International Symposium for Capital Region Development

1. International Symposiumfor Capital Region Development 수도권 발전을 위한국제 심포지움

2. Session II PresentationsonAsianCity-RegionsandDiscussion (아시아 대도시권 사례발표 및 토론)

3. International Symposium for Capital Region Development - Tokyo - October 25, 2005 Arthur D. Little Tokyo

4. Agenda 1 Tokyo Metropolitan Area 2 Vision and Strategy 3 Regional Development Plan

5. Agenda 1 Tokyo Metropolitan Area 2 Vision and Strategy 3 Regional Development Plan

6. Tokyo Metropolitan Area Introduction • Tokyo Metropolitan Area (hereafter TMA) consists of Tokyo, Saitama, Kanagawa, and Chiba Area Map Basic Information1) (% is proportion to whole country) Kanagawa Tokyo Saitama Chiba TMA 13,281(3.51%) 2,102 (0.56%) 3,767 (1.0%) 2,416(0.64%) 4,996(1.32%) • Grossarea (㎢) • Population (10 thousand) 3,444 (27.15%) 1,254(9.88%) 706(5.57%) 878(6.92%) 606(4.78%) 272,508(6.11%) 1,363,513(30.56%) 740,526(16.59%) 180,454(4.04%) 170,025(3.81%) GDP(million $) Saitama Saitama Chiba Tokyo Tokyo Similar size to the National Capital Region (113% of the National Capital Region) High population density(2,593 persons/km2 ,1.4 times of the National Capital Region) Chiba Kanagawa Kanagawa 1) Source : Cabinet office, Ministry of Land Infrastructure and Transport

7. GDP of TMA Share of GDP Tokyo Metropolitan Area Importance • TMA is the center of politics and economy and has been contributing significantly to development of Japan TMA’s share of Japan’s GDP1) TMA’s Importance • Accounts for 31% of Japan’s total GDP • Home to most of large corporations(Including advanced & high-tech enterprises) • Financial activities are concentrated in TMA(e.g. securities trading) • Major consuming region (Billion $) (%) 1) Source : Cabinet office, Ministry of Land Infrastructure and Transport

8. Tokyo Metropolitan Area Importance (City of Tokyo) • As a core of TMA, City of Tokyo has been playing pivotal roles in economic development not only for TMA but also for Japan Concentration by Industries1) Annual sales of stocks2) • The tertiary industries are given much weight in Tokyo’s economy • e.g. Services, Finance & Insurance • The second industries have downward trends • e.g. Wholesale and retail trade, Manufacturing Since 1997, concentration on Tokyo has been accelerated (from 80% to 95%) Trade volume has been also increased significantly, more than 3 billion in 2004 1) Source : Cabinet office, Tokyo Metropolitan Government 2) Source : Tokyo Stock Exchange

9. Agenda 1 Tokyo Metropolitan Area 2 Vision and Strategy 3 Regional Development Plan

10. Vision & Strategy TMA • TMA aims for City-Region which is an international economic center and makes citizens have high quality of life Forces Driving Change Vision & Strategy1) Driving Forces Vision Make the “international environmental and cultural capital city – MetroECOPlex (ECO=Environmental Cultural Cosmopolitan)” Internal External Strategy Population & number of household decline Ageing population Increasingly varied household and living styles Changing style & system of work & employment Globalization Growing environmental problems IT technology revolution • Personalized sub-regions = “Areas” will be redesigned into mutually cooperating units • 5 types of “Areas” • International Dynamic Areas : City Center • New Dynamic Areas : Tokyo Seaside • Wide-area Cooperative Center : Major Points along the Inner Loop • Personalized Independent Areas : Outlying Districts • Green Residential Areas : Suburbs 1) Source : Ministry of Land, Infrastructure and Transport Handbook

