evolving. In Guangdong province in 2004 minimum planning and construction requirements began to be applied to informal development on village collective construction land, and in July 2006 the State Council approved a plan for establishing a new institution of land use supervision in nine provinces which provides for supervision of basic farmland conservation at a provincial level and guides local governments regarding land use quotas for construction. The State Council also released the ‘Circular on Land Conservation According to Related Laws and Regulations to Support Establishment of Socialist New Villages’ (Circular 52/March 200659, which divides the urban fringe into three zones, an inner, middle and outer ring of future urban growth with a view to securing the sequential development of each zone. These policies set the scene for a new approach to land management within China’s rapidly expanding cities. 3.7.13
Yet the ‘basic farmland’ regulations have an important unintended consequence. The preservation of irregular patches of farmland creates a very irregular land use pattern, something avoided by the development zone process. The criticism of this type of urban form is that it is inefficient, as development ‘leap-frogs’ increasing commuter distances and the cost of provision of urban infrastructure. The resultant development pattern is not dissimilar to that found in other Asian cities which do not have the ability to implement the comprehensive land use planning system of the type found in China.
58 Regulations for the Protection of Basic Farmland (1998) responds to the rapid depletion of farmland in the urban fringes of Chinas cities by setting a minimum amount of land that must be conserved (or maintained). The law requires governments at or above the county level, to designate a basic farmland protection zone in every village or township. The State Council also determines a minimum amount of national basic farmland, based on the national population and grain demand. General land use plans must not reduce the amount of basic farmland and it must not be illegally transferred or lay idle. 59
Note how recent this circular is.
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Figure 11. Expansion of the Built-up Area in Guangzhou, 1990-2000 (reproduced from Angel, et. Al, 2005).
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Informal Settlements (chong zhen cun) for Migrants 3.7.14
Village collectives have also been important in accommodating rapid urbanization by providing affordable housing to migrants. The villagers have constructed high density settlements on their own private residential land holdings. These peripheral settlements are referred to as urban villages, or ‘villages-amidst-the-city’ (cheng zhong cun). They provide low cost accommodation to the 140-150 million rural migrants (2005 estimate) working in Chinese cities who are not provided housing on construction sites or in factory accommodation60. A recent report states that Beijing has an urban village population of 1.5 million of which around 1 million are within the city boundaries61.
3.7.15
They have very low levels of urban services and infrastructure and remain socially and physically segregated from the urban area, taking on ‘slum’ like attributes. Their high density (and high resettlement cost) and undeveloped street pattern makes in situ upgrading difficult if not impossible. They do however perform a very important urban function as they provide affordable housing to migrants.
3.8
Physical and Social Infrastructure
Physical Infrastructure 3.8.1
The Chinese State provided the framework for the development of suburbs, ‘new towns’ and special economic zones through major investment in infrastructure investment and construction. As illustrated in Table 17, construction of roads, rail, drainage systems, sewage treatment plants and solid waste treatment facilities in recent years has been impressive.
3.8.2
As a result of this recent investment, and the original modernisation undertaken in the 1950s, Chinese cities arguably share more commonalities with cities in developed countries. Provision of urban services, water supply, power, sewerage and paved roads are almost universal – in sharp contrast to cities in many developing countries. Notwithstanding these achievements, critical issues remain.
3.8.3
Per capita water supply remains low by international standards for developed countries and can thus be expected to increase substantially in the future as incomes continue to rise. If per capita consumption was to reach 300 lhd by 2020, and assuming a 50% increase in population, domestic water supply would need to double by 2020. Yet the major water user in urban areas is industry which consumes about half of urban water consumption. The use of water for residential purposes makes up about 35%, and
60
In Beijing it is estimated that 20% of migrants live on construction sites. Wang 2005, cited in Mc Granahan and Tacoli, 2006 61 See People’s Daily, 2005, at http://english.peopledaily.com.cn/200509/09/eng20050909_207472.html and China Daily, 2006 at http://www.chinadaily.com.cn/china/2006-04/22/content_574236.htm.
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‘unspecified’ use which presumably includes institutional uses, landscaping and system losses makes up almost 25%, a major increase from 8% in 1996. Table 17
Performance Indicators of Urban Infrastructure Indicator
Annual supply of domestic tap water Number of Residents with Access to Tap Water Tap water per capita (l/h/d) Length of water pipelines Length of urban roads Length of sewer pipelines Garbage disposal Open space (sq. m. per cap) Public transport vehicles per 100 pop.
Annual Growth Rates 199619901990-96 2003 2003 na
4.3%
Na
na
4.1%
Na
na na 6.0% 12.1% 8.2% 6.8%
0.2% 7.4% 6.4% 8.1% 4.6% 12.7%
Na na 6.2% 9.9% 6.2% 10.3%
10.4%
4.8%
10.1%
Comment
LHD per day c. 200-220
Source: Derived from China National Statistics, 2004.
3.8.4
Water quality is also problematic. It was estimated that in 1999 approximately 700 million people consumed drinking water contaminated with levels of animal and human excreta that exceed maximum permissible levels by as much as 86% in rural areas and 28% in urban areas62. Urban river water quality had decreased from pollutants from business activities such as industrial factories, food services and agricultural fertilizers63. However, China has invested heavily in pollution control in recent years, assisted by finance raised from pollution levies. In 1996, investment in pollution control only represented 0.5% of GDP; but according to China’s 9th Five-Year Plan, investment in pollution control should have reached about 1.3 % of GDP. However as GDP has increased so has the quantity of wastes, much of which has been concentrated in the expanding urban areas. On the sanitation front, while most cities are sewered, the lack of sewage treatment facilities results in the discharge of untreated sewage into many water courses. The situation is so bad in the Pearl River Delta that factory closures, with consequent loss of employment, are now being implemented to reverse the contamination.
3.8.5
Construction of roads and bridges has been high in recent years. Yet there are 20 million cars on the roads today and traffic jams and long journey times are becoming the norm in some of the biggest cities. The erosion of work-units and the resettlement
62
Wu et al 1999:1
63
He et al, 2003: 1
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of communities in peripheral locations have substantially increased daily commuting distances thereby exacerbating the problem. The advent of electric bicycles has to some extent mitigated the decreasing viability of pedal cycles as a mode of transport as more and more people live further way from their employment; and Chinese cities remain more bicycle friendly than those in almost any other country. The provision of buses per 100 persons increased by 350% between 1990 and 2003 but overall public transport provision is inadequate – few cities have any metro systems, let alone extensive ones64, and bus priority measures have only recently begun to be introduced. Hangzhou and Beijing have received Sustainable Transport Award honorable mentions for their success in implementing Bus Rapid Transit systems along with improved facilities for cyclists and pedestrians65 indicating that both awareness of the problem and the capacity to innovate are present. Housing and Social Infrastructure 3.8.6
Table 18 presents some indicators of urban living conditions which all show major improvements in housing conditions. In particular, per capita spaces standards increased by over 20% in the second half of the 1990s when the large scale urban regeneration projects started. They nonetheless remain well below those of developed nations. This statistics gives further credence to the conclusion that Chinese urban densities will continue to decrease in the future.
Table 18. Indicators of Urban Living Conditions Indicator Living area
Unit sq m./ person
1982 6.1
1990 7.0
NA
NA
1995 8.1
2000 9.8
Comments Approx. equivalents in UK and US are 26 and over 50 sq m. respectively. Average for Shanghai and Beijing only.
50 % 15 % Absence of private toilets is main reason why NA NA 26 % 39 Habitat estimate of slums in China is 37 %. % urban % Households Access to piped water is, however, almost No private tap NA NA 28 19 % universal. water % Gas connection NA 19% 34% 45 % Sources: Various sources, including Zhou Y., 2004, Heterogeneity and Dynamics in China’s emerging Urban Housing Market: two sides of Success Story from the late 1990s, Habitat International, Elsevier; Su M and Zhao Q., 2006,The Fiscal Framework and Urban Infrastructure in China, WPS4051, World Bank, Washington. Private ownership of dwelling No private toilet
3.8.7
The second important housing-related issue is household size. From 1990 to 2000 the average size of urban households decreased by 27% from 3.7 to 2.7 persons66 due to
64
This situation can be contrasted with the extensive systems of Seoul and Tokyo and the wide variety of transport modes available in Bangkok.
65
Under the auspices of Institute for Transportation & Development Policy, Environmental Defence, the US Transportation Research Board Committee on Transportation in Developing Countries, the regional Clean Air Initiatives for Asia, Latin America, and Africa; GTZ and the United Nations Center for Regional Development. 66
The average household size of rural households also decreased but the decline was far less pronounced – from 4.0 to 3.8 persons.
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a combination of declining fertility, increased divorce rates and reduced numbers of extended households. As a result the number of households grew significantly faster than the overall population. This trend, which is occurring worldwide, is expected to continue. Based on UN-Habitat projections 67, average household size nationally will decrease to 3 persons by 2010 and 2.2 persons by 2020. While the change in urban households is unlikely to be so pronounced, an average urban household size of 2 persons in 2020 is not impossible. 3.8.8
This means that the demand for housing will be substantially greater than would be estimated based on population growth alone. Specifically, if the urban population increases by 50% between 2005 and 2020, the number of households will double. The assessment of future housing needs is however complicated by the issue of migrants many of whom live in construction camps, factory accommodation or privately rented, low standard, collective apartments. If this continues to be the case, the demand for single family housing will be much lower. It will nevertheless exist, despite a negligible rate of natural increase in the urban hukou population, falling household size is likely to mean around a 35% increase in housing demand for this group by 2020.
3.8.9
The above estimates of future household demand are highly sensitive to changes in the policy context as regards the one child policy, the care of the elderly and the housing of migrants. The same applies to the future demand for schools and health facilities. In inner areas, falling enrolments mean that schools are likely to have spare capacity which would enable them to accommodate migrants’ children. The issue is however likely to be more one of location. With increasing proportions of the urban population, hukou and non-hukou, located in suburban areas, the demand will be for more schools (and improvements to existing rural establishments) in these areas rather than more places in existing schools68. Much the same will apply to health facilities although these, apart from major hospitals, require less land.
Economic Restructuring and Employment 3.8.10
Rapid urbanisation in China has occurred in parallel with economic restructuring since the 1980’s, and has had a major impact on employment. Economic restructuring refers to broad changes in the economy, encompassing production, distribution, finance, governmental relations, and the labour process, or industrial restructuring. Essentially this involves a transformation in the relative importance of industries, most notably the manufacturing-service shift.69
3.8.11
One of the most significant changes has been the closure of SOE’s, which has not only
67
UN-Habitat, 2001, Cities in a Globalizing World, Habitat, Nairobi
68
Interestingly, the same issue occurred in Britain a few years ago when declining enrolment was threatening the viability of a number of inner city schools.
69
Beauregard, Robert A. (ed.), 1989. Economic Restructuring and Political Response. Newbury Park, London and
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altered the face of the city but has also created major job losses. Between 1998 and 2004, more than 40 million jobs were lost in state and collective sectors, although many have been replaced by the private and informal sectors. Private enterprises created more than 20 million new jobs during the same period. A survey conducted by the Ministry of Labor and Social Security in 66 major Chinese cities in 2002 shows that 65 percent of the laid-off workers from state-owned enterprises found jobs in private enterprises. During 2000-2003, exports of private firms rose by an average of 150 percent annually. 3.8.12
Despite these gains in the private sector, Chinese cities and towns have been under pressure to absorb the layoff of tens of millions of employees by loss-making SOE’s. A total of 8.27 million were registered as formally unemployed in 2004, resulting in a registered urban unemployment rate of 4.2%. This figure however only covers the registered urban residents. Informed source indicates that the surveyed urban unemployment rate was in the region of 7-8% in 2004.70
3.8.13
The urbanisation process also involves the transformation of rural workers to the urban economy, with cities and towns becoming increasingly important in absorbing surplus rural labour. This occurs as rural populations in the urban fringe are granted urban hukou either from land requisitioning to accommodate urban expansion, or through reclassification. Given the drive for further urbanisation as outlined in the National Urbanisation Policy, the number of rural workers that are expected to join the urban workforce will only increase. Gale Johnson 71 projected for instance that rural employment would decline by about 3% per annum until 2030, thus requiring an average annual increase in non-rural employment of 12-15 million jobs. 72 Chinese experts come up with similar numbers, although through different calculations. For instance, He suggests that 10 million rural workers will join the urban labour force under the assumption that 1% of the rural labour force will become urbanised each year. 73
3.8.14
At the time of his writing, Johnson hoped that much of this increase could be absorbed by the township and village enterprises (TVEs). However, while a large number of nonfarm jobs were created in the countryside by the TVEs in the 1980s and the first half of 1990s, the TVEs have entered a phase of decline or stagnation since mid-1990s, although there has been a slight recovery in the past few years (see Figure 12 below). Official statistics shows that during 1999-2004, the TVEs added on average only 2.22 million new jobs per annum. By setting a targeted annual increase of 2.5 million jobs in
70
Ping
He,
(2006),
Develop
Labour
Market
and
Improve
Social
Security,
HYPERLINK
"http://www.cdrf.org.cn/2006cdf/report3_cn.pdf" www.cdrf.org.cn/2006cdf/report3_cn.pdf (accessed on 15th Sept, 2006) 72
D. G. Johnson, “ Agricultural adjustment in China: problems and prospects,” Population and Development Review, 26(2), p. 329 (of 319-334) He (2006).
73
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this sector, the 11th FYP acknowledges implicitly that this low growth trend is set to continue.74 Therefore the sizable shortfall will have to be made up by growth in urban areas. 3.8.15
The severity of the urban employment situation in China is often not fully comprehended because previous researchers have only considered the aggregate figures, which suggest that urban employment would rise by about 8 million a year when the rate of economic growth maintains its current level of 8-9% a year.
Figure 12.
Economic Growth and Decline of TVEs
2000
16
12 1000 10 500
8 6
0 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
4
Annual rate of growth of GDP(%)
Employment change over previous year (10,000)
14 1500
-500 2 -1000
0 Year employment change
GDP annual growth
This implies that about 10 million urban workers (including the currently unemployed) will not be able to find jobs, and therefore the rate of unemployment will rise, although not substantially. Urban employment in China is however difficult to assess, mainly because the official statistics leave important gaps. Official statistics provide total number of urban employment as well as breakdowns between ten categories of economic units in urban areas (see Table 19). However, since 1989, there has been a growing gap between the total number of employed persons stated and the sum of the employment in the ten categories. In fact, by 2004, the former is 61% more than the latter, leaving more than 100 million jobs unaccounted for. 3.8.16
74
The growth of the informal sector goes some way to help explain this residual gap. Firstly, the ten categories cover every conceivable kind of business in the urban areas, and therefore the only possibility is that the residual encompasses employment that exists outside these categories. Secondly, the Research Institute of Social Security
th
Overall development targets for TVEs during 11 five-year plan are determined HYPERLINK
"http://www.cte.gov.cn/index/asp/xqxw.asp?idd=1874" http://www.cte.gov.cn/index/asp/xqxw.asp?idd=1874 (accessed on 15th Sept, 2006)
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under the Ministry of Labour and Social Security, reported that a survey in 2002 indicated that about 70-80m people were employed in the informal sector, which is of similar magnitude to the gap for that year.75 (The following graph plots the growing size of this gap. See Figure 13). We are also aware that the former was calculated on the basis of the data collected from the 5th National Population Census, while the latter represents registered employed persons, further clarifying the significance of the informal sector.76 This implies that there are 100 million urban employees that are not employed in the formal sector, and thus are most probably outside the protection of law. Figure 13.
The growing size of the Chinese Urban Informal Sector
Number of jobs (10,000)
12000 10000 8000 6000 4000 2000
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
0
Year Number of jobs
3.8.17
Despite these immense shifts in employment, by the end of 2004, the state sector was still the largest employer (40.8%), followed by the private sector (18.2%), self-employed (15.3%) and the FIEs (6.3%) (including enterprises with investment from Hong Kong, Macao and Taiwan, as well as foreign countries).77 A key challenge for city managers and metropolitan level government in the coming decades is therefore to improve the performance of the state sector including continuing to exploit its potential as an employment source, whilst continuing to support the growth of the broadly-defined
75
He, Ping (2006), Develop Labour Market and Improve Social Security, http://www.cdrf.org.cn/2006cdf/report3_cn.pdf" www.cdrf.org.cn/2006cdf/report3_cn.pdf (accessed on 15th Sept, 2006) 76
A note on Page 125 of China Statistical Yearbook 2006 reads:” From 1990 to 2000, the total number of employed persons, the sub-total of urban and rural employed persons have been adjusted in accordance with the data obtained from the 5th National Population Census. Since 2001, these data are calculated based on the annual population sample survey. As a result, the sum of the data by region, by ownership and by sector is not equal to the total". We are grateful to Mr. Zhang Gengtian, NDRC, for clarifying this point for us.
77
Using the stated total, rather than the calculated sum, would significantly reduce the weight of these sectors. But doing so would logically be incorrect.
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private sector (including the private, self-employed and the FIEs) which will be a key feature in the drive to create new employment opportunities in China. Local authorities that are seriously concerned with the long-term prospects of their city economies need to shift policy emphasis towards the private sector. 3.8.18
One of the critical challenges however is not only the economic structuring of the city, but the relationship between cities, which is particularly important when considering metropolitan level government. Under the planned economy, Chinese economic units, ranging from enterprises to cities and regions, tried to achieve self-sufficiency by developing a comprehensive range of industries and services, rather than trying to specialise by building on their comparative advantages. This policy meant that Chinese cities were typically characterised by SOE’s, built around pillar industries. Economic restructuring entails the questioning of trusted policy and planning tools such as the designation of pillar industries and the relationship between cities, which currently suffer from the lack of market integration, sometime referred to as zhu hou jing ji (economic dukedom).
Table 19. Urban Employment in China, 1998 - 2004 Urban Employment (10,000)
Change and Contribution (1998-2004)
Grand total Sum of 10 subcategories
1998
199 9
2000
2001
2002
2003
2004
2161 6
224 12
23151
23940
24780
25639
26476
1591 8
155 76
14988
Share (%) (2004)
Change in jobs (10,000)
Share in chang e (%)
4860 14782
15138
15731
16452
100 100 534
State-owned units
9058
857 2
8102
7640
7163
6876
6710
40.79
-2348
- 440
Collectivelyowned units
1963
171 2
1499
1291
1122
1000
897
5.45
- 1066
- 200
Cooperative units
136
144
155
153
161
173
192
1.17
56
10
Joint ownership units
48
46
42
45
45
44
44
0.27
-4
-1
Limited liability corporations
484
603
687
841
1083
1261
1436
8.73
952
178
Share-holding corporations ltd
410
420
457
483
538
592
625
3.80
215
40
Private enterprises
973
105 3
1268
1527
1999
2545
2994
18.20
2021
378
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Urban Employment (10,000)
Change and Contribution (1998-2004)
Units with funds from Hong Kong, Macao & Taiwan
294
Foreign funded units
293
306
332
345
391
454
563
3.42
270
51
Self-employed individuals
2259
241 4
2136
2131
2269
2377
2521
15.32
262
49
306
310
326
367
409
470
2.86
176 33
3.8.19
The socialist legacy in China has emphasised vertical coordination, i.e. a market economy depends and thrives on intense horizontal collaboration. Research and experience suggest that, while this is a change of a long-term nature, FIEs can play an important role in fostering market coordination and clustering in the Chinese context, as companies from the West appears to be more inclined to engage in horizontal collaboration thanks to a different industrial tradition. 78 Secondly, the relationship between the state and enterprises needs to be further adjusted. Despite progress, while absorbing a large proportion of financial resource, the dominant state sector still suffers from a high incidence of loss-making. On the other hand, the domestic private sector, though numerous in numbers, is still too weak and limited to anchor local economies among Chinese cities with the notable exception of those in Zhejiang (see case study in Appendix). This is a problem especially for the inland cities. Changing this will require fundamental changes to the outlook of government officials and the policy framework. A better balance in policy emphasis and resource allocation is required, with the metropolitan scale of planning providing opportunities in this regard.
3.8.20
De-industrialisation is however not an easy process. While the most visible effect is in terms of job loss and the challenge of re-employing the workers, experience from cities in developed countries has shown that this requires a shift from an investment-led economy to a knowledge-based economy, as well as the revamping of the physical fabric.79 A key bottleneck in realising this transition is however the lack of skills and training of the labour force, along side infrastructure.
3.8.21
Basically industrial restructuring cannot be realised without the support of appropriate infrastructure and human resources. A particular point to note is that with ICT and
78
. J. Kim and L. Zhang “Formation of FDI Clustering – A new path to local economic development? The Case of Qingdao” (forthcoming), Regional Studies.
79
. Michael Peneder, serguei Kanovski and Bernhard Dachs, “ What Follows Tertiarisation? Structural Change and the Role of Knowledge-Based Services, “ Service Industries Journal, 2003, vol. 23 (2), pp. 47-66.
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advanced technology, physical distance has become less an obstacle for development. But it does requires that the human resources offered are able to off-set this barrier. In other words, for cities in the western and central regions, greater emphasis need to be placed on the investment of telecommunication technology and related industries, and on labour force training that are able to take advantage of such opportunities, in comparison with the coastal cities. 3.8.22
In particular, the research skills available in local universities and research institutes need to be explored to their full potential. This means that rather than calculating the ratio of university students per 1,000 populations, it should be asked, in what specific areas local universities and research institutes have a particular edge either nationally or internationally?, and what can be done to exploit these potentials?.
3.8.23
Finally, fully assimilating the increasing urban labour supply will prove to be a demanding task. This is partly because there exits a large backlog of work to be done in this area. Although the government has issued a number of decrees requiring local authorities to offer migrant workers basic level of protection, the extent to which these rules are followed varies widely because of budgetary constraints and low political priority. Inevitably, the inland cities have less capacity to deliver on their obligations.
3.9
Financing Urbanisation
Investment in Infrastructure 3.9.1
Investment in urban infrastructure in China is impressive. Investment during the 7th, 8th and 9th Five Year Plan period was RMB 50 billion, RMB260 billion and RMB700 billion respectively. Current expenditure is equivalent to between Y950– equally 11% of average per capita urban household incomes. Table 20 shows how this expenditure was used. Almost half the expenditure was on roads and bridges. The next highest sector was sanitation and wastewater with just under a quarter of the total. Relatively little was spent on either water supply or public transportation. It is nevertheless feasible that spending on urban roads and bridges may soon peak following the construction of ring roads and flyovers and central area roads, thus enabling more funds to be diverted to other sectors.
Table 20. Expenditure on Urban Infrastructure, 2004 Category Roads and bridges Sewage/wastewater treatment and environmental sanitation Landscaping/open space Public transport Gas/central heating Water supply Solid waste Other (not specified) Total
Expenditure (billion RMB) 212.9
% 45 %
73.5 35.9 32.8 32.2 22.5 5.3 61.1 476.2
15 % 8% 7% 7% 5% 1% 13 % 100 %
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Category % Government Expenditure % GDP GDP urban per capita * Based on an urban population of 530 million in 2004.
Expenditure (billion RMB) 18 % 4% 950*
%
Source: China National Statistics 2004.
3.9.2
At present Chinas urbanisation process is mandated from Central Government via five year plans (see Box 3.6), but is predominantly implemented and financed at the municipal level. The fiscal relationships between the Central and Municipal Government was altered in 1994. Essentially, fiscal revenues were shifted from subnational to central government. 80 Consequently local government revenues as a percentage of total national revenues have decreased dramatically from around 80% in 1993 to under 50% in 2002. On the expenditure side, sub-national expenditure as a proportion of total fiscal expenditure has remained fairly constant at 70%. There is thus a widening gap between revenues and expenditures at local level reflecting the decentralization of responsibilities to local governments which are now essentially responsible for all local expenditures, including, for instance, urban infrastructure, education, social security, and health. In 2002, this gap was around RMB800 billion or 50 percent of total sub-national expenditure.
3.9.3
These fiscal arrangements effectively means that central government and local government have independent sources of tax revenue and that in effect, local government in China is more independent than many other federal economies. In China all levels of Government (i.e. city, district, township etc) are also mandated to promote economic growth and improve their urban environments and infrastructure, with very little in the way of finance. There is therefore a strong incentive to seek funding through alternative means including transfer payment from central government, inside budget revenue from tax and other revenues, direct debt financing, indirect debt financing and private sector financing. These financing mechanisms are discussed in detail in the Table 21. Transfer payment from central government is important for financing poverty alleviation, education and social insurance. The bulk of funds to support urban development however comes from indirect debt financing including loans from commercial banks and the China Development Bank, and outside budget revenue, or land leasing.
80
Su M and Zhao Q., 2006, The Fiscal Framework and Urban Infrastructure in China, WPS4051, World Bank, Washington. Unless stated, the following data comes from this source.
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3.9.4
Debt financing is one of the major sources of funds and is the second largest source for infrastructure projects (26.91% of the total in 2003). In 2001 more than 60% of Chinese cities had infrastructure loans with banks or outstanding loan applications. Total loans to local governments amounted to RMB74.2 billion in 2001. Local governments often face difficulties in repaying loans if the infrastructure projects do not produce a positive cash flow. The recent policy trends are towards restricting lending, promoting a more commercial basis and reducing the national problem of non-performing loans. These policies are likely to increase the already difficult financial situation of local governments faced by increased demand for expenditure but reduced sources of finance.
Box 3.6 Financing Five Year Plans Currently municipal government establishes a 5 year plans through NDRC, which indicates major urban development projects for the coming 5 years. The municipal congress approves the 5 year plan and the 5 year plan is then transferred into an annual plan, which includes major infrastructure projects and the main components of the city master plan. Currently once the annual plan is established, municipal government tries to meet financing needs through a variety of current alternative finance options available to them including transfer payment from central government, inside budget revenue from tax and other revenues, direct debt financing, indirect debt financing and private sector financing.
3.9.5
The other most reliable means of obtaining revenue for investment in urban development has come through the outside budget revenue or land leasing/transfers to the private sector via land requisitioning. Nationally, “land transfer fees account for at least 20-30% of total sub-national government revenues”81 and amounted to around 300 billion annually or over 60% of total investment in urban infrastructure, for which the great majority of these revenues are used82. By 2005, it is estimated that revenue from sales of land had reached 580 billion Yuan. Its proportion in total government revenue has increased from 4.49% in 1999 to 24.29% in 2004.
3.9.6
This revenue has been important in terms of allowing China’s cities to expand in a more sustainable way than in most other countries (i.e. the avoidance of wide scale slums), as it has provided municipalities with revenue from direct sales or land use rights at market prices (after purchase at current use values) and as a means of securing mortgages. Yet it is also one of the major causes of the over-requisitioning of land and involuntary resettlement described previously. Typically, land is disposed at six to eight times the compensation cost, although multiples of 20-30 are not unusual and can be as high as 75.83 This differential, allied to the ability to use the requisitioned
81
Deng, 2003
82
The amounts raised by individual cities can also be considerable: Shanghai collects RMB10 million annually and Guangdong has raised RMB20.5 billion since 1992.
83
Land for industrial purposes can, however,be disposed at or below cost price owing to the pre-eminent mandated objective of achieving rapid economic growth. See World Bank/ DRC, op. cit. In practice, it is not easy to assess the
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land as collateral for bank loans and mortgages, provides city authorities with a major incentive to requisition land, the impact of which can be serious – a residential project of 7,000 mu in Dalian required the displacement of 63 village enterprises, 350 private companies and 10,000 farmers84. 3.9.7
3.9.8
The need for new sources of finance is thus apparent. While increased user charges can be used to increase investment funds for water supply and sewage treatment, they are less applicable for other sectors. Directives from Beijing in October 2007 were given to introduce property tax (see Box 3.8). The potential revenue generated could be substantial – between RMB300 billion and RMB110 billion per annum (see Box 3.7).
Indicative Revenues from Property Taxation a. Based on GDP: Property taxes = 2.5 percent of GDP (based on UK/US data) China GDP 2004 = RMB 11, 650 billion (excl. agriculture as rural areas would not pay property taxes). Total Revenue: RMB 290 billion b. Based on Household Income: Property tax = c. 3 percent of average urban income (UK data)
It is important to note that revenue currently generated by municipalities tends to be spent Average Chinese urban per capita = RMB by the municipality in the urban area and not 9,000; urban population: 400 million (excl. migrants) in the smaller settlements and rural areas (that tend to fall within the districts Total Revenue: RMB 108 billion jurisdiction), which creates inequality within c. Total Expenditure on urban regions. This occurs because municipal- infrastructure, 2004: RMB 480 billion district transfers have not been legally d. Property Tax Contribution: High codified, and the numbers of transfers mean estimate: 60 percent Low estimate: that the ‘size and direction of net flows is not 22.5 percent easily determined.’85 In most cases, however, Source: Halcrow/ Tsinghua, op. cit. districts receive little in the way of transfers from higher levels of government and are heavily reliant on revenues generated by activities situated within their boundaries but. Su, op. cit. estimates that only around 30 percent of sub-national revenues are available to counties and townships. Consequently if revenues are limited, investment in infrastructure and other services will be seriously constrained86. The implication is that municipal governments although administratively responsible for the towns and villages located in their hinterland, tend
‘profit’ arising from land sales given the different levels, and costs, of infrastructure that are provided, and the lack of comprehensive data on land disposal operations. 84
Halcrow/ Tsinghua University for World Bank, 2007, Sustainable Development on the Urban Fringe, China Country Study.
85
ADB /Ministry of Finance China, (2000). Managing Urban Change: Strategic Options for Municipal Governance and Finance, Manila.
86
Research into the ability of smaller counties to provide funds for road investment, in admittedly poorer parts of Sichuan province, showed very limited financial capability. See Halcrow/ADB, 2002 and 2004, Southern and Central Sichuan Highway Development Projects, Final Reports. See also Su, op. cit. who describes the financial situation of counties and lower level entities as having ‘worsened and worsened’.
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to concentrate their resources on the main urban centre, creating divisions. Inequality also occurs because the urban areas and the urban fringe present greater opportunities for land leasing than more peripheral towns and villages. 3.9.9
Another problem is that in this highly competitive environment, municipality tends to use revenue for infrastructure investment often related to foreign direct investment, and reduce the expenditure on basic public goods such as education and health care.
3.9.10
Implementation of a metropolitan level of governance will need to take account of the current mechanisms in which finance is obtained and distributed within the boundaries of the metropolitan area for urban development87. The current situation where there is very little incentive for municipalities to cooperate (they are in fact competing for tax and other revenue sources including FDI) will have to be tackled. Financing of plans for the metropolitan area will need to be based upon a realistic assessments of available financing, from users, State government and from private sector development. Imperative to this are more sustainable revenue sources (i.e. property taxation) which avoid excessive land requisitioning, the wasteful use of resources and corruption. Box 3.8 Introduction of Property Tax In October 2007 the introduction of Property Tax for Urban Properties has begun, and offers great potential for generating alternative revenue streams for governments, and potentially reducing reliance on land requisitioning.
Table 21
Finance Mechanisms descriptions and Explanations
Financing Mechanism
Description
Limitations
Transfer payment from central government
These include payments related to culture, education, industry, poverty alleviation and social insurance to local governments, especially to poor provinces or municipalities.
Some payments are only designated to certain sectors or regions. For example, social insurance payment is only transferred to Northeast China Region and some other provinces.
Inside budget revenue from tax and other revenues.
The proportion of inside budget revenue contributing to urbanization has declined for last 20 years. The proportion of inside budget revenue in total sources of funds decreased from around 50% in 1999 to 9.22% in 2003.City construction tax and surcharge used to be the most important source for urban development. In 1990 the two items accounted for 40% of the total sources for infrastructure projects. Due to increasing demand for urban development, local governments use more inside
There is no regular revenue inside budget designated to urban development since city construction tax and surcharge on public utilities are too small to meet demand.
87
Although complicated, in cases where the municipality falls within the jurisdiction of one sub-provincial city’s (i.e. Chengdu) the situation is better than in situations where the Metropolitan region falls outside this
boundary (i.e. Wuhan).
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budget revenues to meet the government expenditure. Outside budget revenue a major source for government funded urban development, includes sale of land, lease of land and fee revenue
Lease of lands includes lease revenue, land development fee, net land earnings. Since 1993 when government implemented a tax reform, lease of lands has become an important source of funds. Lease of lands is also called second source of government budget and provides local government with great flexibility for infrastructure investment.
Direct financing
debt
Local governments utilize direct debt financing for urban development through bonds issued by central government, loans and grants from foreign governments and agencies such as the World Bank. and the Asian Development Bank. For last 10 years, expenditure on urban infrastructure significantly through bond financing has increased. It is estimated that from 1998 to 2001, 76.6 billion Yuan of government bonds were issued for 967 urban infrastructure projects, covering water, roads, gas, heating, solid waste and waste water sectors, and 95% of the medium size cities and some urban areas in the counties of western regions. It is estimated that total amount of international loans and grants used for infrastructure projects was around 52.6 billion Yuan for last 10 years, accounting for 10.6% of the total international source. In the 1980s, 95% of the foreign inflow was in form of international loans. Since 1990s, FDI and BOT have become popular in addition to international loans.
Based on the Budgeting Law enacted in 1995, local governments should follow the balanced budget principle and are not entitled to issue municipal bonds except for special circumstances.
Indirect financing
debt
Indirect debt financing includes loans from commercial banks and China Development Bank.
Under current regulations, local governments are not entitled to borrow directly from banks. However, most local governments rely heavily on banks for development purposes. Whilst projects may have positive impacts on the environment and living standard in the municipality, local governments have to bear the costs of debt payment. As many infrastructure projects span a long construction period and are costly, local governments often face difficulties in paying their loans if the infrastructure projects do not produce a positive cash flow. Local governments therefore have to borrow new loans to repay the old loans and as a result face higher financial risks.
Second largest source for infrastructure projects (26.91% of the total in 2003Domestic bank loans amounted to 614 billion Yuan in 2003, accounting for 26.91% of total source of funds. There are three forms. 1. Local government authorizes its state-owned investment companies to be involved in infrastructure development and borrow from banks (including commercial banks and development banks). In return, local governments provide direct guarantee and subsidy. Over the last few years, the China Development Bank has developed a new business called “reliance on government guarantee”. For example, the bank has an agreement with Nanhai District Government, Foshan Municipality, Guangdong Province in 2001 and 2002 and agreed to provide a package of loans with 13 billion for a high tech zone, gym, railway, expressway, and other infrastructure projects. 2. Local government authorizes state-owned firms to issue corporate bonds for infrastructure projects. At the same time, local governments provide guarantee. Pudong Development bonds (with 5 year maturity and 9% interest rate per annum) and Jinan Water Development Bonds are two examples of such indirect debt financing. 3. Local governments source funds through trust companies for infrastructure projects. Many municipal governments establish their trust plan for urban development and provide a certain proportion of subsidy based on the amount of investment. For example, Shang Tunnel Company received government subsidy at 9.8% of
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total investment for 25 years. After 20 years, the project is transferred to local government. Other financing (including private source)
Central government has issued a series of policies to allow and encourage private sector and foreign firms to be involved in infrastructure provision. 7 utility companies in water supply, gas, public transportation, and subway sectors have been listed on the Shanghai Stock Exchange and Shenzhen Stock Exchange. In addition, some water and rail way companies issue corporate bonds with 3.0 billion Yuan for last 10 years, accounting for less than 0.136% of the total sources of funds, lower than most of countries. One example of private participation in infrastructure projects through BOT is the Quanzhou Chitong Bridge with 250 million Yuan investment, which was built, operated and transferred by a joint venture between a private firm (Mingliu Co.) and an institution authorized by municipal government. Another example, a county government in Sichuan Province signed an agreement with Sichuan Ruiyun Group to develop a new district through BOT with the firm building and operating for 50 years, transferring the project to municipal government after 50 years.
Whilst Central government has issued policies to allow private sector and foreign firms to be involved in infrastructure provision, private participation is still strictly limited and barriers for private sector participation in infrastructure projects include: Market entry barriers. Public utilities and infrastructure sectors are highly regulated by Chinese government and it is extremely difficult for private firms to obtain licenses. Administrative barriers. The approval processes for private firms are slow. Credit barriers. Private firms have difficulty in obtaining loans from commercial banks for infrastructure projects
However, private participation is still strictly limited. The barriers for private sector participation in infrastructure projects in China include: Market Entry Barriers. Public utilities and other infrastructure sectors are highly regulated by Chinese government. It is extremely difficult for private firms to obtain the license in the related sectors although central government intends to diversify the sources of funds. Administrative Barriers. It also takes time to go through the approval processes for private firms. Credit Barriers. Private firms have difficulty in obtaining loans from commercial banks for infrastructure projects. Often there exists a mismatch between responsibilities and resource availability and usually there is a huge gap between funding needs for the projects identified in development plans and the actual sources and amounts of finance available to municipal authorities.
3.10 3.10.1
Implications of Future Urbanization The information presented in this Chapter gives rises to several certainties and several uncertainties in terms of the future planning and development of Chinese metropolitan areas and regions. The certainties are considered to be: •
The urban population and physical expansion of urban area will continue for the foreseeable future. Best estimates are: a 50% increase in the urban population and a doubling of current urban areas by 2020.
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•
•
•
•
•
•
The great majority of the increase in the urban population will be previously rural residents who either migrate to the cities or are living in peripheral villages which will become incorporated into the main urban areas. Due to declining household size, the demand for new housing from the existing urban population will remain significant for the foreseeable future. Infrastructure networks (water, sewerage and roads) will need to be extended into the new urban areas. If these are concentrated in and around existing county towns, the facilities in these will need upgrading with appropriate linkages provided to the main urban centre. Likewise, infrastructure will need to be improved in villages that become enveloped by the expanding cities. The development of improved and integrated public transport systems will be a priority as there is little precedent in the major cities of developing countries outside the USA (and Australia) for car-oriented urban transportation strategies. The same applies to the richest Asian cities, e.g. Japan, Korea and Singapore. There will need to be a reappraisal of the financing of urban infrastructure if the over-requisitioning of land leading to inefficient provision of infrastructure, unnecessarily dispersed settlement patterns, premature loss of agricultural land, and increasing social discontent arising from inequitable and non-consultative land acquisition practices are to be avoided. Increased user charges and property taxation appear to be the most appropriate options. The amount of already requisitioned land which has yet to be developed and probably cannot be returned to cultivation provides a major reserve of land which can accommodate a substantial proportion of future land demands. Additional land demands will come from the continuing central area redevelopment projects. The importance of these in terms of future land demands will however decrease over time. In contrast there are several uncertainties which also need to be taken into account. These relate primarily to the policy context, the strength of which is probably unique amongst developing countries today. The most important of these are the hukou and the one child policy. Changes to the one child policy may well become necessary to avoid the type of high dependency ratios which are now causing great concern in Europe, Japan and Korea; any changes, which would dramatically increase the demand for schools, are however unlikely to have a significant impact in the medium term.
3.10.2
This is not the case with hukou. If the current situation persists along with current policies, the likely outcome is deteriorating living conditions for migrants in the peripheral settlements where they now live AND a major oversupply of, often unaffordable, housing for the current urban population, as the demand from relocated urban household trials off. On the other hand, the demand for schools and additional health facilities would not increase significantly if migrants continue to be denied access.
3.10.3
The government has recently made the creation of a harmonious society one of its foremost national development goals. In conjunction with the objectives to reduce the conversion of agricultural land, reduce pollution and generally improve environmental conditions, the priorities become:
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• • •
• • • 3.10.4
Explicitly including the needs of migrants88 and rural residents on the urban fringe in the future urban policy, especially in terms of housing and education. Increasing infrastructure expenditure in rural areas within municipal boundaries. Re-orienting land conversion and development policy to maximise the use of underdeveloped land within the current urban boundary and land which has already been requisitioned in order to create a more efficient urban form and reduce the premature displacement of farmers. The development of intra-urban and intra-metropolitan public transport systems. Controlling pollution from industrial enterprises, especially SMEs. Improving the treatment of wastewater.
From the above it is apparent that the future development and metropolitan regions is far more than a question of ‘projection and provide’. Rather it is a question of making the most of existing resources and potentials, increasing the integration of urban and peripheral rural areas (i.e. reducing the urban-rural divide), making urban development decisions more demand/ market responsive so as to reduce the unnecessary allocation of scarce financial resources to projects unlikely to be financially viable, identifying and acting upon key strategic development issues in a concerted and integrated way. If all of these are guided by the overall goal of creating a harmonious society within the context of development which is sustainable economically, socially and environmentally, China has potential to provide far more lessons for the rest of the world than it can learn from them.
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Quite apart from the shifts in the policy context, it is recognised that this is far easier said than done owing to the lack of information on the characteristics of urban migrants. In this context, analysis of the migration data collected by the 2000 Census is seen as a priority. The ongoing ADB study on urban migration being undertaken by Beijing Normal University will also provide valuable information on this topic.
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4
Wuhan Metropolitan Region Case Study
4.1
Review Process
4.1.1
To comprehend the impact of urbanisation on metropolitan areas and to gain insight into the issues that could arise in establishing metropolitan regions both with regard to finding mutually beneficial actions/achieving a common good and in continuing to development via current trends, case studies of two metropolitan regions are explored. The case study reviews follow a similar process: • • •
•
• •
An outline of each region is provided delineating its area and reasons for the delineation; General characteristics of the core city and region are provided setting a context of current trends, population, management and environmental issues; A range of urbanisation scenarios are provided to 2020 for each region using high, medium and low urbanisation levels. These are prepared cognisant of national urbanisation scenarios prepared in Chapter 3; The consequences of the urbanisation scenarios are then addressed across eight topic areas – (i) the urban economy; (ii) urban poverty; (iii) land supply and land use; (iv) sustainable transportation; (v) environment; (vi) institutions and governance; and (vii) finance. The topic areas incorporate a review of the existing situation as well as that which could occur if current trends continued to 2020 without a change to policy intervention. An overview is provided on the key issues which would benefit from metropolitan regional management being introduced; and Finally a summary of regional management issues needing to be addressed to achieve more sustainable settlement patterns, attain better managed urban development and gain buy-in from the key stakeholders is documented.
4.1.2
The case study of Wuhan is investigated in this Chapter and Chengdu in Chapter 5. Chapter 6 summarises the issues, consequences of urbanisation continuing under current policies and management issues with regard to these loosely defined metropolitan regions.
4.2
Overview of the Wuhan Metropolitan Region
4.2.1
Wuhan is the capital of Hubei Province and is located at the juncture of N-S BeijingGuangzhou Railway, E-W Shanghai-Chongqing Railway and the Yangzi and Han Rivers in what is known as the “Golden Canal”. The location is identified in Figure 14 over page. The core urban area of Wuhan City formerly consisted of three cities separated by the two rivers. The name Wuhan derives from the three cities of Wuchang, Hankoa and Hanyang (with “Wu” taken from the first city and “Han” from the other two). Wuhan is a sub-provincial city which now contains 13 district towns and
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three national-level development zones. 4.2.2
Wuhan is the dominant city in the wider area. Its population reach around 8.5 million in 2005 with just over 5 million classified as urban residents (c.63%). The city has undergone rapid urbanisation since 1978 building on industrial development (initially heavy industry and latterly fibre optic and hi tech industries) and its locational advantage being on the Yangtze River thus gaining access to the east coast megalopolis at the mouth of the Yangtze River Delta.
Figure 14.
Hubei Province and Wuhan
4.2.3
Through the Provincial Government (Provincial NDRC) a loosely defined metropolitan region has been established which is in the early stages of exploring regional coordination processes. No official Metropolitan Authority exists although 3 officers run a Metropolitan Coordination Office which is supported by the mayors of 9 city governments as well as the mayor of Wuhan sub-provincial city authority itself. The “boundary” of the Region is based on the contributing city authorities’ own notions of what comprises their region. In the case of the Wuhan Metropolitan Region this is based on transport links from Wuhan to surrounding cities and plans to strengthen such links in the future. Thus the nine city government administrative boundaries delineate the Wuhan Metropolitan Region or the Wuhan City Circle as it is locally called.