11. Vision & Strategy TMA • TMA aims for City-Region which is an economic center and makes citizens have high quality of life (continued) 2000 2015(Target 1) 2030(Target 2) (Target 3) 2050 Milestone Items Population  Hollowing out of Central Tokyo  Avg. age up 30%  Ageing of Jr. baby boomers  Start pop. decline  Real pop. decline (avg. age up 25%) Industry & Labor  Dev. of telecommuting  Spread of telecommuting & e-commerce  Shift to higher knowledge based economy  Shift in industry structure  Deterioration & shifting usage of highways & other early infrastructure  Achieve COP31) & other environmental issues Environment & Social Foundation  Fading of housing boom Ideas behind the Redesign Steps “A town accessible on foot” becomes a reality Attain residences that combine working and living Improve air pollution Underground highway system Build “a town accessible on foot” Expand int’l functions, culture & education Int’l dynamic leading areas Shift land usage Cultivate seaside leisure activities Advance recycling and energy systems Make a plan fostering regional relationships Shift land usage & improve public access Set up a waterfront area and “environmental infrastructure” New dynamic areas Strengthen traffic and information networks Boost localized employment and adult education Set up an LRT2) Foster eco-friendly land usage, telecommuting and expand adult education Form a personalized town and a living culture Wide-area cooperative center Promote industrial development thru intra-area competition Improve the housing stock & preserve space Establish a personalized area utilizing regional assets Improve public transportation Create new industry using local assets expand support for business w/ local ties Personalized Independent areas Promote usage of lower impact/load cars Environmental infrastructure harmonized with leisure activities Expand residential areas while preserving farmland & woodland Establish a green residential environment for quality of life Green residential areas Source : Ministry of Land, Infrastructure and Transport Handbook 1) United Nations Framework Convention on Climate Change 2) Light Rail Transit

12. Vision & Strategy City of Tokyo • Based on vision of TMA, Tokyo Plan 2000 was formulated for the purpose of creation of an attractive, dynamic Tokyo as a global city Vision of City of Tokyo Global City of Tokyo Make all people able to fully display their creativity Make citizens live with a sense of security Relay pioneering messages Balance of job and residence Smooth interaction of people, goods, and information Abundant nature and culture Various kinds of lifestyles depending on their motivation and ability Management innovation in enterprise, new business and startups to revitalize industry Decrease the level of danger and create a safe city Improve the urban environment and protect the health of citizens Decrease environmental load and create a sustainable society Promote the longevity of social infrastructure and keep city functions Bring out the potential of the TMA and become a driving force for Japan in the 21th century Create an appealing Tokyo and become a peerless international city Source : Bureau of City Planning

13. Vision & Strategy Specialized Industries • TMA has been playing as ‘Asian Financial Center’ and IT and Biotechnology are promoted as future growth engines TMA as ‘Asian Financial Center’ Future Growth Engine (%) • IT Industry • Building relevant infra • Establish organization which supports IT enterprises • Foster cooperation between universities and IT enterprises • Providing financial aid to SME • Biotechnology Industry • Support networking of universities, government research institutes and private companies • Make financial support through new Tokyo bank or VC funded by regional government • Provide opportunities to advertise new technologies • The past • Developed with strong economy performance, less competition with other stock markets • During 90’s • Suffered from recession (Low growth & High cost) • Present • Still in uncertainty in spite of considerable liberalization of foreign exchange transactions in 1998 Source : Tokyo Stock Exchange

14. Agenda 1 Tokyo Metropolitan Area 2 Vision and Strategy 3 Regional Development Plan

15. Nationwide General Development Plan New Nationwide General Development Plan Third Nationwide General Development Plan Fourth Nationwide General Development Plan Grand Design of a 21st Century Country Regional Development Plan National Development Plan Overview • Building of a multi-dimensional country has been pursued by National Plan 1962 1969 1977 1988 1995 Equal development across regions Create a rich environment Maintain human living environment Build a multi-polar, spread-out country Build a foundation for a multi-dimensional country Basic Objective Approach Developing regional bases Large scale project Designing permanent residences Designing integrated networks Participation and cooperation Towards high growth economy Oversize capital city & widening wealth gap Income raising plan High growth economy Concentration of population and industry in the capital Development of digitalization, internationalization, and technology Stable growth economy Trying to disperse the population and industry Reaching the limits of the country’s resources, energy, etc. Extremely high concentration in Tokyo Increasing regional unemployment Development of real internationalization Global era Declining population, graying population Increasing digitalization Back-ground

16. Regional Development Plan Concentration • There were significant problems associated with over-crowded and over-concentration of functions within TMA Degree of over-crowded/over concentration Problems Over-crowded (Population)1) Problems with transportation(Heavy traffic congestion, longer commuting condition) Bad housing (small and expensive) Environmental problems (Unit: Persons/km2) Over-concentrations (Functions) • Most of business activities are concentrated • 35.2%(4,728) of nationwide or large enterprises are located in Tokyo2) • Many government organizations were located in the center of Tokyo • Along with the 4th development plan, approximately 80 organizations were identified and to be moved to other places 1) Source : Cabinet office, Tokyo Metropolitan Government 2) Source : SME Agency

17. Regional Development Plan TMA Development Plan • The purpose of the capital region development plan is to remedy abuses resulting from overpopulation and congested functions and to develop the capital region according to their own characteristics Objectives Distributed Network Structure Arrange to be base of free activities that can contribute to bring vitality to Japan Build a society where the various individual-subjected activities can be made Make the TMA have symbiotic relationship with environment Construct an area with safe, refreshing and high quality living environment Establish TMA as assets shared with and succeeded to the next generation Based on strongpoint cities, build highly independent areas and organize areas sharing the functions of each other by being connected closely and exchanging Promote to foster and arrange the local bases as a center of activities in region, and the broad connection bases as a strongpoint of broad connection with regions inside or outside the Capital province By the mutual connection and exchanges among bases, there formulated a ring shape strongpoint cities complex in TMA, and a greater ring shape connecting axis of TMA in the north and east Kanto, and the west of inland

18. Regional Development Plan TMA Development Plan • A multi-functional, intensive urban structure that exploits the merit in terms of integration of each regions of TMA will be built up Single Core with High Concentration Multi-cores with Horizontally Connected Network Current Future Source : Planning of Tokyo

19. Regional Development Plan TokyoMegalopolis • For renovation of TMA, governments developed a future plan, ‘Tokyo Megalopolis Concept’ The Circular Megalopolis Structure of Tokyo Megalopolis concept Source : Planning of Tokyo

20. Regional Development Plan TokyoMegalopolis • Tokyo Megalopolis Concept would distribute various functions to different zones, and allow for dynamic interaction among zones Summary of Tokyo Megalopolis Concept Strengthen transportation and information networks Divide various functions among zones and bases and realize integrated functions Coexist with the environment and form a framework based on water and greenery Demonstrate the benefits of consolidation using a framework of cores and urban axes 5 cores shall lead demonstrating energy and attractiveness Create a loop composed of the urban axis linking core cities and the Tokyo Bay waterfront urban axis The loop axis of cities, in addition to strengthening cooperation within the loop, will also achieve efficient functioning for all related entities by creating center-core connections

21. Regional Development Plan TokyoMegalopolis_Infrastucture • To achieve the image of Tokyo Megalopolis, it is necessary to strengthen and improve functions of infrastructure Roads • Experimenting with Toll Fees • Changing toll rates according to time and location to promote shifting traffic from busy streets to the highway, etc • Smart Toll Interchanges • Introduce “Smart ICs” with Electronic Toll Collection (ETC) machines that can cut construction and maintenance costs Rail • Encouraging steps regarding “obstacle rail crossings” • There are 500 rail crossings within 360 in the TMA • MLIT is taking “drastic steps” to address “obstacle rail crossings” by continuing to build overpasses • By 2035, complete overpass, widening rail crossing roads, and other rail crossing measures Air Transport • Plans for additional expansion of Haneda Airport • Also planning to become compatible with international flights Shipping • Promote the Super Hub Port Project • Unify efforts from public and private entities to create a next generation high quality container terminal in the Keihin (Tokyo-Yokohama) Port • Simplify trade and port related procedures