4.2.4
The city authorities comprising the Wuhan Metropolitan Region are Wuhan, E’zhou, Huangshi, Huanggang, Xianning, Xiaogan, Tianmen, Xiantao, Qianjiang. The outer boundaries and key urban centres in the Region are illustrated in Figure 15 below. The total area of the Region is 57,800 square kilometres. The total urban population in the Region was nearly 10.5 million (2000).
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Figure 15.
The Wuhan Metropolitan Region
4.3
General Characteristics of the Wuhan Metropolitan Region
4.3.1
The Wuhan Metropolitan Region is the fastest growing in Central China. In 2004, the GDP ratio of the primary, secondary and tertiary industries in the Region was 9%, 49% and 42%, respectively. However, the overall development and economic influencing power of Wuhan Metropolitan Region remains comparatively weak. There is a large gap between Wuhan Metropolitan Region and the three major metropolitan regions in China, i.e. Yangtze River Delta, Pearl River Delta and Bohai Rim, as measured by GDP, per capita GDP and industrialization levels. The GDP per capita of the Wuhan Metropolitan Region was estimated to be around a quarter of that of the Pearl River Delta and about a third of the Yangtze River Delta. Similarly, with agricultural population in Wuhan Metropolitan Region constituting two-thirds of the Region’s total population, the urbanisation rate is 33% - which is 11% and 26% lower than that of the Pearl River Delta and Yangtze River Delta Regions respectively. These comparisons are illustrated in Figure 16 below.
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Figure 16. Comparison of Wuhan and Chengdu with other metropolitan regions in terms of GDP per capita and Urbanization Rate in 2004
4.3.2
89
Within the Wuhan Metropolitan Region there are significant differences and variations amongst the city authority areas. The Wuhan City authority (municipality) area constitutes about one third of the Metropolitan Region and a small proportion of the Province, but contains more than a half of the total Provincial population, producing over 60% of the Provincial GDP in 200589. The per capita GDP was 1.15 times that of the whole Province. Regional economic growth among the 9 city authorities shows diversity (see Figure 17), Wuhan Municipality dominating regional growth; its GDP per capita and urbanization rate is much higher than other cities. The urbanization rate within the Region is about 40%. However, Wuhan is exceptional with around 63%. City authorities of Huangshi, E’zhou, Xianning, Xiaogan, Qianjiang and Xiantao are just beginning to take-off with industrialization while Huanggang and Tianmen lag being at the initial stages of industrialization.
th
Report, 30 July, 2006, http://www.hb.xinhuanet.com/newscenter/2006-07/30/content_7644734.htm, see also “Wuhan Metropolis Master Plan”
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Figure 17. GDP Per Capita and Urbanization Rate of Nine Cities within the Wuhan Metropolitan Region in 2003 (10 thousand Yuan, %)
Source: Wuhan Statistical Yearbook (various years) and Consultants estimates
4.4
Characteristics of the Municipalities
4.4.1
To gain an understanding of the type of development occurring in the region and the potential for synergies between the city authorities the nine city authority areas are briefly outlined below.
Wuhan Sub-Provincial City 4.4.2
Wuhan, as the Provincial capital city, is the dominant urban centre in the Region. The City has expanded from 6.9 million in 1990 to 8.6 million (estimated) in 2005 – an increase of around 25% over the 15 year period. The municipality area covers a total of 8,467 km2 giving an average density of 1,000 persons per km2 indicating that a large part of the municipality remains rural. The per capita GDP reached RMB ¥26238 (about US $3364)90 in 2005. In 2004 Wuhan opened a subway rail system with 10 stations serving the down town area within the Hankou District.
4.4.3
The industrial basis of Wuhan is constantly restructuring. The proportional rates of primary, secondary and tertiary industries moved from 6.7:44.2:49.1 in 2000 to
90
US$1=RMB7.80
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4.9:45.5:49.6 in 2005 (see Table 22). Secondary industries have been the engine driving local economic development increasing annually by 16.8% in terms of industrial output value during the 10th FYP period. However it is heavy industry, mainly iron, steel and automobile sectors, which dominates the City’s growth, accounting for 78% of the total industrial output value in 2005. Latterly hi-tech industries have become increasingly important in Wuhan’s economic development. This sector’s growth is based on a concentration of research and development and production facilities. The output of high value and new technology sectors reached ¥80 billion in 2005, averaging an annual growth of 12.7%. Notably, the Wuhan East Lake National Hi-Tech Park, known as “China Optical Valley”, is emerging as the lead location for high-tech industries throughout the country, especially for optical fibre, communication and production industries. In 2005, its outcome amounted to 10% of the City’s GDP 91. Table 22. Changes in the GDP Proportion: Primary, Secondary, Tertiary Industries Growth Ratios (%) YEAR GDP proportion
Annual growth (%)
1999 7.2 44.1
2000 6.7 44.2
2001 6.4 43.6
2002 6.2 43.3
2003 5.9 43.3
2004 5.4 43.9
2005 4.9 45.5
48.7 8.4
49.1 11.2
50.0 10.7
50.5 9.9
50.9 10.5
50.7 16.0
49.6 18.9
Primary Industry
3.5
3.6
4.5
6.4
5.2
7.5
7.2
Secondary Industry
6.4
11.5
9.2
9.1
10.4
17.7
23.4
Tertiary Industry
11.0
12.0
12.8
11.1
11.2
15.6
16.3
Primary Industry Secondary Industry Tertiary Industry GDP
4.4.4
Between 1989 and 1996 the City’s urban area was expanding at around 700 ha per year. This doubled to 1,454 ha per year between 1996 and 2002. In response to rapid growth and to better manage urban development the “Wuhan Master Plan 1996 to 2020” was adopted which identified 10 new towns on the periphery of Wuhan to encourage industrial development outside of the urban core and decentralise population. This had an impact on growth in Wuhan and since 2002 it is the suburban and new town growth which is accommodating much of Wuhan’s urbanisation demand. Significantly it is more the suburbs of Wuhan which is accommodating new development rather than the new towns questioning the success of the Master Plan in directing and managing urban expansion. Figure 18 shows the Master Plan while Figure 19 indicates the spatial and land take implications of Wuhan’s growth.
4.4.5
The Master Plan has been recently refined to establish an urban spatial structure developed on a two rivers and three core centres structure (Wuchang, Hankou and Hanyang) surrounded by a multi axis and multi-centre radius focussing development on
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http://gb.chinabroadcast.cn/8606/2006/07/31/
[email protected]
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three sub-centers: Sixin, based on the development of car industry and manufacture; Luxiang, based on hi-tech industry, education and research; and Yangchunhu, based on the potential created by the construction of railway station as part of the high speed rail network. Figure 18.
Wuhan Master Plan 1996 - 2020
Figure 19.
Urban Growth of Wuhan 1989 – 2002
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Figure 20.
Comparative Urbanisation in and around Wuhan City 1989-2002
Source: Wu-YuJian, 2003
E’zhou 4.4.6
E’zhou is a Prefecture level city containing 3 districts. The population is over a million with the urban population constituting around half that at 552,000 (2000) giving an urbanisation rate of 54% - the highest in the Region outside Wuhan. The city’s administrative area is relatively small at 1,504 square kilometres. E’zhou’s northern city boundary adjoins the Yangtze River and 6 ports are located along side the river including one port capable of handling 10,000 ton vessels.
4.4.7
The city is considered to be relatively industrialised with heavy industries including metallurgy, manufacturing of construction materials, textiles and machinery. Significantly the city is a major logistics and distribution centre given the development of its ports, access to the Yangtze and good road and rail links within and outside Hubei Province. It has a GDP per capita of around ¥26,000.
4.4.8
Whilst E’zhou City area adjoins Wuhan City administrative boundary it is understood that there is very little supply chain linkages between the two administrative areas, reflecting the legacy of the command and control system.
Xiaogan 4.4.9
Xiaogan is also a Prefecture level city with a population of around 5 million in 2000. Its urbanisation rate was around 35%. The economic base of the city area is mixed with industrialisation having occurred over the past 20 years again in the heavy industry sector. The agricultural sector is also prominent in the administrative area’s economy with large portions of land still in agricultural production. This is reflected in the GDP per capita which is one of the lowest in the Region at between ¥10,000 and ¥16,400.
4.4.10
Whilst transport links with Wuhan are good (especially road) similar to E’zhou City it would appear that little synergies exist between Xiaogan, Wuhan and other city authority areas particularly with regard to industrial activities linkages or provision of
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labour. Huanggang 4.4.11
Huanggang City is a Prefecture level city and contains 7 counties, two county level cities as well as two direct administrative divisions. It has a population of 7.1 million (2000) with the administrative boundary covering 9,861 square kilometres. The city’s administrative boundaries are bordered by the Yangtze River to the southwest and the Dabie Shan mountain range to the north. It is linked to Wuhan via an expressway and the Yangtze River with the main port in Wuhan 80 km away up river.
4.4.12
The municipality is primarily rural with an urban population of 1.7 million in 2000. It has one of the lowest urbanisation rates in the Wuhan Region at 24%. Its economy is based on agriculture, some manufacturing and tourism. Bio and herbal medicines are produced and the area is now also becoming well known for organic vegetables, green tea, cattle breeding and freshwater shrimp. One county – Loutian is the leading chestnut producer in China. Industrialisation is recognised to be in the initial stages with the municipality still retaining an agricultural economic base and low density rural and village settlement patterns. Its GDP per capita is the lowest in the Region at between ¥10,000 to ¥16400.
4.4.13
Although sharing an administrative boundary with Wuhan City’s boundary little synergies exist although agricultural produce is transported to Wuhan and other locations in the region.
Huangshi 4.4.14
Huangshi is a Prefecture level city authority located on a southeast bend in the Yangtze River. It has a population of 2.53 million with an urban population of around 1.2 million of which just over half is located in the main city (2000) and an urbanisation rate of 49%. Covering an area of 4,631 square kilometres the city administrative area’s topography consists of rolling hills and many lakes.
4.4.15
Its key location on the Yangtze and linkage to several railway networks has made the area an important distribution, logistics and transportation hub. Industrialisation has been occurring in the area since the 1980s with metallurgy, textiles, construction materials manufacture, electronics, pharmaceuticals, chemicals and food processing industries in operation. The area is plentiful in mineral resources including iron, magnesium, gold, copper, lead, zinc, cobalt and many more. Thus mineral extraction is an important component of the economy. Agriculture is also a key part of the economy with some plants used in pharmaceutical and fragrance manufacture.
4.4.16
GDP per capita is between ¥16400 to ¥22800 making Huangshi one of the lower economically competitive administrative areas in the Wuhan Region. Similar to other city government areas in the Region little economic and industrial supply chain linkages exist with its neighbouring city administrative areas nor with Wuhan.
Xianning 4.4.17
Xianning is a prefecture level city authority located on the southern bank of the Yangtze
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River and across the river from Wuhan. It has an area of 1,501 square kilometres with a mixed terrain of mountains, undulating hills and lakes. Over half the area is forested (56%). Of its 2.7 million population around 920,000 are urban. 4.4.18
The area is served by the Beijing-Guangzhou rail line and with its river frontage it has become an important transportation and shipping hub. Agriculture is an important component of the economy which includes tea plantations and bamboo. Mineral resources are also prevalent including gold, coal, manganese and marble – all of which are quarried or mined. Tourism, given the natural scenery, is also a component of the local economy. Partly as a result of its agricultural, mineral reserves and forestry assets the urbanisation rate is towards lower end in the region at 38%. GDP per capita is the lowest in the Region being between ¥10,000 to ¥16,400.
Xiantao 4.4.19
Xiantao is a sub-prefecture level city and its authority’s boundaries adjoins Wuhan’s south-western border. It has a population of 1.5 million of which around 500,000 are urban.
4.4.20
The area is industrialising with heavy industries such as plastics and chemical manufacture well established. Agriculture still has a role in the local economy. GDP is the lowest of all local authority areas in the Wuhan Region at between ¥10,000 and ¥16,400 per capita. The urbanisation rate is 38% reflecting its initial steps in the industrialisation process.
Tianmen 4.4.21
Tianmen is a sub-prefecture level city authority with a population of just over 1.6 million. Its urban population grew from around 256,000 in 1990 to 370,000 in 2000. The urbanisation rate for the area is one of the lowest in the Region at 26%.
4.4.22
Although some industrialisation has occurred it is in the initial stages. The area is more dominated by rural activities and as such its GDP per capita is one of the lowest in the Region at between ¥10,000 and ¥16400.
Qiangjiang 4.4.23
Quianjing is a sub-prefecture level city authority located on the western edge of the Region. It has a population of just over a million of which around 425,000 were classified as urban (2000). The urbanisation level is around 38%.
4.4.24
The economic basis of the area is natural resources significantly oil and gas. Rock salt is also produced. Agriculture is also a mainstay of the economy which has meant that GDP per capita is at the lower end compared to the rest of the Region at between ¥16400 to ¥22800.
4.4.25
The area is linked to the rest of the Region by road and the Yangtze River. Significant trade interaction with the rest of the Region is minimal.
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Summary 4.4.26
The component nine authority areas which make up the Region are diverse with some showing potential synergies if weak. Wuhan, as a sub-provincial level city and capital of the Province, dominates the Region with regard to GDP per capita, industrialisation and urbanisation growth. Its ability to radiate development and generate synergies with the other 8 city authority areas in the Region has not yet been visible. Transport links appear to be the thread linking the Region together although economic and cultural links are weak. Many of the criteria to delineate regions outlined in Chapter 2 do not seem to apply to the current city authorities making up the Region. Apart from an official “boundary” and an agreement to strengthen transport links there does not seem to be a clear function nor mandate for the Wuhan Metropolitan Region to exist. Economic, trade, supply chain and clustering advantages are not apparent. The Master Plan for Wuhan City area indicates that this authority is beginning to function as a metropolitan area on its own. The surrounding municipalities are forming part of a potential “region” but the combination does not clearly define a metropolitan region. In encouraging new town development with a focus on particular industries linked to the central core by road and increasingly rail, there is no apparent need for Wuhan City, at this stage, to interlink with the other municipalities. The eight other municipalities are developing their own industrial base irrespective of the types of industries developing in Wuhan City.
4.5
Population and Urbanisation
History of Urbanisation in Wuhan 4.5.1
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Urbanisation and population growth in Wuhan municipality92 has been shaped by the same forces and been subject to the same phases as those that have been described in relation to the national situation in the preceding Chapter. This can be seen in Figures 19 and 20 where the initial period of rapid urbanisation following the establishment of the Peoples’ Republic of China in 1949 was followed by the anti-urban thrust of the Cultural Revolution in the 1960s and 1970s. Following Mao’s death in 1976, urbanisation picked up and has continued to this day, first with the development of TVEs and, since the early 1990s, with increasing rural urban migration. Since 2000, the level of urbanisation has attained and exceeded 60%.
Data for other areas of the Metropolitan Region is not available.
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Figure 21.
Urbanization of Wuhan, 1950-2005
Table 23
2005
2004
2003
2002
2001
2000
1995
1990
1985
1980
1976
l970
l965
1955
1949
70 60 50 40 30 20 10 0
l959
%
Wuhan Urbanization Rate,1949-2005
Hubei and Wuhan Population, 1990 and 2000 AREA
Population (millions) 1990
Hubei
2000
Annual Growth Rate
53.97
59.51
Na
21.43
Wuhan Municipality
6.90
8.04
1.5%
City proper
3.74
4.81
2.5%
Rest of WMR
20.23
22.39
1%
Total Urban
Urban All WMR Urban WMR
Na
7.23
Na
27.13
30.42
1.2% Na
Na
15.27
WMR total as % of Hubei WMR urban as % of Hubei urban
50% Na
52% 71%
Wuhan as % of WMR
26%
27%
Wuhan urban as % of WMR urban
Na
29%
WMR Urbanisation Level
Na
50%
54%
60%
Na
32%
Wuhan Urbanisation Level Rest of WMR urbanisation level
1%
Note: While data on Wuhan and total WMR populations are believed to be generally accurate 93, urban populations of WMR may be underestimates as they may not include migrants. Sources: Yang Y., 2003, Urban Labour Market Segmentation: Some Observations based on Wuhan Census Data, China Review, Vol. 3, No. 2; Wuhan Statistical Bureau, various years (from Censuses); Consultants’ Estimates.
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There are almost as many estimates of Wuhan’s population as there references to it. Additionally Wuhan city will have some remaining rural areas (30% of employment is described as agricultural although many are likely to also have non-agricultural incomes); conversely, areas outside the city proper will have some urban population (there are 2 designated cities with a combined population of 200,000). The data provided did not enable us to disaggregate the Municipality population to identify these occurrences and we have therefore assumed that the population of the city proper is a close approximation of the urban population of the municipality.
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4.5.2
The analysis of population change in general, and urban population change in particular, in the Wuhan Metropolitan Region (WMR) is complicated by the same problems that affected the national level analysis namely changes in urban boundaries and definitions and the inclusion / exclusion of the migrant population. Additionally, there is little available data for the areas outside the municipality itself 94 . Table 24 presents the available information. The main findings from the Table are:
• • •
WMR contains half of Hubei’s population and over 70% of its urban population. Low overall population growth in Hubei province and the WMR as a whole. Only above average growth is in Wuhan Municipality and the city proper. These rates indicate both migration into the municipality and an accelerated urbanisation process within it. Urbanisation level in rest of WMR is 50% which is higher than national average but lower, unsurprisingly, than for the municipality itself.
•
4.5.3
Yang (op. cit.) also examines the impact of migration on population change in Wuhan municipality. This information is summarised in Table 24.
Table 24 Population Growth in Wuhan Municipality, 1990-2000 1990 Category of Population
2000
Municipality
City proper
Municipality
City proper
6,903
3,741
8,037
4,812
Temporary residents*
354
297
2,200
1,836
Permanent residents
6,549
3,444
5,837
2,976
% permanent
95%
92%
73%
62%
Total Population. (000s)
Actual change,
Total
1,134
1,071
1990-2000 in 000s
Temporary
1,846
1,539
Permanent
-712
-468
Annual growth rate,
Total
1.5%
2.5%
1990-2000
Temporary
20.0%
20.0%
Permanent
-1.1%
-1.4%
* Including migrants and all others whose place of residence differs from their permanent hukou residence. ** Definition of migrants was more all encompassing in 2000, hence these growth rates are likely to be on the high side. Source: derived from Yang, op. cit.
94
This is because Wuhan municipality has no remit to collect or compile information for areas outside its jurisdiction.
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4.5.4
The findings from the preceding Table are important. Firstly, in 1990, the presence of temporary residents in Wuhan municipality was negligible. By 2000 however, they had increased to 27% of the municipal population and almost 40% of the main urban area. This reflects the perception that, except for major eastern cities, mass rural urban migration only really started in the 1990s. The other important finding is that the permanent resident population in both the city proper and the municipality decreased in the 1990s95. This largely accounts for the relatively low growth rate for the main urban area – 2.5% annually compared with 3-4% nationally.
4.5.5
The reasons for these apparently paradoxical findings can be identified from Table 25, also derived from Yang.
4.5.6
From Table 25 it is clear that over half the temporary population registered in Wuhan in 2000, were actually internal, intra-city migrants, who had relocated due to the major urban renewal projects and the requisitioning of rural land. This largely confirms the importance of reclassification and urban redevelopment projects as a major component of China’s recent urban growth and urbanisation process, i.e. true rural urban migration only accounts for around half the number of temporarily registered urban residents96.
Table 25
Origin of Temporary Migrants, Wuhan, 2000 Origin
Municipality
City Proper
Another province
11.3%
11.4%
Intra-province*
33.4%
34.8%
Within Wuhan
55.3%
53.8%
Within city
40.8%
42.6%
Other**
14.5%
11.2%
Total
100.0%
100.0%
* Elsewhere in Hubei province. ** Other cities or counties within the Municipality. Source: derived from Yang, op. cit.
4.5.7
Rural urban migration thus accounts for around 45% of the total number of temporary residents. The majority (75%) of this migration is intra-provincial and only a quarter is inter-provincial, which also accords with national level findings.
4.5.8
Together these findings have major implications for future urbanisation scenarios. They can be used to recalculate the figures in Table 24 in order to provide a truer assessment of recent urban growth in Wuhan. The results are contained in Table 26. The revised calculations show that the ‘true’ migrant population constitutes a much
95
The rate of natural increase, although low in urban areas, was still positive during the 1990s.
96
In our research for this and other projects, we have only identified one other study of this type, yet it reveals aspects of China’s urban growth that are crucial to future policy making.
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lower proportion of Wuhan’s current population than appeared to be the case from Table 24 – 18% as opposed to 38%. Furthermore, the counter-intuitive finding that the ‘permanent’ population had decreased is no longer the case. It has actually increased by around 0.7% for the municipality as a whole which approximates the national rate of natural increase in the population. From this one can deduce, that the annual number of net migrants coming to Wuhan in the 1990s was around 50,000, approximately equal to the natural increase of the population over the same period. 4.5.9
While no comparable data is available for other cities in the WMR, it is likely that they exhibit the same trends, possibly to a greater extent, as: (i) virtually all cities in China have embarked upon major central area relocation schemes which have involved the parallel resettlement of large numbers of rural residents and (ii) rural migration into secondary towns is less likely to be as pronounced as it is in Wuhan97.
Table 26
Re-Estimation of Population Growth in Wuhan Municipality, 1990-2000 Category of Population
1990
2000
Municipality
City proper
Municipality
City proper
6,903
3,741
8,037
4,812
Temporary residents*
354
297
983
848
Permanent residents
6,549
3,444
7,054
3,964
% permanent
95%
92%
88%
82%
1,134
1,071
Temporary
629
551
Permanent
505
520
Total
1.5%
2.5%
Temporary
10.8%
11.1%
Permanent
0.7%
1.4%
Total Population. (000s)
Actual change, 1990-2000 in 000s
Annual growth rate, 1990-2000
Total
* Including migrants and all others whose place of residence differs from their permanent hukou residence. ** Definition of migrants was more all encompassing in 2000, hence these growth rates are likely to be on the high side. Source: Consultants’ estimates derived form preceding Tables.
4.5.10
The above analysis is based on 2000 information. Since then, the main trends affecting urban growth in China have continued apace:
97
In this context, Brinkhoff viewed at http://www.citypopulation.de/China-Hubei.html) estimates extremely high growth rates for some of the more important cities in the WMR: Ez’hou, 11.2% annually, Qianginag, 10.2%, Huangang, 9.5%. Almost certainly these growth rates result fomr relocation and reclassification rather than massive rural urban migration.
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•
• •
Natural increase, especially in urban areas, has continued to decrease. Indeed, a recent announcement states that the non-migrant population in Wuhan has actually started to decline98. Rural urban migration is continuing with estimates that there are 40 million rural migrants resident in Chinese cities in 2005 than in 2000. Major urban regeneration and land requisitioning projects have continued and probably gathered pace in the last few years.
Population Projections 4.5.11
The evolution of Wuhan’s population since 2000 is however hard to assess given (i) these contradictory trends and (ii) the lack of a definitive new data source. Estimates provided by the authorities must therefore be treated with caution both in terms of the overall population and the urbanisation level. For these reasons, our population projections and urbanisation scenarios are have been formulated on the basis of the 2000 data. Three alternative projections have been prepared and these are shown in Table 27 along with the key assumptions which underpin; they are similar to those used for Chengdu in the following chapter.
Table 27
WMR Population Projections (millions), 2000-2020 ASSUMPTIONS
AREA
2000
2005
2010
2020
Current trend held constant*
WMR
30,423
31,817
33,110
35,502
Based on current growth differentials**
WM
8,037
8,531
9,011
9,953
Rest of WMR
Constant migration at 50,000 per annum
22,386
23,286
24,099
25,549
WM as % of WMR
26%
27%
27%
28%
WM
8,037
8,572
9,083
10,047
Rest of WMR
22,386
23,245
24,027
25,455
26%
27%
27%
28%
WM as % of WMR Constant migration at 75,000 per annum
WM
8,037
8,947
9,594
10,835
Rest of WMR
22,386
22,870
23,516
24,668
26%
28%
29%
31%
WM as % of WMR *
i.e. WMR population will increase at 0.2% pa above national rate of natural increase.
**
i.e. WM population will increase at 0.5% pa above projected national rate of natural increase.
Source: Consultants’ Estimates
4.5.12
98
The projections indicate a current population for Wuhan Municipality between 8.5 and 9 million which will increase to between 10 and 11 million by 2020. The population in the rest of the WMR is likely to be between 24.5 and 25.5 million in the same year.
China Daily, March 2, 2005. It was the second city in China after Shanghai to register such a trend.
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Urbanisation Scenarios 4.5.13
The above projections, while they provide an indication of the likely total population of the WMR and the municipality, do not show the urban population. Accordingly we have formulated three urbanisation scenarios for WM.
4.5.14
A minimum estimate of this component can however be obtained by assuming that (i) the current urban population will increase at the prevailing rate of natural increase and (ii) that all migrants will move to urban areas. This estimate however excludes any increase in the urban population due to further reclassification or hukou transfers and is thus considered implausible. As such the second estimate is obtained by assuming that Wuhan’s urbanisation increases by 10 percentage points in each of the next two decades; this is also the current Wuhan Master Plan target. This is however considered to be a ‘high’ scenario as it basically implies the re-classification/ hukou transfers of around half the population outside the main urban area. This will be a massive task given that the only other cities identified in municipality area by Brinkhoff (op. cit.) are Wuchang and Huangpi with a combined 2000 population of little of 200,00099. If these two scenarios are considered to be lower and upper bounds, a more realistic scenario is to simply assume that the future urban population of Wuhan will be the average of these two scenarios. The urbanisation level derived from this scenario (63%) accords with current estimates. Table 28 summarises these projections.
Table 28
Urbanisation Scenarios, Wuhan, 2000-2020 Scenario
Assumptions
Mid-point of Table 25 projections
Low
High****
Assumes no further reclassification/ hukou transfers and that all migrants locate in urban area. Urbanisation rate increases by 10 percentage points in each decade.#
Variable
2000
2005
2010
2020
Municipality population
8,037
8,700
9,300
10,500
Urban Population
4,812
5,296
5,770
6,690
Non-urban population*
3,225
3,404
3,530
3,810
60%
61%
62%
64%
Urban Population
4,812
5,655
6,510
8,400
Non-urban population*
3,225
3,045
2,790
2,100
60%
65%
70%
80%
Urban Population
4,812
5,475
6,140
7,545
Non-urban population*
3,225
3,225
3,160
2,955
Urbanisation level **
Urbanisation level ***
Medium
Average of Low and High urban projections#
Urbanisation level ** 60% 63% 66% 72% * Obtained by subtraction. ** Derived. *** Projection based on this variable. ****Based on observed Wuhan urbanisation; also current Master Plan target. # These projections assume increased reclassification/ hukou transfers. Source: Consultants’ Estimates.
99
New migrants and natural increase are already included in the ‘low’ projection.
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4.5.15
The implications of these urbanisation scenarios for Wuhan Municipality are: •
•
•
4.5.16
The urban population is likely to range between 5.8 and 6.5 million in 2010 and between 6.7 and 8.4 million in 2020. ‘Best’ estimates are 6.1 million and 7.5 million in 2010 and 2020 respectively. The implied average annual growth rate may appear low at 2.3%. This is not unrealistic given that (i) the rate of natural increase is negligible; (ii) growth rates tend to decline as cities increase in size and urbanisation levels become high; and (iii) it is little different from the rate achieved during the 1990s (allowing for the decrease in the rate of natural increase). The increase in the urban population will nevertheless increase by around 2.7 million, 57%, over the next 20 years. Of the projected increase, only around 560,000 (20%) will be due to the natural increase of the current urban population 100 . The migration component will be around 1.3 million (c. 66,000 annually), equivalent to 48% of the total increase. The third component will involve the reclassification/ Hukou transfer of around 850,000 currently rural residents – approximately one third of the total increase.
The data to enable such detailed projections to be made for the rest of the WMR is not available. Indicative projections can however be made assuming that the current urbanisation level, increases in parallel with the medium scenario national urbanisation level. On this basis, the urbanisation level would increase from the current 32% to 48% by 2020. These projections are shown in Table 29 which also provides of those contained in previous Tables.
Table 29
Summary of WMR Projections, 2000-2020 Area
2000
2005
2010
2020
WM
8,037
8,700
9,300
10,500
Urban
4,812
5,475
6,140
7,545
Non Urban
3,225
3,225
3,160
2,955
Rest of WMR
22,386
23,117
23,810
25,002
Urban
7,231
8,322
9,524
12,001
Non Urban
15,155
14,795
14,286
13,001
WMR
30,423
31,817
33,110
35,502
Urban
12,043
13,797
15,664
19,546
Non Urban
18,380
18,019
17,446
15,956
40%
43%
47%
55%
% urban
Source: Consultants’ estimates derived from preceding Tables.
4.5.17
Overall, the urban population of the WMR is likely to increase by around 7.5 million between 2000 and 2020; the increase over the next 15 years is around 4.8 million. The urbanisation level of the region will increase from 40% to 55%. Unlike for Wuhan, the increased urban population will be spread around a number of smaller cities over a
100
The impact of this group on future housing demand will be greater as household size is projected to decline by around 20% in the next 20 years.
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large area and is thus less likely to have as significant an impact on the surrounding rural area as is the case around Wuhan. 4.5.18
Single projections have been presented in several of the tables. This is for presentational simplicity and does represent a certainty on the part of the consultants that these projections will definitely prove to be accurate. All urban projections are subject to a substantial degree of uncertainty owing to the complex mix of factors involved, and this is particularly the case in China where government policy has a major influence on urban growth and development. In order to demonstrate this complexity, we give reasons why our projections could prove to be either too low or too high. Reasons why the projections could be too low include: •
Further relaxations to the hukou system which encourage the flow of more dependent migrants to urban areas Relaxation of the one child policy to combat the ageing of the population, although this isles likely to have an impact during the period of this study. An increase in FDI in major inland cities due to lack of land, congestion and rising wages in coastal regions.
• •
4.5.19
Conversely reasons why the projections could be too high are: • • •
A decrease in major urban renewal and infrastructure projects, reducing the need for unskilled construction workers A decrease in economic growth prompting a decline in the commercial and catering sectors where over 40% of outside migrants are employed. A decreasing demand for land as a result of reduced relocation of population from central areas leading to less need to either incorporate or relocate farming communities and the subsequent hukou transfers.
4.5.20
There is however one certainty and that is that the great majority of new urban residents will be rural people whether they actually migrate, their villages are demolished and they are relocated to new apartments or they remain in villages which become encircled by the main urban areas.
4.6
Sectoral Studies – Urban Economy
4.6.1
There are several key components that influence the urban economy. Industrialisation has been the most significant impact on urban economies and their spatial form. Since opening up industries to attract FDI, changes in industrial structure and employment patterns have occurred. This industrial restructuring has impacted on the balance of employment and investment in the private sector and SoEs. The impacts of industrial restructuring for WM and WMR are discussed below. It should be noted that the main impacts have been on the core city of Wuhan itself thus most information pertains to WM and Wuhan City proper – very little information is available on the other municipalities within WMR despite the Consultants research efforts.
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Industrial Clusters 4.6.2
As outlined in Section 4.4 above there have been varying levels of industrialisation across the Region with secondary and primary industries underpinning the urban economy. The development of industrial parks has been a key feature in promoting industrial development in Wuhan City and other leading cities across the Region. Many central enterprises have been re/located to industrial parks or industrial concentrated areas generally on the periphery of urban areas or in new release areas. Globally and nationally there are many examples of spatial concentration of certain industrial clusters forming economic advantages and thus promoting regional development. Currently, there is evidence that some industrial clusters, especially the Photoelectronic information sector, have been very successful in WM. For instance, there are over 6,000 companies residing in Wuhan “Optical Valley”, including 1,557 high and new-tech companies, and 700 photo-electronic information companies. Photoelectronic information industry accounts for 50% of all the industries in the Donghu High and New-Tech Area. In these industrial areas the production of photo-electronic components and optical cables makes up about 40% and 50% of the total domestic manufacturing market, respectively.
4.6.3
However, the promotion of industrial clusters can face many challenges particularly in an environment consisting of a diverse industrial base, small company sizes, and locational concentrations of industries which are incompatible. For example in the Wuhan Optical Valley, enterprises with less than 300 employees make up 91% of the total. Large scale enterprises are few accounting for only 2.1%. The dispersed industrial base and small enterprise size have not only hindered the development and agglomeration of the Valley but also limited its contribution to the economic development of Wuhan. This further undermines the rational distribution and integration of industries in the WMR.
4.6.4
In addition, there is an apparent trend with an accelerated increase of heavy industry (petro-chemistry, manufacture, etc.) in WM and in the WMR. Whilst the concentration of heavy industries stimulates and maintains local economic growth it is also hampering the aim to move to a tertiarization process and shift to a more environmentally sustainable development model. The immaturity of the tertiary sector could constrain employment increase and thus opportunities for rural labour transferring to new employment including at the secondary level.
Constraints to Market Integration 4.6.5
Studies of other Regions (Yangtze River Delta, Pearl River Delta) in China clearly indicate that economic success relies on market integration across the region. As such “..any initiatives that improve the efficiency of metropolitan areas as environments for production, transactions, innovation and day to day life will have highly leveraged
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socio-economic and environmental impacts in China”101 With regard to WM and WMR analysis of economic data indicates that there are significant gaps between industrial development and market integration and growth. 4.6.6
Firstly, various industries are well developed while the market is lagging behind. The market system in WMR, and in WM in particular, is under-developed. Local marketization of products of major industries is not high. Industrial advantages are not transformed into market advantages and service advantages. For example, in WM in 2003, sales revenue of locally manufactured products such as automobiles, iron and steel, telecommunication and textiles reached ¥20.7 billion, ¥25 billion, ¥11.1 billion and ¥5.9 billion respectively. However, the local markets supporting these sectors remain relatively weak. The sales volume of automobiles and telecommunication products in wholesale and retail markets were only ¥1 billion and ¥1.53 billion respectively. To date, there are no large-scale specialized and far-reaching wholesale markets for such leading industries. This can help explain why the sales volumes in the local market trail far behind the output of these sectors.
4.6.7
Secondly, there are instances where the market is well-developed while the sectors are not. The consumer market in WM enjoys obvious advantages with the City itself having relatively high GDP per capita by Chinese standards. However the consumer industry in WM’s surrounding areas is relatively weak. The Wuhan Metropolitan Region is increasingly characterized by the tendency towards heavy industries. The ratio of the output of light industry and heavy industry is 19.4:80.6 in 2003. Consumer goods production accounts for only a small proportion of this and its market competitiveness is low. As such the consumer market in WMR is still dominated by products from outside the Province, especially the high-end consumer goods market. For example, in 2003 the output of light industry in WM recorded ¥38.654 billion, while the retail sales of consumer goods ¥85.4 billion giving a ratio of 1:2.2. This shows that although most local light-industry products are sold in Wuhan, some 60% of consumer goods in the market come from outside the Region, representing a “net inflow” into the consumer market. This has indirectly reflected in conflicts between sectors and the market, and between industrial structures and the market system primarily due to a lack of a highly cohesive and mutually reinforcing local production and local market mechanism.
4.6.8
Thirdly, the production labour and capital market is underdeveloped in comparison with industrial growth demands. One of the reasons for this is that unsound financial markets and low marketization do not meet the needs of the majority of enterprises in industrial development. For example, in 2004 the savings in WMR reached ¥469.35 billion, an increase of ¥262 billion over that reached in 1999, while the total amount of loans was only ¥357.55 billion, an increase of ¥153.3 billion over 1999. In 2004, the gap between savings and loans reached ¥112.2 billion; an increase of over ¥100 billion compared with 1999. Financial resources are not well utilised to serve the development
101
Webster D, Jianming Cai and Chuthatip Maneepong, Op Cit, 2006, p. 1.
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of industries and local economy - this is the most outstanding contradiction at present. Apart from the monetary market, a multi-layer capital market has yet to form. Companies rely heavily on indirect financing, while direct financing currently accounts for only a small proportion. Similarly human resource, labour and technology markets are all at their infancy, unable to meet the development needs. Difficulties in the market mechanisms for land purchase and pricing is widely recognised as needing to be revamped. The under-development of these production factors is increasingly becoming a weak point in the current market system and the most outstanding contradiction in the development of the market system and the regional economy. 4.6.9
Fourthly, development of a market among cities is considerably uneven. The market system within the Region is highly concentrated in Wuhan City in WM, while the market with and in surrounding cities is lagging behind. In the consumer goods market, for example, retail sales of consumer goods in Wuhan City account for nearly 60% of that of the Metropolitan Region. In terms of financial market, savings in Wuhan City accounted for 71.15% of the total in 2004. Savings balance and loans account for 61% and 75.7%, respectively, of the Regional total. Moreover, there has been an increasing tendency of financial resources flowing into WM. While quite a few comprehensive markets exist in WM, specialized wholesale markets that interact closely with local industries and that could have far-reaching benefits are seriously lacking.
4.6.10
Fifthly, WM, as the centre of the Metropolitan Region, has not provided sound industry services to surrounding cities in the Region. The market in WM, the production factors market in particular, has not been able to meet the demand of the industrial development of the Metropolitan Region. Although business and trade activities in WM are robust, the market systems surrounding Wuhan Municipality are not welldeveloped. A recent survey shows that the garment industry in surrounding cities relies heavily on coastal cities for the procurement of raw materials and sales, etc. Due to a severe lack of a well-developed market, the surrounding areas cannot fully depend on WM and Wuhan City in particular, for capital, technology, human resources and information. The “mega central city” cannot shoulder the responsibility of acting as the financial, information, marketing, R&D, and human resources centre that can serve the regional economy. Not only does this hinder the transformation, upgrading and development of services in WMR, but also results in low effectiveness and efficiency in resource allocation throughout the Region.
4.6.11
Sixthly, there are also some conflicts between industrial development and existing intervention. Duplication in industrial structure and the separation of accounts within the fiscal system has resulted in the emergence of regional market barriers which hinder market integration. According to a latest survey undertaken by industrial and commercial authorities there are still intentional barriers hindering the free movement of products and services (although there are much fewer cases in which products from other provinces are kept out the local market in the name of the government or authorities), either by verbal orders or by holding coordination conferences. For example, it is common for local law enforcement authorities to repeatedly scrutinize products and services coming from outside the region.
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Employment 4.6.12
It has been difficult obtaining employment information for cities in the authority areas surrounding WM. As such information is concentrated on WM itself with issues identified considered relevant for the Region.
4.6.13
Unlike the other City authority areas in the Region the development of the tertiary industry sector provides the main sources for urban employment in WM. The elasticity coefficient of employment per GDP unit for WM’s three industries is -0.88, 0.34, and 0.60 respectively (2005). The employment elasticity in the agricultural sector has always been negative, as shown in the Figure below. The release and retraining of labour in WM is lower than the national level which is related to the higher level of economic development of WM over the national average. In recent years, the employment elasticity of secondary industries has seen fluctuations but generally remained negative, while the national one is positive. The tertiary industry accommodated 48% of total urban employment in 2005. The employment elasticity of the tertiary industry has been rising steadily, and its historical shifting is in line with the national configuration. These figures suggest that WM is now undergoing industrial structure upgrading, and the labour force is now shifting from the primary and secondary industries to the tertiary sector. While the tertiary industry remains comparatively small, industrial restructuring is expected to aim to accommodate tertiary industries and its employees in WM. In WM’s 11th FYP, however, policies and related measures aimed at supporting tertiarisation and private sector development remain unclear.
Figure 22. 1997-2005
The variations in GDP Employment Elasticity (sector-specific) in Wuhan during 0.4 0.2 0.0 -0.2
2000
2001
2002
2003
2004
2005
-0.4 -0.6 -0.8
Primary industry Secondary industry Tertiary industry
-1.0
4.6.14
Within WM the state-owned sector still absorbs the largest proportion of the workforce in the city and towns, but its share is declining. The proportion of employees in TVEs dramatically decreased from 8.09 percentage points in 1986 to 1.86 in 2005. The proportion of the employees in self proprietorships, the private sector and sectors with other types of ownerships in cities and towns has seen some changes, but generally shows an upward trend (see Table 30). The number of jobs in the entire WM was 4.218 million in 2005. Since 2000, the number of jobs has only grown by 0.9%, an annual increase of 0.18% on average. The growth of jobs is lagging far behind urban population growth. The employed population in urban areas is 2.729 million, a net
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increase of 97,300. Registered residents who have lost their jobs in urban areas amounted to 112,200 and the registered unemployment rate was 4.2% in total (2005). The newly created jobs in urban areas throughout the year reached 125,000, roughly equal to the number of job-losses. In the same year, 53,000 agricultural workers entered other sectors for employment.
Table 30 Employment in enterprises of different ownerships in Wuhan during 1999-2005 (Unit：person)
Year
Self
Employed
State-owned
Collective
Other
population
Sector
Sector
Sectors
‘000 E*
%
‘000 E
%
‘000 E
%
‘000 E
proprietorships in urban areas
%
‘000 E
%
Village Labour
‘000 E
%
Private sector
‘000 E
%
Others
‘000 E
%
1999 4177.8 100.0 1504.9
36.0 338.0
8.1 226.0
5.4
541.5
13.0 1214.4
29.1 353.0
8.4
2000 4178.0 100.0 1440.4
34.5 289.5
6.9 266.5
6.4
636.1
15.2 1213.0
29.0 332.5
8.0
2001 4061.2 100.0 1385.2
34.1 231.8
5.7 312.6
7.7
596.7
14.7 1203.3
29.6 331.6
8.2
2002 4073.0 100.0 1346.5
33.1 172.3
4.2 319.1
7.8
607.9
14.9 1237.8
30.4 389.4
9.6
2003 4120.0 100.0 1174.9
28.5 138.5
3.4 449.0
10.9
700.4
17.0 1279.9
31.1 368.0
8.9
9.3
0.2
2004 4175.0 100.0 896.6
21.5
75.5
1.8 514.0
12.3
305.7
7.3 1543.3
37.0 228.3
5.5 611.7
14.7
2005 4218.0 100.0 900.5
21.3
78.6
1.9 506.2
12.0
427.7
10.1 1489.0
35.3 292.0
6.9 524.0
12.4
*‘000 E thousand employers Source: Wuhan Statistical Yearbook (various years)
4.6.15
In undertaking a more detailed review of 2000 Wuhan (City Proper) census data Yang et al102 found that traditionally the hukou system has acted as an institutional barrier preventing rural workers from accessing urban occupations. As such migrants have been forced to take up urban jobs in the low paid/low skilled sectors. Hukou was thus segregating the labour market. However with market reforms and the opening up employment sectors more jobs in urban areas are available to both rural and local
Yang, Y “Urban labour Market Segmentation: Some observations Based on Wuhan Census Data” in The China Review, Vol3. No.2 (Fall 2003) pp 145-158
102
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workers. Interestingly the analysis of the 2000 census data indicated that outside or rural workers were the most active and flexible in responding to industrial structural changes however the segregation pattern and channelling of these workers was to different industrial strata – but again usually low skilled and lower paid. As a percentage of outside labour to all labour construction, commercial and catering, and social services were 43%, 49% and 30% respectively. The flexibility of rural migrants to structural changes in the employment sector may also have a detrimental impacted upon local urban residents – particularly those who have lost employment with the closure of SoEs. Given age and lack of skills these employees are less flexible and capable of change. This review of Wuhan census employment data shows that despite some relaxation in employment in the industrial sector “..there is still a long way to go in forming an integrated urban labour market and, consequently, an integrated society”.103 Development of the Private Sector 4.6.16
The private sector comprising mostly of small or medium-sized enterprises, is relatively underdeveloped. WM’s economy is government-dominated with State-owned enterprises (SoEs) dominating the local economy and the private sector only playing a marginal role. This leads to a number of economic issues: • • • •
A dual structure to the local economy, i.e. uneven development between urban and rural areas which is likely to remain significant; The heavy industrial sector contributes a considerable proportion to local economic output; Market-based mechanisms and instruments are largely absent; and The competitiveness of state-owned corporations is limited thereby compromising the potential competitiveness of the region.