22. Regional Development Plan TokyoMegalopolis_Transportation • Plan of highways and expressways constructions to meet the Circular Megalopolis Structure concept Wide-Range Highways and Urban Expressways in Tokyo Metropolitan Area Source : Planning of Tokyo

23. Regional DevelopmentPlan TokyoMegalopolis • Through Tokyo Megalopolis Concept, the competitiveness of TMA would be strengthened with well-connected network (Expected) Results1) Implications Average 10% increase in transportation speed for entire area→Time saved is equivalent to some \1.7 trillion Reduction in atmospheric pollution in the Tokyo megalopolis through faster travel time→Approx. 10% reduction in NOx emissions and 10% reduction in CO2 emissions Reduction of some 200,000 rail commuters to Tokyo's 23 wards→Alleviation of commuting congestion Increase in transport volume on radial urban axes→Strengthen radial urban axes which increases area's integration→Decrease of environmental load in city center5) Approximate 30% reduction in through traffic in Tokyo's 23 wards→Alleviation of traffic congestion, smoother traffic flow→Reduction of environmental load By development and integration of each region’s function, the whole capital region can be more competitive To foster and integrate of each region’s characteristic, strengthening transportation network is needed Circular transportation structure can make capital region well-connected with multi-cores 1) Source : Planning of Tokyo

24. International Symposium for Capital Region Development - Beijing - October 25, 2005 Arthur D. Little Beijing

25. Agenda 1 Status and Competitiveness 2 Development Strategy

26. Agenda 1 Status and Competitiveness 2 Development Strategy

27. Status and Competitiveness • Beijing is China’s political and cultural capital Basic Information Beijing is situated in the northeastern part of China at an elevation of 43.5m above sea level (2003, % is proportion to whole country) People’s Republic of China Beijing Tianjin Hebei 16,800 (0.2%) • Gross area (㎢) 11,920(0.1%) 187,700(2.0%) 1,456(1.1%) • Population (10 thousand) 1,011(0.8%) 6,769(5.2%) Beijing Municipality 45,223(3.2%) GDP(million $) 33,922(2.4%) 87,637(6.1%) AdministrativeSystem Beijing Beijing MunicipalCity Tianjin Municipal City Hebei Province Tianjin Heibei Each municipal and provincial government makes development strategy and also central government establishes policy for Beijing Surrounding Area. Source:1. Beijing Statistical Yearbook 2004 2.China Statistical Yearbook 3. http://edu.sina.com.cn/l/2005-02-16/100790.html4. http://www.fmprc.gov.cn

28. Status and Competitiveness • Beijing is playing a moderately important role in China’s economic development Beijing enjoyed fast economic growthsince 1996 Beijing has a long history and it’s economic contribution is important Rest of China Beijing GDP over past 9 years Portion of Beijing (USD billion) World Cultural Heritages Financial revenue CAGR: 13 % 1/32 6/21 Export Industrial output 1/37 1/26 All the central government organizations are located in Beijing. Beijing hosts 139 foreign embassies 22 international organizations have presence in Beijing Beijing’s GDP per capita ranked second among all the provinces in China in 2003 Source:1. Beijing Statistical Yearbook 2004 2.China Statistical Yearbook 3. http://edu.sina.com.cn/l/2005-02-16/100790.html4. http://www.fmprc.gov.cn