Development of Social Sectors 4.6.17
During the 10th FYP period coverage of old-age insurance and unemployment insurance was expanded while a system of medical insurance and injury insurance together with a public fiscal framework were established. At the same time the urban minimum subsistence allowance system was improved and the rural minimum subsistence allowance system was established. Within WM, by the end of 2005, 20,900 urban areas participated in social old-age insurance schemes; an increase of 7.1%. Overall 1.84 million employees participated in the social old-age insurance scheme, an increase of 10.1%. For unemployment insurance 11,700 urban areas participated amounting to 870,000 employees in unemployment insurance and 1.76 million in basic medical insurance.
4.6.18
As an indication of the economic growth achieved in WM many reemployment centres and facilities have closed. The first reemployment centre, i.e. Wuhan Textile
103
Ibid, p145
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Reemployment Centre, was established in 1997. At its height there were 1,426 reemployment centres in Wuhan. Since 1997 at least 90,000 laid-off workers from SoEs have been reemployed with the help of these centres. With improvements to market-based employment mechanisms, particularly since 2000, there has been little need to support reemployment centres having achieved their main objective. In addition, by the end of 2005, the basic subsistence allowance system for laid-off workers was merged with the unemployment insurance system. As such laid-off workers actively seek jobs themselves. On the 15th November, 2006 the “Temporary Measures of Managing Subsidies for Employment and Reemployment Training of Wuhan” was introduced. This significant legal move entitles migrant workers from outside Wuhan to the same free employment training provided by the government as unemployed Wuhan natives. It also provides people with “Reemployment Preferential Certificates” which enables other registered urban unemployed and migrant workers who have not received free employment or business-startup training to enjoy employment and reemployment subsidies as long as they are able to work. Impacts to 2020 4.6.19
The changes occurring in WM urban economy provide insight into what could happen to other cities in the region if increased industrialisation was to occur. The move to tertiary industries has been beneficial for that city’s economy but a lack of critical mass is hampering it reaching its full potential. The move to heavy industry may also detract from the “clean industry” image which is often important in the tertiary and hi-tech sectors. Whilst other City authority areas are not at the stage of WM they are likely to experience similar benefits, if somewhat limited, to Wuhan as their local economies mature. However there are concerns that Wuhan is not reaching it full economic potential and this could also occur in other city areas in the Region if current constraints to market integration are not addressed. If increased market integration, particularly with regard to clustering advantages, promoting supply chain integration, collectively marketing industries and regional products, does not occur then economic growth and prosperity is likely to stagnate and may decline. As has also been illustrated above WM is not yet at a stage where it can fully support regional growth especially with regard to production factors (labour and capital). If this does not occur then the lead city in the Region is unlikely to be able to trigger Regional economic growth.
4.6.20
In general, Wuhan is strongly proactive, especially in promoting large manufacturing projects. It has developed a strong top-down planning and implementation system. The Wuhan 11th FYP identifies a number of development priorities, determines key development areas, and proposes several supporting measures. It should be a key policy intervention in promoting the City and hence Regional growth. In reviewing the Plan there are number of factors which have not been addressed. These factors are considered essential if Wuhan and its Region are to develop a competitive and sustainable (environmentally friendly) urban economy by 2020. Such factors which need to be addressed but are, at the moment, limited in policy direction are:
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• • •
• •
The need to recognise the value of clustering, advanced product services, production supply chains and concentrated compatible industrial development; Comprehensively integrate urbanization development, industrial development, market construction and human resources management; Rationalise and fully coordinate the various development plans, particularly the economic and social development plan with urban master plans and land use plans so as to integrate economic, social and environment concerns; Diversify employment opportunities, and in particular cultivate the tertiary sector in order to optimise job creation and in turn rural labour transfer; and Develop the private sector, especially small and medium-sized enterprises (SMEs), and promote market-based mechanism and instruments.
4.7
Urban Poverty
4.7.1
An ADB (2001)104 study on urban poverty found that the annual per capita poverty line in Wuhan was RMB 2,258, and that 6.3% of locals and 15.1% of migrants were below this level. This is effectively those that have incomes that make them eligible for the urban dibao benefit (i.e. RMB 195 per capita per month)105.
4.7.2
Wuhan’s temporary migrant population has increased dramatically over the past decade, increasing by almost 30% in the city-proper and 16% in the whole city. These migrants have a much higher incidence of poverty as they dominate low skilled and lower paid jobs106., including in the catering, commercial and construction sectors107. In contrast local urban workers have benefited most from economic growth and have filled the higher end job places, including the manufacturing sector
4.7.3
In Wuhan it is important to note that about 45% of these temporary migrants in urban areas, are in fact from within the same county or city. Many are likely to represent rural labour moving out of agricultural sector, either seeking better paid jobs, or being forcibly removed from the land to make way for urban development. If urbanisation continues in Wuhan as projected, the competition in urban labour markets will undoubtedly intensify. (Chapter 3 provides a more detailed discussion of urban poverty in China).
104
ADB. 2001. Urban Poverty in PRC. Manila.
105
See Chapter 3 for more details on urban poverty.
Yang, 2003, Urban Labour Market Segmentation: Some Observations Based on Wuhan Census Data, the China Review, Vol 3, No. 2, p. 145-158
106
107
In total, 40% of all migrant labour is in these sectors.
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4.8
Land Use and Land Supply
Current Land Use 4.8.1
The allocation of land uses throughout the Metropolitan Region is outlined in Table 31. This Table also shows allocation in WM. In both the Region and WM areas agricultural land is the dominant land use making up nearly three-quarters of all land uses in the Region and over two thirds of land uses in WM. The other significant factor is that whilst WM contains less than 15 % of the total land area of the Region its urban land use area is around 58% of the Region. The dominance of urban development – residential, business and industry of Wuhan City in the Region is thus significant. Construction land (land allocated for development) is also relatively high in WM – providing nearly a fifth of the Regional total. Significantly WM contains around 28% of land allocated to traffic indicating that accessibility in the city area is better than for the other authority areas in the Region.
4.8.2
The current Wuhan Municipality Master Plan centres on the protection of cultivated land. The principle behind this protection is to restrain the transfer of agricultural land resources into construction land irrespective of demand. It is argued that this policy, however, is inconsistent with the current high demand for urban construction land as reflected in the rapid urbanisation rate for the City. Around 80% of farmland is protected in WM’s area. Those farmlands on the urban fringe or periphery of urban areas are under the most pressure to be converted to construction land. The protection of farm land thus provides a strong restraint to future urban expansion. Whilst the protection of farmland is advantageous to the agricultural sector and to ensure that conversion of farmland does not occur before it is required, the Plan pays little attention to environmental protection and protecting prime agricultural land. No analysis occurs on balancing land use needs and whether in fact some agricultural areas may be better converted to urban use given the aim to provide more sustainable patterns of urban development. Therefore, there is an urgent need to introduce a more comprehensive land use planning system that acknowledges and accommodates all land use needs and demands and thus allocates land best suited for its intended purpose.
4.8.3
The lack of an integrated land use plan and efficient land transfer system together with the lack of enforcement has meant that urban developers often win when contesting land. The over requisitioning of land has led to the continuing decline in cultivated lands which in turn leads to a decrease of grain production. For example over the period 1996-2004, cultivated land dropped by 17,450 hectares in WM. Accordingly, the grain production declined from 1,730,078 tons in 1995 to 1,375,166 tons in 2005. The overrequisitioning of land has also added to rural and urban poverty. Land taken out of agricultural production prematurely impacts on farmers’ livelihoods. With compensation to farmers based on the agricultural use of the land rural workers and their families are moving to urban areas with little or sufficient funds and skills to support their longer term housing and employment needs.
4.8.4
The over requisitioning of land and weak management of linking land supply with demand, has meant that a large amount of construction land remains idle. For
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example in Wuhan City there were 170 unfinished and about-to-finish projects in the seven main cities of WM, claiming an area of 300 ha between 1992 and 1998.108 By 1999 there were 147 projects which were approved but had not been completed (either in acquiring land or constructing on construction land) claiming an area nearly 1700 ha, of which 1150 ha were in the main city area. Within the Wuhan Region the main cities acquired 3088 ha of new construction land in 2000. This brings into question the need for additional urban land reclassifying agricultural to construction use given high vacancy rates and delays in commencing construction. 4.8.5
As also indicated in Chapter 3 density plays a major role in land use and land take. Densities within WM have decreased slightly going from 15,500 (1989); to 14,200 (1996): to 13,300 (2002). By international standards these density figures are high especially given low household sizes. They do however indicate a trend of decreasing density and as has been shown in other cities in the PRC, this is leading higher levels of land take to accommodate growth and triggering an increase in costs of infrastructure provision and making the provision of public transport less economically viable. Some of these aspects are addressed in Section 4.9 on Transport and Section 4.10 on Environment.
Table 31
Present land uses of Wuhan MR and Wuhan (unit: sq. km)
Type Of Land Total Total Agricultural Land Arable Land Garden Plot Forest Land Grass-Land Other Agricultural Land Total Construction Land Urban Land Use Town Construction
WMR 57822 42122
% of Total 72.8
18605 1493 15325 132 6567
5759
WM 8549 5773
% of Total 67.5
3736 125 778 69 1065
10.0
1314
WM/WMR (%) 14.8 13.7
20.1 8.4 5.1 52.3 16.2
15.4
22.8
452
261
57.7
266
51
19.2
108
Zhu Jisheng, Sort out idled land and press ahead the construction the land market. For details, see http://www.digitalwuhan.gov.cn, accessed on 14 June, 2004.
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Type Of Land Land Rural Residence Independent Mining Land Special Land Use Traffic Land Water Conservancy Land Total Unexploited Land Unexploited Land Unexploited Waters
WMR
% of Total
WM
% of Total
WM/WMR (%)
2816
409
14.5
554
241
43.5
175
88
50.3
370
105
28.4
1126
159
14.1
9941
17.2
1462
17.1
14.7
4388
210
4.8
5553
1251
22.5
Source: Based on Wuhan Statistical Yearbook and Consultants Estimates
Impacts to 2020 4.8.6
Based on the urbanisation scenarios developed for WM Table 32 below outlines land take estimates based on density assumptions. For the medium scenario between 136 to 184 km2 of additional urban land would be required to accommodate population increases in the Municipality to 2010. Depending on densities achieved over the next 15 years or so between 379 to 882 km2 of urban land would be required to accommodate growth in 2020. This would mean that the urban area would increase by around 3.5 times over that existing (2002). As land is a finite resource making best use of this resource and increasing densities will become vital.
4.8.7
Currently WM accommodates nearly three fifths (57%) of the Region’s urban land use. If current trends continue the City is likely to accommodate a similar portion in the next 15 years. As such total urban land with WM area would increase from between 512 km2 and 560 km2 in 2010 and then to 755 to 1258 km2 by 2020. It is known that brownfield sites have been underutilised in WM. Use of such brownfield sites will become increasingly important to ensure greenfield sites/ agricultural land do not continue to be over-requisitioned, best use is made of existing infrastructure and more sustainable patterns of development can be achieved.
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Table 32 Municipality
Land Use Scale Projections for the Three Urbanisation Scenarios In Wuhan
URBAN POPULATION*
Density
Built Up Area**
Total land required
Annual land required
Millions
Persons/ km2
km2
km2
km2
2002
5.0***
13,300
376
0
0
2010
6.14
12,000****
512
136
17
6.14
11,000****
560
184
23
7.545
10,000
755
379
32
7.545
6,000
1258
882
74
YEAR
2020
* Based on medium population projections; **From Table 25 ***Consultants estimates of 2002 population ****Obtained by interpolation Source: Consultants Estimates
4.8.8
As outlined in Chapter 3 nationally the trend towards increasing urbanisation is likely to continue to be a strong force in shaping cities and this trend is reflected in the growth scenarios proposed for WMR. Continued pressure on the lead city – Wuhan is likely to be intense. Although a Master Plan to guide growth has been implemented recently to guide growth there is evidence that it has not necessarily been successful nor supported by the private sector. Given the scale of development likely to occur over the next 15 years it is vitally important that strategic and forward planning occurs on a metropolitan and regional scale to better manage land release, control the requisitioning of land, direct growth, support higher densities, link development with infrastructure provision, force the reuse of brownfield sites, locate industry in appropriate locations especially to foster increased growth of the tertiary sector, protect agricultural land but also recognise the need for sustainable urban development patterns and to better integrate land use and transport.
4.9
Sustainable Transport
4.9.1
Wuhan is a major transport hub in Central China, located in the middle of the Yangtze artery and being equidistant from Beijing, Shanghai and Guangzhou. Wuhan is the key rail interchange and water carriage pivot.
4.9.2
As the main purpose for establishing the Region, the Metropolitan Coordination Office has indicated that the immediate transport objectives are to reduce access times to the surrounding cities to one hour, and thereafter to reap the benefits of a metropolitan regional area extending 300-400 kms radius, within two hours travel time of Wuhan City. City expansion is to be concentrated in a massive 368 km.sq. area south-west of the city, with a further new development area to the south-east.
4.9.3
Although Wuhan City has a metro system it serves only a small portion of the urban area. Since there are no transit or suburban rail systems to link Wuhan to surrounding cities in the WM, 60% of all travel is by walking and cycling (40% and 20% respectively), with just 23% by bus, and the remaining 15% using a combination of car,
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motor-cycle and other means (Wuhan City 2004 109 ). Thus walking and cycling are important within the city (although not at the inter-city level given vast distances) .Vehicle ownership is low (82 per 1000 people in 2005) but is increasing rapidly – up 13% per year between 2002-2005, and passenger vehicles are increasing by 23% per year. The result is that traffic congestion has increased significantly particularly in the urban centres. Transport Plans and Issues 4.9.4
The potential transport impacts of the urbanisation scenarios for Wuhan are addressed in broad terms – the change in physical infrastructure and level of cost110. The Wuhan Transport Plan indicates the resulting transport network through to 2020 by type outlining increases in kilometres for expressway, trunk roads, LRT, metro, suburban rail. It shows linkages to the other City authority areas in the WMR. To evaluate this Transport Plan in the context of the urbanisation scenarios implicit assumptions are made which are: • • •
The policies of the current Master Plan are assumed; Increase in the network is proportional to population increase A focus on the primary network (not the secondary/ local network for which the Master Plan forecasts were unavailable).
4.9.5
Not surprisingly the scenarios trigger a wide range of forecasts. The one thing they have in common is that future transport requirements are uncertain. Any transport plan needs to plan for such uncertainty, and develop a robust core that is viable under a range of future development scenarios (of which urbanisation is but one example). The Wuhan Transport Master Plan provides no such approach. As discussed below this planning strategy needs to change to ensure the transport plan is fit for purpose in the future.
4.9.6
The current Transport Master Plan does not seem to complement the land use Master Plan and as such does not aid in guiding the City towards achieving more sustainable patterns and better managed urban development. There are some positive elements the focus on public transport and the energy demonstration projects being two such examples. However, a key factor omitted is policies and actions addressing traffic restraint and the need to improve the bus system. The City is proposing to expand to the southwest (over a massive 368 km2 area) as well as to south-east which would generate a metropolitan area extending over 300-400 kms with some urban areas around two hours travel time of Wuhan. However the Transport Plan does not provide an effective road network, and lacks potentially effective sustainability options such as
109
This refers to number of trips. No information is available on passenger-kms, that would increase PT share and reduce walking/ cycling shares.
110
We had planned to assess the impact of the scenarios of the sector on energy demand. This requires quantification of the totality of demand, vehicle types, distance travelled per vehicle and specific energy consumption per distance travelled – now and for 2020. Unfortunately the data necessary for this was not available to the team.
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incorporating bus ways within radial roads. 4.9.7
The need to introduce traffic restraint policies is becoming important as car ownership is increasing rapidly with associated increasing congestion. Over the past 3 years ownership of automobiles in Wuhan City (2005) reached 653,000 units, including 370,000 automobiles and 145,000 cars (ref Table 33). The ownership of private cars was 98,000 units with annual growth around 31.8%. This is a rapid increase over the 10th FYP where the annual growth of automobiles stood as 13% on average.
Table 33. Changes in the ownership of automobiles in Wuhan, 2003-2005
Total Number of Automobiles Automobiles Cars Private Cars Cars for Business
2003
2004
2005
560649 271391 101800 50288 12861
623302 334567 n.a. n.a. n.a.
652713 370609 145204 98197 12536
Annual Growth On Average 5.5% 12.2% 14.2% 31.8% -0.8%
4.9.8
Another significant omission from the Plan and which would be exacerbated by 2020 is that public transport has not become a major means of transport in Wuhan and is not likely to given the transport policy framework. Whilst there are policies on improving buses there are no policies to change the frameworks for bus operations nor any plans to introduce Segregated Public Transport. Bus Rapid Transit (BRT) is an aspiration but no actions are outlined to achieve implementation. In addition, public transport fares are low and subsidies are not contracted in advance. Public transport volume in Wuhan City has been growing very slowly, just 4.5% on average annually since 2002. Rail construction in the city is still in its infancy and has not played a key role in public transport provision. The coverage of public transport networks in newly developed suburbs is still very small, and in others there are “blind spots” with no provision of public transport. By contrast, the duplication in the construction of major public transport routes in downtown area is relatively high.
4.9.9
No benchmarking of the transport system’s performance has taken place.
4.9.10
The Transport Master Plan contain an ambitious programme of investment in roads and LRT/ metro systems so as to bring key regional cities within the 1 hour travel time to Wuhan City. The assumptions/ judgements behind these policies are that: • • • •
the necessary investment will be available; major investment projects will be good value for money; the Plan will solve the problems of traffic congestion; and the Plan will guide Wuhan to a sustainable future.
There are reasons to question each of these four assumptions as outlined as follows.
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4.9.11
Firstly, the scale of investment is huge111, whilst the estimated direct revenues likely to be generated are small. Most of the initial cost will need to be financed by government. The Plan does not address affordability. As most of WM’s finances are underpinned by large-scale land leasing/requisitioning affordability will become a constraint on what can be done given that the sustainability of this type of funding is unlikely to continue to 2020. As such the transport plans through to 2020 appear unrealistic.
4.9.12
According to the Plan, the rail transport network is expected to extend to 70 km in 2010 with an investment of ¥25.9 billion; to 140 km in 2020 with an investment of ¥54.8 billion; to 220 km in the years after 2020 with an investment of ¥87 billion. Yet in 2005, the total investment in public transport in Wuhan City stood at ¥464 million, including ¥170 million in rail transport, accounting for 36.6% of the total. The remaining 63.4% of investment was made up of ¥230 million in public buses and electric buses, ¥33 million in the construction of bus stops and stations, and ¥31 million in technical improvements. The share of public transport has been only 4.9% of the total investment in transport construction. The Plan is thus proposing a significant increase in investment but the increase in funding sources is not stated. It is also noted that to date there has been little Private Sector Partnership (PSP) in the transport sector.
4.9.13
Secondly, whether the major projects provide good value for money depends upon the project development process. Although the details are not known some of the proposed new suburban rail lines to the regional cities are seriously questioned particularly with regard to value for money: • •
Their costs will be high and they will be competing with buses using the expressways The pace of development of the LRT and metro system proposed is dramatic compared to most cities – it may be too much too early to provide good value for money.
4.9.14
Thirdly, it seems unlikely that the current plan priorities alone will solve traffic congestion. Experience internationally shows that traffic restraint must work together with enhanced public transport. Thus while public transport is proposed there is no reference to the need for traffic restraint. Without this congestion and its attendant impacts will become an increasing part of Wuhan – as it has become in Bangkok.
4.9.15
Finally, there are doubts raised about the sustainability of the existing Plan. This is particularly the case in the lack of policies to improve the bus network – one of the more affordable forms of public transport and one that could more easily incorporate private /public sector partnerships. Improvements to the bus system would require:
111
For n2006-2010 of the total investment of 106bn RMB, 36% is allocated for intercity projects, 25% for LRT/ metros, and 15% for roads
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•
•
Bus operations - the city does have plans to improve the bus system that they rightly regard as important; but these probably need a changed framework to increase system efficiency and responsiveness Segregation – there is no reference to busways/ BRT systems112 yet these would be expected to be part of a sustainable strategy in some corridors, and perhaps a precursor to metro LRT/ systems later.
Transport Impacts to 2020 4.9.16
This section has found that Wuhan has been effective in many of its endeavours. However it has also raised some important issues and points to a necessary change in direction to allow the region to attain a much higher level of sustainability than existing plans and policies will allow. This will be crucial to accommodate the expected growth in WM and the Region and to better link the core urban area with the other cities in the Region. The key transport issues that will need to be addressed to ensure sustainable transport can be accommodated in the Region are as follows: •
• •
• • 4.9.17
112
Realistic plans and policies need to be adopted that enhance public transport, increase bus system efficiency but also introduce traffic restraint effectively solve traffic congestion; That transport plans and the scale of investment appropriate, affordable and sustainable in long-term; Public transportation, such as BRT, should be a major means of transport. Service frequency and attractiveness of public transport needs to be improved, and management and ticket system needs to be upgraded; Key stakeholders should be involved into plan development; Private investment and Private Sector Partnership needs to be actively encouraged.
As the underpinning to establishing the WMR the Transport Master Plan does not appear to provide the backbone or structure by which to direct growth both in the WM area as well as the adjoining City Authority areas. Whilst there is an aim to reduce travel times to 1 hour with Wuna City and to 2 hours for the surround municipalities it is unclear as to the reasons to do this. The urban economy data shows little trading occurs with the outer municipality areas, no clear supply chain advantages, nor movement of labour between the municipalities making up the Region, exist. Improving transport links could facilitate this but the affordability of those proposed is seriously questioned. A phased approach has not been adopted nor considered. Thus transport infrastructure proposed to 2020 in the context of expected urbanisation and its location do not appear realistic. Further duplication in transport infrastructure (road versus rail for example) does not encourage sustainable transport nor more sustainable transport patterns.
When questioned we were advised this was an aspiration and there had been some preliminary planning
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4.10
Environment
Current Environmental Status 4.10.1
In line with the rapid increase in economic growth (although unevenly spread) of most of the cities in the WMR are facing serious challenges in protecting the natural environment. The Figure that follows (for WM) shows that while total discharge of wastewater and COD have decreased in recent years in parallel with GDP growth, that of SO2 has rebounded in the last two years due to the rapid increase in consumption of fossil fuels. The emission intensity of SO2 measured by GDP clearly shows a reverse “U” curve shape, which is not uncommon in developing China.
4.10.2
There have however been some benefits of regional economic growth and improved environmental awareness particularly in regard to pollution control. The rates of industrial waste disposal and treatment have risen and, as a consequence, there has been a decline in the discharge of industrial pollutants. Urban sewerage treatment rates, although still relatively low, have increased annually, reaching 21.2% in 2003, 39.1% in 2004, and 45.0% in 2005 in the WM.
Figure 23.
Trends of emission of key pollutants and GDP growth in Wuhan
Source: Wuhan Statistical Yearbook (various years) and Consultants estimates
4.10.3
Although recent improvements in pollution control have occurred it has not brought with it immediate and direct environmental benefits in all sectors. For example water quality of many rivers and most lakes is less than the minimum national standards. As shown in the Figure below eutrophication is the most significant environmental threat facing to WM.
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Figure 24.
Eutrophication of major lakes in Wuhan
mediumeutrophication, 25%
supereutrophication, low10% nourished, 1%
` loweutrophication, 18%
mediumnourished, 46%
Source: based on Wuhan Environment Condition Communiqué 2005
4.10.4
Wuhan’s air pollution has progressed from being caused by coal fired power stations and industries, to now mainly being caused by industrial emissions emanating from factories, households and transportation. Particulates, SO2 and NOX were the leading three pollutants affecting the city’s air quality. The aggregate industrial waste gas emissions amounted to 256.36 billion m3 in 2005, increasing by 13.376 billion m3 from 2004. The rapid growth of motor vehicles between 1995-2005 has led to an upward trend in vehicle exhaust emissions particularly with regard to SO2 and NOx..
4.10.5
With rapid economic growth, expansion of urban areas, increasing urbanization, increasing industrialisation and significant increases in permanent and floating populations, aggregate solid waste in the cities is becoming a key environmental issue. Some urban areas vacant, underused pockets of land as well as river banks and lakesides have become open-air garbage “dumps”, where bacteria proliferate affecting people’s daily life, polluting environmentally sensitive areas and spoiling the urban and rural landscape. Where waste is collected the collection, transfer, transport, storage and disposal of garbage can, if not properly treated, generate secondary pollution through contamination of land and ground water resources. Observations in Wuhan City and other areas in the Region have indicated that solid waste management is a crucial environmental issue and one that could be best managed at regional level through different authorities sharing solid waste facilities. This could assist in reducing the costs of management and implementing pollution control mechanisms.
4.10.6
Open or green areas within WM’s built-up area is around 35%, a little higher than the average level of the WMR (32%). The open space per capita was 8.34 m2 in 2003, lower than the average level of 12 m2/capita of the WMR. 113 With increased urbanisation and land demands (for residential, industrial and transport) there will be a decrease in cultivated land, forest land and green land. The need to manage land as a
113
Master Planning of Wuhan City Circle <Special Analysis Report, Page 198
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finite resource and ensure open space and “green land” is retained is, and will continue to be, an issue in WM and in the Region. The need for land use planning system that is realistic in managing development can thus also have benefits for the natural environment. 4.10.7
The exploitation of mineral resources in the region is an important industry. However, the impacts of mining on the ecological environment are often neglected. For example, mineral resource exploitation is often open cut with little controls on dust, runoff and material storage damaging surrounding vegetation, farmland, and water bodies. Removal of vegetation has led to soil erosion, and quarry of mountains has triggered mudslides. Illegal back filling of lakes with wastes from mining activities has significantly impacted on water quality. The impacts on water bodies has also generated dam failures with loss of life.
4.10.8
The WMR contains many lakes and wetland areas. Urban development together with mining has led to shrinking of the lakes and wetlands creating ecological degradation. Over abstraction and back filling from mining activities together with urban development and cultivation of land right up to lakes’ tidal edges have led the reduction of lakes by about 66% over the past 50 years. This has had an adverse impact on water quality, flood control, aquatic ecology and biodiversity.
Environmental Impacts to 2020 4.10.9
Proposed urbanisation increases will impact on environmental factors. Table 34 below outlines for key environmental factors what the impacts are likely to be based on assumed industrial GDP and urban population.
Table 34 Year
Wuhan Environment Implications of the Three Urbanization Scenarios
WM/WMR Medium Scenarios
2005
2010
2020
Total Population (million)
Urban Population (million)
Discharge of urban sewage (million ton/yr)
Generation of urban SO2 (104ton/yr)
Generation of domestic garbage (104ton/yr)
WM
8.7
5.48
712.1
20.2
157
WMR
31.82
13.8
1795
50.8
575.7
WM
9.3
6.14
994
26.2
167.5
WMR
33.11
15.66
2535
67.8
596.3
WM
10.5
7.55
1304
37.7
275
WMR
35.5
19.55
3377
97.8
710.9
4.10.10 The discharged quantity of urban sewage will increase 1.5 times by 2010 and 1.8 times by 2020 over that in 2005. The emission of SO2 in terms of generation quantity will increase 1.3 times by 2010 and 1.8 times by 2020 over that in 2005. The generation of household domestic waste will increase by 1.6 by 2020 over that in 2005.
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4.10.11 In the context of the above current methods of environmental coordination is questioned to manage the environment over the next 15 years during a time of continuing rapid urbanisation and industrialisation. Currently no environmental management or coordination occurs at a metropolitan level where most trans-boundary environmental conflicts happen. Wuhan’s environmental management is considered a local matter by local EPBs. As the evaluation and supervision of local governments’ environmental performance is generally weak, environmental enforcement and implementation is often inadequate. The need for environmental leadership and responsibility has been recognised and will be further enhanced during the 11th FYP period. The 11th FYP requires mayor and different governmental agencies to take more responsibilities for environmental management, effectively institutionalizing the coordination of environmental considerations into their decision making. 4.10.12 Sources of environmental pollution in Wuhan are undergoing transformation with households soon to become the dominant pollution source. Public participation has been introduced and implemented, particularly under SEPA’s promotion, to increase knowledge and awareness of pollution and impacts of environmental degradation at household level. On a broader basis however, comprehensive and effective public participation programmes haven’t been institutionalized and systematically incorporated within other government departments which also have a role to play in environmental management (for example transport department). Private sector participation is continually encouraged in principal. However, effective instruments and incentives remain vague. Market-based environmental financing mechanisms are generally underdeveloped. Governmental encouragement of private sector investment in environmental management is inadequate and development of appropriate and necessary urban environmental infrastructure lags behind (e.g. wastewater, domestic solid waste; collecting and treatment). Environmental investments need to be increased as the environmental investment index is about 2.3 in Wuhan (2004). The interest of private sector has not been stimulated due to the lack of proper policies and initiatives. 4.10.13 In the facing of increasing environmental pressures, WM has developed a comprehensive local environmental law and regulation system covering water management, natural resource management, pollution control, energy efficiency etc, which are consistent with national directives on environmental regulation. Wuhan presents a comprehensive framework in both the 11th FYP and its Environmental Plan. However both the 11th FYP and Environmental Plan provide an action agenda without many of the underlying institutional, governing, financing and managerial barriers being addressed. A number of environmental goals are set down, but how to achieve them remains vague. 4.10.14 The local environmental authority generally follows the national environmental management framework, which has been established and continuously improved since the 1970s. All nationwide adopted environmental tools are introduced and applied. In particular, Wuhan has applied a number of SEA programs as a key environmental management tool. Among others, the SEA of Wuhan Municipal 11th FYP is one of the SEPA’s nation-wide demonstration projects. Another important regulatory tool is the “total discharge management” scheme, which has been emphasized during the 11th Asian Development Bank, Peoples Republic of China - Study on Sustainable Urbanization in Metropolitan Regions Draft Final Report, June 2007. Halcrow Group Ltd.
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FYP period. Wuhan also carries out the allocation of pollutant quota (COD and SO2) to its sub-administrations via a top-down approach. Yet, the mechanism of quota implementation, management and monitoring remains vague. 4.10.15 The Environmental planning process in Wuhan is relatively independent, lacking communication and coordination with financial, land resource and other departments. Rapid economic growth often exceeds the capacity and development of urban infrastructure which is consistently overlooked in environmental plans. Lacking periodical evaluation and timely revision, implementation of environmental plans is often overtaken by events and become out of date. 4.10.16 As some industries that heavily rely on resources and energy inputs (e.g. heavy industry and petrochemical industry) constitute a high proportion of Wuhan’s local GDP and will certainly experience a rapid increase during the 11th FYP period, future industrial demand for and consumption of resources and energy will inevitably increase. The adjustment of energy consumption structures, e.g. via promoting the use of “cleaner” and renewable energy is most important during 11th FYP period. Mechanisms to achieve this though are not clear in the Environment Plan nor the 11th FYP. 4.10.17 Actions are being taken on some aspects of air quality. WM is applying a total discharged amount control strategy for SO2, restricting chemical and cement industries’ development in urban areas, and relocating existing enterprises to identified development areas. They are also implementing a pollution discharge permit system, trying out tradable pollution rights and enforcing total control emissions measures for power plants and chemical industries. Traffic emissions are not yet equally considered, especially in trying to decrease emissions of NOx and PM10. 4.10.18 Strengthening and increasing monitoring of water pollution emissions are required if water resources are to be improved. Applying a total discharged amount control strategy for COD and NH3-N is a very effective tool. Wuhan is adopting a centralized industrial pollution control strategy which includes relocating heavy polluting enterprises and forbidding the construction of heavy polluting enterprises in urban areas. By 2010 it is proposed that all municipal sludge should be appropriately treated. Dumping of sludge from effluent is forbidden. It is also proposed to accelerate the construction of urban waste water treatment plants (WWTPs) and increase the wastewater treatment rate to 70% by 2010. Whilst the objectives are clear in the Environment Plan mechanisms to introduce these important environmental measures are lacking. 4.10.19 Thus WM does show that environmental improvements can be achieved in an urban environment. But similar to other Plans there needs to be better coordination and finance to achieve real and sustained improvements. These improvements will become crucial in the context of further urban development pressures, increasing GDP and industrial development likely to occur to 2020. The lack of coordination and link with other Plans (land use and transport, financing of infrastructure), the need to introduce incentives for private sector and household participation, recognition of the importance
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of the protection of natural resources (particularly air and water) and biodiversity must be addressed in the near future if benefits are to be achieved in the medium term. Trans-boundary environmental impacts could benefit from Regional coordination but such coordination and co-action on environmental issues does not yet exist. 4.11
Governance and Management
Current Metropolitan Governance 4.11.1
The WMR is in the early stages of creating strategic coordination processes but no Metropolitan Authority has yet been established. The Metropolitan Coordination Office has 3 staff and supports the councils and 9 mayors has only been in operation for a few years. It however has no direct relationship with Central Government. All contacts and decisions proceed through the intermediary of Provincial Government (Provincial NDRC).
4.11.2
The cross-city Metropolitan Coordination Office (MCO) was established by the Provincial government. As the MCO lacks the necessary administrative resources, nor operates as a legal entity, its power to coordinate and manage regional issues is severely limited and restricted. Presently MCO’s main remit is to investigate issues and to advise the local authority governments. An annual round-table meeting of the mayors is the only official opportunity for the MCO to discuss and devise actions on regional matters. However, lacking long-term goals, clarity over functions/ activities, a clear agenda or mandate and inability to implement actions, the role of the MCO in influencing Regional actions and gaining real buy-in from the 9 mayors is weak.
4.11.3
Because an official Metropolitan Regional Authority does not yet exist there is insufficient information to evaluate internal structures and analyse the effectiveness of institutional inputs. In only having 3 full time staff the MCO has little opportunity to increase efforts to undertake regional functions and achieve cooperation. By comparison, for example, the Greater London Authority has approximately 600 highly qualified staff.
4.11.4
Recently there have been efforts at the municipality level to gain input into the planning and vision exercises as well as overall decision-making and implementation processes. A broad range of governmental agencies, experts and consultants, and civil society have participated in planning exercises. However, representation from industrial and the private sectors is low. Whilst there does seem to be some momentum building for input into city planning this has not been moved up a level into consolidated partnership, consisting of multi-actors at multi-levels, taking on responsibilities for implementing sustainable urban growth and driving forward potential metropolitan regional advantages.
Impacts to 2020 4.11.5
The sector analysis of the loosely defined Wuhan Metropolitan Regions has consistently indicated that there is a need to manage urban development and
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environmental issues on a wider scale than municipal government. Without a Regional Metropolitan Authority Wuhan City may not reach its full economic potential and be able to provide labour and capital to support development in other cities in the Region. The levels of urbanisation indicate that Regional actions both with regard to strategic planning and investment need to occur in the near future to better achieve more sustainable patterns of development and lever increased economic benefits than population share in the Wuhan Region. In order for a regional coordination authority to develop in Wuhan however it is crucial that there is: • • •
•
4.12
A clear mandate on which the region exists and those municipalities within the region can achieve common good from it’s formation; An agreed vision for achieving sustainable development and a economic growth; A fit for purpose metropolitan regional authority to manage development, protect and enhance the natural environment and sufficiently resourced to implement actions; Multi-level representation and buy-in to build up a consolidated regional partnership.
Finance
Municipal Funds 4.12.1
Although this study is focussed on Regional Metropolitan development there are issues with regard to mechanisms by which individual city authorities currently raise funds to undertake municipal functions; these impact on Regional finance issues. Information is provided below for WM which is indicative of how the other 8 municipalities are likely to operate. This has aided in raising issues over how a Regional Metropolitan Authority could access funding in the future.
4.12.2
The sources of finance for WM have progressively developed and diversified. Table 35 illustrates various sources of funds for WM for its urban development programme showing the amount and proportion respectively. The figures show a rapidly increasing trend in total amount of urban development funds, reaching ¥53.9 billion in 2005, 2.8 times that in 2002. “off budget” funds constitute a major part of the total funds. The WM raised ¥32.8 billion in 2005, about 3.5 times that in 2002, accounting for 60.8% of the total. Like any rapid growing areas, the income from land release and land requisitioning contributed 31% to the total governmental revenues.
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Table 35
Sources of Funds for Urban Development in Wuhan
Year
Total
Inside Budget
Domestic
Foreign
Counterpart
Revenue Sources
Billio
Other
Funds Loans
Sources
Sources
%
Billion
%
Billion
%
Billion
%
Billion
%
Billion
%
100
3.7
19.
3.2
16.
0.1
0.8
9.3
48.
1.3
6.9
3.0
11.1
2.2
6.8
2.2
4.0
n 2002
19.2
5 2003
27.1
100
1.7
5
6.2
5.1
18.
5 0.6
2.4%
15.2
8 2004
32.7
100
1.3
4.0
7.4
22.
1 0.9
2.7%
19.2
6 2005
53.9
100
1.9
3.6
13.6
25.
56.
58. 7
1.4
2.6%
2
32.8
60. 8
Notes: Data for government bond finance is not available; Total percentage is not equal to 100% since last year’s remaining balance adds to this year’s sources.
4.12.3
There are a number of key issues with regard to municipal finance which have regional implications. These include a lack of coordination between the relevant plans; poor coordination between planning and budget availability; illegality of some methods used to raise municipal finance; credit risk; unsustainable land sale/ leasing and its ability to continue as a major source of local revenue; “off budget” financing; limited private participation; and methods used to fund mega projects. The consequences of these issues are described below:
4.12.4
Firstly, there is little coordination between the social and economic development plan, the master plan, environment plan and transport plan. One does not trigger the other and as has been discussed above, can contradict or duplicate one anther. Nor is there financial underpinning to the actions proposed. Finance required for proposed improvements in the respective plans for transport and infrastructure for example, is disproportionate to current expenditure and capital investment budgets in these two crucial areas. Mechanisms to raise and substantially increase finance to development the improvements is not addressed in the plans.
4.12.5
Secondly, WM Government currently obtains a significant amount of Transfer Payments from central government for urban development. As such “inside” budget revenue has become less important for urban infrastructure in WM: It accounts for only 3.59% of the total source in 2005. There is big gap between tax on city maintenance
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and construction and expenditure on city maintenance and construction. 4.12.6
Off budget revenue is one of the most important sources of urban development finance; in 2004 land revenue accounted for 30.96% of the total government revenue. WM Government utilizes both central government bonds and international loans for infrastructure projects. The Wuhan Investment Company is used by the Government to obtain loans from commercial banks etc. The Government also issues municipal bonds through its investment company. In addition, it operates on heavy debt. This means the City authority is highly unlikely to operate on a balanced budget. Financial risk is thus likely to be high and no controls are currently in place that would indicate impending serious financial problems nor encourage more prudent budget and fiscal management.
4.12.7
Thirdly, WM Government has issued several regulations to encourage private participation in the infrastructure sector and has successfully implemented this policy through BOT. In 2005, a joint venture between a Singapore firm, and the Wuhan Power Company, Wuhan Gelin Environmental Company and Wuhan Water Company successfully launched an infrastructure project using BOT over a 25 year period. Also using BOT the WM Government authorized Hanxi Waste Water Treatment Company to construct a WWTP utilising ¥460 million of investment and capable of 400000 tons of daily capacity (2005). In addition, WM established the first power plant using solid waste again through a BOT scheme thus raising a ¥480 million capital injection from the private sector. Knowledge gained in these schemes has not been transferred to the transport sector, nor to other city authorities in the Region.
4.12.8
Fourthly, real estate taxes have been in effect in Wuhan for many years. However, similar to most City governments in China, WM has not implemented a property tax.
4.12.9
In summary WM’s sources of finance have progressively been developed and diversified but key areas require further review including: •
• •
Coordination between and underpinning of budgets of approved Plans, such as the social and economic development plan, transport plan, master plan and land use plan Further encouragement of private participation through BOT and PPP but eradiating market entry barriers, administrative barriers, and financing barriers Adopting an appropriate mechanism, such as early warning systems, to monitor credit risk and local government default risk etc.
Impacts for Regional Finance to 2020 4.12.10 The above points raise issues for funding Regional activities (and those at municipal level) particularly in an environment of increasing urbanisation, the need to provide community facilities, infrastructure and housing given rural to urban migration and industrial development likely to occur to 2020. The main factors which must be addressed if realistic finances are to be obtained to support development and the communities within the cities and Region are:
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•
•
•
More reliance on local financial resources will have to occur as all indications are that funding from central government will decrease. This may mean that property tax could offer a more reliable and equitable option for raising local revenue. Requisitioning of land is proving unsustainable - land is a finite resource and will always have competing demands for its use between agricultural, urban, natural environment activities. Linking of land supply with demand and addressing more sustainable patterns of development, could ensure that financial resources are not misdirected in acquiring land not needed for development, avoiding the leap frog approach (development jumping over agricultural land surrounded by urban development), and providing a land resource for farmers who need agricultural land to supply food and a form of employment which are necessary for a functioning Regional economy. More involvement of the private sector. The use of BOT etc has proven to provide options for the provision of infrastructure. This has not been transferred to other sectors nor in providing needed services between local authority areas in the region (shared solid waste treatment facilities for example).
4.13
Summary
4.13.1
In reviewing the current situation in the loosely defined WMR it is apparent that Wuhan could establish some regional advantages over the years to 2020 which would strengthen economic growth, encourage better use of finite resources, enhance environmental protection and substantially improve urban management in a time of predicted of rapid urbanisation and economic growth. However there are key areas which need to be addressed if regional advantages are to be achieved. These are summarised as follows:
4.13.2
Firstly the current Metropolitan regional boundary does not appear to match that which would delineate a functioning region. Inclusion of all 8 city authorities around WM has created a large region the outer authorities of which offer little synergies with the core. As analysis of the urban economies has shown no supply chain linkages nor clustering advantages exist across the Region – with the few being located in one authority’s area – Wuhan City. In the context of the criteria outlined in Chapter 2 the establishment of a region needs to ensure a collective benefit can be achieved – the current proposed Region does not appear to offer such benefits. If a Region is to be successfully established in Wuhan a more coherent and functioning Metropolitan focus needs to be achieved. Basing the region on transport improvements does not appear to have achieved buy-in from all authorities in the currently defined region, especially as the annual mayors meeting is the only regional management coordination activity. Analysis of the Transport Plan to 2020 raises serious questions on the viability of the transport improvements proposed to underpin the Region.
4.13.3
Secondly there is a clear need to develop Wuhan City especially in regard to production factors – labour and capital. Wuhan City itself does not yet have the critical mass to trigger positive multiplier effects for other cities in its municipality and as such, has not reached the stage where it can influence development occurring in surrounding municipalities. Each city is competing for industrial development and not encouraging
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industries that supply to one another or build on clustering advantages. Improved management (marketing, land use, development of capital markets) is required to lever advantages and encourage synergies and cluster advantages in the City itself. 4.13.4
Thirdly, as partly discussed above, if the WMR is to advance it needs to have a clearer remit than transport - there is little trade between authorities in the region at this stage therefore limited need for costly transport improvements. Duplication in economic development occurs partly in response to a lack of co-ordination and marketing but also perhaps because of in intra city authority and intra-regional rivalry. If the Metropolitan region is to be established there needs to be common good able to be obtain by all municipalities forming part of that Region with a clear mandate and buy-in from all participants.
4.13.5
In the context of the above metropolitan regional planning could offer improvements particularly with strategic planning addressing infrastructure provision, protection of natural resources, better management of land release by consolidating compatible industries and finding economies of scale in dealing with the environmental consequences of urban development particularly in regard to WWTP, solid waste management, potable water supply, realistic intercity transport improvements and traffic restraint.
4.13.6
Wuhan Metropolitan Region has some serious issues to resolve if sustainable development or “healthy urbanisation” is to be achieved in the face of current and continuing rapid urbanisation and industrial restructuring. Key areas issues are summarised in Chapter 6. Potential policy interventions to address these problems are discussed in Chapter 8 based on an examination of best international practices in Chapter 7.
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5
Chengdu Metropolitan Region Case Study
5.1
Introduction
5.1.1
Chengdu is located in Central and Western area of China and is the capital of Sichuan Province. It incorporates more than 10 million people and a total land area of 12,290sq. km, with a radius of over 62 km. Chengdu is one of the largest municipalities in China in terms of total population as shown in the table below.
Table 36
Municipal Populations, 2000 City Chongqinq Shanghai Beijing Chengdu Tianjin Guangzhou Wuhan Xi’an Dalian
Total population (millions) 30.9 16.8 13.8 11.1 10.0 9.9 8.3 7.4 5.9
Urbanization level (%） 33.1 88.3 77.5 53.5 72.0 83.8 82.9 41.6 63.4
Urban population 10.2 14.9 10.7 5.9 7.2 8.3 6.9 3.1 3.7
Note:Statistics not always directly comparable due to definitional issues and treatment of migrant population. Source: Fifth national population census communiqué.
5.1.2
Chengdu plays a very important role in south western China as it is a centre for regional finance, commerce, science and technology, transport and communication. It is the capital of Sichuan Province which, with a population in excess of 80 million, is China’s fourth most populous province. Chengdu also plays a strategic function in terms of generating urban employment, and absorbing migrants and surplus agricultural labour into the urban economy. It also provides an anchor in the northwestern end of the Chongqing-Chengdu corridor, the fourth largest urban cluster in China.
5.1.3
Chengdu’s jurisdictional territory contains 9 urban districts, 4 semi-municipal level cities and 6 counties. It includes the city proper, the urban fringe and rural hinterland. The city proper contains Jingjiang district, Qingyang district, Jinniu district, Wuhou district, and Chenghua district. The urban fringe contains Wenjiang district (outside ring road 4), Xindu district (outside ring road 4), Qingbaijiang district (outside ring road 4), Longquanyi district (between ring roads 3 and 4), and Shuangliu county (outside ring road 4), Pi county and Xinjin county. The rural hinterland includes Pengzhou city, Dujiangyan city, Congzhou city, Qionglai city, and Dayi county, Pujiang county and Jintang county. The three development areas, the city-proper, urban fringe and rural hinterland which make up the Chengdu Metropolitan area are shown in the Figure that
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follows. 5.1.4
On 29th July 2007, “Ideas on Improving the Development of Coordinated Reform Test Zone” was published by the Chengdu Municipal Government, depicting the key development aspects and the targets within the next ten years. In particular this document constitutes significant institutional reform across the metropolitan region, including the conversion of county/city areas to districts, and administrative boundary adjustments to incorporate villages. The objective is to “unify Chengdu”, including all economic, political, cultural and social development aspects through a coordinated economic and social development plan, and a metropolitan master plan and land use plan. This is a very important step forward in metropolitan planning for this important metropolitan region.
5.1.5
The Metropolitan region of Chengdu differs from Wuhan in that it is effectively one administrative entity. In terms of the definition of metropolitan areas established in Chapter 2, Chengdu falls into Category A. This makes management of urbanisation and development processes simpler in several respects than Wuhan which falls over more than one municipal boundary (Category D). The commitment to creating a unified Chengdu through a new approach to metropolitan planning is a positive step forward in this respect.
5.1.6
This chapter describes the Chengdu Municipal Region with respect to: • • • • • • • • •
5.1.7
the rate of urbanisation; the urban economy; land use and land supply; sustainable transportation; environment; finance; institutions and governance; urban poverty; and rural migration (urban-rural issues).
This chapter concludes with a summary of the key areas that require intervention in the Chengdu Municipal area, so as to promote a more sustainable form of urbanisation and development. These problem areas are then considered in Chapter 7 in relation to policy interventions in other parts of the world that have been successful.
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Figure 25.
Chengdu Metropolitan Region Chengdu’s administrative boundaries are characterized by “circles and layers”. The city-proper, comprises the districts of Jinjiang, Qingyang, Jinniu, Wuhou and Chenghua. Jinniu and Chenghua. The urban fringe, comprises the districts of Xindu, Qingbaijiang, Wenjiang and Longquanyi and the towns of Pi and Shuangliu. The rural hinterland and comprises the cities of Dujiangyan, Pengzhou, Qionglai and Chongzhou and towns of Xinjin, Jintang, Dayi and Pujiang.
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5.2
Population and Urbanisation
Population and Urbanisation 5.2.1
The population of Chengdu as per the Sichuan Statistics Yearbook 2007 is shown in Table 37 and is broken into the city-proper urban fringe and rural hinterland. The total population in 2006 was 11 million and the urbanisation rate was about 52%. The cityproper which is made up of Jinjiang District, Qingyang District, Jinniu District, and Wuhou District, Chenghua District is completely urbanised, and is home to almost 30% of the Municipalities population. The urban fringe contains a slightly greater share of the population at 31%, but is much less urbanised at about 40%. The north and north western areas are more urbanised at around 46- 56% than other areas.
Table 37
Population in Chengdu Municipality, 2006 Location
City-proper
Urbanisation Rate (%)
Central
40
40
100
Qingyang District
Central
51.2
51.2
100
Jinniu District
Central
69.5
69.5
100
Wuhou District
Central
79.5
79.5
100
Chenghua District
Central
61.6
61.6
100
301.8
301.8
100
Xindu District
North east
65
23.6
36.3
Qingbaijiang District Wenjiang District
East
40
14.2
35.5
West
33.8
18.8
55.6
Longquanyi District
South East
56.6
21.8
38.6
Pi Town
North West
48.4
22.1
45.7
Shuangliu Town
South West
92.8
34.9
37.6
336.6
135.4
40
Subtotal Rural hinterland
Urban Population (10, 000 persons)
Jinjiang District
Subtotal Urban fringe
Total population (10,000 persons)
Dujiangyan
North West
61
17.1
28
Penzhou
North
78.4
24.6
31.4
Qionglai
South West
65.2
18.4
28.2
Chongzhou
West
66.9
16.9
25.3
Xinjin Town
South West
29.9
9.5
31.8
Xintang Town
East
86.2
21.8
25.3
Dayi Town
West
51.4
19
37
Pujiang Town
South West
26.1
7
26.8
Subtotal
465.1
134.3
28.9
Total
1103.5
571.5
51.8
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5.2.2
In contrast the east is less urbanised at less than 40%. This suggests a much more rapid pace of development in the west. The rural hinterland is the least urbanised at 38% but has the greatest share of the population at 42%. With the exception of Dayi Town in the west which has an urbanisation rate of 37%, all other areas are less than 35% urbanised. This suggests that further urbanisation should occur in the urban fringe.
5.2.3
The Table 38 below presents changes in Chengdu’s level of urbanisation from 1980 to 2005 illustrating a continual process of urbanisation. The current goal is to achieve 70% urbanisation rate within the next 10 years. This is outlined in the recently released “Ideas on Improving the Development of Coordinated Reform Test Zone”, 2007.
Table 38 Urbanisation in Chengdu, 1980-2000 Population (millions)
Annual growth rate
1980
Total Urbanisation level
8.22 23.4% 1.92
Urban Population
1990
2000
2005
1980-90
19902000
2000-05
9.26 28.3%
11.1 34.1%
1.2%
1.8%
1.8%
2.6
3.79
11.9* 50.3%** 5.4**6.0*
3%
3.8%
8.7%***
* Consultants’ Estimate. ** Official Estimate. *** Using mid-point of urban population estimates.
5.2.4
Up to 2000, the urban population was only slightly higher than the population of the city proper. In 2002, however two districts, Xindu and Wenjiang were reclassified as urban. As a result the urban population increased dramatically as the entire population of these districts was then categorised as urban. While this makes projections of the future urban population using the level of urbanisation suspect in the extreme, it does reflect an actual process of transformation of the population and the physical area from rural to urban. This transformation occurs in three ways: • • •
5.2.5
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suburbanisation as areas become urban through the relocation of population from the existing urban core; the increasing trend of farmers taking up non-agricultural employment114. the transfer of farmers from rural to urban hukou, irrespective of whether or not they change their employment.
The crucial points about these transformation processes is that firstly they are largely policy driven and secondly, they do not involve rural urban migration as most of the farmers taking up new urban occupations will remain living in their original villages or in new purpose built accommodation.
Urban employment increased by 10% annually between 2000 and 2005 (see Table XXX).
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Migration 5.2.6
The analysis of population change in general, and urban population change in particular, in Chengdu Metropolitan Region (CMR) is complicated by the same problems that affected the national level analysis namely changes in urban boundaries and definitions and the inclusion / exclusion of the migrant population. As a starting point, Table 39 below shows how Chengdu’s population has changed relative to that of Sichuan province in 1990 and 2000. The increase in the proportion of the provincial population residing in Chengdu during this period indicates a significant level of rural urban migration. It should also be noted that Sichuan’s rate of population growth, 0.5% annually, was around half the national rate reflecting its position as one of the major providers of rural migrants to Eastern provinces.
Box 5.1 History of Urbanisation in Chengdu Urbanisation and population growth in Chengdu has been shaped by the same forces and been subject to the same phases as those that have been described in relation to the national situation in Chapter 3. This can be seen in below Figure where the initial period of rapid urbanisation following the establishment of the Peoples’ Republic of China in 1949 was followed by the anti-urban thrust of the Cultural Revolution in the 1960s and 1970s. Following Mao’s death in 1976, urbanisation picked up and has continued to this day, first with the development of TVEs and, since the early 1990s, with increasing rural urban migration. More recently, the level of urbanisation increased substantially as administrative changes were implemented. From 1988 to 1994, four towns in the main urban area were reclassified as cities, and in 2002 Xindu and Wenjiang became districts (they had previously been counties), forming the current administration system of 9 districts, 4 cities and 6 towns and the current metropolitan structure of a central city surrounded by a number of smaller decentralised urban centres. The majority of the region however constitutes, as described above, an essentially rural hinterland. The impetus for these changes was the large physical expansion of the urban areas resulting from the relocation of population from redeveloped central areas and the development of large peripheral communities dominated by non-hukou rural migrants. Urbanisation of Chengdu, 1950-2005
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Table 39, Sichuan and Chengdu Population, 1990 and 2000 Population (millions)
Annual Growth Rate
1990
2000
Sichuan
78.35
82.35
0.5%
Chengdu
9.26
11.10
1.8%
11.8%
13.4%
% in Chengdu
5.2.7
Table 40 summarises changes in the population of Chengdu Municipality between 1980 and 2000.
Table 40
Population Change in Chengdu, 1980-2000 Population (millions)
Sub-area City-proper Urban fringe Rural Hinterland Total
Annual growth rate
Share of Population
1980
1990
2000*
1980-90
1990-2000
1980
1990
2000
1.69 2.55 3.98 8.22
2.2 2.8 4.3 9.26
3.47 3.16 4.47 11.1
2.7% 0.9% 0.8% 1.2%
4.7% 1.3% 0.4% 1.8%
21% 31% 48% 100%
24% 30% 46% 100%
31% 28% 40% 100%
* Data for 2000 includes entire migrant population whereas for 1990 recent arrivals are excluded. Source: Derived from Webster, 2003 and 2004.
5.2.8
Between 1980 and 1990, the municipality as a whole attracted relatively few net inmigrants from other areas – the overall growth rate is similar to the national average. There was however substantial in migration from the fringe and rural hinterland as evidenced by the below average growth rates for these areas. A rough estimate would be that around 300,000 migrants moved from the outer areas of the municipality to the main urban area during this period.
5.2.9
From 1990 to 2000 this pattern changed and the municipality received a substantial number of migrants from outside. Based on the national population growth rate of 1%, an approximate estimate of this number would be around 900,000. If these are assumed to have settled in the main urban area, one can then estimate that the city now accommodates around 100,000 additional migrants moved from the rural hinterland. More importantly, it means that over half the increase in the Municipality’s population between 1990 and 2000 was due to migration.
5.2.10
As a result of these two migrant flows, around 30% of the city population now consists of migrants. This proportion could be higher due to relocation of population from central to peripheral areas. In particular, the population of Longquanyi increased by 30% between 1990 and 2000 due to its designation and development as a new town. This important trend is discussed below where the physical expansion of the main urban area is examined.
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5.3
Population and Urbanisation Projections
Population Projections 5.3.1
Chengdu’s urbanisation level and urban population have both increased rapidly since the ‘open door’ policy and both are likely to increase into the foreseeable future. The critical question is by how much? Urban population projections are subject to high degrees of uncertainty due the issue of migration which in turn will depend to a considerable degree on migrants’ perceptions of the relative employment prospects between different urban centres and the prospects for the rural economy in their home villages. In this context, it is considered desirable to produce a range of scenarios. Furthermore given that this study is about metropolitan regions, it is considered desirable to start with projections for the municipality as a whole. Initially three scenarios were developed: • • •
5.3.2
Scenario A: Assuming that Chengdu’s share of the Sichuan population would increase in line with the observed increase between 1990 and 2000 Scenario B: Assuming that the number of net migrants arriving between 1990 and 2000, c. 1 million, would also come in each of the next 2 decades Scenario C: Assuming that number of net migrants in each of the next 2 decades would be 50% higher than was observed between 1990 and 2000. Although a high assumption, this is not considered implausible given the target of continuing rapid growth in the urban economy.
The resultant projections are contained in Table 41 below. There is relatively little difference between them. The current 2005 population will be around 12 million, the 2010 population will be 12.5 to 13 million and between 14 and 15 million in 2020 which is virtually the same as specified in the “Chengdu Master Plan (200-2020)”. The projections also show the effect of the declining rate of natural increase, in consequence around 80% of the increase in population in the municipality will be due to migration.
Urbanisation Scenarios 5.3.3
The above projections while they provide an indication of the likely total population of the municipality do not show the urban population. A minimum estimate of this component can however be obtained by taking the current (2005) estimate, c. 5.7 million, and assuming (i) all this population will increase at the prevailing rate of natural increase and (ii) that all migrants will move to urban areas. This produces a 2020 estimate of the urban population of around 8.3 million implying that 57% of the population of the municipality will be urban by 2020.
Table 41
Chengdu Municipality Population Projections (millions), 2000-2020 Year
Sichuan Chengdu Chengdu Annual Growth Population Share Population Rate2005-2020
Average annual increment 2005-2020
2000 82.35 13.4% 11.1 Scenario A: based on share of Sichuan Population 2005 84.01 14.2% 11.9 Asian Development Bank, Peoples Republic of China - Study on Sustainable Urbanization in Metropolitan Regions Draft Final Report, June 2007. Halcrow Group Ltd.
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Year
Sichuan Chengdu Chengdu Annual Growth Population Share Population Rate2005-2020
2010 85.28 15.0% 12.8 2020 87.00 16.6% 14.4 Scenario B: based on 100,000 new migrants per annum 2005 11.8 2010 12.5 2020 13.8 Scenario C: based on 150,000 new migrants per annum 2005 12.2 2010 13.1 2020 14.9
Average annual increment 2005-2020
1.3%
170,000
1.0%
130,000
1.3%
180,000
Source: Consultants’ Estimates.
5.3.4
This estimate however excludes any increase in the urban population due to further reclassification or hukou transfers. In order to crosscheck this estimate, Table 42 below includes alternative urbanisation scenarios based on the observed urbanisation rate of Chengdu during the 1990s, and the medium and high scenarios derived from the national projections.
Table 42
Urbanisation Scenarios, Chengdu, 2005-2020 Scenario
Assumptions
Item
From population projections
See text; assumes no further reclassification or hukou transfers
Urban Population (millions) Urbanisation level
Based on observed Chengdu urbanisation
Urbanisation rate increases by 6 percentage points in each decade.*
Urban Population
Based on National medium urbanisation scenario
Urbanisation rate increases by 6 percentage points up to 2010 and 9 between 2010 and 2020.*
Urban Population
Based on National high urbanisation scenario
Urbanisation rate increases by 8 percentage points up to 2010 and 12 between 2010 and 2020.*
Urban Population
Urbanisation level
Urbanisation level
2005
2010
2020
5.7
7.1
8.3
50%
55%
58%
5.7
7.2
8.9
50%
56%
62%
5.7
7.2
9.4
50%
56%
65%
5.7
7.4
10.1
Urbanisation 50% 58% 70% level Nb. All projections assume populations of 12 million, 12.8 and 14.4 million for 2005, 2010 and 2020 respectively. * These projections assume increased reclassification/ hukou transfers. Source: Consultants’ Estimates.
5.3.5
All four urbanisation scenarios give a 2010 urban population for the municipality of 77.4 million. The range for the 2020 urban population is wider, between 8.3 and 10.1 million. As the low projection assumes no reclassification/ hukou transfers, it is
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considered to be unrealistic. ‘Best’ estimates for the future urban population of Chengdu would thus be around 7.3 million in 2010 and 9.5 million in 2020115 . A 2020 urban population for Chengdu of 9.5 million implies the following: • • •
An increase in the urban population of 3.8 million, equivalent to 66% and an annual growth rate of 3.5%. An average annual urban population increase of 250,000 The relative contributions of natural increase, migration and reclassification to this overall increase will be approximately 12%, 40% and 48%.
5.3.6
The uncertainties related to the above projections also need to be mentioned. These are the same as mentioned in the context of the national urbanisation scenarios, namely changes in the hukou and one child policies. While the latter is unlikely to have a significant impact during the planning horizon for this study, relaxation of hukou regulations could increase the flow of migrants significantly by making it easier for families to accompany the working husband, especially if they children are granted access to the urban education system. Furthermore, the extent of reclassification/ hukou transfers will to a large extent depend on the policy towards to future urban densities – the higher future planned densities, the lower will be the need for the removal of existing villages and the consequent transfer of hukou status, and vice versa. This aspect is discussed below.
5.3.7
Irrespective of the final outcome, a substantial proportion, around a third, of the municipality will remain essentially as it does today: rural villages served by small market towns. Providing for this population will also require substantial financial resources.
5.4
Chengdu Physical Expansion and Land Use
Physical Expansion 5.4.1
The built up area of Chengdu has grown tremendously to accommodate the increase in the urban population. The total land area of the Chengdu Municipality is 12,000sq. km. In 1980 the built-up area was only 60 sq.km2 (less than 1% of the municipal area). It increased to 85 km2 by 1990 but by 2003 it had increased 4.5 times to 386 km2.
5.4.2
Despite this increase, the built-up area still represents only 3% of the total municipal area. Furthermore, the total amount of designated urban land, which increased by over 50% in 2002, accounts for under 18% of the total, meaning that the municipality as a whole remains a predominantly rural area (see Figure over page).
115
The “Chengdu Master Plan (2000-2020)” implies an urban population of 9.7-10.4 million.
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Figure 26.
Land Supply in Chengdu by County, 2006
( Notes - horizontal axis: central Chengdu, Wenjiang, Dujiangyan, Longquanyi, Shuangliu, Pi, Xindu, Xinjing, Qingbaijiang, Jiangtang, Congzhou, Dayi, Pengzhou, Qionglai, Pujiang; Column: land supply area; curve: land supply amount ) Source: Bureau of Land Resources, Chengdu 5.4.3
Of greater importance is the fact that the currently designated urban land area is over 5.5 times greater than the currently built up area. This reflects not only the sizeable expansion of designated urban areas but the creation of the large planned development zones through increased land supply. The total area of land supply in 2005 was 1,188.5ha (17828.02Mu). About 25% of land supply was in the city-proper and 75% was in the fringe and rural hinterland. This is not unsurprising given the cityproper is heavily urbanised already, and that expansion into the fringes in inevitable.
5.4.4
Wejiang in the west topped the whole metropolitan region in land supply at 375.176 ha (5627.64 Mu), followed by Central Chengdu. After this group, land supply in the north west and south east corridor was greatest. The south west and north (Penghzou) had the lowest levels of land supply.
5.4.5
As illustrated in the figure below there is a gap between land supply and demand between the city-proper on the left and the urban fringe and rural hinterland on the right. For the city proper, supply is only slightly greater than demand, whereas for the peripheral areas demand is significantly lower than supply, reflecting overrequisitioning of land. As an example, the total planned area of development zones has reached 106 km2, which is larger than the total urban built up area in the mid 1990s. The largest such zone, the High-Technology Industry Development Zone in Wejiang occupies an area of 21.6 km2.
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Figure 27.
Comparison of land supply and land leased
(Left: Central Chengdu, Right: Suburb Area; Purple: land supply, Amaranth: land leased) Urban Densities 5.4.6
Table 43 below also shows the sharp decrease in urban densities. As previously mentioned in Chapter 3, this is a worldwide trend that is being more acutely manifested in China than elsewhere due to the major programs of city centre redevelopment116 and the creation of new, lower density, residential areas. Although densities are less than half what they were in the early 1980s, they are however still high by world standards (see previous chapter) due to the design of the new suburbs – multi-storey apartments but with much greater provision for roads and open space than hitherto.
Table 43
Trends in Urban Land and Built-up Areas, Chengdu, 1980-2003 YEAR 1980 1990 1998 2000 2004 Urban land area na 1382 1418 1418 2177* (km2) Built-up areas (km2) 60 85 192 208 386 % Built-up Na 6.2% 13.5% 14.7% 17.7% Implied urban 28,200 25,900 na 16,000 13,600 density (pop/ km2)
* Xindu and Wenjiang were reclassified as urban districts in 2002.; ** Assuming that urban population is entirely located within this built-up area.; hence densities are, to some extent, likely to be overestimated. Source: Chengdu Statistical Yearbook 1990-2005. Note: the data contains.
5.4.7
The figure overleaf shows where this physical expansion has occurred by comparing satellite images from 1978 and 2002. In 1978, most of the development was concentrated within the area now contained within the second ring road which was completed in the late 1980’s. By 2002, this area was virtually fully developed while there is only limited vacant land remaining between the second and third ring roads (completed in 2001), much of the area between the third and fourth ring roads
116 Especially removal of traditional housing areas and 4-6 storey tenements dating from the 1950s and 1960s. (see UN-Habitat Report, ??).
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(completed in 2002) remains undeveloped. This illustrates the substantial potential for future urban development within the current ring road structure of Chengdu City. This conclusion is corroborated by Webster (2003): while the area within the second ring road is now almost completely urban, 22% of the land between the second and third ring roads is currently undeveloped yet only 30% of the area between the third and fourth ring roads is currently built up. He further estimates the undeveloped (non-urban land) between these ring roads to be around 240 sq km which is equivalent to over 60% of the current built up area. 5.4.8
As Chengdu is located on the Sichuan Plain, its spatial development has proceeded largely unconstrained by topographic or other considerations and has been facilitated by the open door policy which has provided freedom to the private sector to develop where it wishes. The result is evident in Figure overpage – a combination of intensification within the ring roads and development along the radial transport links in all directions. There has also been a pronounced westward trend since the 1990’s. Key catalysts for this have been the new airport in Shuangliu County, and the fastgrowing satellite towns of Wenjiang and Huayang which have become commuter towns. Wenjiang, Pixian and Shuangliu have also become concentrated with luxury housing. The Chengdu National Hi-Tech West Zone Park near Pixian has also been a catalyst for growth. In contrast, the north east and east which contain heavy industry have proved less desirable locations.
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This image illustrates the spatial distribution of towns and cities within the Chengdu Metropolitan Urban Region. Only 18% of the metropolitan region is built up and there is very little urban development outside the third ring road except to the southwest.
Figure 28.
Spatial Distribution of Towns and Cities in Chengdu Metropolitan Urban Region
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Figure 29.
Chengdu Metropolitan Urban Region, Comparison between 1978 and 2002
In 1978 only 1 ring road was built
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5.4.9
The growth pattern shown in Figure that follows has not been entirely in accordance to adopted policy117. The Chengdu Master Plan (2000-2020) establishes the main city growth direction towards the east and south, targeting closer connections to Chongqing. Three sub-centres in the east, south and north, as well as seven new satellite towns, were designated in order to shape future spatial growth on the basis of a “centre-core, satellite-corridor”. In 1991 when the old districts in the city centre were first being redeveloped communities were resettled in these areas, especially Longquanyi to act as a catalyst for further urban expansion. While these sub-centres and satellite towns are becoming established118, as is evident from the Figure 28 above, but it is apparent that market forces have been influential in the leapfrogging of the fourth ring road towards Wenjiang119. The implication is that market forces, especially where they bring employment or major real estate/ commercial investments, tend to override planning policy in Chengdu just as they do in many other Chinese cities.
Current Land Use 5.4.10
Table 44 below shows the changing pattern of land use in Chengdu between 1996 and 2003. A point to note is the increase in construction land. This category is higher than the urban built up land as it includes all non-agricultural/ built up land outside designated urban areas, including mining areas, transportation links, water areas and, more importantly rural residential land located in villages and small towns. Currently rural residential land covers 945 km2 and thus accounts for over half the total construction land. Another finding of interest is that the decrease in cultivated land is almost equivalent to the increase in garden plots as farmers nearer the urban centre have shifted to growing higher value flowers, trees, fruit and vegetables.
Table 44
Regional land use change in Chengdu during 1996-2005 (unit: km2)
LAND USE TYPE Cultivated land Garden Forest Grassland Other agricultural land Subtotal
Agricultural Land
Construction land Unexploited land Total
1996 4976.3 452.8 3119.0 157.7 1271.3
1997 4704.4 545.2 3224.0 157.7 1267.6
1998 4897.2 503.1 3109.8 157.7 1237.0
1999 4814.5 521.0 3108.1 158.1 1230.0
2000 4709.0 572.9 3151.0 158.1 1229.1
2001 4617.1 616.1 3161.5 158.2 1219.7
2002 4546.9 673.4 3171.3 158.2 1203.4
2003 4311.4 847.4 3215.7 156.9 1160.8
9977 1507.7 698.5 12183.2
9898.9 1598.3 686.0 12183.2
9904.8 1598.3 680.1 12183.2
9831.7 1667.9 683.6 12183.2
9820.7 1693.5 669.6 12183.2
9772.6 1738.5 672.1 12183.2
9753.2 1766.6 663.4 12183.2
9692.2 1841.5 649.5 12183.2
Source: Land use investigation data of Chengdu between 1996 and 2003.
117
The five-year municipal physical plan released in 1997, and the subsequent five-year plan released in 2002
118
As previously noted, the population in Longquanyi district increased by over 30% between 1990 and 2000, excluding non-hukou migrants. 119
The impact of market forces is also clearly indicated by the extent of undeveloped land within the large development zone to the west of Longquanyi.
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5.4.11
Yet despite these changes, The table below shows that the great majority of the municipality remains in agricultural or forest uses. Despite the rapid urbanisation the percentage of land under cultivation for rice or garden plots has decreased.
Table 45
Distribution of Regional Land Use (%) in Chengdu, 1996, 2000 and 2003 Land Use Type All agricultural land Of which - Cultivated land Garden Plots - Forest Land Construction land Unexploited land
1996 81.89 40.85
2000 80.60 38.65
2003 79.55 35.39
3.72
4.70
6.95
25.58 12.38 5.73
25.84 13.90 5.50
26.35 15.12 5.33
Source: Preceding Table.
5.4.12
The below table shows the distribution of urban built-up land uses. Residential land has increased by 50% but still only accounts for a third of the total which is low by international standards but reflects the predominant high density apartment construction type. The largest proportionate increases have been in land for public facilities and for industry. It is not known however how much of this land consists of underused or moribund SOE land or vacant plots in industrial estates.
Table 46
Urban built-up areas of Chengdu (km2) Land Use Type
2000
2002
2004
2005
Residential land
66.1
86.5
93.97
100.1
Land for public facilities
29.0
36.62
50.53
54.1
Industrial land
46.2
66.43
78.3
81.3
Land for storage
5.4
6.81
7.3
7.4
Transportation land
8.6
12.54
7.44
7.3
Land for road and square facilities
na
34.41
38.2
Land for municipal public facilities
na
7.23
10.36
Green land
na
15.68
14.17
Special land use
na
11.71
11.18
TOTAL
na
277.93
311.45
77.65
327.85
Source: Urban Construction Statistics Yearbook of China, 2002-2005. Note: there are some inconsistencies between the data from different sources.
5.5
Land Use Implication of the Urbanisation Scenarios
5.5.1
The crucial question is the demand for future urban land over the next 15 years? This is not easy to assess given the rapid increase in built up area since 1990. This doubled between 1990 and 2000 and doubled again since 2000, a much higher growth than the national 8.7%. The continuation of this growth rate is not however considered likely in
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the medium term due to the current national concerns about the loss of agricultural land and the impact this is having on farmers. 5.5.2
Given that Chinese authorities can control most aspects of urban development, more than in a great majority of developing countries, it is reasonable to develop a range of future land use demand projections around assumptions regarding future urban densities. In Chengdu these virtually halved between 1990 - 2004; yet they remain high at 13,600 persons/km2. Indications from elsewhere suggest that this trend will continue. Two land demand projections have therefore been formulated based on achieving densities of 10,000 and 6,000 persons per km2 by 2020 as used for the indicative projections contained in the previous chapter. These projections are shown below.
Table 47
Alternative Land Demand Projections, Chengdu, 2005-2020 URBAN POPULATION*
Density
Millions
Persons/ km
km
2
km
2005
5.7
13,600
390
0
0
2010
7.3
12,400**
590
200
40
7.3
11,100**
660
270
50
9.5
10,000
950
360
36
9.5
6,000
1,580
920
92
YEAR
2020
*
Built Up Area 2
Based on medium population projections.
Total land required 2
Annual land required km
2
** Obtained by interpolation.
Source: Consultants’ Estimates.
5.5.3
These projections show that the demand for new urban land between 2005 and 2010 is likely to be in the range of 200-270 km2 while the increase required for the subsequent decade will range from 360 to 920 km2. If the current national annual increase in built up land is maintained at 8.7% over the 15 year period, the total built up area in 2020 would be around 1,350 km2. As this seems unlikely given the current policy debate, a total demand of around 1,000 km2 appears more realistic. As an upper limit this would require another 600 km2 to be developed over the next 15 years.
Key Issues Relating to Future Land Use Supply and Demand 5.5.4
120
As previously mentioned, there are intense national level concerns over the amount of land transferred out of agriculture use and the impact that this is having on farmers120. The majority of new land for urban development is likely to come from currently cultivated land. At present there is around 5,150 km2 of cultivated land which supports a rural labour force of around 4.5 million which at under 4 mu (0.25 hectares) per farmer and under 2 mu per capita is plainly insufficient.
Almost 2 million farmers have lost land in the last 10 years and have been transferred to non-agricultural sectors.
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5.5.5
Irrespective of the policies adopted to reduce the development of agricultural land and maintain high new development densities, more agricultural land will be required, indeed the population projections imply that over half the demand for new urban land will come through reclassification and hukou transfers that will often require the demolition of villages and the relocation of their inhabitants. However this area could be significantly reduced if currently idle land in development zones were allocated to residential uses; the expansive Longquanyi development zone is largely vacant and other examples are to be found closer to Chengdu proper. Idle lands also occur because of the abandonment of large scale construction projects that are or have become unattractive to developers/ investors and as a result lack sufficient resources and market demand.
5.5.6
There is also a large amount of land potentially ripe for development between the third and fourth ring roads. The extent of this land is around 240 km2 which is equivalent to likely demand up to 2010. More generally, in 2004, the amount of designated yet not built up urban land amounts to around 1,800 km2 which far exceeds the likely demand up to 2020. Allied to the likelihood of under-used land existing within the main urban area resulting from SOE rationalisation and closures, and the availability of currently undeveloped parcels that have been ‘leapfrogged’ by development in inner fringe areas, the amount of available land is considerable. Overall there appear to be few grounds for increasing new urban land designations or creating new development zones in the foreseeable future.
5.5.7
Arguably therefore the emphasis the problem facing Chengdu in terms of future land supply is not one of supply ‘per se’ but one of managing and exploiting the substantial reserves of land which are currently available within the fourth ring road, in development zones and as smaller isolated parcels in otherwise largely built up areas. Furthermore the discrepancy between the planned and actual physical development trends emphasise the need for much increased flexibility in urban plans rather than using them to establish a set of targets for land allocation which may prove to be wide of the actual demand and/or located in areas unappealing to private sector residential and industrial developers. The pitfalls of inflexible plans are illustrated in the Box below. Box 5.2. Land Allocations in the Chengdu Master Plan The Chengdu Land Use Plan (1996-2010) specifies that by the end of 2010 total construction land should be constrained to 1,906 km2 with about 353 km2 being added over during the plan period; 272 km2 of which would be transferred from cultivated land through the requisitioning process. By the end of 2003 however, actual construction land amounted to 1,841 km2 representing almost the entire 2010 target. Between 1997 and 2003 however 288 km2 had been added of which 232 km2 was transferred from cultivated land. The designated 1996-2010 quota was thus largely used up by 2003, only half way through the plan period. Similarly with residential land: according to the plan, by 2010 the residential land should claim a total area of 1,182 km2 including 150 km2 of new land over half of which (73 km2) would be requisitioned. By the end of 2003, however, the actual residential land amounted to over 1,400 km2 surpassing the planned area by 20% with over 227 km2 being requisitioned, 50% more than the plan target.
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5.5.8
The mismatch between plan and actuality is clear in. What is not clear is whether this mismatch represents a failure of the plan to cater for a much higher demand than was originally envisaged and/or provide for land development in areas that proved to be favoured by investors? Alternatively, it could reflect the undoubted over-requisitioning of land which has occurred as result of the potential profits (licit and illicit) to be made from its resale and its importance as collateral for bank loans to finance further infrastructure development. Another possible explanation is that many of these transfers occurred on rural land, i.e. outside the control of the urban planning system. While it is not possible to ascertain the importance of each of these possible explanations, and the most likely is that they were all contributory factors, they reinforce the conclusion that the current planning system needs to become more flexible and that land transfers in urban and rural areas need to be conditional on a rapid assessment of the viability of the proposed development.
5.6
Urban Economy
Economic Restructuring 5.6.1
Compared to other semi-provincial level municipalities in China, Chengdu’s overall economic output ranked 11th, but its per capita GDP is below average, only ranking in 18th place in 2005. The situation at the domestic level is different. GDP increased on average by 11.5% between 1978 and 2000 which is impressive by international standards. By domestic standards however the GDP growth rate descended from 6th place in 1991 to below 10th place in 2005. This is a reflection of the lagging level of development in Chengdu which is typical of the western regions of the country.
5.6.2
Since the open door policy there has been immense economic restructuring in Chengdu. Chengdu has been earmarked as a centre for science and technology, finance, transportation and trade. As shown in the Table below the primary sector has generally decreased as a share of GDP from 13.4% to 7.7% from 1996 to 2005. In contrast secondary industry has seen a positive growth rate from 13% in 1996 to 15.8% in 2004. Its share of GDP has remained fairly stable since 1996 at around 45%, although it took a dive in 2004 to 40%. The tertiary sector has increased its share of GDP from about 42% to 50% during this period.
Table 48, Chengdu: Proportion Changes and Development Paces of Value Added, 1996-2005 YEAR GDP (%)
Growth Rate (%)
Primary Industry Secondary Industry Tertiary Industry GDP Primary Industry Secondary Industry Tertiary Industry
1996 13.4
1997 12.0
1998 11.2
1999 10.4
2000 9.6
2001 8.8
2002 8.4
2003 8.2
2004 8.3
2005 7.7
44.3
45.3
45.1
44.7
43.6
45.4
45.5
45.9
39.7
42.5
42.3
42.7
43.7
44.9
46.7
45.8
45.9
45.9
52.1
49.8
11.6 4.4
11.5 3.2
10.1 3.1
10.2 3.4
10.7 4.3
13.1 4.2
13.1 5.2
13.0 5.4
13.6 5.7
13.5 5.7
13.0
13.5
10.8
10.3
11.5
15.0
14.8
15.5
15.8
20
12.2
11.7
11.0
11.7
11.2
13.0
12.8
11.7
12.5
9.6
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5.6.3
This shift reflects a change from the traditional economic structure of Chengdu which has been characterised by Soviet-style satellite industry towns, and then the proliferation of Township and Village Enterprise (TVE), towards a more market oriented economy. As part of economic restructuring many SOE’s have been closed down and removed from the city centre to the urban fringe. The expanding tertiary industry has become concentrated in the central areas of the city and industrial clusters have been identified to promote agglomeration economies.
5.6.4
The 9th FYP period pushes forward economic restructuring by identifying 4 leading industrial clusters, which covered electronics, mechanics (including automobile), medication and food (includes tobacco). This led to growth in secondary industry and a trend towards high-tech. In 2003, these four targeted industrial clusters provided 20.448 RMB billion yuan of industrial added value and contributed 66.2% to the Chengdu total (excluding output of TVEs).
5.6.5
Despite this growth these “leading” industrial clusters only produced about 10% of GDP of Chengdu121. Furthermore, added value from these leading industries averaged only 15% between 1998 and 2003, and is not considered significant in comparison with the increasing rate of GDP within the metropolitan region. In essence, these leading industries have had a limited effect on the regional economy and are not considered key economic drivers, despite the intentions of the 9th FYP.
5.6.6
An exception is the Chengdu High Tech Park which was established in the North West and is the best performing and most pronounced industrial cluster. In 2003, the total industrial output of Chengdu High-tech Development Zone was 17.3 billion Yuan, of which 6.8 billion Yuan went to the electronic information sector. It includes some of the largest IT company’s in the world including Semiconductor Manufacturing International Corporation (SMIC), UNISEM, BESAM, TCL and Monolithic Power System Inc. (MPS). Supporting activities include the NanShanBridge Co. Ltd. (NSBIC), a chip designing company and packaging test providers as PSI and MPS.
5.6.7
Although this industrial cluster has been relatively successful, in general the leading industries tend to be geographically dispersed, and their spatial concentration is not as high as would be expected. Instead of being located within designated clusters, industrial spatial distribution is relatively centralized in Chengdu with the industrial production value of the top 3 sub-districts accounting for 30% for Chengdu’s total. The industrial added value of medication, mechanics and electronic information industries in the most-developed sub-districts accounts for no more than 25% of that of their own above scale industries. Not surprisingly, this absence of agglomeration economies leads to inefficient use of resources, increases the costs of enterprises and reduces economic competitiveness.
In contrast, the proportion of added value of leading industries to regional GDP reached 19.11% in Hangzhou and 28.15% in Chongqing (regardless of tourism and construction material industry) in 2003.
121
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5.6.8
Furthermore, competition (economic, financial) between the cities/towns in the regions acts against regional economic integration. The phenomenon of competition is serious, especially in suburban areas. Some specializations like mechanism, food, medicine, and construction material, are developed almost in every district/city/county, as shown in the table below. Even in the 11th FYP, the supporting industries are overlapped.
5.6.9
Some articles point out that low- credit assessment and consequent difficulty in loan authorization is one of the key barriers for the development of the enterprises in towns/ countries, especially small ones. In this sense some industries with easier access to resource and lower threshold are developed as priority, which leads to significant duplication in industry structure.
Table 49
Economic Activity within Metropolitan Regions
Targeted Support Industry in 11th FYP ( five Business, finance, electronic information, medicine, new material, mechanism High-tech industry, packing, beverage and food Xindu Mechanism, furniture, food, medicine, electricity, and logistics Qingbaijiang Metallurgy, chemical industry, construction material, mechanism and logistics Longquanyi Mechanism (automobile), new material, steel processing, food, medicine, and electricity Shuangliu Mechanism, medicine, photoelectron, and new material Pi Mechanism, packing, beverage and food Xinjin Food (forage), mechanism, packing, and medical appliance Pengzhou Petrochemical, gas, herbal medicine, and construction material Dujiangyan Tourism, electronic information, mechanism, medicine, beverage and food, material Congzhou Furniture, leather product, construction material, food processing, and herbal medicine Qionglai Food, gas, and medicine packing Dayi Food, mechanism, electricity, and apparel Pujiang Beverage and food, medicine, mechanism, electricity, and packing Jintang Power and energy, textile, mechanism, and food Source: district and counties 11th FYP City/Town/County Central Chengdu districts) Wenjiang
5.6.10
In essence, the process of economic integration and the creation of effective agglomeration economies (i.e. industrial clusters) has been slow within the Chengdu metropolitan region. Firstly, this is because there has been no clear classification of
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economic functions between sub-districts and there has been a duplication of industrial structure across the region. Secondly, as natural resources are roughly the same in all localities across the Chengdu Plain, the sub-district governments, in considering their individual interests, encourage the development of similar industries that can make the higher profits and provide more taxes. As a result, there is significant duplication and competition, including duplication of infrastructure. This inevitably leads to resource inefficiency, wasteful investments, idle production capacity and premature requisitioning of farmland. 5.6.11
The current administrative structure (i.e. the absence of a metropolitan body) means there is an absence of policy regulations that apply across different localities and therefore different governments at the sub-district level often organize and regulate the economic activities for their own interests, often with a detrimental impact on the economic efficiency of the region. For instance, there are limitations on the free movement of commodities, human resources, technologies, capital and information – all of which are important in forming an efficient integrated economic region.
5.6.12
Governmental policies of sub-districts also vary significantly and there is a lack of unified intervention in addressing negative externalities, such as the social security system to deal with unemployment caused by economic restructuring, environmental criteria or workplace safety criteria. These uncoordinated interventions tend to undermine the emergence of influential industrial clusters and the allocation and integration of regional markets within the Chengdu metropolitan area.
5.6.13
In summary, Chengdu’s economy is still characterised by a government-dominated development mode which poses some serious economic issues. In particular the economy has a dual structure with uneven development between urban and rural areas. Market-based mechanisms and instruments are still largely absent and there are duplications of investments. The private medium and small scale enterprises are developing but require more support. Finally aggregation and restructuring of secondary industries, especially the economic efficiency of large enterprises need to be further promoted.
Industrialization and Urbanization 5.6.14
The Table below has been prepared to illustrate the relationship between industrialisation and urbanisation since 1980. In 1980 the ratio was 0.4; in 1990 the ratio was 0.71. The gap has been partly fulfilled in parallel with economic restructuring and urbanization progress. In 2005 the figure became 1.18, implying an imbalanced development between urbanization and industrialization. While the industrialization pattern of Chengdu configures the prioritization of heavy industry, the urbanization has been disconnected with and lags behind industrialization.
5.6.15
Prior to 2003, it is evident that Chengdu’s economic growth and urbanization were codependent, with annual economic growth ranging from 10% to 13%, and urbanization increasing by 0.58%-0.77%. Since 2003 however there has been a reversal in earlier trends with the urbanisation rate increasing by over 13% annually while economic
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growth has remained relatively stable since then. This has occurred as there has been a major reclassification of administrative jurisdictions, often following large scale relocations of population from the central parts of Chengdu, which has meant a significant increase in the non-agricultural population, i.e. the urban population. 5.6.16
Despite these major increases in urbanisation it is argued by some that Chengdu’s urbanization lags behind the industrialization process see Table below.
Table 50, Industrialization Rate (IR) and Urbanization Rate(UR) in Chengdu, 1980-2005 1980 1985 1990 2000 2001 2002 2003 2004 2005 Urbanization 23.35 28.23 28.30 34.13 34.79 35.56 36.98 42.82 50.27 Rate Industrialization 49.63 49.62 39.71 43.59 45.35 45.51 45.92 39.66 42.50 Rate UR/IR 0.47 0.57 0.71 0.78 0.77 0.78 0.81 1.08 1.18 Note: industrialization rate refers to the proportion of secondary industry to GDP; urbanization rate refers to the proportion of non-agricultural population to the overall population. Source: Chengdu Statistical Yearbook (various years)
Employment and Labour Force 5.6.17
Since the 9th FYP period, labour force in the primary industry of Chengdu has been transferring to urban areas, reflecting the rapid urbanisation process. During the 10th FYP period, new urban employment had increased by 0.453 million and by the end of 2005, urban employment had reached 2.7654 million.
5.6.18
As shown in Table 51 in 2005, the employed persons in the three industrial sectors amounted to 32% (2.0 million for primary); 31% (1.9 million for secondary); and 37% (2.3 million for tertiary), respectively. This illustrates a decline in primary and an increase in secondary and tertiary industries. The proportion of the employment in secondary industry has remained relatively constant, with only a marginal increase, whereas the development of tertiary industry has been significant.
Table 51 Shift in Employment Sectors, Chengdu YEAR Labor Primary Force Industry (%) Secondary Industry Tertiary Industry
1996 46.8
1997 46.0
1998 46.6
1999 45.2
2000 44.2
2001 40.9
2002 38.4
2003 38.7
2004 34.9
2005 32.3
28.5
28.3
26.9
25.5
25.7
25.0
26.4
27.4
29.9
30.8
24.7
25.7
26.5
29.3
30.1
34.1
35.2
33.9
35.2
36.9
Source: Chengdu Statistics Yearbook (2006).
5.6.19
The structural change of employment by industrial sectors has however lagged behind industrial restructuring in Chengdu. The transfer of rural labour remains relatively slow, as shown in the Figure below. In 2005, more than 30% of the labour force worked in the agricultural sector and rural areas even though there had been a transfer of 1.96 million farmers who had lost farmland and rural surplus labourers to non-agricultural sectors.
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Figure 30.
Chengdu: Industrial Structure and Employment Structure in 2005
37%
32% Primary Industry 8%
Secondary Industry Tertiary Industry
49%
43%
Industrial Structure Employment Structure 31%
5.6.20
The distribution of employed persons in various industrial sectors in 2004 is demonstrated in the Table that follows. A great majority of employment is concentrated in manufacturing and construction sectors, which were responsible for 53.5% of the total urban employment. In contrast the absorption of labour force in the finance, insurance and social service industries accounted for only 6.7%. Employment potential in the tertiary industry therefore remains large, as it currently only contains about one third of the total urban employment.
5.6.21
The 11th FYP for Chengdu however tends to enlarge the economic proportion of the secondary sector to 45% and retain a relatively constant tertiary sector, i.e. 50%, by 2010. Given the increasing pressure on urban employment, this policy objective may be contrary to the urbanization levels that are projected. Furthermore, as secondary industry has the highest growth rate it is likely to lead to uneven development between economic growth and employment. The expectation of further enlargement of secondary industry is likely to obstacle employment increase and thus rural labour transfers.
Table 52 Chengdu: Distribution Situation of Employed Persons in Sub-industries in 2004 INDUSTRY
Total Agriculture, Forestry, Livestock and Fishery Excavation Industry Manufacturing Industry Production and Supply Industry of Electric Power, Gas and Water Construction Industry Geological Exploitation Industry, Water Conservancy Industry Traffic Transportation, Stocking and Post Telecommunication Industry Wholesale and Retail Trade, Restaurant Industry Finance and Insurance Industry Real Estate Industry Social Service Industry Sanitation, Sports and Social Welfare Industry Education, Culture Arts and Broadcasting, Movie and TV Industry Scientific Research and
ENTERPRISE (UNIT)
RATIO (%)
65320 1622
100 2.5
368 13767 668
0.6 21.1 1
4.02 83.58 3.74
1.3 28 1.3
2328 296
3.6 0.5
76.13 1.17
25.5 0.4
1507
2.3
12.61
4.2
15358
23.5
25
8.4
2215 1629 6020 2364
3.4 2.5 9.2 3.6
7.55 6.07 16.75 7.18
2.5 2 5.6 2.4
5120
7.8
17.53
5.9
1008
1.5
11.91
4
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EMPLOYED PERSONS (10,000 PERSONS) 298.52 1.97
RATIO (%)
100 0.7
143
INDUSTRY
ENTERPRISE (UNIT)
RATIO (%)
10240
15.7
14.85
5
810
1.2
8.46
2.8
Comprehensive Technique Service Industry National Departments, Party Organs and Social Groups Other Industries
EMPLOYED PERSONS (10,000 PERSONS)
RATIO (%)
Source: Second General Investigation Materials on Basic Units in Chengdu
5.6.22
Total urban employment has increased by about 30% since 1996. As shown in Table 53 below, the numbers of employees in the state-owned economy and collective economy have dramatically reduced. From 1996 to 2005 SOE employment had been reduced by 36% and collective employment has been reduced by 36%. Employment in the private and individual economy has dramatically increased almost four-fold during the same period.
Table 53, Distribution of Employed Persons in Different Types of Enterprises and Annual Chnage,1996 to 2005 YEAR
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
URBAN EMPLOYED PERSONS
2,106,542 2,115,747 2,058,912 1,902,480 1,862,139 1,868,360 1,980,767 2,127,096 2,382,938 2,765,412
TYPE OF EMPLOYMENT State-owned Economy
0.4% -2.7% -7.6% -2.1% 0.3% 6.0% 7.4% 12.0% 16.1%
1,239,409 1,234,089 1,101,636 988,500 934,427 884,121 818,698 826,105 790,021 789,867
-0.4% -10.7% -10.3% -5.5% -5.4% -7.4% 0.9% -4.4% 0.0%
Collective Economy
301,505 282,361 237,310 185,650 171,193 118,072 124,313 126,804 121,984 108,614
-6.3% -16.0% -21.8% -7.8% -31.0% 5.3% 2.0% -3.8% -11.0%
Other Economy
301,971 307,860 358,713 361,577 380,722 421,546 494,919 507,949 466,426 624,188
2.0% 16.5% 0.8% 5.3% 10.7% 17.4% 2.6% -8.2% 33.8%
Private and Individual Economy 263,657 291,437 361,253 366,753 375,797 444,621 542,837 666,238 1,004,507 1,242,743
10.5% 24.0% 1.5% 2.5% 18.3% 22.1% 22.7% 50.8% 23.7%
Source: Chengdu Statistics Yearbook (2006)
5.6.23
There were 48188 “4050” persons 122 were re-employed; 1.1016 million persons participated in various training (among which 254,500 persons participated in reemployment training, 847,100 persons participated in guiding training for agricultural labourers, vocational skill training and enterprise training); Free occupation introduction service was introduced and 0.2 million employment preferential cards were granted to unemployed residents, laid-off workers and farmers. Urban registered unemployment
122
“4050” personnel: refers to labourers who are above working age period of 40 for women and 50 for men and are eager to obtain employment, but have difficulty in competing for employment in the labour market due to comparatively bad employment conditions and their own and lack of diversified skills. “4050” personnel are ratified by Labour Guarantee Department at various levels.
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rate has remained lower than 4%, and reduced to 3% in 2005, which was 1.2 per cent lower than that of the national average configuration.123 Social Security 5.6.24
Chengdu has established a comprehensive social security system and employment training system which matches that provided in larger regions in China (Shanghai, Shenzhen, Beijing and Guangzhou). 124 In 2001 basic medical insurance was introduced. Pensions are paid to retirees from SoEs although those who have been made redundant do not receive full pension rights. In 2004 Chengdu developed social security measures for new urban residents who lost their rural land via land requisition. The Municipality has also set up a standard and unified social security measure for farmer including endowment and medical insurance.
5.6.25
The number of people and units applying the insurance shows an upward trend year on year. By 2005 the number of residents with basic endowment insurance, basic medical care insurance, unemployment insurance, work injury insurance and maternity insurance reached 1.39 million, 2.10 million, 0.89 million, 1.0 million and 1.26 million respectively. These figures are a significant increase to those in the 9th FYP period. No information is available however, on insurance obtained by outside vs inside residents.
Urban Economy Impacts to 2020 5.6.26
It is difficult to estimate with any great certainty future economic growth under the given urbanization scenarios. Officially, the Chengdu municipal government has provided an anticipated annual economic growth rate of 12% over the 11th FYP period, slightly less than that during the 10th FYP period. Some local experts argue that the Chengdu economy will continue to grow at 8%-12% during 2010-2020. Regardless of the administrative reclassification or other reasons, Chengdu’s sustainable urbanization requires efficient regional economic cooperation and sufficient employment.
5.6.27
In general, and similar to Wuhan, Chengdu’s economy shows a strong proactive model. However uneven economic and social development is prevalent in manufacturing and service sectors, in urban and rural areas. Rural residents’ income lags behind that of urban residents and the gap is increasing (see Urban Poverty sections below). Innovative measures are needed to be introduced to coordinate the development of secondary and tertiary industries, to provide sufficient urban employment and to harmonize urban and rural co-development towards a more sustainable development regime. In addition, migrant population, while proving a necessary source of urban industrial labour, experience social inequalities with regard accessing housing, jobs, community services, social security, and education, etc. The
123
Source: The Eleventh Five Year Plan of Urban Employment and Social Security of Chengdu
124
China Mayor Association Committee of Development Report of Cities in China, Development Report of Cities in China, 2003-2004 Volume, The Commercial Press, 2005
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Chengdu’s 11th FYP recognises these issues. However, targeted policies and related measures supporting urban-rural cooperation remain unclear. If Chengdu’s urban economy is to become more economically competitive and environmentally sustainable to 2020, the following aspects will need to be addressed: •
• •
•
Integration of economic, social and environment concerns through coordinating economic and social development plans with other plans particularly urban land use plans, infrastructure and transport plans; Cultivating industries that generate jobs recognising the continuance of rural labour migrating to urban areas as well as the needs of existing urban employees; More attention to the needs of the private sector, especially small and medium-sized enterprises (SMEs), and promoting improved market-based mechanisms and instruments. Continuing to support high-tech industry and recognise the value of clustering, advanced product services, production chains and concentrated industrial development.
5.7
Urban Poverty
5.7.1
An ADB (2001)125 study on urban poverty found that the annual per capita poverty line in Chengdu was RMB 2,742, and that 17.2% of locals and 10.7% of migrants were below this level. This is effectively those that have incomes that make them eligible to receive the urban dibao benefit (i.e. RMB 156 per capita per month)126.
5.7.2
Chengdu is quite unusual in that the rate of urban poverty among the local population is much higher than the migrant population. This is likely due to the fact that since 1998 the restructuring of state-owned enterprises (SOEs) has led to the retrenchment of a large number of local workers. In the first three quarters of 2001, the number of unemployed reached 785,467, 5% of whom were newly registered as unemployed (ibid). With the acceleration in the city's economic restructuring and the continual reform of SOE’s, unemployment among SOE workers may continue to rise. Furthermore, only one-fifth of the municipality’s labour force is covered by the official unemployment-pension plan social security scheme (ibid).
5.7.3
In addition to retrenched SOE workers, poverty in Chengdu is concentrated among the "floating population", and landless suburban farmers127. From 1996 to 2000, over 38 percent (1.5 million) of the municipality’s 3.98 million farmers left the agricultural sector, with over half leaving for coastal cities; while the other half were absorbed into the local economy or became the unemployed128. It is estimated that up to 2005 about 1.96
125
ADB. 2001. Urban Poverty in PRC. Manila.
126
See Chapter 3 for more details on urban poverty.
127
See Mc Granahan, G and Tacoli, C, 2006.
128
Webster,2003
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million farmers who had either lost their farmland or become surplus rural labourers. As land requisitioning occurs to make way for urban development, many farmers have been displaced, left landless and unemployed. This not only has an impact on their livelihood, but also their way of life. In Sichuan province, regulations are being enacted to ensure that farmers losing land to infrastructure projects and whose income remains below the poverty line after 3 years become eligible for welfare payments. 5.7.4
The third group affected by poverty are the "floating population" who tend to live in the urban fringe and work in menial labour and informal sector for low pay, and often in dangerous conditions. There is very little information on the number of migrants in Chengdu. This group is particularly vulnerable as they tend to fall outside of rural and urban poverty alleviation programmes.
5.7.5
Finally, it is known that poverty has geographic characteristics in Chengdu, being more heavily concentrated in the eastern suburbs. 129
5.8
Sustainable Transportation
Background 5.8.1
Chengdu is an important transportation hub in southwest China that is well connected to other parts of the country through railway, road, air and waterways. In recent years transportation construction in Chengdu has developed rapidly, especially during the 9th FTP period, given Central Government’s emphasis on developing the western regions.
5.8.2
As discussed in Section 5.5, Chengdu’s settlement structure is characterised by a radial layout with development expanding out from the central core along spine roads linked by concentric ring roads. Although having relative high accessibility significant portions of land between the 2nd and 3rd ring roads, and particularly between the 3rd and 4th ring roads, is still vacant.
5.8.3
The key transportation implications, including, roads, public transportation, airports, of the existing and likely future situation (to 2020) is discussed below.
Road Based Transport 5.8.4
129
The total length of the trunk road system in Chengdu is some 272 km, while that of the sub-trunk road systems totals 150 km, and secondary roads is 524 km. The road network density is 6.21 km/km2. The per capita road area is 7.51 m2 which is relatively low by national standards. In the “second circle” where most of the population is concentrated the per capita road area is only 5.49 m2 per person.
See Jun, Tian, 2003, The Case of Chengdu, China, for UN Habitat
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Table 54
Chengdu Vehicle Growth 2000-2005130 (Units: Ten-thousands) VEHICLE TYPE
2000
2003
Bicycle Electric bicycle Total bicycles Motor-cycle Private car Bus Truck Total vehicles
318 0 318 36
397 18 415 77 34 2 9 125
8 73
2005
2000-2005% PA
45
Rapid
88 47
20
8 148
15
5.8.5
Similar to that which is occurring elsewhere in the PRC, vehicle ownership in Chengdu is increasing rapidly. By the end of 2005 total motor vehicles registered in Chengdu amounted to 1.481 million of which private vehicles was 46,600. This places Chengdu third highest in the PRC in vehicle ownership behind Beijing and Guangzhou. Current trends show that private car ownership is rising by almost 17% annually and the average growth rate of the total automobiles reaching 15%.
5.8.6
The main features of this Table are the rapid growth in electric bikes, and the growth of both motor-cycles and cars. Total vehicles are growing at 15% pa and motor-cycles by 20% pa.
5.8.7
There exist five transport plans instructing the transport connections across the metropolitan region, among which three core plans are “11th FYP for rural road ”, “ Plan for Chengdu country road network”, and “ Plan for transport links between Central Chengdu and satellite towns”. In the next five years, it is targeted to finish the construction of 28 within 32 proposed linkages between the central city and 6 clusters in the second circle, as well as 10 direct rapid- connection within central city and 8 cities/counties in the third circle. Four rapid connections will be in use for free at the end of the year. They are Chengdu-Jiangtang-Qingbaijiang with total length of 31.2km and 6 lanes (8 lanes in Qingbaijing); Shuangliu-Chengdu- Heilongtan(in Meishan City) with total length of 42km; Phase 2 of Shaxi Line ( Chengdu- Pi County) with the length of 3.823km and 6 lane, which, according to road network plan, will link the rapid connections of Pi County- Dujiangyan and Pi County-Pengzhou; and Extension of Guanghua Avenue (Congzhou- Wenjiang).
5.8.8
In order to promote the transport unification in metropolitan region, there are five regulations assisting the work, especially via the mean of financial support. They are: subsidy of RMB 600,000 to 1,000,000 per kilometre for the projects linking counties and main towns; subsidy of RMB 400,000 to 800,000 per kilometre for the projects linking industry central development area and main towns; subsidy of RMB 200,000 to 400, 000 per kilometre for the projects linking village relocations and town centres;
130
Primary Source: Chengdu Urban Comprehensive Transportation Plan 2002-2020
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subsidy of RMB 30, 000 to 50, 000 per kilometre for the projects linking villages in poverty or of low-development; subsidy ( or in the way of share-holding) of 500,000 to 2,000,000 for newly constructed village coach station. Public Transport 5.8.9
The development of public transport in Chengdu is in its infancy. The City’s everyday public transport service is dependent on buses and taxis, with Pedi cabs in some parts of the City. There is no public orbit passenger transportation system. Only one public bus company exists although with separate operating entities, including foreign partownership. Bus operations are not profitable with low efficiency levels and recognised management problems.
5.8.10
Public transport has become less efficient just as rapid urbanisation was taking off in the 1990s. Congestion resulting from rapid urbanisation and economic growth has caused a decline in speed and services. This, combined with a lack of competition, has seen deterioration on some routes, resulting in a reduced service and poor maintenance to the detriment of passengers. In 2002, Chengdu Public Transportation Corporation operated 141 bus lines, of which 111 lines were in the urban district and 30 in the suburbs (see Table 55 below). A small number of special lines and suburban lines have stopped operation (temporarily); other lines however are operating at an acceptable capacity. Currently the length of the operational bus lines totals 2995.5 km, with the average line length in the urban area of 15.3 km, and that in the suburbs 43.2 km. Daily passenger capacity is about 1.8 million.
5.8.11
The bus lines operate along the trunk roads of the city such that the bus network’s structure is similar to that of the strategic road network. Among the lines serving the urban areas, nearly 50% originate or pass through the central area. The bus routes are mostly distributed between the second ring road and central area but because of congestion, bikes are proving more convenient.
Table 55 REGION
Situation of Chengdu’s public transportation lines LINES
LENGTH OF THE LINE(KM)
BUS DISTRIBUTED (SETS)
PROPORTION (%)
NUMBER OF RUNS
PROPORTION (%)
OPERATIONAL LENGTH (KM)
(TIMES /DAY) 141
2995.5
2414
–
14161
–
441900
Urban
111
1698.65
2241
92.8
13472
95.1
Suburb
30
1296.85
173
7.2
689
4.9
– –
Central area
Transport Impacts to 2020 5.8.12
The urbanisation scenarios will result in population increases and are likely to trigger a
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wider range of employment opportunities across the city proper and the municipality. However there are concerns that transport plans are not in keeping with land development plans. For example Chengdu has formulated a plan of creating a massive rail system which mirrors the radial road network. Formulation of the Plan has not been constrained affordability and questions are raised over the implementability of the plan based on costs, returns and raising capital for maintenance and operation. 5.8.13
The rapid railway transport network program of Chengdu has a number of clear layers, mainly consisting of the subway system, the railway surrounding the city and the light railway and the existing railway (Figure 31) through the city. Chengdu’s rapid railway network is proposed to be 493.3 km long consisting of 309.8 km of newly constructed railway lines (128 km subway and 181.8 km light railway) and the existing railway of 183.5 km. It is estimated that it will take about 30 years to construct this railway transport network, phased from 2005 to 2035. Presently, approval of State Government has been given for the construction of No.1 and No.2 subways however, the level of final implementation of the plan remains uncertain.
5.8.14
While reference is made to supporting and improving the bus network no detailed actions are proposed nor mechanism to redress the bus operation monopoly and introduce competition. A segregated bus way via a BRT is not considered. No mechanisms are outlined to restrain traffic growth and reduce road congestion.
5.8.15
The traffic situation in Chengdu is expected to change quickly as vehicle ownership and subsequent road space demands increase. In view of the features of Chengdu’s economy and land resources and current layout of the city, public transport should play the main role in the transportation system. To avoid worsening traffic congestion, to improve public transport accessibility, and generate more sustainable transport patterns in the future the following issues will need to be addressed at Metropolitan and Metropolitan Regional level:
•
• • •
• • •
Adoption of policies with a sustainable vision. Three main targets are considered to be (i) to develop trunk public transport system consisting of an affordable city rail system and BRT; (ii) build a general system of bus lanes in the existing road network; (iii) develop integral public transport system between rural and urban areas; (iv) in new expansion areas busways should be integrated with land use and roadway to guide and support inclusive urban expansion; Introduction of an effective restraint policy on car use at peak times and congested locations; Continually support and enhance bicycle facilities and promote use of electric bikes; Give priority to the development of public transport systems, such as Segregated Bus Rapid Transport system; procure services that maintain the integrated network and are passenger-centred; Improve the framework for bus operations and infrastructure etc., by involving the private sectors; Employ systematic and scientific traffic management; and Adoption of benchmarking procedures to assess the transport system performance.
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Figure 31.
5.9
Chengdu: Railway Transport Network Plan, 2035.
Environment
Water Supply and Quality 5.9.1
Chengdu is one of the areas with ample rainfall in Sichuan Province, receiving precipitation of 900-1300 mm annually. The annual volume of surface water averages 8.9 billion m3. It would appear that water resources are abundant. However more than 70% of water resources are unusable because of pollution from urban runoff and inadequately treated wastewater. As such the absolute quantity per capita amounts to less than 3000 m3 equalling only 30% of the world average. Chengdu thus features in the list of the 400 most water deficient cities in the PRC. There are other concerns with water supply in Chengdu particularly with potable water supply both with regard to quality and networks as well as a lack of water storage facilities.
5.9.2
Water use efficiency in agriculture also remains low. For example in 2004 the agricultural sector used 61% of the total amount of water consumed. For each cubic
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meter of water used, about one kilogram of harvested grain was produced - only half of what is usually produced in developed countries. In the industrial sector, each ten thousand unit production value consumed 160 m3 water in TVEs and 240 m3 in other industries. The average recycling rate of industrial water was less than 60%, far behind the international or even the national average.131 5.9.3
According to official data (2005) water quality of more than half monitoring stations was beyond Class V of the national standard as shown in the Figure below. Main pollution factors include NH3-N, BOD5, DO and TP. Similar to elsewhere in the PRC it is increasingly households as well as industries which are the major sources responsible for Chengdu’s worsening water quality.
Figure 32.
Water quality of monitored river sections in Chengdu in 2005
Class I, 3.4%
Class II, 13.8% Class III, 13.8%
Beyond Class V, 51.7% Class V, 10.3%
Class IV, 6.9%
Source: Bulletin on Water Environment of Chengdu, Chengdu Sub-centre of Sichuan Environmental Monitoring Centre.
5.9.4
In recent years, Chengdu’s wastewater treatment capability has improved, but the condition of wastewater collection remains poor. While urban water quality is deteriorating through pollution the situation is also worsening in rural areas. Non-point source pollution is worsening due to the rapid development of livestock husbandry and small scale TVEs in rural areas.
Air Quality 5.9.5
The Air Pollution Index (API) averaged 85 in 2005, indicating it was “good” in principal. Air pollution is caused mainly by emissions from coal fired powered stations and industries. Now however, air pollution is evolving to be a mixture to emissions from energy supplies and vehicle emissions. During the 10th FYP period the main air pollutant was identified as particulates. As shown in Table 56, the total emission amount of SO2 has decreased gradually, but that of soot retains an increasing trend. Due to the poor atmospheric diffusion conditions, air pollution is serious in both winter
The Collection of Important Research Results of Eleventh Five-year Plan (Vol.II), Chengdu Development and Plan Committee, p62, April 2005.
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and summer seasons. Table 56, Emission of Air Pollutants in Chengdu YEAR
SO2 (10,000 TONS)
SOOT (10,000 TONS)
Total
Industrial
Domestic & others
Total
Industrial
Domestic & others
2004
17.72
14.04
3.68
23.27
20.31
2.96
2003
18.07
13.80
4.27
23.56
20.08
3.48
2002
18.53
14.03
4.50
22.07
18.33
3.74
Sources: China Environment Yearbook, China Statistical Yearbook, Report on the State of Environment Statistic in China, etc.
Vegetation Cover 5.9.6
Currently, woodland coverage occupies some 2247 km2 in Chengdu, accounting for only c.19% of total land use. Forest resources, mainly scattered in the west mountainous area, are deficient and unevenly distributed. In terms of the quality of forest resources, the woodland of high quality classification only covers some 337 km2. Most vegetation is secondary vegetation with both agricultural and urban uses responsible for the loss of primary forest. The lack of green spaces and open green areas has impacted on local ecology. This combined with poor water quality is seriously impacting on biodiversity.
Environmental Impacts to 2020 5.9.7
The environmental implications of the various urbanisation scenarios have been prepared to 2010 and 2020 as shown in Table 57 below. They have been prepared by applying assumed industrial GDP and urban population growth. In summary the key findings are that: •
•
•
•
The discharged quantity of urban sewage will increase to 1.3-1.5 times by 2010 or 1.5-2.4 times by 2020 that in 2005. The most likely figures are 1.4 times by 2010 and 1.8 times by 2020, based on the medium (baseline) development scenario. The emissions of SO2 will increase to 1.3-1.8 times by 2010 or 1.5-3.3 times by 2020 that in 2005. The most liable estimates are 1.5 times by 2010 and 2.3 times by 2020, based on the medium (baseline) development scenario. The generation of household domestic waste will increase to 1.3-1.7 times by 2010 or 1.6-2.4 times by 2020 that in 2005. The most likely figures are then 1.5 times by 2010 and 1.9 times by 2020, based on the medium (baseline) development scenario. If current pollution management levels remain the same a worsening of the natural environment in Chengdu will occur. Changes to environmental protection and
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management are required immediately to redress the environmental impacts expected to 2020. Table 57, Chengdu Environment Implications of the Three Urbanization Scenarios YEAR
CHENGDU SCENARIO
TOTAL POPULATION (MILLION)
2005 2010
2020
URBAN POPULATION (MILLION)
DISCHARGE OF URBAN SEWAGE (MILLION TON/YR)
GENERATION OF SO2 (104TON/YR)
GENERATION OF DOMESTIC GARBAGE (104TON/YR)
10.82
6.492
735.05(2004)
20.3
190
Low
10.8-11.3
7.0 - 7.3
970-980
25.5-27.5
255-265
Medium
11.3-12.3
7.3 - 8.0
1000-1030
28.0-31.5
265-290
High
12.3-13.3
8.0 - 9.0
1100-1130
31.0-34.0
290-330
Low
12.0-13.5
8.4 - 9.5
1090-1120
31.0-39.5
310-350
Medium
13.5-15.0
9.5 - 10.5
1320-1350
41.5-52.5
350-380
High
15.0-16.5
10.5 - 12.4
1680-1740
53.5-68.0
380-450
Environmental Priorities to 2020 5.9.8
Two key environmental goals, i.e. improving surface water quality and urban air quality, as proposed in the 10th environmental FYP were not achieved by 2005. Quantities of emissions of main pollutants, especially water pollutants, remained excessive during the 10th FYP period, and exceeded the environmental capacity in many areas. If allowed to continue at their current rate (or as predicted to increase) environmental deterioration will worsen.
5.9.9
Light industries (paper, food, leather and textile) and chemical industries have been promoted to develop in Chengdu over an extended period of time and continue to contribute to environmental pollution. Moreover, coal-based and water-dependent industries which are the main basis of the urban economy will lead to considerable increases in energy demand and water consumption. Currently the Environment Plan promotes spatial re-distribution and centralized control as the most effective measures for industrial pollution control. Some key environmental measures include: new industrial projects confined within industrial parks; existing “bad neighbour” or often termed “outside” industries relocated to industrial parks; promoting environmental admission standards for industry entrance; improving infrastructures of industrial parks. These measures will improve environmental quality, but actual implementation and enforcement remains weak.
5.9.10
Similar to Wuhan, effective environmental coordination is largely absent at the metropolitan level where environmental conflicts often happen. Chengdu’s environmental management also remains essentially a local matter via local EPBs. As the evaluation and supervision of local governments’ environmental performance is
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generally weak, the environmental enforcement and implementation are sometimes ineffective. This has been recognised in the 11th FYP where measures are proposed to increase the environmental responsibilities of the mayor and different governmental agencies so as to institutionalize environmental considerations into decision making. 5.9.11
Similar to Wuhan environmental planning processes are independent, lacking communication and coordination with financial, land resource and other departments. Rapid growth often exceeds the development of urban infrastructure. In the absence of periodic evaluation and revision, environmental plans lag in effectively addressing key environmental issues.
5.9.12
SEPA has introduced public participation programmes to address household’s impacts on water and air pollution. Comprehensive and efficient participation programmes of civil society and public haven’t been institutionalized throughout environment protection structures nor has the involvement of the private sector been comprehensively addressed. New mechanisms developed such as financial incentives remain vague and underdeveloped. Governmental support for environmental infrastructure investment is inadequate. Development of urban environmental infrastructures lag behind urban growth particularly with regard to collection and treatment of wastewater and domestic solid waste. The environmental investment index for Chegdu reached 2.7 2004 and needs to be increased given projected continued population and economic growth.
5.10
Institutions and Management
5.10.1
Although the Chengdu Metropolitan Region equates to the Chegdu Municipality’s area of jurisdiction, without legal authority the Chengdu DRC has limited power to coordinate economic, social and environmental development at metropolitan level. With no metropolitan regional authority designated in Chengdu there is no direct relationship with Central Government; all contacts and decisions proceed via provincial government. As discussed few formal programmes focus on regional scale issues and if they do there is no cooperation or consistency between plans. Although typically a broad range of governmental agencies, experts and consultants, and civil society usually participated in the planning process this is not reflected in planning outcomes or participant’s actions. Limited involvement of the private sector has become a significant omission is attaining metropolitan and regional coordination.
5.10.2
There is already a pronounced contradiction between the current administrative division system and regional development in the Chengdu Metropolitan Region. Currently, the administrative areas and economic areas are often uncoordinated. With the desire and historic precedence to compete across cities irrespective of Municipal or regional boundaries different interests prevail. Increasing urbanisation and industrialisation however has meant that uncoordinated, often short term, individual interests constrains the development of the localities as well as of the region as a whole.
5.10.3
In July 2006, the State Council approved a plan for establishing a new land use
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supervision institution. The Minister of MLR has been appointed as the Chief Supervisor of a national land supervision office. Regional branches under MLR are being established by the end of 2007 within nine province’s capital cities including Chengdu and Wuhan. The prime responsibilities of these regional branches include: 1) to supervise local achievements of the designated tasks of basic farmland conservation at a provincial level; 2) to guide local governments complying with the land use quota for construction; and 3) to inspect local implementation of the minimum standards for industrial land leasing. 5.10.4
Whilst these land use supervision institutes will aid in addressing land supply and land requisitioning, they still fall short of providing regional direction for the range of development factors which support sustainable development – transport, environment, social protection and development, infrastructure and coordinated and balanced economic development. Without comprehensive metropolitan management and regional coordination diverse interests will continue to influence development patterns in an uncoordinated way, resources will be used to support urban development irrespective of demand or market forces, will duplicate infrastructure, and the divide between rural and urban residents will increase.
5.10.5
The proposed increases in urbanisation and population have indicated a diverse range of regional issues relevant at the urban, metropolitan, and rural scales. A new form of management and governance is thus required to comprehensively address these cross-sectoral factors and achieve more sustainable patterns of development.
5.11
Introduction of a New Metropolitan Regional Management
5.11.1
On 29th July 2007, “Ideas on Improving the Development of Coordinated Reform Test Zone” was published by Chengdu Municipal Government formally, depicting the key development aspects and the targets within the next ten years. The key contents of this document are as follows: •
Convert county/ city to district - Institutional reform will be adopted across metropolitan region, especially in the administrative conversion of county/city to district, and administrative boundary adjustment and combination in village level, etc.
•
“Unifying Chengdu” - The issue is raised to promote the unification of economic, political, cultural and social development in metropolitan area, highlight the coordination of economic and social development plan, metropolitan master plan and land use plan, as well as improve the plans for town and county development, land use, industry, transport, public facilities across the metropolitan region.
•
Optimise fiscal expenditure - It is proposed to adjust and optimize the structure of fiscal expenditure aiming for more investment in public service. Some strategies like discount loan, proper subsidy, and tax rebating will be set to encourage social investment in public products and services. This attracts investment into social services.
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5.11.2
•
Capitalization of rural collective land - The mechanisms of use-right transition for rural collective construction land, as well as ownership register and transition for rural housing will be explored and promoted. This means that jobs are more open to urban and rural residents, reducing transaction costs for rural residents.
•
The reform of forest development right will be processed.
•
Urban –rural unified labour market will be improved in order to build a fair system for free labour flow and equal competition.
•
Rural bank - Local financial institutes will be development in multiple modes, like rural bank, loan company and rural mutual cooperatives, the mechanism of agriculture insurance and disaster compensation will be studies and constituted. Some regional market for property ownership transaction will be constructed as well.
•
Urban-rural social security - Social security system will cover urban and rural area within the next 10 years, including equal access for urban and rural residents to employment, education, medical care, and social aids, etc.
The ambitious targets for the plan are as follows: •
1.5 million farmers will become urban residents
•
urbanization rate 70% ,
•
industry centralized rate 80%
•
in 2017, GDP will be above 100 million as double of that in 2006
•
The income gap between urban and rural residents will be reduced to 2:1,
•
social insurance will cover both area, as well as education, medical treatment, social security and public service.
5.11.3
On 8th October, 2007, “Directory for Extending the District/ city/ County Administrative Power” was formally published as echo of the setting of Chengdu-Chongqing National Coordination Reform Test Zone. In this directory, about 59 items are transferred from Chengdu municipal government to local ones, which cover mainly detailed assessment powers like tax management, investment project evaluation, land use approval, and price management, etc. The Municipal Government will focus more on plan-setting, directing, coordinating and supervising in metropolitan level in the future. This suggests increased decentralisation within a metropolitan setting.
5.12
Municipal Finance
Key Issues 5.12.1
Chengdu Metropolitan Region as defined by this study has an advantage in terms of management and financing as it falls within the jurisdiction of one municipality – Chengdu. In 2001 municipal revenue in Chengdu was RMB 6,181 million of which RMB
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2,499 million (40%) was allocated from Central Government and RMB 738 million (12%) was allocated from Provincial Government (i.e. taxes). Outside budget revenue, including revenue from land requisitioning formed the remainder. By 2004 land requisitioning accounted for 69.36% of total government revenue, and thus has become the most important source of revenue for financing urban development in Chengdu. In contrast, inside budget revenue is becoming less important for urban infrastructure and accounts for only 2.0% of total source of funds in 2005. Chengdu government also utilizes international loans for mega project financing and indirect debt financing for infrastructure projects. 5.12.2
Private participation in infrastructure and public utilities also occurs in Chengdu, including BOT, BOO, financial instruments and stock issues. For example, between 2002 and 2004, Chengdu municipal government received 400 million yuan through granting licenses to private firms for transportation, water supply, gas, taxi, waste management, plantations, roads and bridges. On January 16, 2003, Xingrong Investment Company in Chengdu issued a financial instrument entitled Water Environmental Investment Products directly to the public through China Construction Bank and collected 200 million yuan capitals from households. Chengdu Chongqing Co. was listed in HK Stock Exchange and received direct sources from private capitals. After acquiring Chengya Expressway Co., the firm issued 1.5 billion short term notes on November 27, 2006. The alternatives for financing mechanisms are the important innovation that assists Chengdu’s municipal government with urban development financing.
5.12.3
Chengdu established a group of investment companies to undertake municipal infrastructure projects, including Industrial Investment and Operation Company, High Tech Investment Company, Xingrong Investment Company, Xingnan Investment Company, and Xingdong Investment Company. Those companies act as intermediaries to channel loans and other debt from financial institutions to infrastructure projects. Although this indirect mechanism is effective in facilitating infrastructure development, the dual functions of the city investment on behalf of local government, it conducts infrastructure investment and financing for no profit purpose, whilst on the other hand it needs to maximize its profits.
Municipal Finance – Impacts to 2020 5.12.4
Sources of finance for Chengdu have been progressively developed and diversified. However, consistent with the issues identified for Wuhan, there remain a number of key areas that require action to better manage finance in the future both at municipal and regional level in the future including a lack of coordination between the relevant plans; poor coordination between planning and budget availability; the legality of utilising municipal bonds as a source of finance; credit risk; unsustainable land sale/ leasing as a sustainable source of local revenue; illegal indirect financing; limited private participation; and narrow mega project financing.
5.12.5
Areas that are strongly supported as policy opportunities for further municipal financial diversification and enhanced budgetary capability are the following:
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• •
•
• • • •
Coordinate the relevant major plans and ensure Government revenue fully informs preparation and implementation of the plans; Shift from relying on land requisitioning as a source of revenue which is not considered a stable, regular or sustainable source to support Inside Budget’s needs for urban development. An option to support more stable forms of inside budget resources includes the introduction of property tax. Facilitate municipal government direct and legal borrowing from public and capital markets; Lift market entry barriers, administrative barriers, and financing barriers and implement the policy through BOT etc. and Private Finance Initiatives Establish an early warning system to forecast and manage default risk of municipal governments Ensure private sector participate in infrastructure projects especially revenue oriented projects It is essential to diversify the sources of financing for mega projects, even the important projects at state and municipal levels. The introduction of property taxation as an alternative source of municipal revenues is under consideration.
5.13
Summary
5.13.1
Chengdu as a municipality does have some managerial advantages over that observed in WMR. Whilst the boundaries of the Chengdu Metropolitan Region are realistic there are still issues with the region achieving sustainable development or “healthy urbanisation” in the face of current and continuing rapid urbanisation and industrial restructuring. Key areas issues are summarised in Chapter 6. Potential policy interventions to address these problems are discussed in Chapter 8 based on an examination of best international practices in Chapter 7.
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6
Case Study Comparisons and Summary
6.1
General Comparisons
6.1.1
The conclusions of the two case studies raise questions which are also relevant to many other metropolitan regions in the PRC. These are: • • • • • • •
delineation of metropolitan areas and metropolitan regions cognisant of their function and their hinterlands (area of influence); the sustainability of physical and economic development; the need for strategic planning particularly with regard to urban growth, infrastructure provision and environmental protection; the increasing pressure on resources and environment; how to comprehensively address increasingly severe traffic problems, environmental pollution etc; rural and urban poverty and an increasing rural-urban divide; and the need for realistic budgeting underpinned by more sustainable finance mechanisms.
6.1.2
A step change in planning and managing metropolitan areas and their regional hinterlands is required introducing strategic planning which is capable of triggering sustainable patterns of development, sound budgeting, poverty alleviation and environmental management. This can then foster “healthy” or sustainable urbanisation and thus achieve one of the key aims of the 11th FYP. The new form of metropolitan management must be one which is ready to operate in a dynamic environment and one of rapid change. It must build up social and environmental sustainable development in a balanced way rather than just concentrating on economic growth as occurs at present.
6.1.3
Development plans do not recognise land as a finite resource, nor do they recognise market demands or the dynamic forces in industrialisation. They also propose infrastructure – particularly transport, that is unsound financially and practically. Municipal finance also raises serious concerns. There is a lack of equitable planning and financial support to rural areas and limited recognition of urban poverty, rural migration and the impacts of changing employment patterns on social structures.
6.1.4
However, GDP per capita has increased and poverty levels have significantly reduced. If metropolitan regions work successfully they can offer increases in income and livelihood. The challenge is to balance economic growth with social development and environmental protection.
6.2
Sectoral Comparisons
Urbanisation 6.2.1
High rates of urbanisation will continue in China. By 2020 there will be between 750 and 900 million persons living in cities of which 19.5 and 9.5 million will live in Wuhan
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and Chendu Metropolitan Regions respectively. Not all of new city dwellers will be rural to urban migrants as outlying villages or townships are gradually being enveloped into urban areas. This directly impacts on spatial implications of the population and urbanisation scenarios. 6.2.2
However the case study areas indicate that the core cities will continue to attract migrants because of better employment opportunities and higher wages. Rural economies in surrounding areas will be affected through the loss of cultivated land, loss of workers to urban areas and continuing pressures for higher outputs from land under agricultural production. Changes in the hukou system will be one of the most influential impacts on urbanisation in the near to medium term.
6.2.3
Both Wuhan and Chengdu have achieved rapid industrialisation since 1978, with the tertiary and private sectors (including through FDI) now exerting a stronger influence on skills based requirements, the advantages of clustering and good transport networks.
6.2.4
Both case studies show that while the rate for both urbanisation and industrialisation will continue to be comparatively high the actual magnitude is uncertain. As such future planning must acknowledge this and manage growth and impacts rather than relying on an outdated “predict and provide” approach.
Urban Economy 6.2.5
Both Wuhan and Chengdu are moving towards tertiarisation of industries through private sector investments. With backing from FDI, they are entering global markets and are exposure to international competition requiring new levels of innovation. State Operated Enterprises (SOEs) and far behind. This transition requires more sophisticated responses. Development modes of “Centralization, Clustering, and Intensiveness” are not fully understood or used. Sustainable urbanization, under a market economy, requires concentrations of population (i.e. labour) to be fully integrated with industrial clusters with a high land-use intensity. Market-oriented reforms have stimulated mobility of production factors (although unevenly as shown in the two case study examples) but with negative consequences of, 1) uncoordinated, adhoc and unsustainable urban expansion, 2) invalid or irrational land requisitioning and transfer, 3) low efficiency of land use, 4) unviable land marketing, and 5) increasingly inadequate public transportation.
6.2.6
Scaling up the factors of production is required. Wuhan and Chengdu, the core metropolitan cities in their regions, have not yet reached the critical mass in production factors (labour and capital) to adequately operate as regional centres for finance, information, marketing, research and development and human resources. Development and maturing these factors within the cores of Wuhan and Chengdu is required to enable them to transfer economic benefits and create synergies within the wider regional hinterland.
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Land Supply 6.2.7
Land allocation is not market orientated. Significant areas of “idle” lands appear to be the result of extensive and unrealistic land “grabs” with scattered resource provision and insufficient investment. Some rural areas are now surrounded by development when a more rational approach to patterns of development would facilitate their use as urban. Idle lands may also be the result of poor location, which in turn pose difficulties in attracting viable investments, and eventually success.
6.2.8
Linking land supply with demand is not part of municipal or metropolitan planning management. Neither Wuhan City and Chengdu are developing in line with their approved master plans, although this is not uncommon in many cities in the PRC. There is insufficient planning of industrial clusters resulting in unwanted mixing of heavy industry with high tech and clean industries.
6.2.9
Land use master plans are not clearly linked to transport plans, nor are they integrated with social and economic development. In short there is no strategic co-ordination to steer growth by providing a structure by which to achieve more sustainable development patterns.
6.2.10
The current practice of land supply linked to municipal finance and restrictions on municipalities obtaining funds to finance serviced land. Changes to land supply must go hand in hand with addressing the sustainability of municipal finance mechanisms.
Transportation 6.2.11
Transport plans for Wuhan and Chengdu do not address sustainable urban development. If properly aligned with land use planning and economic development, transport can provide the spine which supports land use – integrating land use and transport. Affordable transport options (bus rapid transport for example) is often overlooked in favour of rail and road. Whilst public transport is promoted (although not necessary supported by realistic plans) traffic management and restraint is undervalued as a means of reducing impending traffic congestion. Budgeting of transport improvements must be realistic, in terms of capital funding and profitability. Unless these needs are attended both metropolitan regions may suffer the fate of Bangkok - serious traffic congestion with its attendant adverse economic and life quality impacts.
Environment 6.2.12
The process of urbanization will undoubtedly lead to increased environmental pressure and resource demands. Households now generate most pollution. In terms of resource demand, heavy industry and petrochemical industry are massive consumers and will certainly experience rapid development (at least during the 11th FYP period).
6.2.13
Against this worsening scenario, environmental management appears to follow the national framework, established and continuously improved since the 1970s. However, institutional, governing, financing and managerial barriers or obstacles to effective
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management have not been addressed. Environmental goals are outlined, but how to achieve these remain vague. 6.2.14
The trans-boundary nature of environmental impacts means that management could be improved, with a wider application of innovative solutions (pollution trading, waste recycling, sharing of solid waste or WWTP between municipalities etc), if managed on a metropolitan basis.
Governance 6.2.15
The Wuhan Metropolitan Area is in the early stages of exploring a coordination process. However, metropolitan regional coordination is not yet fully addressed in terms of managerial status, human resource numbers or skills required. In both the Wuhan and Chengdu metropolitan regions there is no clear sustainable vision regarding the overall decision-making and implementation processes.
6.2.16
In both case studies there are no clear consolidated partnerships, consisting of multiactors at a multi-level, responsible for monitoring, advising and managing economic operation, integrated transport and land use or the environment.
6.2.17
Current planning systems are not sufficiently flexible or responsive enough to be able to cope with rapid change of urbanization in the PRC:
6.2.18
A negative characteristic of current industrial development plans is the focus on output analysis (e.g. gross output or added value). As a result industries that generate high employment rates are largely left to their own devices and ignored by authorities. Yet these can trigger beneficial or adverse impacts on the natural environment, spatial patterns of development, transport and living conditions. • •
6.2.19
Urban transportation priorities lack integration with urban and regional land use priorities Environmental protection planning processes operate relatively independently and lack communication and negotiation with financial agencies, land management authorities and other departments and stakeholders.
There is a need to improve management across metropolitan areas and with their regional hinterland. The current loosely defined management structures for metropolitan regions in Wuhan have no remit, and are not backed by legal structures (which legitimise their role). Nor are there mechanisms to fund their operation or drive strategic provision of infrastructure and land management.
Finance 6.2.20
Like other municipalities in China, Chengdu and Wuhan indirectly finance infrastructural projects through forms of state-owned “urban investment and development corporations” which often means that provision of infrastructure is not well coordinated with housing and industrial development. In 2005, the extra-budgetary proportions of funds channelled through these corporations in Wuhan and Chengdu were 61% and 55%, respectively, representing a substantial investment.
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6.2.21
Because there is no regular source of inside budget for infrastructural construction, most municipal governments rely heavily on debt to finance infrastructure provision and thereby take on the risk of repayment with no guarantee that projects will generate sufficient revenues to fulfil liabilities.
6.2.22
Achieving more sustainable finance mechanisms would not only assist with municipal budgeting but also ensure that the metropolitan region’s activities are based on a sounder financial footing.
6.3 6.3.1
Key Issues for Wuhan Metropolitan Region Wuhan Metropolitan Region does not appear to have any functional purpose apart from a general framework for the extension of rail services and arterial roads. However, if the issues below can be resolved there is good scope for making the region an effective spatial unit for sustainable economic growth. Economic :1. Competition between the cities that make up the region is hindering potential advantages that could stem from industrial clustering and integrated markets. There is a need to recognise the value of clustering, advanced product services, production supply chains and concentrated compatible industrial development. 2. Wuhan city is not yet operating as a catalyst for the development of the region. The economy is heavily dependent on heavy industry which accounts for over 80% of production values (2003). Much of this derives from SOEs which are often uncompetitive in the emergent market. The disproportionately low share of light industry is evident in that 60% of consumer goods consumed in the region are manufactured outside the region. There is a need to :•
develop the private sector, especially small and medium-sized enterprises (SMEs),
•
promote market-based mechanism and instruments, finance especially, and
•
diversify employment opportunities, and in particular cultivate the tertiary sector in order to optimise job creation and in turn rural labour transfer.
Social :3. Half of the projected population increase will be from migration and a third from hukou transfers. This will have a profound impact on the provision of affordable housing, employment, education, health and social services. Land Use Planning and Management :4. There is a need to rationalise and fully coordinate various development plans, particularly the economic and social development plan with urban master plans and land use plans so as to integrate economic, social and environment concerns.
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5. There is a need to better manage land use and the manner in which rural land is being urbanised, in particular :•
General policies for protection of farmland is hindering orderly urban expansion.
•
The supply of construction land vastly exceeds foreseeable demand.
•
Infrastructure is lagging behind urbanisation.
•
Leapfrogging of development
Transport :6. Transport policies and proposals are not well conceived in relation to land use policies and proposals, and visa versa, nor are proposals realistic in relation to available financial resources. 7. There is insufficient attention to the role of public transport, now and in the future, especially buses. Services need to be extended and improved to avoid future congestion, as well as the introduction of measures to restrict the use of private cars. 8. The scope for private sector involvement in the provision and operation of transport facilities is undervalued. Environment :9. Sanitary disposal of solid waste is becoming a problem, in terms of its volume and manner of disposal. 10. Measures should be introducted for the preservation of open space (as an integrated element of urban areas). 11. The environment is suffering from indiscriminate mining activity and abuse of lakes/waterways. Eutrophication is a serious issue. 12. Wuhan's Environmental Plan will be difficult to implement as the means to do so have not been worked out. Moreover, the plan fails to realise that the scale of problems (now and in the future) will require a radically different approach involving a greater spread of actors and stakeholders. Finance :13. There is a large funding deficit for envisaged investment, and this will get bigger as central government contributions decrease over time. 14. Raising of public revenues by land requisitioning is unsustainable, disrupts orderly urban expansion and needlessly depletes resources and prematurely displaces farmers from the land. 15. Little attention has been given to attracting private sector investment in the provision and operation of urban services and infrastructure. Asian Development Bank, Peoples Republic of China - Study on Sustainable Urbanization in Metropolitan Regions Draft Final Report, June 2007. Halcrow Group Ltd.
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Institutional :16. The Cross City Metropolitan Coordination Office (MCO) has no legal entity, no authority and is under-resourced. As such it cannot provide the required guidance to manage the metropolitan region. Key Issues for Chengdu Metropolitan Region 6.3.2
The Chengdu Metropolitan Region is well conceived. However, its performance can be enhanced by attention to the following issues. Economic :1. Continual reform of SOE’s is required, but will inevitably lead to redundancies, creating further demands for social protection. Promotion of small and medium scale industry and promotion of high-tech industries and industrial clustering is a priority.
2. County and district level compete aggressively for the same industries, leading to inefficient use of resources, increased costs and reduced competitiveness in the wider region. There is also a lack of united policy across the metropolitan area to promote the free movement of commodities and labour which is imperative to fostering agglomeration economies. Social :3. Employment opportunity for rural migrants is a critical issue. At present they account for nearly 25% of the population and will contribute about 80% of future growth. Provision of affordable housing and social services, such as education, health and social security, is also of concern.
Land Use Planning and Management :4. As a result of over-requisitioning there is a large surplus in land supply compared to demand in the urban fringe. In 2004, land designated for urban development was 1,800 sq. km, three times more that the estimated requirement of 600 sq.km over the coming 15 years. Land available between the existing ring roads (specifically third and fourth where there is 240sq.km available) should be utilised before any further land requisitioning occurs.
5. Land from converted SOE sites and vacant infill areas should be prioritised, in order to promote a compact urban form with higher overall densities. Further
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leapfrogging of development should be avoided by requiring land transfers to be conditional on project viability.
6. Although the current Chengdu masterplan promotes urban development to the east and south, in the direction of Chongqing, expansion is occurring in a westward direction in line with market forces since the 1990’s. Planning policy needs to respond to market demand, and not the other way around. Transport :7. Transport plans needed to be reviewed to achieve a consistent overall policy that reflects current land use trends. This review should seek realistic and affordable proposals to tackle mounting problems of traffic congestion by :•
supplementing the existing rail network, and its proposed expansion, with other measures such as bus expressways, policies to restrain the use of private cars, traffic management and promotion of alternative means of transport, such as bicycles, and,
•
better integrating transport services with the evolving distribution of land use, in particular linkages between urban and rural areas.
Environment :8. Levels of solid waste and waste water are projected to significantly increase with increased urbanisation. Metropolitan level planning provides an opportunity for efficient and sustainable management of these wastes. Finance :9. To reduce urban and rural disparities there is an urgent need to increase funding available to out-lying areas rather than concentrating all resources in the cityproper. This could be achieved through fiscal transfers. Institutional :10. Chengdu does not need a new type of metropolitan management. The existing metropolitan authority provides an administrative structure within which to operate, but mechanisms need to be established to jointly tackle collective problems.
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7
International Good Practice
7.1
Introduction
7.1.1
This chapter examines selected (best practice) metropolitan regions throughout the world to understand how they have confronted and resolved the key issues summarised for Wuhan and Chengdu in Chapter 6. The metropolitan regions are :• Sydney, Australia • Ranstad, Netherlands • Vancouver, Canada • Paris, France • London, UK • New York- New Jersey • Tokyo, Japan, and • Shezen, China. Other regions might also qualify but for the sake of brevity the chapter includes the above mentioned only as these provide sufficient guidance (by way of example) in relation to the concerned issues. Annex A contains further details of international best practice by sector. These were taken into account when formulating the policy suggestions in Chapter 8.
7.2
Sydney Metropolitan Strategy
7.2.1
Covering an area of approximately 10,000 square kilometres, Sydney Metropolitan Strategy (SMS) provides a broad framework to facilitate and manage growth and development over the next 25 years within 43 local government jurisdictions that include 5 regional cities and 22 other strategic centres that in total will have a projected population of 5.3 million by 2031.
7.2.2
The thrust of the SMS is to determine strategic directions for Government decisions on the timing and location of investments in transport and other infrastructure to deliver the best possible services to the community and businesses across the metropolitan area. Recognising that the private sector is the dominant driver of investment and employment growth, the strategy seeks to ensure that there are sufficient and appropriately zoned commercial sites and employment lands to meet private sector demands, while maintaining a quality environment with the highest level of servicing possible. This objectives is to be achieved through 7 sub-strategies :1. 2. 3. 4. 5. 6. 7.
economy and employment centres and corridors housing transport environment and resources parks and public places implementation and governance
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to be implemented across the 10 sub-regions that comprise the total metropolitan area. 7.2.3
Because the metropolitan region is large, and includes both state and local administrations, the role and functions of government bodies has been clearly defined. The state is responsible for the preparation and implementation of a state infrastructure strategy, managing strategic government assets, financing and pricing as well as project delivery on major investments. It is also responsible for coordination among local governments and other agencies involved in development. This broad strategic framework divides into 10 sub-regions that provide the basis for the task of spatial planning and urban management to be performed by each of the 43 local governments that comprise the metropolitan area.
7.2.4
The SMS works with existing administrations and avoids the need to create a new metropolitan authority. It's virtue derives from the participatory manner of its preparation involving all levels of government, the private sector and communities. Ownership of the strategy has brought about a recognition that coordinated actions towards agreed strategic objectives brings harmony and synergy across and between varying administrations and provides a business friendly environment in which the private sector can thrive.
Sydney - Key Lessons for China • The metropolitan strategy provides strategic directions for Government decisions on the timing and location of investments to the benefit of the community and businesses across the whole of the metropolitan region •
7 sub-strategies relating to critical management aspects have been designed as a series of coordinated policies that apply throughout the metropolitan region. Sub-strategies are well integrated with one another
•
The metropolitan strategy is designed to meet private sector demands, by delivering sufficient and appropriately zoned commercial sites in a timely and coordinated manner. Moreover, housing is guided to appropriate locations to facilitate the availability of labour as well as to miminse journey times and transportation requirements.
•
A new metropolitan authority may not be necessary to achieve successful metropolitan planning providing that the role and function of all administrations are clearly defined and that there is a unambiguous means of effective coordination. This avoids the need to create unnecessary additional levels of governance and through processes of subsidiary enables the maximum involvement of stakeholders at the local level.
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7.3
RANDSTAD Metropolitan Region, The Netherlands
Overview 7.3.1
The Ranstad region measures 80 by 60 kilometres and covers approximately 10% of the territory of the Netherlands132. The population is 8.5 million, with 2.5 million living in 5 core cities. The region is located to the South of the Capital city, and comprises the fourth largest airport in Europe and the major harbour of Europe. With 2 million jobs, Randstad represents 50% of the country’s jobs. The economy is strongly related to the marine and air hubs, and contributes 56% of GDP.
Table 58, Population Statistics for Selected Cities in Ranstad City Amsterdam Rotterdam The Haque Almere Town Utrecht
Number of Jobs 578,000 606,000 416,000
Regional Population 991,000 1,400,000 810,000
Urban Population 850,000 650,000 450,000
Urbanisation Rate 86% 46% 56%
50,000 391,000
250,000 640,000
250,000 250,000
100% 39%
New
7.3.2
As Sir Peter Hall points out in his book ‘The World Cities’ (1966) market economies thrive from clustering, gaining an advantage from the concentration of knowledge and production in similar processes, leading to economies of scale and subsequent diversification of economic processes (i.e. a more flexible and responsive (to economic change) set of economic activities.)
7.3.3
The Ranstad Metropolitan Region with its clustering of poly-nuclear cities is recognised as an excellent demonstration of this theory. With its high population density, proximate location of cities, and excellent transport links, it provides the spatial scenario for city cluster formation. It also provides a joint labour pool of highly skilled workers. This worker pool is attracted by a good quality of life in an accessible region. The cities partner with one another, in order to successfully compete for talent and investment. Strong commuter flows and trade movement between the cities reflects an integrated functional relationship of its cities (Commuting and business visits has increased by 40% between 1985 and 1998!).
132 Cities include Almere, Amsterdam, Delft, Dordrecht, Gouda, Haarlem, Hilversum, Leiden, Rotterdam, The Hague, Utrecht, and Zoetermeer. Other centres include Alphen aan den Rijn, Amstelveen, Capelle aan den IJssel, Hoofddorp, Katwijk, Leidschendam, Maassluis, Nieuwegein, Houten, Purmerend, Rijswijk, Schiedam, Spijkenisse, Vlaardingen, Voorburg, and Zaanstad.
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Metropolitan Management Structure 7.3.4
At the beginning of this century all relevant regional and local authorities of the Randstad jointly created an association to address subjects that have a reach beyond their individual jurisdiction. At one time the former prime-minister called for one administrative body to be set up, but this was rejected as the transfer of power and responsibilities would create inefficiencies and take too long to set up. The concluding general wisdom was that current collaborative approach was more efficient and effective.
7.3.5
Thus, the Randstad is not governed by a single authority, but by a network of administrative bodies and private institutions. This form of collaborative administration or ‘governance’ is based on the application of a flexible, responsive method. The current method is so successful that there has been no need to create a single authority.
7.3.6
This successful relationship of cities has not been created over night. It began many centuries ago in response to the need to jointly tackle water management and prevent flooding (the Netherlands is one of the lowest lying countries in the world and heavily prone to flooding). Administrative bodies to organise this responsibility were called ‘Waterschappen’ (water boards). In 1950 there were 25,000 individual waterboards. As it was a regional issue a merger was decided and today only 250 waterboards exist, 1% of the original number.
7.3.7
Today the cities in Ranstad still cooperate on issues that jointly concern them. There is no single administrative or authoritative body. The region is instead governed by three layers of authorities: •
•
•
7.3.8
35 municipalities (includes communal government). These are legally bound to produce land use plans and may give (tax) incentives and directions (zoning plan) to control or encourage development. The Communal Government fosters economic development which is the basis for public investment in regional development. Taxation guarantees a return of investment to the public treasury. The importance of public investment is that the treasury has the capacity to bridge lengthy periods for return of capital. 4 regional authorities - responsible for regional plans that synchronise national policies and local construction projects or private initiatives. They control the implementation of relevant legislation (e.g. infrastructure, environment) and thematic plans (see below). 5 ministries The ministries of Transportation and Public Works, Housing and Planning, Economic Affairs, Agriculture and Internal Affair (Home Office) issue national memoranda on planning within their fields of competence. National level government is responsible for collection and redistribution of public monies (taxes and public budgets). Thematic overarching plans are also prepared for infrastructure (transportation and water management) and are backed up by substantial (national) budgets. These thematic or sector plans are the subject of negotiation.
In January 2008 new legislation will be implemented to promote more direct cooperation between government institutions and between public and private entities. This new legislation gives power to all three administrative levels to develop zoning
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plans. This means that the regional and the national plans will override the municipal level plans. Role of the private sector 7.3.9
The private sector is a key player in the development of the Ranstad region. Entrepreneurs and government policy jointly promote agglomeration economies. Land development is instigated by the private sector primarily. Under Dutch law landownership is well protected. Landowners are allowed by law to execute the plan of Government authorities and reap the benefits, whilst also paying taxes and contributing to infrastructure development. This creates a win-win situation for all and avoids contravention of land use plans. The Government does however use land banks to pool large tracts of land under one governing body. The landowners are compensated for the land at the market rate based on the end use of the land, and they also benefit financially from the subsequent development. This encourages landowners to cooperate and comply with ongoing land use and thematic plans.
7.3.10
The Government uses public budgets to help fund infrastructure. It also creates a favourable tax climate to foreign investors, and a sophisticated system of commercial banks is in place to provide all financial services required for the private sector to operate.
Environmental Collaboration 7.3.11
The spread and variety of land uses in the Ranstad region is such that it is difficult to distinguish resources from environmental concerns. For example, rather than simply dumping waste into the environment, a unique system of recycling has been developed in the Ranstad region, whereby the waste of one company becomes the energy source of another. Hot water waste from one production process can be harnessed to become a resource of another company (energy production). Industries that were not allowed to operate in other areas due to environmental hazards were in fact accepted in Rotterdam as a proven method for accommodating waste exists. This ability to cooperate has major benefits for the regions economy and environment.
Ranstad - Key Lessons for China • Collaboration should be based on areas of joint concern (e.g. waste management) and not imposed. Open dialogue between key stakeholders is vital. •
A new metropolitan authority may not be necessary to achieve successful metropolitan planning providing that the role and functions of administrative layers are clearly defined in a meaningful way.
•
Successful clustering of activity is not an overnight process. It can be achieved over time if the right policy and investment framework is established to offer an attractive place to invest and live. This requires good transport links to facilitate commuting and free movement of labour resources and investment.
•
Unplanned ad-hoc development can be prevented if landowners are encouraged to
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follow land use plans and development strategies of government. For this to occur they need to reap financial rewards and become active agents in the development process. • •
Clustering and collaboration between firms allows them to recycle wastes as an energy source. This is a highly innovative idea that could be develop in China. The role of the public sector is to facilitate sustainable development, in all aspects, in particular land and finance.
7.4
Vancouver Regional Governance
7.4.1
The region of Metro Vancouver is one of Canada’s leading metropolitan regions that does not follow the normal growth pattern of most North American cities. It is constrained by mountains, ocean, the U.S. border and an agriculture land reserve. The total area of Metro Vancouver stretches 75 km east-west and 50 km north-south. With a city population of 600,000 and a metropolitan population of 2.3 million, Vancouver is a mid-sized urban region by global standards, but very small by Chinese standards. Approximately 250,000 residents live outside the boundaries of Metro Vancouver, but are functionally part of the area of urban influence.
Figure 33. Constraints in the Metro Vancouver region (mountains, ocean, U.S. border and agriculture land reserve)
Source: Metro Vancouver
Figure 34.
Greater Vancouver Densities (2006 Census, Statistics Canada)
GREATER VANCOUVER LAND AREA AND POPULATION Land Area (sq. km) Downtown
Population
Density (persons / sq. km)
5
100,000
20,000
Vancouver City
111
600,000
5405
Metro Vancouver
2821
2,100,000
744
7.4.2
Due to land constraints, the city has been forced to densify. Despite these efforts, a significant amount of land has been used for low density purposes in peripheral locations. As a result, there is very little land remaining within the existing framework. Without trespassing into agriculture reserves there remains less than a decade's worth
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of land. This is a very sensitive political issue. Higher density development is required on all remaining lands, with urban regeneration throughout the metropolitan area. Figure 35. Density Developable Land
and
Restricted
Regional Economy 7.4.3
The regional economy is based on the commodities trade but is augmented by “new economy” industries that attract a ‘creative class’ of professional migrants who place a high value on ‘quality of life’. Frequent high ratings of Vancouver's quality of life has led to the creation of a vibrant ‘leisure economy’ that has attracted massive investment in tourism and meeting-related facilities, such as convention centres, hotels, investment-oriented condominium towers, ski resorts, golf courses and shopping districts. Vancouver has a significant number of small and mid-sized head offices and regional offices for multi-national corporations. This is complimented by a vibrant technology sector, which seeks international locations that will attract skilled professionals. For instance, the television and film industry has a major presence in the city. The port is Canada’s largest, and competes with Los Angeles-Long Beach as the largest port on the Pacific coast of the Americas. The transport sector plays a critical role in the movement of goods and people between the North American and Asian markets.
The Agriculture Land Reserve (ALR) 7.4.4
The ALR is one of the defining features of Greater Vancouver development. Legislation was enacted in 1973 in response to concerns regarding urban sprawl and the loss of large tracts of farmland, fed by the emerging freeway network. The legislation prohibited development on agriculture land throughout the entire province and as a result the ALR encompasses nearly 200,000 hectares of the Metro Vancouver land base.
Historical Evolution of Governance 7.4.5
The Vancouver region is managed by a multi-tiered system of government. Ultimately, the division of power is legislated by the provincial government of British Columbia,
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based in the capital city of Victoria. The federal government in Ottawa is not directly involved in the governance of cities in Canada, but indirectly affect their revenue streams and success through project funding. Local government is divided between local towns and cities, as well as parallel regional agencies with their own of board of directors. The metropolitan area of Vancouver consists of 21 municipalities. Each municipality has a mayor and council that represent their jurisdictions. There is no elected mayor or commissioner for the entire region. Translink and Metro Vancouver are the regional government organisations that provide a range of combined services for the member municipalities. The allocation of responsibilities has evolved over a period of time, and has always been influenced by enabling legislation created by the provincial government. Creating a Regional Authority 7.4.6
The rapid growth of the region beyond the borders of the dominant core city in the 1960s led to the need for a larger organization that could generate synergies across municipal boundaries. Local councils agreed that the separate provision of utilities and landfills for each municipality created duplication and waste and that a larger regional organisation would be able to generate economies of scale, and take advantage of geographic advantages. Currently, Metro Vancouver and Translink are the parallel regional government authorities that provide cooperative regional services for various land use issues and transportation respectively (see Figure overpage) Each body has a board of directors whose members (mayors and councillors) are selected by the respective councils, based on a weighted system of representation by population). The evolution to the current system occurred over a period of time, as needs anged and provincial politics influenced policy.
Figure 36.
Metro-Vancouver and Translink
National Government of Canada
Provincial Government of British Columbia
Single Project Funding
Taxing Powers for General Revenue
METRO VANCOUVER
TRANSLINK
Metro Board of Directors
Translink Board of Directors
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Translink Figure 37. 7.4.7
Translink Revenues
In 1999, the provincial government set up Translink which had the legal mandate to Translink Revenue Sources develop a transportation plan that is in line 1% Transit Fares & with the objectives set out in the regional Advertising 4% Fuel Taxes land use plan. Translink was provided with 36% 28% legislated powers to generate funding Property Taxes through a variety of sources, including fuel Parking Tax taxes, parking charges and property tax. Other Sources 31% Current funding is mostly generated from transit fares and advertising, as well as fuel and property taxes. Higher fuel taxes offer a double incentive for Translink, potentially raising millions of dollars in revenue, while reducing vehicle use and altering development patterns. Tolls on new projects are also an effective transport demand management tool.
7.4.8
The division of jurisdiction between Translink and local authorities is determined on the basis of provincial significance for goods movement and inter-regional travel. Public transport and arterial roads fall within Translink’s jurisdiction.
7.4.9
Translink has been hailed as a major success story given its ability to operate a seamless transport system across all municipal boundaries, with the significant power to generate revenue. Translink has increased public transport ridership by 31% between 2002 and 2007, from 225 million to 295 million passenger trips per year.
7.4.10
Translink has strong control over regional transport planning, and in coordination with the regional land use planning of its partners, Metro Vancouver (see Box that follows), has significant direct and indirect impacts on the region. For example, Translink implemented a tax on all car parking spaces within the region, to be included in the property owners’ municipal property tax notices. Business groups attempted to discredit the initiative but following a public propaganda programme the tax was finally accepted, albeit at a lower rate. This tax is used as a means to generate revenue while reducing private vehicle ownership and use.
7.4.11
The current provincial government has passed legislation to overhaul the structure of Translink in 2008. The new authority will be expand to include a much wider area, including towns across the green zone that are functionally a part of the metropolitan area. A council of mayors will replace the current appointment of councillors and mayors from the individual municipalities, and a board of professionals will take over the day to day operations. By weakening the power of the larger municipalities, the
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provincial government has strengthened its control over Translink.
Figure 38.
Metro-Vancouver Revenue and Expenditure
7.4.12
Formerly the Greater Vancouver Regional District (GVRD), the role of Metro Vancouver is to: a) deliver essential utility services like drinking water, sewage treatment, drainage, recycling and garbage disposal that are most economical and effective to provide on a regional basis; and b) protect and enhance the quality of life in our region by managing and planning growth and development, coordinating housing, as well as protecting air quality and green spaces.
7.4.13
Today, Metro Vancouver is funded by a number of sources, including property taxes and service fees. Taxing powers and service provision is regulated by the provincial government, and is accountable to the public through the member municipalities, through the board members. Only a small proportion of funding comes from grants or transfers (6%), while the vast majority is own source revenue collected via levies, fees and sales (76%). See Figure 38.
7.4.14
Over the years several versions of the "Livable Region Strategic Plan" (LRSP) were prepared. The LRSP outlines a set of goals intended to meet four key objectives: • •
Protection of the Green Zone Build Complete Communities which include employment and primary and secondary centres to be linked with the urban core (Vancouver CBD). • Achieve Compact Metropolitan Region by supporting medium to high-density development in the growth concentration area and prohibiting growth on agricultural lands in the periphery. • Increase Transport Choice with capital investments towards infrastructure that will not cause sprawl. Partner municipalities are expected to conform to the objectives of the LRSP, and can potentially face consequences (even vetoes on development) if failing to comply with land use objectives or population targets. (The LRSP contains Regional Context Statements that outline population ceilings and limits on housing types for each municipality). The LRSP has been very successful in comparison to other North
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American urban regions. On average, 70% of new development has occurred in the existing urban area over the past 20 years 7.4.15
With transportation and regional land use planning firmly under the control of regional government, there is little risk that a single municipality could upset the overall regional strategy. However, there have been numerous instances where local politics interfered with regional decision-making, as Metro Vancouver and Translink board members have voted against projects in other municipalities, despite the fact that they were part of the regional plan. Demand for new land and tax revenues has caused tension between local and regional goals. The Agriculture Land Reserve (ALR) has controlled outward expansion of the urban area. Arguments for developing the ALRT were rejected because land with good soil quality is scarce.
. Vancouver Metropolitan Region - Key Lessons for China •
Region-wide provision of transport and utilities can be managed by a regional authority (Translink) that is mandated to operate on behalf of many local authorities. This provides a means to coordinate planning, implementation, operations and financing in a sustainable and cost effective manner while ensuring that services are properly conceived in relation to landuse policies.
•
Region-wide land use planning and control can be managed by the establishment of a regional authority (Metro-Vancover) that is mandated to operate on behalf of many local authorities. This provides the means to coordinate the planning and control of land use in relation to service provision (transport in particular) as well as to enforce region wide policies such as the Agricultural Land Reserve.
•
Taxes and charges to finance region-wide authorities (Translink) enables them to operate with a minimum of subsidy while assisting in the implementation of policy objectives.
•
Shortage of available land need not be a constraint to city development and can be resolved with policies to encourage more compact development of higher densities whilst maintaining high standards in quality of life.
•
Non urban land with a higher resource value, but under intense development pressure (Agricultural Land Reserve), can be retained if need be and used as a device to stop urban sprawl.
•
Coordinated public sector policies, for the mutual benefit of all parts of a region, can attract private investment in sectors with comparative and competitive advantages (leisure, tourism, IT etc.) while avoiding wasteful and unwanted competition between local authorities.
7.5
Paris Metropolitan Region
Area, Population and Density 7.5.1
The metropolitan region of Paris (aire urbaine de Paris) is generally considered to be
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the hinterland from which workers commute to the city. Broadly this corresponds to the region of Ile de France that was introduced in 1971 as one of 21 new regions covering all of France. As such the metropolitan area comprises 1,281 village or towns (communes), 8 administrative units called departments 133 (départements) and has a total population of about 11.6 million. The city of Paris (Ville de Paris) is itself a department and one of the 8 mentioned above. See Figure 39. 7.5.2
The urbanised area (unité urbaine de Paris) is not as extensive as the metropolitan region and yet covers approximately 2,723 km2 - about 26 times larger than the historical city core - the Ville de Paris (Paris proper), which has an area of just 105 km2. The population of the unite urbaine is just over 10 million, compared to 2,153,600 for Paris proper (2005). These statistics illustrate that Paris proper has some of the highest population densities of any city in the world, considerably higher than those of its urban area and metropolitan region, see Table 59 below.
Table 59, Paris Metropolitan Region Region/Area
Area (km2) Metropolitan Region (Aire urbaine de 14,518 Paris) Urbanised Area (Unité urbaine de Paris) 2,723 City of Paris (Ville de Paris) 105
Figure 39.
Population Density (Person/ km2) 799
10.10 2.15
3,710 20,476
Paris Metropolitan Region
7.5.3
133
Population (Millions) 11.60
Although Paris proper has experienced a decline in population in recent years it has not undergone the displacement of residents that results from inner city redevelopments, as is the case in many other western cities. Paris' strict building codes and lack of developable land have contributed to a phenomena called museum-ification (muséification) whereby regulations have discouraged redevelopments involving larger buildings and improvements to utilities to meet the needs of a growing population. As a consequence many institutions and
There are 100 departments covering the country. These may be considered as equivalent to English counties.
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economic activities are moving to the suburbs, in contrast to trends in other European cities. For instance, the financial business district (La Defense) is actually outside the city of Paris. Metropolitan Administration 7.5.4
The administration in France (excluding Corsica and other places overseas) comprises a hierarchy:• • • • •
7.5.5
21 regions, 100 departments (counties), 341 arrondissements (districts), 4,302 cantons often comprising several communes, 36,568 communes (municipality) can be a city of 2 million, a town of 10,000 or a village of 10.
Regions are managed by a regional council (conseil régional) comprising nominated representatives of department assemblies and major communes (municipalities) in the region. The councils do not have any legislative autonomy nor can they issue regulations. They can however levy their own taxes and have a sizeable, though not considerable, budget. Their main function is infrastructure, such as public transport systems, aid to universities/research and support to entrepreneurs. Departments are administered by a general council (conseil général), elected for 6 years. The executive body is headed by the President of the Council (formerly the Prefect) who is nominated by the government of France. Arrondissements (districts) operate as sub-department offices. Cantons are an association of communes, whereas communes are the equivalent in role and function to municipalities in most other countries. The lowest administration is quarter, equivalent to a neighbourhood.
Figure 40.
Administration of Paris Metropolitan Region 7.5.6
ADMINISTRATIVE STRUCTURE : PARIS METROPOLITAN REGION Regional Council (Ile de France)
Mayor
President
Department/ Commune (Ville de Paris)
Other 7 Departments
Arrondissement Councils Cantons Mayor 22 Municipal Arrondissement Councils
Communes
Quarters
Quarters
The administrative structure of the Paris metropolitan area is complex, as shown in the Figure adjacent. Whereas the administrative structure and hierarchy within the seven departments (excluding Paris) is broadly the same as summarised above, administration within Paris proper is different, as shown in the left side of the Figure. Initially the city of Paris (Ville de Paris) was a commune. This together with its surrounding urban areas came under the jurisdiction of a single department (Séine département). Rapid urban growth in the last century necessitated changes in
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1964 to the political and administrative structure whereby, the department was split into four separate new departments, one of which was the former commune of Paris.
7.5.7
Due to this oddity, the Mayor of Paris is both the elected representative of the commune as well as president of the department. The next tier in the administration are 22 "municipal" arrondissements,134 each of which has a directly elected council (conseil d'arrondissement) which in turn elects an arrondissement mayor. A selection of members from each arrondissement council form the Council of Paris (conseil de Paris) which in turn elects the Mayor of Paris. Arrondissements further subdivide into quarters and a recent initiative is to establish elected councils for each quarter. The 8 departments together were called La Region Parisienne and were later designated in 1971 as one of 21 new levels of regional administration in the country - the region of Ile de France.
7.5.8
The 4 inner departments (Ville de Paris, Hauts-de-Seine, Seine-Saint-Denis, and Valde-Marne) form a ring around Paris called the la petite couronne (small ring), which is now entirely urbanised. The remaining 4 departments are referred to as the grande couronne (large ring) and are partly urbanised.
Metropolitan Planning Initiatives 7.5.9
The Paris conurbation grew according to two basic spontaneous trends. First, concentric expansion of Paris, and second, radial growth in fingers along the main river valleys of the Seine, the Oise and the Marne. These trends were modified in the 1960s by the decision to create five new towns 20 or 30 kilometres from Paris, as satellite settlements to absorb peripheral growth. Successive regional planning efforts since then have all been based on the idea of containing and limiting discontinuous urbanisation to avoid urban sprawl.
7.5.10
The 1965 Regional Urban Development Plan focussed on organising Paris's fast developing urban agglomeration and protecting open space. It laid the foundations for development by the creation of 5 satellite towns, the suburban express rail system, extension to the metro, motorways and highways. Policies of the 1965 plan continued into the 1976, "Ile de France Region Urban Development Plan" (Schéma Directeur d'Amnagement et d'Urbanisme de la Région Ile de France - SDAURIF) which introduced the concept of green belts, in much the same way as London, through the strict application of zoning and land use control.
7.5.11
After the SDAURIF the 1994-2015 Region Urban Development Plan (Schéma Directeur de la Région Ile de France - SDRIF) began a new phase in regional planning
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These should not be confused with the arrondissements that exist within the remaining seven départements that make up the metropolitan region.
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and management that looked at zoning in a more comprehensive manner, recognising that strategic planning must involve all different administration levels working together for the implementation of coherent projects with identified funding, irrespective of whether these levels are national, regional, departmental or local. Moreover, coordination between the multiplicity of authorities and para-statal agencies is recognised as critical. 7.5.12
The 1994 Urban Development Plan (SDRIF) is about to be superseded by a revision which will guide development of the metropolitan region up to 2030. An important element of this revision is that all other urban planning documents within the region must comply with it. The revision aims to match environmental concerns and energy supply challenges by achieving balanced development of housing, offices, transport and business districts while reducing inequalities and enhancing the attractiveness of the region. This will be done within the framework of 3 key objectives, limiting urban sprawl, further improving public transport and protecting open spaces. While there is nothing new about these objectives the manner in which they are to be achieved is interesting. The government, operating through the regional council will play a lead role in guiding future development through investing heavily in key projects to influence and direct urbanisation. Examples of these include:• • •
Senart new town comprising over 3,000 hectares to include 6,000 new homes, business parks and office complexes, Regeneration of the "Plaine de France", a disadvantaged area within the region with a high rate of unemployment. The proposal includes extension of the metro to improve its connectivity as well as various new activities to boost jobs. Renewal plan for the business district of La Defence.
7.5.13
Much of the finance for key projects is sourced from national government. To better coordinate and implement the revised SDRIF, and to ensure that projects are affordable, State-Region Contracts (abbreviated to CPER in French) have been prepared and agreed to ensure that the necessary resources will be made available for co-financing of projects by state and regional governments. For the Paris Region (Ile de France) the CPER amounts to Euro 5.56 billion of which 38% will come from the state. Among other projects, these funds will be used for improving and extending the metro rail system, the RER as well as bus and tram systems. It also includes funds for renovating educational facilities and projects to promote economic growth, employment, housing, sports facilities, environment, culture and tourism.
7.5.14
Another important aspect of government intervention is promotion of the region's economy, which forms a critical element of the new approach to regional development. The Paris metropolitan area has an economy equivalent to a small country (Euro 481 billion in 2005) and accounts for 29% of the country's total GDP. It rates as Europe's leading employment zone with a total of 5.35 million jobs, and plays leading role in the domestic and global economies. The regional council sets aside 25% of its research budget (Euro 28.6 million) to promote the economy through a strategy of supporting competitive clusters. The idea is to create a business friendly environment in strategic locations to attract private investors (small manufacturing enterprises in particular). This approach seeks to exploit the comparative advantage of the Paris metropolitan area through maximising competitive advantages in selected economic activities. Five
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competitive clusters are supported:•
System@tic Paris Region is focused on technological expertise in optics, electronics and software, with special attention to potential markets in telecommunications, automobiles and transportation, security, defense and system design. • Medicen Paris Region is a cluster dedicated to advanced technologies in medical care with emphasis on new molecular, cell and gene therapies. • Cap Digital develops new innovations in digital content and information engineering. • Urban Development and Mobility is a cluster that explores new solutions in the fields of urban development, housing, construction and mobility, for energy efficiency and sustainability. • Mov'eo is an anagram for a cluster that looks into more efficient modes of energy, road safety, mobility and mechatronics. Three new clusters are planned; finance, aeronautics and open-source software. 7.5.15
Spatial measures to promote competitive clusters are contained within the revised SDRIF and underline a realisation that metropolitan planning is all about the economy, employment and the places where labour lives, moves and works. The SDRIF is supported by various other agencies operating at the regional level. These include:•
•
7.5.16
Regional Board for Industry, Research and Environment, Ile De France (DRIRE) is loosely attached to the Ministry of Economy, Finance and Industry Service and linked to the Ministries in charge of Environment Research and Transport. It is placed under the Regions and Department Prefects Authority and provides advice to the 8 departments through departmental offices. PREDA (Paris Region Economic Agency) which assists and advises French and international companies that seek to start expand or relocate business activities in the Paris region.
The SDRIF is prepared by the Regional Council for the Ile de France, with the assistance of the Institut d'Aménagement et d'Urbanisme del Region Parisienne (IAURP), which loosely translates as the Urban Planning and Development, Ile de France. Established in 1960, the IAURP has worked continually for the development of the metropolitan region and in 1982 created a Geographic Information System that is used for the planning and management of the region. Other agencies and organisation involved in metropolitan planning, development or operations are as follows :•
Syndicat des Transports d'Ile de France (STIF) which is a public body bringing together the French government, the regional council and the 8 departments that comprise the region to manage and develop public transport services provided by more that 80 authorised companies. STIF regulates the quality/quantity of service and provides operational subsidies to ensure that fares are affordable. Two of the companies are public monopolies (RATP and SNCF) while the rest are private. - Regie Autonome des Transports Parisiene (RATP) operates 16 metro lines, 2 heavy rail lines, 2 tramways and 317 bus routes. - Societe nationale des Chemins de Fer Francais (SNCF) operates the French railway system including routes used for suburban and regional services.
•
Green Space Agency of the Ile de France Region (AEV) for the management and preservation of green spaces, woodland and footpaths. More recently it has also taken on responsibility for preservation of nature and farmland in and around urban areas.
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•
Environment and Lifestyle Department of the Regional Council. This defines regional policy and programmes for water, sewage, waste, air, noise, quarries, landscaping and regional nature parks.
•
Regional Agency for the Environment and New Energies (ARENE) for the education of public and private agents to promote energy conscientiousness.
7.5.17
Below the level of the Regional Council there is no inter-municipal association for the Paris urban area, nor is there any form of inter-communal initiative to heed problems of the region's dense urban core as a whole. Paris's alienation of its suburbs is seen as a problem and considered by some to be the main causes of civil unrest, such as the suburban riots in 2005 and November 2007. One explanation is a fear that the Ville de Paris will dominant any form of inter-municipal or association. Another is the continued interest of national government to dictate the development of the capital city and its metropolitan region. State funding to the regional council and departments allows the national government to play a major hand in the planning and execution of capital intensive projects that shape metropolitan development, such as railways, major roads and mega projects.
7.5.18
Although greater devolution of power to lower order authorities has been discussed, Paris and its surrounding urban areas are subject to a much greater degree of centralised control than other European cities. By comparison, the development of London is largely managed by 32 London Boroughs, each of which is governed by an elected council with little interference from the state. The formation of a Greater London Authority in 2001 was conceived to manage transport. Other functions are the responsibility of the boroughs.
7.5.19
The success of the revised Region Urban Development Plan will depend on the degree to which the multiplicity of authorities and agencies that have jurisdictions within the region are able and willing to participate. Each of the communes have local urban development plans, and similar plans exist at the department level. Arrondissements also have development plans. In total there are over 1,300 different development plans, not including sectoral plans of various agencies. Coordination is therefore a key to success. Even within a single commune coordination is a daunting prospect given the number of agencies involved, as witnessed by those working in the Ville de Paris :•
CPCU Paris Urban Heating Company
•
SENMARIS Rungis national market development and management company, Paris Metropolitan Area
•
SOGARIS Rungis bus station management company
•
CENECA National centre for agricultural fairs and competitions
•
SAGEP Water management company
•
SAEMES Parking management company
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•
SGIM City real estate management company
•
SEMIDEP Interdepartmental company, Paris metropolitan area
•
SEMAPA Paris urban planning and development
•
SEMAVIP City of Paris urban planning and development
•
SEMEA 15 Planning for the 15th arrondissement
•
SMAEST Eastern urban planning and development
Paris Metropolitan Region - Key Lessons for China •
A very large region, comprising of many local administrations, can be managed as a single entity by the creation of a regional authority (conseil régional) with a mandate for intervention in matters of regional significance only. In the case of the Paris Metropolitan Region (Ile de France) this mandate is seen as promoting the regional economy in a global context, with particular attention to the five competitive clusters.
•
Regional management is dependent on consistent and committed support from central government. In the case of the Paris Metro Region, the government is a major player, accounting for 38% of funding for regional projects and activities.
•
Regional transportation services are best managed by the creation of a transport authority, such as Syndicat des Transports d'Ile de France (STIF).
•
Regional bodies can be effective in achieving region-wide policy objectives. The Regional Council has implemented strategic land use policies, the Green Space Agency succeeded to preserve nature and farmland in and around urban areas, the Environment and Lifestyle Department has managed policies for water, sewage, waste, air, noise, quarries, landscaping and nature parks, and the Regional Agency for the Environment and New Energies (ARENE) has educated public and private agents to promote energy conscientiousness.
•
Projects of regional significance are best conceived and executed by regional authorities with the backing of the central government.
•
Urban growth can be structured by appropriate policies and major investments in projects such as satellite towns and rapid inner regional rail services.
•
The dominance of powerful local authorities within a region, such as the Ville de Paris, can be controlled.
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7.6
Greater London Authority (GLA), UK
Context 7.6.1
The population of the Greater London Area (the area covered by the 32 London Boroughs) is estimated for 2006 to be between 7.47 and 7.57 million, with a projected growth to between 8.26 and 8.71 million by 2026. Over the past 20 years London changed dramatically, driven by forces, including: • •
• • • • • 7.6.2
globalisation of many economic sectors, and the dominance of the finance and business sectors, frequently interlinked with dramatic advances in technology, an increased inter-relationship between major economies, where internationalisation of investment and trade accompanies developments in telecommunications and rapid transport effectively shrinks distances between people, markets, and business decision takers, movement of people across borders, bringing with them fresh ideas, new cultures, enhanced skills and access to new markets, growth of incomes and wealth with particularly strong rising demand for leisure and tourism activities an increase in social and economic polarisation, a new and increasing environmental imperative to use energy and resources more efficiently, value the environment and reduce environmental stress, and changes in opinion and values making people welcome diversity and be less tolerant of discrimination, misuse of resources and pollution.
These pressures developed at a time when there was no strategic plan for London. Earlier policies led to the decentralisation of many key economic activities together with population dispersal to new and expanded towns elsewhere. London’s population declined from a peak of over eight million in 1939 to 6.8 million in 1983. Just as this process reversed and London started to grow again, the strategic resources to rethink the implications of growth (under the former Greater London Council) were abolished. The phenomenal growth of London’s finance and business services sector, and in population, was not matched by sufficient investment. Housing, transport, office stock, skills and the public realm all experienced under-investment. The benefits of economic buoyancy were not shared between all Londoners. Most strikingly, unemployed Londoners accounted for 17 per cent of all UK unemployment. The results were :• • • • • •
increased difficulties in travelling around London, with heavy traffic and slow and unreliable journey times, upward pressure on business costs, made worse by a shortage of appropriate office space, leading to some of the highest office rents in the world, acute housing shortages resulting in rapidly rising house prices, reducing real living standards, disadvantaging people on modest and low incomes, and creating a destabilising factor in the UK macro-economy, skills gaps in some sectors, alongside social deprivation in many areas and increased economic and social polarisation, continued social exclusion and discrimination, particularly affecting minority ethnic communities, and increasing pollution, damaged environments and chronic underinvestment generally and in particular, in the public realm.
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The Greater London Authority 7.6.3
Established under the Greater London Authority (GLA) Act 1999, the GLA is a unique form of strategic citywide government for the London Metropolitan Region covering the jurisdiction of 32 London Local Authorities known as Boroughs. The GLA is made up of a directly elected Mayor and a separately elected Assembly - the London Assembly. There are around 600 staff to help the Mayor and Assembly in their duties. The Mayor is London's spokesman. He leads the preparation of statutory strategies on transport, spatial development, economic development and the environment. He sets budgets for the GLA, Transport for London, the London Development Agency, the Metropolitan Police and London's fire services. The Assembly scrutinises the Mayor's activities, questioning the Mayor about his decisions. The Assembly is also able to investigate other issues of importance to Londoners, publish its findings and recommendations, and make proposals to the Mayor. The GLA's main areas of responsibility are: • • • • • •
Transport Policing Fire and emergency planning Economic development Planning Environment
7.6.4
Most of the budget is met by central government grant. London council taxpayers also contribute a small amount from Council Taxes (Property Tax).
7.6.5
The GLA have prepared a "London Plan" as a spatial development strategy for Greater London. It covers the broad development strategy and specific themes including sustainable development, housing, communities, transport, economic development, culture, and heritage, and waste, quality of the environment, building design, the natural environment and development of the sub-regions. The London boroughs have to consider the London Plan and related strategies when preparing their own local development plans.
The London Plan 7.6.6
The Plan recognises that London’s future will be significantly shaped by a number of factors driving change. The most significant of these, at least for a spatial development strategy, is the projected rapid growth of people and jobs, driven by powerful market and demographic forces. This requires recognition that London cannot realistically reverse strong, deep-rooted factors driving change. However :•
growth can only be accommodated without encroaching on open spaces if development takes place more intensively, leading to higher densities and plot
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• • •
7.6.7
ratios on existing brownfield sites. In short – London must become a more compact city. the future scale and phasing of development should be integrated with the capacity of the public transport system and accessibility of different locations. this level of growth will be inhibited unless a range of supply side issues is dealt with to match the demand. These include the supply of commercial floorspace, housing, relevant skills, adequate transport and a high quality environment. a clear set of spatial priorities are needed. Areas of London that have not benefited from recent development – notably in parts of the east –should be prioritised for future development. Other areas, including central London and suburban town centres, will also accommodate considerable growth.
All policies are set within an overarching policy of sustainable development. A more compact city will enable the more effective use of scarce resources, including land, energy, transport infrastructure, water and construction materials. These aims are to be achieved by 6 policy objectives :• • • • • •
To accommodate London’s growth within its boundaries without encroaching on open spaces, To make London a better city for people to live in, To make London a more prosperous city with strong and diverse economic growth, To promote social inclusion and tackle deprivation and discrimination, To improve London’s accessibility, and To make London a more attractive, well-designed and green city.
Transport 7.6.8
The Mayor is responsible for producing an integrated transport strategy for London and for consulting the London Assembly, boroughs and others on the strategy. The Mayor's Transport Strategy was published in 2001 and is implemented through the agency called Transport for London (TfL)
7.6.9
Transport for London (TfL) is responsible for most transport in London and for delivering the Mayor's Transport Strategy through :• • • • • • •
7.6.10
managing London Buses, Croydon Tramlink, and the Docklands Light Railway, managing the Underground, managing a network of major roads, the Transport for London Road Network (TLRN), regulating taxis and minicabs, running London River Services, and promoting the safe use of the Thames for passenger and freight movement, helping to co-ordinate the Dial-a-Ride and Taxicard schemes for door-to-door services for transport users with mobility problems, management of traffic lights across London.
The London Boroughs continue to play a vital role in London's transport and remain the highway and traffic authorities for 95 per cent of roads in London. They work in partnership with the Mayor to deliver the aspects of transport strategy relevant to their responsibilities. They are required to develop and implement Local Implementation Plans detailing their proposals for carrying out the transport strategy in their borough.
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Some of the achievement of the Transport for London are :•
In 2003 a congestion charging scheme was introduced in combination with a substantial expansion and improvements to the bus system (under the Mayor’s control). The system operates within a defined congestion charging zone. Chargeable vehicles paid £5 (increased to £8 in July 2005) for any number of entries per day. Payment is either beforehand or on the day of travel, by a range of means. The scheme created a buoyant revenue stream that has been mostly reinvested in upgrading the bus system (80% of £100mn pa revenues are so invested). Traffic adapted quickly to the scheme. Vehicle movements entering the charging zone during charging hours reduced by 18%, and congestion reduced by 30%. The main response of car drivers was to switch to improved public transport. When the charge was increased to £8, further reductions in traffic took place. Traffic entering the zone in 2005 was 21% lower than in 2002, before the scheme was implemented. Vehicle emissions had also been reduced in the zone – CO2 by 16%, NO by 13% and particulate matter by 15%. The congestion charging scheme had an immediate obvious impact, and appears to have reversed the spiral of decline that had faced London’s transport system. Not everyone is happy but the scheme has gained widespread acceptance.
•
The bus service has been entirely franchised out under arrangements that are widely considered successful.
•
The new Docklands Light Railway (DLR) had been progressively developed from small beginnings.
•
The underground rail network had become progressively unreliable and congested, with many assets life expired. In response, the central government awarded a 30year privately operated contract to renew and upgrade the Underground infrastructure and trains.
Policing, Fire and Emergency Services 7.6.11
The Greater London Authority Act 1999 established the new independent Metropolitan Police Authority (MPA) to oversee policing in London. The existing London Fire and Civil Defence Authority was reconstituted as the London Fire and Emergency Planning Authority (LFEPA), which is directly accountable to the Mayor. The LFEPA sets the strategy for the provision of fire services and ensures the fire brigade can meet all normal requirements efficiently .
Economy 7.6.12
The London Development Agency (LDA) works for the Mayor, co-ordinating economic development and regeneration across the capital. With a budget of £300 million, it promotes business and works in partnership with industry, the public and voluntary sectors to create opportunities so all can benefit from London's economy. Established in July 2000, the LDA joins the eight regional development agencies previously set up in England. The LDA shares the same powers, as set out in the Regional Development Agencies Act 1998 and the Greater London Authority Act 1999, and is answerable to the Mayor.
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7.6.13
The LDA has prepared an Economic Development Strategy, 'Sustaining Success' which is seeks to implement through various programmes to :• • •
further the economic development and regeneration of London , promote business efficiency, investment and competitiveness in London, and promote employment in London by enhancing and developing the skills of local people
Planning 7.6.14
With the creation of the GLA, the Mayor took over responsibility for strategic planning of London from the Central Government. The main responsibilities of the Mayor are to: • • • • •
7.6.15
produce a spatial development strategy - the London Plan. This planning strategy covers the type of development and land use that the Mayor wants to see in London. ensure that London boroughs' unitary development plans (UDPs) conform generally with The London Plan. consult on planning applications of strategic importance, with the power to refuse planning permission on strategic grounds. monitor and collect information on the implementation of The London Plan, and, represent London's planning interests in the wider Southeast.
The London Plan is a wide-ranging strategic plan for London's development that puts planning issues into context with other areas of responsibility for the Mayor, including economic development, social development and the environment. It also takes into account European, national and regional planning policies. It sets the guidelines for how London should grow and change, and is crucial to the integrated development of the capital. The London Plan must fit within the framework of national planning policies and must protect national or broader regional interests.
Environment 7.6.16
In the UK, national environmental policy is determined by government and presented in a series of national Planning Policy Guidance Notes or Statements and Regional Planning Guidance. The London Plan includes policies initiatives to: • • • • • • • • •
Protect and promote open space networks Protect the green belt and Metropolitan open land from inappropriate development Protect, promote and manage biodiversity Improve access to the countryside and quality of landscape in the urban fringe Encourage and support a thriving agricultural sector Controlled development along the ‘Blue Ribbon Network’ of streams, rivers and lakes Protect and enhance biodiversity along the Blue Ribbon Network Consider flood risk for developments on floodplains Make better use of aggregates by reusing construction and demolition waste
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Figure 41.
7.6.17
A Municipal Waste Management Strategy for London was prepared which aims to exceed the government’s recycling and recovery targets, which have been set to meet central government's Landfill Directive targets for the reduction of biodegradable material sent to landfill. The strategy aims to reduce waste by :• • • • • •
7.6.18
London Waste Authority Areas
Waste Reduction and Use Recycling Composting Waste Recovery and Residual Waste Treatment Landfill Specific Wastes
An Energy Strategy was issued. The main objectives are :•
to reduce London’s contribution to climate change by minimising emissions of CO2 from all sectors (commercial, domestic, industrial and transport) through energy efficiency, CHP, renewable energy and hydrogen, • to help eradicate fuel poverty by giving Londoners, especially the most vulnerable groups, access to affordable warmth, and • to contribute to London’s economy by increasing job opportunities and innovation in delivering sustainable energy and improving London’s housing and other building stock. The energy strategy is to be delivered through a number of policies and proposals to use energy efficiently, to use renewable energy and to supply energy efficiently.
7.6.19
The overall objective of the Air Quality Strategy is to improve air quality to the point where pollution no longer poses a significant risk to human health by 1) reducing air pollution from road traffic through reducing the amount of traffic and the introduction of cleaner vehicles, 2) reducing emissions from air travel, 3) making building more
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sustainable by reducing energy consumption and associated emissions, 4) encouraging businesses to take up a range of measures to reduce air emissions and 5) encouraging individuals to take actions to make a difference. The impact of these policies is constantly monitored using automatic air quality monitoring at 94 sites across London. Greater London Authority - Key Lessons for China •
Without a regional authority, to conceive and execute a strategic plan, subordinate local bodies cannot be expected to control and guide dynamic forces that may operate within metropolitan areas. The establishment of the GLA was a recognition that a strategic level plan (The London Plan) with various strategic objectives was a necessary precondition for vital sectors such as land use planning, transport, economic promotion and environment.
•
Traffic congestion has to be tackled in comprehensive, multi-dimension manner and ultimately must include measures to restrict the use of the private car (congestion charges). However, complementary improvements to alternative means of transport (public transport) must be instigated as part of an overall transportation strategy.
•
Any strategic planning exercise should recognise that underlying economic trends are often driven by dynamic processes that lie beyond the region's limits (and control). Accordingly strategic objectives should seek to work with these trends rather than frustrate them.
•
The overall operations of utility services, such as solid waste collection and disposal, may be better managed at a strategic level by the establishment of a regional authority that can assist lower order authorities to coordinate their activities and thereby achieve economies of scale for shared facilities (such as sanitary landfill sites).
•
National policies objectives, as contained in government directives, are more easily achieved if there exists a strategic authority to translate objectives into various actions to be performed by many local bodies. This is refers to the role of the strategic authority as a team leader.
•
Where management of urban areas is divided between many local authorities, problems that result from the actions by all sectors of society (for instance, air pollution) are not easily resolved unless an overarching approach is adopted that may include a range of activities some of which might lie outside the mandate of local authorities. Such activities may be included as a role and function of a metropolitan regional authority.
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7.7
New York-New Jersey Metropolitan Region
Profile 7.7.1
The New York Metropolitan Region includes counties in New York City, Long Island, and Northern New Jersey. The population is approximately 18.7 million. Details are shown in the table below.
Figure 42.
New York-New Jersey Population and Employment Statistics
City Level
No. Boroughs / Counties
Population (million)
Urban employment (million)
New York City
5
8.1
3.7
New York Suburbs
3
1.3
0.58
Long Island
2
2.8
1.2
Northern New Jersey
na
6.5
2.9
18.7
8.5
Total 7.7.2
The region is connected via public transportation. Metro-North Railroad, Long Island Railroad and New Jersey Transit provide rail links, in addition to bus services, a bridge and tunnel connections for automobiles. Historically, the City of New York provided the urban centre with the majority of jobs, but regional development patterns have evolved, with employment centres and population concentrations developing out of the City in suburban counties.
Regional Coordination 7.7.3
Regional planning and coordination between cities is not undertaken in the US. As a result there is no higher authority responsible for managing or controlling development of the metropolitan area. The political system is designed to protect private property rights, and follows a home-rule approach. As such, local governance is done at the municipal level where decisions on land use, education, police, and some infrastructure services are made. In some States, such as Florida, municipal land use decisions require County and State approval, but in New York and New Jersey, this is not the case. States are empowered to govern themselves, and while are beholden to Federal rules, are not beholden to other States. Disputes between States or across political jurisdictions are resolved in the judicial system.
Regional Finance 7.7.4
Tax revenue collection and municipal funding further illustrate the independence of municipalities, as well as explains the preoccupation with creating jobs and increasing the local tax base. Government revenue is collected at three levels, municipal, state and federal. Municipalities are responsible for funding many of their activities, including education and other basic services, through local property tax, whereas the City of New
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York leverages an additional income tax on all residents or corporations within the five Boroughs. The State of New York taxes income, which is redistributed to municipalities within the State, providing additional revenue for some services or projects. The Federal government tax revenue is redistributed to the States. Redistribution is not proportional to contribution, however. Local governments therefore want to increase their own tax bases by attracting companies and are continually competing with other municipalities to provide the most attractive incentives. In fact, the proposal of a commuter tax to allow New York City to capture a portion of the income tax paid by those who work in the City, but reside in suburban communities, has long been debated but never approved. Regional Agencies 7.7.5
There is an inter-governmental agency that manages regional transportation, while the Port Authority of New York and New Jersey coordinates planning and operations of the container ports, airports and tunnel crossings. Apart from these (and The Catskill Watershed Corporation (CWC) see below) there is no intergovernmental agency or regional coordinating body within the New York – New Jersey Metropolitan region that manages economic development or regional planning. Matters relating to economic development and planning are left to the individual local governments. Often, municipalities compete with each other to attract or retain firms in order to expand their tax base and hence revenues. For example, Goldman Sachs were considering to build a new headquarters in New York City in downtown Manhattan, directly across the Hudson River from its existing Jersey City headquarters. New York City, desperate to retain and rebuild downtown Manhattan (following the attacks on the World Trade Center), assisted Goldman Sachs to reach a decision by offering an incentive that included $1.65 billion in bonds and $140 million in tax breaks and/or cash.
City Watersheds 7.7.6
Regional governance and inter-jurisdictional coordination in the United States historically develops only when natural resources, especially watersheds are involved. This is the case with both the New York Watershed which obliged the City of New York to negotiate and work with Upstate communities, as well as the Delaware River Basin, where the States of New York, New Jersey, Pennsylvania and Delaware are members of a governing body. In both cases, the regional governing body developed in response to legal challenges between the States over rights to water.
New York - New Jersey Metropolitan Region - Key Lessons for China •
Unlike other metropolitan areas of world significance there is no regional authority that provides a strategic vision and development framework. To this extent there are parallels with the situation that applies in China.
•
Due to a the high degree of decentralised governance that prevails in the USA, local authorities within a single metropolitan area will often compete with each other to attract businesses to locate within their jurisdiction. Again, this is similar to China. However, this is not always productive. The self interest of local authorities to increase their tax base may be to the detriment of the whole region if businesses are encouraged to locate in sites that
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are not appropriate. •
There are few lessons that would apply to China. There is merit in the Watershed Agreements, but only from a legal perspective as these represent the outcome of long litigation over water rights and as such are not good examples of mutual cooperation within a metropolitan context.
7.8
Tokyo Metropolitan Region
Population 7.8.1
The Greater Tokyo Area, centered on Tokyo is the most populous metropolitan area in the world with a population of over 35 million people. It has been the world's most populous urban area since 1965, and despite Japan's overall declining population, is still growing. Tokyo is a major global city and refers to Tokyo Metropolis (the prefecture) as a whole, or only to the main urban mass under its jurisdiction. The metropolitan region comprises the prefectures of Tokyo, Kanagawa, Saitama, Chiba, Gunma, Tochigi, Ibaraki, and Yamanashi together with the west Tama and the Izu/Ogasawara Islands.
7.8.2
As of October 1, 2005, the population of Tokyo is estimated to be 12.544 million. At 2,187 square kilometers, its the third smallest of Japan's 47 prefectures. With a population density of 5,736 persons per square kilometer, Tokyo is the most densely populated prefecture in Japan.
7.8.3
The composition of Tokyo's population is changing. The ratio of aged persons in 1978 exceeded the United Nations standard of 7% for an "aging country", and the pace of increase has been accelerating since then, exceeding the "aged society" standard of 14% in 1998.
Economy 7.8.4
Tokyo has the largest metropolitan economy in the world with a total GDP of US$1,191 billion in 2005. Tokyo city is a major international finance center, houses the headquarters of several of the world's largest investment banks and insurance companies, and serves as a hub for Japan's transportation, publishing, and broadcasting industries. During the centralized growth of Japan's economy following World War II, many large firms moved their headquarters from cities such as Osaka (the historical commercial capital) to Tokyo, in an attempt to take advantage of better access to the government. This trend has begun to slow due to ongoing population
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growth in Tokyo and the high cost of living there 135. 7.8.5
A trend that has assisted the region's economic development is the tendency for like activities to cluster. In the central part of Tokyo clusters have emerged for IT, multimedia (including films, animation, games, music, sports and advertising), digital animation and video gaming. Neighbourhoods in the southern part of Tokyo have concentrations of many small and medium-sized businesses involved in the development of new products or in R&D in various manufacturing sectors.
7.8.6
Several high-tech zones are found in the greater Tokyo metropolitan region. The city of Kawasaki in Kanagawa Prefecture, traditionally known as Japan's major manufacturing center, is now home to more than 183 R&D institutions and 21 universities with three research parks, attracting highly qualified, well-educated human resources in the fields of IT and R&D. Also well known is Tsukuba Science City, located north of Tokyo and linked to Akihabara by the Tsukuba Express rail line. As one of the largest concentrations of basic research labs in Japan, Tsukuba is home to 33 national research institutes and the University of Tsukuba. Along the Tsukuba Express line, there is an emerging research center, Kashiwa Park, with a business incubator, a department of Chiba University, the National Center for Cancer and Tokyo University's frontier science campus.
7.8.7
The Japanese government has established "framework plans" for the development of science and technology by combining academic research policy with industrial development policy since the year 2000. As a result, university spending on scientific research has been increasing rapidly and university-industry partnerships as well as regional research interactions have been growing steadily for the last few years. At the same time, The Ministry of Economy, Trade and Industry has adopted a new policy of cluster development to reinforce the dynamics of industrial networks involving universities, businesses and governments in clusters since 2001.
Administration of Tokyo Metropolis (City) 7.8.8
There is no regional authority that manages the 8 prefectures that constitute the metropolitan region. Policies within the metropolitan region are the responsibility of the individual prefectures, although this is often influenced by directives or initiatives conceived by the national government. The prefecture of Tokyo is the central core of the region and accounts for 12 million of the region's residents. This alone is megacity by any standards, the management of which is summarised below.
7.8.9
Tokyo city is a regional government (and prefecture) encompassing 23 special wards, and 39 municipalities (comprising 26 cities, 5 towns and 8 villages). In the 23 special ward areas, the Tokyo Metropolis Government (TMG) takes on part of the work usually assigned to the municipalities (including waterworks) to keep their unity and cohesion
135
Tokyo was rated by as the most expensive (highest cost-of-living) city in the world for 14 years in a row ending in 2006.
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as a single 'city'. 7.8.10
In addition to the 23 special wards, Tokyo Metropolis also contains 39 municipalities 26 cities (shi), 5 towns (cho) and 8 villages (son) - that are ordinary local public entities 136 . However the TMG has taken responsibility for firefighting services and waterworks (sectors that are generally designated as municipal services by law) on the grounds that these services can be handled more efficiently on a broader scale with economies of scale.
7.8.11
Although the special wards were given the authority to elect their mayors by popular vote, and handle affairs similar to other cities, they continued to be viewed as internal organizations of the TMG. Various issues arose. These included a lack of clarity in the allocation and sharing of roles and administrative responsibilities of the wards and the TMG; interference with the autonomy of the wards; and the inability of the TMG to implement thorough urban administration from a comprehensive viewpoint. To resolve these issues, national government revised the related laws and regulations. As a result, it was decided that jurisdiction over administrative operations that touch closely on residents' lives, such as waste management, should be transferred as far as possible to the wards. New legislation passed in 1998 brought about a partial reform of the Local Autonomy Law and established the wards as basic local public entities.
Tokyo Metropolitan Assembly and Tokyo Metropolitan Government (TMG) 7.8.12
136
The Tokyo Metropolitan Assembly is made up of 127 members directly elected by Tokyo citizens to serve a term of four years. The President of the Assembly is elected from among its members. The Governor of TMG is directly elected by the citizens, and operates in much the same way as a mayor. With a four-year term of office, he or she has overall control of city affairs. The Governor has a total of 171,283 persons in a massive bureaucracy as shown in the Figure below
Local Public Entities : For administrative purposes, the country is divided into areas called "local public entities." There are two
types: ordinary local public entities and special local public entities. Tokyo Metropolis, and each of the municipalities which are a part of Tokyo, are ordinary local public entities; the 23 special wards in Tokyo are special local public entities. Ordinary local public entities are general in terms of organization and functions, and consist of two tiers: prefectures, and the municipalities that make up the prefectures.
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Figure 43.
Organisation of Tokyo Mertropolis (City)
Organisation of the TMG
7.8.13
As the workings of the metropolitan administration have become increasingly varied and complex, the TMG has become large and unwieldy. For seven consecutive years since 1997 expenditures exceeded revenues. To deal with this situation, the TMG reviewed all its systems and policies and streamlined its internal operations to make them more flexible and efficient.
Policies and Priority Projects of TMG 7.8.14
The TMG has issued a number of principal policies that it seeks to implement through priority projects in coordination with the special wards and municipalities that make up the city. These are summarised below. •
Principal Policy 1: Revitalizing Tokyo through Urban Structure Improvement. The international competitiveness of Tokyo will be boosted by redeveloping the key areas of the metropolis that form the backbone of urban infrastructure and by creating a traffic network with a perspective on the entire Greater Tokyo Area. In addition, through manners such as using private sector resources, urban functions
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will be upgraded and attractive urban spaces will be developed to reinvigorate Tokyo into a safe, attractive and elegant city. •
Principal Policy 2: Supporting New Industries to Spur on Tokyo’s Economy. Policies concentrating on developing and strengthening industries that will lead Tokyo into the future will be implemented. With the Olympic Games in mind, policies to promote tourism through effective utilization of tourism resources highlighting the attractions of Tokyo such as the “waterfront area” and “cuisine” will also be developed.
•
Principal Policy 3: Developing Diverse Human Resources for the Future of Tokyo. The development of capable persons who will be the support and driving force behind the future of Tokyo in a multitude of areas such as industry and culture will be encouraged. The potentials of each and every child will be developed through education that aims to give children the fortitude to live, and a system that will foster the development of a workforce capable of supporting the manufacturing industry will also be established.
•
Principal Policy 4: Versatile Support Systems for Independent Living in the Community. Japan is facing a rapid progression in declining birth-rates and aging population. Support will be given to enable residents to continue to live independently in familiar surroundings, through provision of comprehensive and seamless services in welfare, healthcare, and medical treatment and by tapping the potential strength of the community.
•
Principal Policy 5: Safety and Security for the Residents of Tokyo. The safety and security of residents will be maintained through the establishment of systems able to respond immediately to various threats to life and property, and through urgent and focused response to situations such as new dangers and failings characteristic of urban environments.
•
Principal Policy 6: Regional Collaboration and Pioneering Initiatives to Address Environmental Issues Associated with Large Cities. Tokyo’s unique pioneering initiatives will be promoted to reduce global warming and the heat island effect and to more effectively utilize water. Tokyo will also undertake work with the seven neighboring prefectures and cities to address urgent issues such as pollen allergies and illegal dumping of industrial waste. These projects will be promoted to secure the safety of the people of Tokyo and Japan and to create a pleasant living environment.
•
Principal Policy 7 : Tokyo’s Initiatives to Open the Future of Japan. Tokyo will open the future of Japan by strongly promoting bid activities for the Olympic Games and delivering a clear message to the world.
Future of the Tokyo's Metropolitan Region 7.8.15
With continual expansion to the economy, can Tokyo provide the necessary infrastructure and up-graded facilities not only for business and industry, but also for citizens to improve their standard of living. •
The demand for water, both domestic and industrial, has increased considerably, but at the moment and for the foreseeable future the supply in the metropolis is secure in principle. As for the energy , both electricity and gas (LNG and LPG) are sufficient.
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•
In the capital area the air pollution and photochemical smog of the 1970s has been greatly reduced by strict regulations and the mandatory introduction of flue gas desulphurization processes in various factories and plants. However there still remains a problem with vehicle exhaust fumes. Exhaust emission control has been effective, but the ever-increasing number of vehicles has reduced its effect..
•
Quality of water, in both the river and the Bay, is also considerably improved by efficient sewage-processing plants. In some large-scale redevelopment projects, recycled water has begun to be used. Environmental issues have now become more focused on preservation of the ecological system in the exceedingly crowded metropolitan environment.
•
A big issue for local authorities in the metropolis is waste, both industrial waste and household waste (in particular non-combustible waste) because of massive resistance from its citizens who oppose such disposal facilities. The average weight of daily waste per person has almost doubled in the past two decades. (In Tokyo, 1.1-1.3 kg of waste per person has to be collected daily). In the city of Tokyo alone, two-thirds of the total waste (2.6 million tons per year) is processed (burnt), while the other one-third is used for landfill in the Bay.
•
The mass-transit system, the train and subway systems are run at the limits for safe operation. The well-known commuters' "hell" is a part of daily life for Tokyo and its adjacent prefectures. The road system is narrow and congested, and fails to offer effective alternatives for commuting by bus. The reason for this is that workplaces are highly concentrated in the central parts of the city while the residential areas are dispersed and developed further and further away from the workplace.
•
The private vehicle is a non-viable means of transportation during the working day in the middle of Tokyo. The notorious traffic congestion is caused by the structure of the road system, which radiates from the city centre, without having an effective bypass system for through traffic. The construction of inner city highways and a ring road connecting all interregional highway systems outside of the densely inhabited areas is the top priority in planning for transportation. The obstacle is the difficulty to acquire the necessary land owing to its formidably high price.
•
Of the various types of competition for urban space, the demand for office space has been explosive, especially in the CBD area close to the government and corporate headquarters. In addition to the growth in tertiary industry and its advanced service sector, the expansion of information technology has accelerated the construction of office buildings adequately equipped with state-of-the-art technology and telecommunications. The demand for "intelligent office buildings" remains strong, and new construction of these kinds of building has spread into the surrounding areas, especially into the redevelopment areas of the waterfront.
Tokyo Metropolitan Region : Key Lessons for China • •
When Metropolitan Regions get as big as a small country, regional management becomes a national priority that transcends the need to create a regional authority. Tokyo is a classic example of a Type D metropolitan region, of mega proportions. It's administration has to be divided by virtue of its sheer scale. The administration of Tokyo city alone has created a monolithic organisation (TMG) that has problems to coordinate its local bodies due to unclear demarcation of roles and functions.
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• •
•
• •
Clustering of economic activities is important for promotion of growth, especially for new technologies. The national government of Japan was quick to recognise this and take appropriate public sector actions to facilitate their creation. As urban areas expand and merge into one another suitable and acceptable sites for essential utilities such as solid waste disposal sites (landfill or incineration plants) become increasingly difficult to find and expensive to acquire. Adequate land for such facilities should be reserved well in advance. Concentration of workplaces in central zones creates an unbalanced distribution of land use, unacceptably long and congested commuter journeys and pushes up land values such that much needed improvements to infrastructure, transport in particular, becoming excessively expensive. Despite measures to negate air pollution, continued growth of car journeys will eventually cancel any improvements. Ultimately the use of private vehicles has to be constrained and public transport improved. Despite the economic success of Tokyo Metropolitan Region it should not be regarded as a model for China. However, given the rate at which some Chinese city regions are growing it will require special efforts to avoid this fate.
7.9
Shenzhen, China
City Profile 7.9.1
Shenzhen Municipality is a sub-provincial city of Guangdong province in southern China with an administrative area of 2,020 kilometres. There are six districts in its administrative boundary, Luohu, Futian, Nanshan, Yantian, Bao’an and Longgang.
7.9.2
Located in the centre of the SEZ, and adjacent to Hong Kong, Luohu is the finance and trade centre. It covers an area of 78.89 km². Futian, the seat of the Municipal Government is at the heart of the SEZ, covering an area of 78.04 km². Covering an area of 164.29 km², Nanshan is the centre for high-tech industries, situated in the west of the SEZ. Yantian (75.68 km²) is known for logistics and also located to the west. Outside the SEZ, Bao'an (712.92 km²) and Longgang (844.07 km²) are located to the north-west and north-east of Shenzhen respectively. Table 60, Population of Shenzhen
7.9.3
The total population in Shenzhen is 8.27 million (2005), with the distribution is shown adjacent.
7.9.4
According to the existing administrative system, reformed in 2004, most of the mechanisms for decisionmaking, especially for project approval and management, have been assigned to district governments, while the municipal government maintains control of mega projects or those with large impacts. In addition, municipal government focuses more on policy setting, planning, coordination and monitoring.
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Population (10,000 person)
Luohu
86.04
Futian
116.10
Nanshan
90.06
Yantian
21.58
Bao’an
330.05
Longgang
183.92
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Figure 44.
Shenzhen’s Districts
Authority and the Mechanism Decision making 7.9.5
The consultancy committee for decision–making, constituted by scholars, enterprise leaders and experts from related fields, is suggested as necessary. Public participation is also encouraged but is not always considered necessary in the decision making stage.
Fiscal system 7.9.6
Shenzhen started the first fiscal system reform in China in 1997. It introduced a tax based sharing system. In 2001, the second round of reform was implemented in order to reinforce public finance. In 2006 the third round of reform started to adjust the percentage of tax-sharing for each district. According to the new system, total taxes are divided into three types: • • •
municipality only (deed tax, vehicle and vessel usage license plate tax, stamp tax on stock trading, and business tax for financial and insurance enterprises), district only (tax on urban maintenance and construction, housing property tax) municipality-district shared (value-added tax, income tax, business tax).
7.9.7
The sharing percentage is different for each district due to difference in economic contribution, expenditure on social services, and export tax return.
7.9.8
With the tax based sharing system, district government has more opportunities to fund the construction of social facilities, especially for Bao’an and Longgang, which are peripheral and thus have heavier demands for infrastructure investment and less revenue streams.
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Natural and environmental concerns 7.9.9
The natural environment is under strict control by municipal government. On 17th October, 2005, the ‘Regulation on the Management of Basic Ecological Lines’ was set to control construction in environmentally sensitive areas. It established continuous "control lines" covering 974 square kilometres, forbidding any construction activities except public facilities like roads, infrastructure, tourism and parks, with affiliated support on feasibility, environmental impact assessment and planning suggestions. The municipal government has started to control the development within the ‘controlling line’ on the one hand; and on the other hand it demolished existing illegal buildings.
7.9.10
While positive for environmental protection, the regulations have met with objections from local people as most of the area (covered by this regulation) belongs to local collectives, which under former regulations were able to lease or transfers their lands. The regulation allows for the demolition of all illegal buildings, and for limits on most new constructions, without compensation. This has resulted in economic losses for collective, individuals, and enterprises, and has faced heavy opposition.
7.9.11
Shenzhen is also known to be very strict on pollution control for the last 5 years.
Figure 45.
Control Lines
Competition between the cities/local authorities 7.9.12
With attempts to build Shenzhen as a regional financial centre, municipal government
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established a finance plan to form three financial centres, Luohu, Futian and Nanshan. 7.9.13
Luohu is a traditional trade centre but suffers from a serious land shortage and out-ofdate facilities. It is still the most convenient position in relation to Hong Kong. Futian was defined as administrative centre in the master plan and attracts some financial and business offices. Nanshan is 2.3 square kilometres of reclaimed land east of the existing cultural centre. It is proposed as a business development zone with the target clients being global financial corporations, banks and investment institutions. The advantage of Nanshan is its large amount of land available for construction, highstandard facilities and its easy access to the airport and expressways.
7.9.14
The existing plan proposes Luohu as the base for banks, Futian for stock relative institutions and Nanshan for fund related ones. However, there are no policies, regulations or incentive systems to support the plan. Currently there is no official statistics on replicated investments or construction, or vacant land, but it is likely to become an issue in the coming years.
Competition for industrial investment- Longgang, Nanshan, and Bao’an 7.9.15 Nanshan has been involved in the hi-tech industry since the start of SEZ’s, concentrating most of the industry in SEZ areas. When collective lands in Longgang and Bao’ao were released in 2004, both districts had advantages of better land supply in the competition for attracting industry, especially those with high land requirement. Currently, these two districts have the same development target focusing on hi-tech industries and manufacturing, with some overlaps with Nanshan. 7.9.16
Competition has led to some vacant land due to over-requisitioning. Although official documents in 2007 indicates the land in 2006 was 74.78 ha, some experts believe it could be as high as 70 square kilometres due to a large amount of land not listed officially but leased locally, especially in Bao’an and Longgang.
Success and Lessons 7.9.17
Due to rapid industrialisation, Shenzhen suffered a serious land shortage, especially in SEZ areas. Within the last 20 years, development has utilised nearly 500 of the 767 square kilometres of land reserved. Even with strict control on land leased each year, the stocked land supply would have been depleted within ten years. As a comparison, the collective land in Bao’an and Longgang districts amounted to 956 square kilometres, however, under the collective management there were strict limitations for transfer.
7.9.18
In June, 2004, Shenzhen became the first city in China to adopt a land reform strategy to convert all of its administrative area from village land and agriculture huko into urban. As a consequence, about 260 square kilometres collective lands in Bao’an and Longgang came under the management of the municipal government. It is now the only city in China with no agriculture hukou or village status.
7.9.19
The key issue for success of this conversion is reasonable compensation, in both
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economic and non-economic aspects, as well as several policy concessions. The economic compensation is mainly for land, agriculture and other attachments. Other non-economic compensation includes: • • •
Municipal government will spend 1.5 billion for villagers’ social security in the coming 5 years; education and infrastructure will be the responsibility of the government instead of the collectives, as before; and work training programmes will be organised regularly.
Policy concessions include: • • •
7.9.20
a certain amount of lands are maintained for collective and individual nonagriculture construction use, like residential, industrial and commercial corporations; non-agriculture construction land can be marketed with only 10% of land price paid to municipal government; the land-use fee for non-agriculture construction land is charged with at the rate of a standard lease, which is about 50% less than that for administrative assigned land.
The policy has been implemented with limited opposition from local residents and has enabled for 260 square kilometres of land to be released for urban for development. This policy has also enabled rural families to move to cities or county towns, and they are doing this so that they can access schools and create a better life for their children.
Shenzhen : Lessons for Other Metropolitan Regions in China •
Tax based sharing system can be recommended to other metropolitan regions, as it provides fiscal support both to municipal government and to district level in the China context.
•
The success of land reform in Shenzhen can be followed by other municipalities to some extent. The key issue is that acceptable compensation varies due to differing levels in the local economy and variations in land availability and social security. Compensation therefore has to be tailored to specific circumstances and has to be negotiated jointly by municipal/district government, collectives and village representatives.
•
Granting urban hukou in Shenzhen has significantly reduced urban-rural disparities by allowing villagers to live in towns and cities, gaining access to better employment and education opportunities.
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8
Sustainable Metropolitan Regions – Agenda for Change
8.1
Overview
8.1.1
Urbanisation will continue to be the main driver of the spatial configuration of China’s cities for many years to come. Since 1990, Chinese urban areas have increased by over 80% and contain 40% of the population. Between 2000 and 2010 just over 50% of the population will be urbanised rising to around 75% in 2020. This implies between 16 to 20 million annually will become part of urban areas to 2020. This phenomenal rate of growth is unprecedented – internationally and nationally.
8.1.2
Urbanisation trends in the PRC, and specifically in the two case studies, indicate that cities are heading on an unsustainable path. Current forms of urban management and planning are under-performing in relation to new demands. In the absence of joined-up thinking, and cross-sectoral approaches to management, other sectors are driving the metropolitan urban agenda, and not always in a sustainable manner. Introducing innovative and sustainable metropolitan management can provide a mechanism to achieve healthy urbanisation, help promote a “harmonious society”, manage land and its resources irrespective of individual local authority boundaries.
8.2
The Agenda for Change
8.2.1
Taking into account the conclusions of urbanisation analyses (Chapter 3), the case studies of Wuhan and Chengdu (Chapters 4 and 5), it is evident that effective metropolitan management calls for a strategic approach. Key issues from the case studies are summarised in Chapter 6. How similar issues were managed in other metropolitan regions throughout the world is examined in Chapter 7 (and at a sectoral level in the Appendix). The conclusions of these analyses indicate that this strategic approach should operate across at least 9 levels :1. Institutional 2. Planning 3. Land Use 4. Economic Development 5. Infrastructure 6. Transportation 7. Social Welfare 8. Environment, and 9. Finance These are discussed below and summarised in Table 61, at the end of this chapter.
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8.2.2
The starting point for the definition of strategic levels, and the range of policies within each, are the key issues pertaining to Wuhan and Chengdu. These are not unique to these metropolitan regions, and generally apply (to lesser or larger degree) to all metropolitan regions in China, irrespective of their type, as discussed in Chapter 2.
8.3
Institutional : Establishment of a Metropolitan Authority
8.3.1
A common issue facing Chinese cities is the absence of any institutional mechanism to prepare and implement policies that can guide and control development within their larger metropolitan regions. Even if the metropolitan region falls entirely within the jurisdiction of a single city administration (as in Type A metropolitan regions), this study concludes that existing urban management practices do not operate sufficiently well (at a strategic level) and fail to adequately coordinate the activities of subordinate administrations. Accordingly, most of the suggested policies shown in Table 61 still apply to Type A metropolitan regions, including Chengdu. In the case of other metropolitan types, from B to D, the need for strategic level management is more apparent. •
•
•
Type B metropolitan regions face management dilemmas because urban growth and economic activities have expanded beyond the jurisdiction of the core city and are under the control several administrations which may not share a common agenda. Either the administrative limits of the core city have to be extended (to encompass the metropolitan region) or some form of metropolitan authority should be established to prepare and implement strategic level policies that transcend and guide the activities of all the administrations that comprise the region. In situations where the economic hinterlands and urban conurbations of two or more core cities have merged, as in the case of Type C metropolitan regions, the need for a Metropolitan Authority is even greater as the concerned cities may be competing with one another to the detriment of proper coordination. Adjustment to administrative boundaries within the region may also be required.
Institutional Policies :1. Establish a metropolitan authority with strategic responsibility for the entire region. 2. Revised boundaries of administrations (if necessary) to encompass urban conurbation and other regional attributes. 3. Clearly demarcate roles, functions and jurisdictions between the metropolitan authority and subordinate administrations. 4. Define operation and funding procedures (see finance) on the understanding that the plans and programmes of subordinate administrations will comply with the guidance and directions given strategic plans.
Metropolitan Regions that comprise a number of isolated cities, such as Type D, may suffer from the negative impacts of differing and possibly conflicting policies operating across the region. The establishment of a metropolitan authority in such instances can bring harmony and synergy to strategic level decisions.
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8.3.2
As noted in the Table 61, the establishment of a Metropolitan Authority is not the only solution. Depending on the type of metropolitan region, and its particular circumstances, strategic policies can be prepared and implemented by coordination mechanisms between existing administrations, as in the case of the Sydney Metropolitan Region. However, whereas this example appears to work well in Australia, continued competition among administrations may disqualify this option. The example of New York-New Jersey, a region that appears to operate on the basis of competition, with no metropolitan authority, is a product of the American preoccupation of minimal government interference to free enterprise. This may not be appropriate to the Chinese context. For this reason strategic policy formulation and implementation through coordination among existing administrations is not recommended, except perhaps in the case of Type A. Chengdu Metropolitan Region might therefore qualify. However, given the dramatic growth of this region, and the large number of administrations that would need to be coordinated, there is still merit in the establishment of a Metropolitan Authority for reasons similar to those that justified the Great London Authority in UK.
Box 8.1: Delineation of Metropolitan Regions In addition to geographic distance, population thresholds or jurisdictional boundaries, factors which aid in defining a region are considered as follows: • Land resources (urban land and basic farmland potential) • Employment Catchments • Employment Clusters • Strategic elements of major infrastructure: • Power generation facilities and transmission line reserves • Potential sites for development of renewable energy resources • Flood defences and river corridors • Sites for solid waste incinerators and/or landfills; and the delineation of their service catchments • Wastewater collection and treatment facilities, delineation of catchments and effluent disposal routes • Water catchments or watercourse protection zones • High value horticulture, agriculture, forest or green space areas • Areas of outstanding natural value, either as ecological reserves or as potential major recreation areas • Mineral resource management, including • Control of development to avoid sterilisation of mineral resources by building over them • Protection/ controlled utilisation of resources vital to a particular industry/ economic base • Recycling • Environmental management to limit adverse impacts such as dust levels, noise, off-site traffic etc • Setting conditions for final site restoration e.g. to landfill, recreation, agricultural, etc. • Sites of cultural heritage assets and any buffer zones which may be needed to ensure their protection • Locations of any other major marketable assets, notably tourist assets, industries etc. potentially having a major negative impact, which need to be under high level control.
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8.3.3
The task of establishing a metropolitan authority lies with the state, in collaboration with all the administrations that comprise the region (as eventually defined). These are summarised as policies 1 to 4 in the Table 61. The Authority's geographic jurisdiction is a matter that warrants careful consideration. The simple solution is to lump together the jurisdiction of those administrations that cover the economic hinterland of the core cities. In practice, this is not so easy. Thought should be given to future development trends, as well as features and attributes of regional significance. Suggestions to guide the delineation of metropolitan regions are given in Chapter 2. Additional considerations are shown in Box 8.1.
8.3.4
Once the region is defined, the roles, responsibilities, procedures and financing arrangements have to be clearly defined for the authority and its constituent administrations. As soon as these are agreed, and the necessary legislation approved, the task of the Metropolitan Authority is to prepare a strategic vision.
8.4
Strategic Vision
8.4.1
The "vision" should be the product of extensive consultations throughout the region, involving all administrations and all sections of society. The purpose of the vision is to define how the region should develop, how it should "be" in the future, and above all, how to achieve sustainable development. More specifically it should respond to the key issue of uncoordinated and unplanned development within or between one or more local administrative areas that comprise the region.
8.4.2
8.4.3
The vision statement of the Greater London Authority is a good example. Based on the lessons learned from elsewhere, and the context prevailing in China, the vision's broad objectives should translate into coordinated, inter-related strategies for the 9 levels mentioned earlier. These are discussed in the remainder of this Chapter. As shown in Table 61 these should contain policies that directly respond to the key issues identified in Chapter 6.
Strategic Planning Policies :5. Establish a metropolitan vision for sustainable development with clearly stated aims and objectives. 6. Prepare strategies to realise aims and objectives (of the vision). This should include a land use/management strategy prepared in association with similar strategies for transportation, economic development, infrastructure, sociowelfare and environment. 7. Require that land use and development plans of subordinate authorities accord with the strategic land use/management plan.
Strategies should be binding on subordinate administrations. Details would need to be worked out in relation to the roles and functions of the metropolitan authority and the administrations, and written as a set of regulations and procedures. Policies 5 to 7 are suggested for the vision and its implementation.
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8.5
Land Use/Management Strategy
8.5.1
The strategy should respond to the following key issues :•
Urban sprawl and leapfrogging137 of development,
•
Under utilisation of central urban areas (due to low density development and unused vacant land),
•
Over requisitioning of land for projects/activities that are unnecessary and inappropriate, and
•
Unacceptably long commuter journeys.
8.5.2
The overall thrust of the strategy should be to maintain the urban area in a compact form, with higher densities, in order to increase the efficiency and economies of infrastructure provision, reduce journey time, increase ridership of public transport and minimise the rate at which rural hinterlands and basis farmlands are being converted to urban use, whilst protecting natural resource areas. This can be done by a variety of policy interventions 8 to 16, as summarised in Table 61.
8.5.3
Essentially, an overall spatial framework is required in the form of a "Structure Plan", to guide and control existing and future development. This need not be detailed but rather should contain broad zones which segregate and apportion various policies relating the land use and density according to location. Particular areas may be identified for special policies, such as growth poles/satellite towns or corridors, to encourage urban expansion in certain locations or directions. Such proposals need to be incorporated within an overall land management programme that:-
•
identifies which land should be converted to urban use, and when,
•
which areas should be targeted for additional development or redevelopment to increase existing densities, with particular attention to infill areas and vacant land that is already serviced, and
•
guides the requisitioning of land by matching the supply of land to demand.
137 Leapfrogging is the act of one person jumping over the back of another. In this context the meaning is urban development occurring in a location that is some distance from the edge of the urban area by leaping over the intervening rural area.
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8.5.4
8.5.5
8.5.6
The programme will counteract the current trend for land to be indiscriminately converted from rural to urban use in an uncoordinated manner, with no distinct urban form or sequence over time. It should also prohibit leapfrogging development whereby the urban area expands as a series of unrelated, independent events in the surrounding rural area. Moreover, the programme, in association with land use zoning, will provide a rational framework for the sequencing of infrastructure upgrading/extension as well as transportation services. To this extent, the land use strategy, comprising the structure plan and other components, has to be prepared in close collaboration with other strategies, in particular infrastructure, transport and economic development. At present plans and strategies are prepared in isolation with one another and often do not succeed for this reason. A critical issue that needs to be addressed is the tendency for land to be requisitioned for projects that are neither necessary nor appropriate. Not only does this displace and destroy the livelihoods of farmers, who have little recourse but to become unskilled migrants (see policy 61 and 62 of the Social Welfare Strategy), it also represents a loss of agricultural land previously used for food production. Moreover, the projects may not accord with land use and growth strategies, impose unwanted strains on infrastructure, and (due to their ill-conceived nature) become "white elephants" within their prevailing socio-economic settings. Financial failure creates further difficulties and is one cause for many non-performing loans to local administrations (See Financial Strategy, policy 61).
Land Use Policies :8. Prepare a land use/management strategy, which among others will include policies listed below. 9. Introduce zones to phase development over time and to coordinate development with a programme for extension upgrading of infrastructure networks/services 10. Formalise the rights of Village Collectives and introduce standards for compliance with strategic plan requirements (If appropriate re-classify rural land as urban in line with the lessons learned in Shenzhen). 11. If appropriate, target selected peripheral areas as growth poles (satellites) and coordinate their priority development with other strategic plans (economic, transport and infrastructure in particular) 12. Establish zones which specify appropriate densities. 13. Introduce measures to encourage development of infill areas and vacant land. 14. Projects of a specified size (area) should accord with strategic plans, and receive Metropolitan Authority approval, before land is requisitioned for construction.
Another land use concern is the informal activities of villages collectives namely through Town and Village 15. Estimate future land requirements and prepare a Enterprises (TVEs), including industry. While the scale programme for further of these activities is generally small they do have a requisitioning in relation to collective impact on the pace and direction of urban land already available. Prohibit additional requisitions in development. Moreover, since little concern is shown zones with abundant vacant or for proper disposal of effluent and emissions, they are under-utilised land. beginning to impact on the environment (see 16. Decentralise jobs to locations Environmental Strategy, policy 53). How to bring these closer to residents. many and varied activities under some form of control is a vexed issue. A similar problem arose in the Shenzhen metropolitan area, where it was recently decided to re-classify rural land as urban in order that regulations that apply to urban land could be used to control and limit the
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problem. The success in Shenzhen should be carefully monitored and replicated (where appropriate) in other metropolitan areas that exhibit the same problem. 8.5.7
The land use strategy provides an overall framework (at a strategic level only) for administrations within the region to prepare their own land use and development plans. For the strategy to succeed, compliance should be mandatory, thus requiring the metropolitan authority to approve the plans of all administrations.
8.6
Economic Strategy
8.6.1
The absence of any consistent policy for the economic development of the entire region is the rationale for the preparation of an economic strategy. This will provide an overall framework for the promotion of economic growth, restructuring the economy, the introduction of industrial clusters and any other innovations that can be initiated by the public sector. Preparation of the strategy must be done in close collaboration with the private sector and seek to work along with established economic and market trends (rather than against them), to make them more sustainable. The strategy should be prepared in association with other strategies to ensure consistency, coordination and synergy.
8.6.2
Key issues that need to be addressed in the strategy are as follows and addressed by policies 17-24 :•
restrictions on the movement of labour, (the Hukou system) impacting on the availability of appropriate human resources,
•
competition among local administrations to attract investment/economic activities resulting in wasteful investments that prejudice land use and transportation planning objectives as well as initiative to establish industrial clustering,
•
Local economies have to adjust/restructure as inefficient, heavily polluting or loss making State Operated Enterprises (SOEs) either remodel, relocate or phase out.
•
potential advantages of clustered economic activities (these have not been recognised or realised) and should be considered as an important attribute of special economic zones,
•
public sector support or marketing of the region's products or services, and
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•
8.6.3
8.6.4
8.6.5
8.6.6
creating a more business friendly environment (the public sector is not facilitating private sector investment, especially small to medium enterprises).
Restructuring the economy is a painful process which may involve the shifting of certain activities to more appropriate locations. This may apply to activities that were once peripheral to the city but have gradually become engulfed within urban areas and now occupy sites with high opportunity costs for alternative, more intensive use. State Operated Enterprises often fall within this category and in some case deserve to be relocated to more appropriate sites in outlying towns. Similarly, the location of heavy industry and nonconforming activities should also be reviewed, in particular those that pollute. Wherever possible derelict land should be utilised for relocated industries to minimise loss of agricultural land. The UK is an example of how this was done using grants. See Box 8.2. The number, purpose and location of Special Economic Zones need to be considered in a comprehensive manner, rather than the present tendency for each and every administration to establish a SEZ in competition with one another. SEZ's should also be used to promote the concept of clustering so that specialised needs of various productive sectors can be met by the provision appropriate infrastructure, services and labour. Policies 19 to 21 are summarised in Table 61 and are designed to tackle these issues by bringing about a changed mentality whereby public administrations work hand in hand with the business community to promote the prosperity of the region in a sustainable and equitable manner. This mentality will be reflected in the introduction or amendment of various regulations, procedures and financial inducements of a strategic nature that should provide a coordinated basis for local administrations to work with each other and the private sector. The strategy should also follow the example of the Paris Metropolitan Region where the Regional Council, in collaboration with the government, promoted the development of clusters by designating favoured locations, allocating grants/subsidies to offset
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Economic Policies :17. Prepare an economic development strategy which will among others include the policies listed below. 18. To facilitate labour flow, relax Hukou regulations between the administrative units that comprise the region (see social welfare strategy). 19. Coordinate operations of local administrations by adoption of a policy for the location of economic activities and link these with strategies for land use, transportation and infrastructure, as well as programmes for social welfare. 20. Consult with SOEs and if necessary take appropriate actions to renovate, relocate or redevelop sites using various incentives including grants and loans. 21. Discuss and agree clustering concepts with the business community. Identify appropriate locations in association with other strategies, in particular land use, infrastructure and transportation. 22. Adopt a joint approach to outward marketing to promote the collective comparative advantages of the region. 23. Allocate funds (from regional budgets) to assist business in research and development. 24. Ensure that comparative advantages also have competitive advantages by streamlining bureaucratic procedures and smoothing the public face of production chains.
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research/development costs and establishing technology incubators. Tokyo Metropolitan Region is possibly the pioneer of clustering. Although this may have initially occurred without government assistance, it is now official policy to stimulate clusters by assisting provision of all necessary factors of production. Box 8.2 : Derelict Land Grants.UK The British Government offers Derelict Land Grants which effectively subsidies the reuse redundant industrial land rather than farmland. These funds cover the cost of any required reclamation from previous industrial uses. Kirklee in the UK carried out a study and found that between 1988 and 1993, 200 hectares of land was restored. About 50% was done by the Council with grant assistance.138
138
See http://www.kirklees.gov.uk/business/planning/UDP/9Derelict.pdf for more information
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Infrastructure Policies :-
8.7
Infrastructure Strategy
8.7.1
As the region evolves, infrastructure requirements continually increase and expand spatially. At present these are managed by the state, agencies or local administrations with no mechanism for overall coordination across the region. This results in the key issue - Absence of any consistent policy for infrastructure provision within the region leading to wasteful investments with little synergy with other public or private sector endeavours.
8.7.2
8.7.3
This can be resolved by preparing an Infrastructure Investment Strategy that provides an overall framework for agencies and administrations to conduct their work. Because the strategy has been prepared in harmony with other strategies (in particular the land use, economic and transportation) agencies or administrations that provide infrastructure or services are able to programme and sequence operations in a rational and economically efficient manner. Moreover, the strategy will enable infrastructure to be provided in the correct quantity and quality, in the right locations, instead of spreading resources indiscriminately across the region in response to varied and competing demands. In addition, major investments to increase the service area or catchments of network systems can be designed with more certainty and programmed in relation to incremental needs. Key issues that need to be addressed by the strategy are :-
25. Prepare an infrastructure investment strategy and link to other strategies. 26. Assess needs and identify priority areas for upgrading and extension of strategic infrastructure and services. 27. Assist the administrations of priority areas to improve local services by using regional funds as grants and subsidies. 28. Facilitate private sector investment/involvement in the financing and operations of infrastructure through appropriate Public Private Partnership (PPP) modalities. 29. Review norms, standards and costing assumptions. 30. Limit the practice of land requisitioning as a means of raising funds for projects. 31. Phase the extension of infrastructure systems to match the spatial progression of physical development, and 32. introduce incentives/penalties to ensure that vacant serviced land is developed. 33. Joint approval of locations for mega-projects in line with land use and other relevant strategies.
•
disparities between the range and quality of infrastructure or service provision across various parts of the region, especially in peripheral areas and outlying towns,
•
infrastructure investments are prohibitively expensive,
•
unsustainable funding of infrastructure (and other projects) through land requisitions,
•
inefficient utilisation of available infrastructure and services in vacant or underutilised land, and
•
duplication of mega-projects, such as airports etc..
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8.7.4
Policies 25 to 33 in Table 61 are conceived to resolve these issues and provide a means for effective coordination between agencies and administrations. Most involve the introduction of regulations and procedures, and in some instance, penalties or incentives.
8.7.5
One aspect that needs particular attention is budgeting and financing of projects. Many instances were noted of projects that are unaffordable in relation to available finances. In addition to reviewing norms, standards and costing assumptions, consideration needs to be given to alternative means of financing projects that don’t add to the debt burden (resulting from failed projects) or depend on requisitioning land. The same concern applies to the practice of issuing municipal bonds. A range of options are available including private sector investment through public private partnership modalities and greater adherence to the user pays philosophy (to recover current and capital costs).
8.7.6
Inequality of service provision is an issue that generally affects residents and land uses/activities on the periphery of regions, where factors of distance or remoteness inhibit provision. Such areas need to be identified and measures conceived to assist upgrading to appropriate standards. A portion of the revenues collected by the metropolitan authority (see finance policies 63 and 64) can be utilised as grants or subsidies to help local administrations or agencies to meet this challenge.
8.8
Transportation Strategy
8.8.1
Although transport facilities are normally conceived as infrastructure they deserve an independent (albeit linked) strategy due to the critical impact they have on the location, direction and nature of development. Accordingly, a transportation strategy should be prepared in response to the single most critical issue serious traffic congestion.
8.8.2
Earlier analyses identified that Chinese cities suffer (or are likely to suffer) the same fate as Bangkok, whereby movement grinds to a halt due serious traffic congestion caused by a combination of factors, principally the ever increasing number of private vehicles on road network with finite capacity. The solution is not easy and requires an integrated policy response (34 to 36 in the Table 61) in the form of a strategy that seeks to :-
Transportation Policies :34. Prepare a transportation strategy which among others should include policies listed below 35. Prepare an integrated package of proposals to, upgrade and rationalise road network, limit the use of private vehicles (congestion charges) and improve public transportation. 36. Coordinate land use and transportation strategies to improve private and public transport services to and from major work place concentrations.
•
promote the use of public transport by improving and extending the range and coverage of services, using all modes (buses in particular),
•
discourage the use of private vehicles by the introduction of congestion charges, financial disincentives, regulations or similar interventions, while
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•
8.8.3
improve the capacity of the road network, in a manner consistent with the above policies, through selected investments and traffic management measures.
The strategy should be linked with the land use strategy to ensure that proposals for growth poles corridors or satellite towns are adequately served by private and public transport services. The Syndicat des Transports d'Ile de France (STIF) is a good example of how to coordinate the government, the Regional Council and the 8 Departments that comprise the region to manage and develop public transport services provided by more that 80 authorised companies. By doing so the STIF created a comprehensive public transport service throughout the Paris Metropolitan Region and was instrumental to the successful development of the 5 satellite towns established in 1965. Social Welfare Policies :-
8.9
Social Welfare Strategy
8.9.1
As the economy advances, and levels of prosperity improve, there are those who are excluded. Unacceptable disparities in income and opportunities now exist between various parts of the region and various segments of society. Among those most affected are recent migrants to urban areas who were obliged to move for economic reasons, or were dispossessed of their lands by requisitions. Persons formerly working in agricultural occupations often have neither the skills or knowledge to enjoy the benefits of urban life and are generally overlooked as a human resource. These issues are central to the preparation of a social welfare strategy that among others would respond to the needs of those who are unable to fully participate in the emerging society due to reasons of education, skills or status, or simply because they live in locations where opportunities are denied to them (the status of Hukou). Some of these issues can be resolved by changing regulations, which has recently happened by loosening of Hukou regulations in some metropolitan areas. Other issues will require strategic programmes to resolve :•
mismatches between the available labour force and the human resource requirements of the economy, resulting in unemployment and under-employment,
37. Prepare social welfare strategy which among others will include the policies listed below 38. Target skill training (to meet shortfalls in available labour) to the unemployed and disadvantaged. 39. Subject to the requirements of other strategies, locate growth poles and economic clusters in an effort to redress inequality 40. Oblige real estate developers to include a proportion of low cost accommodation in residual developments, or pay the equivalent for others to provide it. 41. Encourage the supply of affordable rental units. 42. Initiate housing associations to operate as intermediaries for the poor within the housing market. 43. Support rights of village collectives to market land (providing the intended use accords with the land use strategy). 44. Oblige real estate developers to include social facilities in developments, or pay the equivalent for others to provide them. 45. Relaxation of the Hukou system within the regional jurisdiction. 46. Requisitioning of farmland should be justified in relation to local land use plans and accord with the strategic land use plan.
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•
difficulties for sections of society to access affordable housing, and essential social services,
•
hardships caused by the unnecessary displacement of farmers through requisitioning of land for ill-conceived projects and activities.
8.9.2
The strategy should be conceived as a framework to coordinate the provision of welfare services that already exist and to bring a new level of focus and synergy by targeting specific groups in specific locations to supplement initiatives in other strategies. For example, skill training programmes can and should be mounted in concert with initiatives to launch industrial clusters, so that residents living locally can also enjoy potential benefits as members of the workforce. A similar logic should be applied to the provision of housing, ensuring that additions to the stock meet the needs of all income groups, especially lower groups who's services are necessary for numerous menial tasks that society depends upon. New developments should be required to contain social facilities to meet at least the needs of new residents (also the deficiencies in services to existing residents), or a financial equivalent that will enable the respective authorities or agency to construct and operate them.
8.9.3
Premature requisitioning of agricultural land invariably displaces farmers from their land and robs them of their livelihood. Practices of excessive land requisitioning should be carefully reviewed at the metropolitan level (in relation to the land use strategy, see land use policy 15) with a view to placing a moratorium on all further requisitioning in cases where this system is being abused. Assistance given to re-build lives and develop new skills of those affected. The lessons from Shenzhen offers some valuable case study experience.
8.9.4
In most cases the instruments for implementing the strategy will be regulations, incentives and procedures to ensure that all agencies, whether private or public, respond to the needs of all segments of society. However, the approach should not be charitable. Instead, the objective of policies 37 to 45 (see Table 61) is to mobilise target groups as a resource, to be uplifted in an inclusive and sustainable manner. A similar approach is followed by the Greater London Authority which has as one of its 6 priority objectives - promotion of social inclusion, tackling deprivation and discrimination.
8.10
Environment Strategy
8.10.1
An environmental strategy is necessary to respond to the conclusion that the environment of Chinese cities is deteriorating, despite all recent efforts to reverse trends. One reason for this is the absence of a holistic, systematic approach. Because the environment is a cross cutting issue, concerted and coordinated actions are necessary in virtually all sectors at all levels. The experience of Tokyo Metropolitan Region shows that isolated actions by independent agencies is not sufficient to ensure a sustainable urban environment and that decisions by all sections of society have to be modified by a greater consciousness that our environment is finite resource that cannot be wasted and should not be spoilt. To this extent the role of the Metropolitan Authority is to ensure that all strategies pursue an environmentally sustainable path,
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and that this direction influences and determines the activities of all local administrations working with the region. 8.10.2
Such an approach goes beyond the usual dictate of requiring environmental impact assessments (which should of course be done). It requires each agency to think constructively about resources, and how they are used. Education is therefore a primary focus of the Metropolitan Authority. Environmental Policies :-
8.10.3
Based on the analysis of Wuhan and Chengdu, issues that deserve particular attention in the strategy plan include the following. (Please refer to policies 47 to 53). •
•
•
•
8.10.4
Protection of watershed catchments. The experience of New York-New Jersey Metropolitan Region shows that watersheds can be protected, despite the legal difficulties that this may involve. Waste management, with attention to reducing the volume of waste by recycling and reuse, efficient collection systems and appropriate sanitary ways of disposal. The serious problem of waste disposal faced in Tokyo should be avoided by reserving land now for future sanitary disposal (rather than later, when resistance is great and land values too high). Protection of natural resource areas at risk of being spoilt, or engulfed by urbanisation, especially green areas and parks within urban areas. The experience of Vancouver shows that farmland can be retained by the operation of appropriate policies, despite intense pressures of development due to shortage of available land, and
47. Prepare environmental strategy plan, which among others should contain the policies listed below 48. Introduce land use restrictions in water catchments supported by local management and enforcement mechanisms. 49. Prepare waste management plan, to include measures to reduce and recycle waste, collection and sanitary disposal. 50. Prioritise natural resource areas to be preserved and incorporate measures to protect them within all strategies. Ensure that measures are consistent with local support. 51. Closure of polluting process/activities, or the introduction of measures to reduce their impact to within acceptable standards. 52. Relocation of polluting activities to more appropriate locations. 53. Monitor the activities of Town and Village Enterprises and if appropriate re-classify rural land as urban (in line with the lessons learned in Shenzhen) and introduce pollution controls.
Gradual deterioration of the environment due to the uncontrolled disposal of effluents from industrial activity of Town and Village Enterprises.
The last issue is becoming serious. Industrial initiatives by Town and Village Enterprises tend to be small scale and pay little attention to environmental consequences. While their individual impact is minimal their collective impact has become significant due to the large number of initiatives completed and planned. Some form of pollution control is now necessary. Under the present administrative arrangement, TVE's own the land and are free to develop it as they wish. Local administrations have neither the mechanism nor capacity to monitor or control their
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activity. As suggested in the Land Use Strategy, see policy 10, consideration should be given to reclassifying rural land as urban in order that regulations may be instigated to control pollution. 8.10.5
Laguna de Bay in the Philippines illustrates methods for managing pollutants from small scale industry. See Box 8.3
Box 8.3 : Laguna Bay - Environmental User Fee, Philippines Environmental User Fees were first introduced in the Philippines at Laguna Bay to control pollutants loads into the lake from industry, subdivisions, agriculture and households within the catchment area. The appropriate level of pollution charge for the lake region was based on firstly the point where pollution control cost is equal to marginal cost of environmental damage; and secondly the point at which pollution reduction effort is cost effective. The charge is two tiered a fixed fee covering the cost of administration and a variable fee which is based on BOD loading. The user fees programme is implemented through the Laguna Lake Development Authority (LLDA) which was mandated by law to promote and accelerate the balanced development of the region with due regard for environmental management. LLDAS is authorized by its Charter to collect fees for intake and discharge. After 3 years of operation the number of firms covered is 914. There is also a noticeable reduction in the BOD loading in the lake. 139 8.11
Financial Strategy
8.11.1
In the absence of any administrative entity for the metropolitan region there can be no region-wide financial management or plan. To ensure that the strategies described above are affordable, and make financial sense, a financial strategy plan should be prepared. This should provide the financial means for implementation of policies and projects that stem from other strategies, and to this extent (since resources are limited) the financial strategy will directly determine the investment programme of all actions to be taken by the Authority, and indirectly those of the local administrations.
8.11.2
For this to become reality the following issues need to be resolved and result in policies 54 to 64 in the Table 61.
139
•
Development budgets of local administrations and agencies are insufficient in relation to the scale of investment required.
•
Poorly conceived projects, for activities that are neither required nor appropriate, involving unnecessary land requisitions and incurring non performing loan liability.
•
Development budgets are unequal among the local administrations and do not relate to investment needs and priorities.
Halcrow, 2006 (unpublished), Sustainable Development of the Urban Fringe in East Asia., for World Bank.
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8.11.3
The tax base needs to be widened and expanded to generate more revenue for local administrations, and to finance the Metropolitan Authority and its strategies. While some grant funds may be expected from central government, the main burden of operations should be self-financing, in which case some form of metropolitan tax should be levied, possibly as a share of property tax. Ideally this should be mounted as an element of a GIS information system, although this should not be allowed to unnecessarily complicate or delay operations.
8.11.4
Since the main function of the Metropolitan Authority is to plan and coordinate (not to execute) successful implementation of regional strategies will largely depend on the financial skill and management of local administrations and concerned agencies. The Authority can help to improve these skills by reviewing and adjusting cost recovery systems for existing and proposed infrastructure, transport and utility services. Not will this help to achieve parity throughout the region, but also will ensure that users of these services are paying the full costs to run them on a sustainable basis.
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8.11.5
8.11.6
Projects of a strategic nature, or size in excess of a specified limit, should accord with strategic plans, in particular land use, in order to avoid further wasteful investment in local administration projects that are either unnecessary, inappropriate or duplicate those that already exist. Approval of the Metropolitan Authority for such projects would be a wise precaution to ensure that land is not unnecessarily requisitioned, and that loans (using the land as collateral) are properly appraised by banks. Such regulations would minimise the rate at which rural land is converted to urban, stop the proliferation illconceived "white elephant" projects and help reduce the number of non-performing loans. The latter has become a problem for some local administrations. Loans were issued by government banks for projects that have failed financially leaving the local administrations with no means to make repayments. The practice of financing projects through loans needs to be reviewed, as too does the tendency for local administrations to raise funds through overrequisition land in order to sell it back at a profit. (The latter is in itself an issue as this results in an over supply of land, not always in appropriate places - see land use strategy). In fact, the entire financial sector requires a rethink to achieve more participation of the private sector, using more sustainable credit criteria. The scale of investment required is such that the public purse will never be large enough. Following the practice adopted elsewhere in the world, the private sector should be invited to participate in the provision of essential infrastructure and operations of urban services through appropriate partnership modalities. One advantage is that services can be better managed, on a financially sustainable basis, if operated as a business. Another, advantage is that substantial funds are available to finance much needed investments providing that contractual arrangements are beneficial to all
Financial Policies :54. Prepare financial strategy plan which among others should generate regional revenues and include policies listed below 55. Widen the tax base and introduce more effective taxes to generate regional own source revenues. Property tax has clear advantages, especially if mounted on GIS systems that capture other urban management information. Higher taxes could be levied on vacant or underdeveloped land to encourage a more compact urban form. 56. Review cost recovery systems for existing infrastructure and utility services and adjust user charges accordingly. 57. Consider the introduction of "user pays" principal across the board, for all services, and move towards sustainable financial management. 58. Unless the means to meet liabilities are assured, minimise loan financing of projects and issuance of municipal bonds. 59. Encourage the private sector to contribute funds through appropriate Public Private Partnership modalities. 60. Projects in excess of a specified cost should accord with strategic plans, and receive Metropolitan Authority approval, before land is requisitioned for construction. 61. Government banks and financial institutions should seek the confirmation of the Metropolitan Authority before issuing loans (in excess of a specified sum) for financing projects of the local administrations. 62. Lending criteria for project loans should be reviewed and more commercial principles applied. 63. Introduce regional taxes to generate revenue that can be redistributed among the administrations to compensate and balance any inequalities. 64. Introduction of a standard of a development impact fees to generate revenue for the funding of infrastructure and social services associated with new developments.
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parties, including consumers. The Metropolitan Authority has an important role to play in encouraging local administrations to adopt PPP modalities as well as overseeing and regulating services and facilities operated by the private sector. 8.11.7
Finally, the issue of unequal resources among local administrations can be resolved by the Metropolitan Authority raising revenues from taxes, or a share of taxes levied by administrations, to create a pool which is distributed back to needy administrations in accordance with an appropriate equation. Boxes 8.4 and 8.5 illustrate tax based sharing between municipalities, which could become an effective tool within Chinese metropolitan regions to avoid repetitious investment and rationalise competition, whilst generating finance for infrastructure development in an equitable manner 140. In fact as the case studies in Chapter 7 has shown, this is already being tested in Shenzhen, and should be closely monitored by policy-makers in other regions.
8.11.8
Development impact fees generate funds for social services and infrastructure development. They involve a one time charge that is applied to all new developments. They can be applied in cash, or kind, providing developers and local municipalities with alternatives depending on the local situation141. These fees may not be appropriate in all situations, as potentially they could have a negative impact on the low and middle income housing market by raising development costs. On the upside however, they offer a tool to cross subsidise developers involved in the low income market, assuming that transparent and accountable systems are in place. Two examples from the US and Korea are shown below.
Case Study 1. Box 8.4 : Tax based sharing, Israel and US In Israel local authorities are continually competing for a tax base which has led to excessive development causing a loss of open space and dispersed and replicated investment. Local tax based sharing has been introduced to align common interest i.e. one has land and the other an initiative. Where rural councils have their land acquired by urban councils to accommodate urban growth tax based sharing allows them to receive 50% of the betterment fees and some property tax from the subsequent commercial developments. 142 Tax based sharing has been introduced in parts of the US to promote a more equitable distribution of fiscal resources and to avoid unnecessary competition between municipalities. In the 1970’s it was introduced in Minneapolis-St Paul with 40% of the net gain of tax from commercial and industrial properties being collectively pooled and redistributed taking into account the fiscal capacity of the authority. Allegheny Regional Asset District and Indianapolis metropolitan area have a 1% sales tax to offset the burdens of service provision to low income households and to finance infrastructure development. (ibid)
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Box 8.5: Korea's Development Impact Fees and Milton Keynes Roof Tax (Development Impact Fee) The Milton Keynes Roof Tax is an innovative tax to be applied in the Milton Keynes New Town in the UK for the funding of new infrastructure and services such as roads water and schools. Under current legislation (Section 106 (S106) of the 1990 Town and Country Planning Act 1990) developers do not have a clear understanding of their upfront infrastructure costs as this amount is determined through planning obligations or private agreements. In Milton Keynes a standard fixed tariff on all development is provides certainty to developers in relation to costs. Although Korea is well known for its orderly and planned approach to development. There was a period in the 1980’s when loopholes in the Housing Construction Facilitation Act allowed for the private sector to develop in an ad-hoc and poorly regulated manner. This included high rise condominiums, hotels and restaurants. In response to this problem the Korean Government introduced development impact fees which forced the private sector to internalise the real costs of urban development reducing the burden on the State, whilst also generating revenue for investment into infrastructure and social services.
140
See Razin, 1998; Rosentraub et al 1995; see Hartzok, A.
142
See Bengston et al, 2004; 142Razin, 1998; and Mori, 1992.
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Table 61, Summary of Policy Interventions to Address Key Issues Key Issues and Policy Responses
Responsibility
Instrument
State
Legislation
2. Revised boundaries of administrations (if necessary) to encompass urban conurbation and other regional attributes.
State and Local Administrations
Legislation
3. Clearly demarcate roles, functions and jurisdictions between the metropolitan authority and subordinate administrations.
State and Local Administrations
Legislation
State
Rules and regulations
Administrations within the region
Agreements
INSTITUTIONAL Absence of mechanism to prepare and implement the policies mentioned below 1. Establish a metropolitan authority with strategic responsibility for the entire region.
4. Define operation and funding procedures (see finance) on the understanding that the plans and programmes of subordinate administrations will comply with the guidance and directions given strategic plans (see below). OR Establish a means for liaison between the administrations that comprise the region (for example a committee of representatives from the administrations supported by an executive to prepare the strategies). Clearly define legal status and functional responsibilities of the liaison committee in relation to the administrations, and the means to enforce committee decisions. This is not recommended and may undermine the preparation and implementation of policies recommended below. STRATEGIC PLANNING Uncoordinated and unplanned development within or between one or more local administrative areas that comprise the region. 5. Establish a metropolitan vision for sustainable development with clearly stated aims and objectives.
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Key Issues and Policy Responses
Responsibility
Instrument
Administrations
consultations
6. Prepare strategies to realise aims and objectives (of the vision). This should include a land use/management strategy prepared in association with similar strategies for transportation, economic development, infrastructure, socio-welfare and environment.
Document based Metropolitan on consultation Authority, Local data and Administrations analyses
7. Require that land use and development plans of subordinate authorities accord with the strategic land use/management plan.
Metropolitan Authority, Local Administrations
Regulation and enforcement
LAND USE Urban sprawl (low density, poorly serviced development in peripheral areas) 8. Prepare a land use/management strategy, which among others will include policies listed below.
Metropolitan Document based Authority, Local on consultation Administrations data and analyses
9. Introduce zones to phase development over time and to coordinate development with a programme for the extension and upgrading of infrastructure networks/services
Metropolitan Authority
Regulations
10. Formalise the rights of Village Collectives and introduce standards for compliance with strategic plan requirements (If appropriate re-classify rural land as urban in line with the lessons learned in Shenzhen).
State, Metropolitan Authority, Local Administrations
Legislation, regulations
11. If appropriate, target selected peripheral areas as growth poles (satellites) and coordinate their priority development with other strategic plans (economic, transport and infrastructure in particular)
Metropolitan Authority, Local Administrations
Coordination financial incentives and other appropriate means
Under-utilisation of serviced land 12. Establish zones which specify appropriate densities.
13. Introduce measures to encourage development of infill areas and vacant land (see finance policy 55)
Metropolitan Authority Metropolitan Authority, Local Administrations
Regulations
Regulations, penalties and incentives
Over requisitioning of land for projects/activities that are unnecessary and inappropriate
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Responsibility
Instrument
14. Projects of a specified size (area) should accord with strategic plans, and receive Metropolitan Authority approval, before land is requisitioned for construction.
Metropolitan Authority, Local Administrations
Regulations, penalties and incentives
15. Estimate future land requirements and prepare a programme for further requisitioning in relation to land already available. Prohibit additional requisitions in zones with abundant vacant or under-utilised land.
Metropolitan Authority
Document based on consultation data and analyses
Unacceptably long commuter journeys 16. Decentralise jobs to locations closer to residents (see economics and transport)
Coordination Metropolitan financial Authority, Local incentives and Administrations other appropriate & Private means Sector
ECONOMIC DEVELOPMENT Absence of any consistent policy for the economic advancement of the entire region 17. Prepare a economic development strategy which will among others include the policies listed below.
Document based Metro on consultation Authority, Local data and Admin & analyses Private Sector
Restrictions of the movement of labour (Hukou) are impacting on the availability of appropriate human resources 18. To facilitate labour flow, relax Hukou regulations between the administrative units that comprise the region (see policy 45 of social welfare strategy).
Metropolitan Authority, Local Administrations
Regulation
Metropolitan Authority, Local Administrations
Coordination financial incentives regulations & other appropriate means
Metropolitan Authority, Local
Consultations and appropriate
Competition among local administrations for economic activity results in wasteful investment and may prejudice land use and transportation planning objectives as well as clustering. 19. Coordinate operations of local administrations by adoption of a policy for the location of economic activities and link these with strategies for land use, transportation and infrastructure, as well as programmes for social welfare.
Local economies must adjust/restructure as inefficient State Operated Enterprises either remodel, relocate or phase out. 20. Consult with SOEs and if necessary take appropriate actions to renovate, relocate or redevelop sites using
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Key Issues and Policy Responses
various incentives including grants and loans.
Responsibility
Admin and SOEs
Instrument
actions
Potential advantages of clustered economic activity has not been recognised or realised 21. Discuss and agree clustering concepts with the business community. Identify appropriate locations in line with other strategies, in particular land use, infrastructure and transport.
Metropolitan Authority and Businesses.
Educate local administration about clusters
The government is not giving sufficient attention to market/promote the region's products and services. 22. Adopt a joint approach to outward marketing to promote the collective comparative advantages of the region. 23. Allocate funds (from regional budgets) to assist business in research and development.
Metropolitan Authority, Local Administrations Metropolitan Authority,
Advertising marketing, trade fairs & other Grants and subsidies
Business environment is unfriendly. Government is not facilitating private sector investment, especially SMEs. 24. Ensure that comparative advantages also have competitive advantages by streamlining bureaucratic procedures and smoothing the public face of production chains.
State, Metro Authority, Local Administrations
Regulation and procedural reviews
INFRASTRUCTURE Absence of any consistent policy for infrastructure investment within the region results in wasteful investment with little synergy with other public or private endeavours. 25. Prepare an infrastructure investment strategy and link to other strategies. Among others this should include policies listed below.
Document based Metropolitan on consultation Authority, Local data and Administrations analyses
Disparities between the range and quality of infrastructure or service provision across various parts of the region, especially in peripheral areas and outlying towns. 26. Assess needs and identify priority areas for upgrading and extension of strategic infrastructure and service networks.
Metropolitan Authority
Document based on consultation data and analyses
27. Assist the administrations of priority areas to improve local services by using regional funds as grants and
Metro Authority, Local
Regulations and procedures
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Responsibility
subsidies.
Admins
Instrument
Infrastructure investments are prohibitively expensive. 28. Facilitate private sector investment/involvement in the financing and operations of infrastructure through appropriate Public Private Partnership (PPP) modalities.
Metropolitan Authority, Local Administrations & Private Sector
Regulations and procedures
29. Review norms, standards and costing assumptions.
Metropolitan Authority, Local Administrations
Review
30. Limit the practice of land requisitioning as a means of raising funds for projects.
Metropolitan Authority, Local Administrations
Regulations and procedures
31. Phase the extension of infrastructure systems to match the spatial progression of physical development, and
Metropolitan Authority, Local Administrations
Regulations and procedures
32. Introduce incentives/penalties to ensure that vacant serviced land is developed (see finance policy 55)
Local Administrations
Tax regulations and incentives
Metropolitan Authority, Local Administrations
Regulations and procedures
Inefficient utilisation of infrastructure and services available in vacant or under-utilised land.
Duplication of investment into mega-projects. 33. Joint approval of locations for mega-projects in line with land use and other relevant strategies.
TRANSPORTATION Serious traffic congestion. 34. Prepare a transportation strategy which among others should include policies listed below
Metropolitan Document based Authority, Local on consultation Administrations data and analyses
35. Prepare an integrated package of proposals to, upgrade and rationalise road network, limit the use of private vehicles (congestion charges) and improve public transportation.
Metropolitan Authority, Local Administrations
Regulations penalties incentives and procedures
36. Coordinate land use and transportation strategies to improve private and public transport services to and from major work place concentrations.
Metropolitan Authority, Local Administrations
Coordination
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Key Issues and Policy Responses
Responsibility
Instrument
SOCIAL WELFARE Unacceptable disparities in income and opportunities exist between various parts of the region 37. Prepare social welfare strategy which among others will include the policies listed below
38. Target skill training (to meet shortfalls in available labour) to the unemployed and disadvantaged. 39. Subject to the requirements of other strategies, locate growth poles and economic clusters in an effort to redress inequality
Metropolitan Document based Authority, Local on consultation Administrations data and analyses Metropolitan Authority
Programmes
Metropolitan Authority, Local Administrations
Coordination
Sections of society are not able to access affordable housing. 40. Oblige real estate developers to include a proportion of low cost accommodation in residual developments, or pay the equivalent for others to provide it.
Document based Metropolitan on consultation Authority, Local data and Administrations analyses
41. Encourage the supply of affordable rental units.
Metropolitan Authority, Local Administrations
Regulations incentives and procedures
42. Initiate housing associations to operate as intermediaries for the poor within the housing market.
Metropolitan Authority, Local Administrations
Regulations incentives and procedures
43. Support rights of village collectives to market land (providing the intended use accords with the land use strategy).
Metropolitan Authority, Local Administrations
Regulations incentives and procedures
44. Oblige real estate developers to include social facilities in developments, or pay the equivalent for others to provide them.
Metropolitan Authority, Local Administrations
Regulations incentives and procedures
45. Relaxation of the Hukou system within the regional jurisdiction.
Metropolitan Authority, Local Administrations
Regulations incentives and procedures
Metropolitan Authority, Local Administrations
Regulations incentives and procedures
Sections of society are not able to access social services.
Unnecessary requisitioning of rural land (for urban uses) displaces farmers who (for want of a livelihood) become non-skilled urban migrants. 46. Requisitioning of farmland should be justified in relation to strategic land use plan.
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Key Issues and Policy Responses
Responsibility
Instrument
ENVIRONMENT Absence of holistic, systematic approach to the environment 47. Prepare environmental strategy plan, which among others should contain the policies listed below
Metropolitan Document based Authority, Local on consultation Administrations data and analyses
Pollution of watersheds Metropolitan Authority, Local Administrations
Regulations incentives and procedures
Metropolitan Authority, Local Administrations
Document and regulations, penalties and procedures
Metropolitan Authority, Local Administrations
Regulations, penalties and procedures
51. Closure of polluting process/activities, or the introduction of measures to reduce their impact to within acceptable standards.
Metropolitan Authority, Local Administrations
Regulations, penalties and procedures
52. Relocation of polluting activities to more appropriate locations.
Metropolitan Authority, Local Administrations
Regulations, penalties and procedures
53. Monitor the activities of Town and Village Enterprises and if appropriate re-classify rural land as urban (in line with the lessons learned in Shenzhen) and introduce pollution controls.
Metropolitan Authority, Local Administrations
Regulations penalties and procedures
Metropolitan Authority, Local
Document and related regulations and
48. Introduce land use restrictions in water catchments supported by local management and enforcement mechanisms. Lack of integrated/coordinated approach for solid waste management 49. Prepare waste management plan, to include measures to reduce and re-cycle waste, collection and sanitary disposal.
Competition over natural resources - loss of farmland, open space and green spaces within urban areas. 50. Prioritise natural resource areas to be preserved and incorporate measures to protect them within all strategies. Ensure that measures are consistent with local support. Deterioration of the environment due to the uncontrolled disposal of effluents from industrial activity.
FINANCE No region wide financial management 54. Prepare financial strategy plan which among others should generate regional revenues and include
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Responsibility
Instrument
Administrations
procedures
55. Widen the tax base and introduce more effective taxes to generate regional own source revenues. Property tax has clear advantages, especially if mounted on GIS systems that capture other urban management information. Higher taxes could be levied on vacant or under-developed serviced land to encourage a more compact urban form.
Metropolitan Authority, Local Administrations
Regulations and procedures
56. Review cost recovery systems for existing infrastructure and utility services and adjust user charges accordingly.
Metropolitan Authority, Local Administrations
Review and procedures
57. Consider the introduction of "user pays" principal across the board, for all services, and move towards sustainable financial management.
Metropolitan Authority, Local Administrations
Regulations and procedures
58. Unless the means to meet liabilities are assured, minimise loan financing of projects and issuance of municipal bonds.
Metropolitan Authority, Local Administrations
Procedures
59. Encourage the private sector to contribute funds through appropriate Public Private Partnership modalities.
Metropolitan Authority, Local Administrations
Regulations incentives and procedures
60. Projects exceeding a specified cost should accord with strategic plans, and require Metropolitan Authority approval, before land is requisitioned for construction. (See policy 14)
Metropolitan Authority, Local Administrations
Regulations, procedures and penalties
61. Government banks and financial institutions should seek the confirmation of the Metropolitan Authority before issuing loans (in excess of a specified sum) for financing projects of the local administrations.
Metropolitan Authority, Local Administrations
Regulations, procedures and penalties
Metropolitan Authority, Central Banks
Banking reform
policies listed below
Development budgets are insufficient in relation to the scale of investments required
Poorly conceived projects, for activities that are often inappropriate, involving unnecessary land requisitions and incurring non-performing loan liabilities
62. Lending criteria for project loans should be reviewed and more commercial principles applied.
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Key Issues and Policy Responses
Responsibility
Instrument
Metropolitan Authority, Local Administrations
Legislation, Regulations and procedures
Metropolitan Authority, Local Administrations
Legislation, Regulations and procedures
priorities. 63. Introduce regional taxes to generate revenue that can be redistributed among the administrations to compensate and balance any inequalities.
Insufficient sources of finance for the provision of social facilities (schools, clinics, etc.) 64. Introduction of standard development impact fees to generate revenue for the funding of infrastructure and social services associated with new developments.
8.12
Risks
8.12.1
There are risks that the policies above will not have the desired impacts. For an individual policy there is a risk of failure because it was poorly conceived and not properly coordinated with other policies (which may conflict with its intention). These risks will be minimised if policies are prepared as a integrated package that responds to objectives shared across all sectors. There is also a risk that policies fail because they were not the product of adequate consultations involving all stakeholders. These risks are reduced if strategies are thoroughly discussed with all concerned and supported by a strong degree of ownership. The recommendation to prepare a Vision Statement at the outset, followed by 9 sector strategies, provides a broad platform for consultations that should overcome this risk. Risk of failure also arises if the means to implement policies are missing, either because the necessary institution is absent or the existing institutions have not the mandate or capacity to manage and enforce the policies. This risk is one reason why it is recommended to establish a metropolitan authority.
8.12.2
Policies may not have their intended impact unless the real reasons that underlie and explain key issues are correctly addressed. This risk can occur if government sees its role too narrowly, and limits its actions to those within the traditional public sector ambit. More innovate approaches are required, that delve into people's attitudes and behaviour and seeks to make them more sustainable. These risks can be minimised by exploring issues in more detail to be sure that policy responses are both appropriate and complete. More analyses may be necessary as this study had neither the time or resources to undertake this level of detail. To this extent all recommendations are provisional.
8.12.3
The recommendation to establish a metropolitan authority incurs a risk of yet another layer of government when the general approach should be to free up the economy,
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encourage investment and reduce wasteful bureaucracy. This was the justification used to abolish the Greater London Council in 1982. However it was subsequently realised that there is role for a regional institution to manage aspects of governance that have region-wide implications, providing that :•
the responsibilities of this authority are limited solely to strategic issues and management, and
•
these do not conflict or overlap with the roles and responsibilities of subordinate administrations, and most importantly,
•
the subordinate administrations support the metropolitan authority, preferably through mechanisms of elected representation.
Finally, the most important pre-requisite for minimising risk is political commitment.
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