29. Status and Competitiveness Beijing’s stated objective is to strengthen its position as China’s “political and cultural center” and to be perceived both as “a world famous city with long history” and “a modern metropolitan city” Beijing’s competitive positionwithin northeast Asia Vision & Strategy of Beijing ( ~2020) Vision GDP in 2003 (USD billion) Beijing positions itself as the political and culture center of China, a world famous city with long history and a modern metropolitan city 445 Objectives Economy: the tertiary industry will represent over 70% of the total GDP and industries with high tech content and less pollution will be encouraged. GDP per capita will reach USD 10,000 by the year of 2020 Culture: promote the traditional culture while advocating modern elements Environment: build a beautiful city with fresh air and healthy ecosystem 186 Strategies 163 155 Economy: focus on hi-tech industry and speed up the development of the service industry Social: promote equal opportunities and information transparency. Strengthen the city’s emergency reaction mechanisms Balanced regional development: achieve balanced development through closer cooperation with neighboring Tianjin and Hebei. Ecological environment: build stable regional ecological network and protect the natural resources such as forests, lakes, grassland, and wetlands 77 45 HongKong Beijing Shanghai Seoul Singapore Tokyo Source: 1. interview with Dr. Guobiao Yang; 2. http://www.china.org.cn/chinese/zhuanti/2004cxfz/514859.htm

30. Agenda 1 Status and Competitiveness 2 Development Strategy

31. Development Strategy To achieve this goal, Beijing is implementing a clear strategy that combines national and local policies Beijing’s Development Strategy 1 National planning Beijing’s position has always been the political and cultural city of China and its “service” function has always been put on the top priority of the government’s agenda 2 Infrastructure investment Beijing government is investing a huge amount of money in improving the city’s infrastructure facilities for the coming Olympics game 3 Quality of life Beijing government has attached great importance to improve the living environment quality 4 Pillar industry Service industry and hi-tech industry will be the focus of Beijing’s future economic growth targets 5 International integration MNCs, embassies and international organizations and the international events, tourism are enabling Beijing’s integration into the world economy 6 Local integration Greater Beijing Area development strategy has been initiated in Nov. 2004 which draws up the regional development planning of Beijing, Tianjin and Hebei

32. 1 Development Strategy National planning • Chinese central government has continuously emphasized Beijing’s role as the political capital of China Chinese central government has never positioned Beijing as China’s economic center China’s WTO membership Rural reform Establishment of four special economic zones Further promoting the development of coastal cities while achieving balanced development Go West Policy China national Strategy 1978 1980 2000 2001 2004 and forward Key dates 9th five year plan1996-2000 10th five year plan 2001-2005 11th five year plan 2006-2010 Sustainable development with emphasis on the prevention of pollution and use of resources Strictly control the population growth Political capital of China International city Cultural city City suitable for living Promoting international exchange and cooperation Improving the social economic standard Emphasizing the tertiary industry Beijing’s development strategy

33. 2 Development Strategy Infrastructure investment • Beijing government has committed 22 billion USD in construction of urban infrastructure facilities Beijing Urban infrastructure investment allocation between 2002- 2008 Water, electricity, heat system: 1.8 billion USD 75% of Beijing’s infrastructure investment has been committed to transportation and environment The Government recognize that the growth of Beijing is based on the effective infrastructure with preservation of environment Information system: 3.7 billion USD Transportation: 11 billion USD 50% Environment: 5.5 billion USD 25% Total: 22 billion USD Sources: 1) Beijing Statistics Burea website 2) Beijing Traffic White book 2002, 2004 3) interview with Professor He Xiaofeng from Beijing University

34. 2 Development Strategy Infrastructure investment • For the effective construction of infrastructure, the government should lead the project with the big picture for the future status Beijing government is investing in both transportation and cultural projects Implications • Should recognize the base of the Growth • Effective transportation system • Nature friendly environment • Representative facilities in the center of the city • Must be organized by the Government • Should be planned based on the big picture for the city development • Promoted by top-down method Key Infrastructure Projects Investment value ( billion USD) China Peking Opera Grand Theatre will be completed by the end of 2005 0.4 The new China Central Television Station will be completed by the end of 2008 0.6 Beijing international airport phase II will be completed by the end of 2007 2.4 4 newsubway lines will be completed by the end of 2008 6.26 Peking Opera Grand Theatre Sources: 1) Beijing Statistics Burea website 2) Beijing Traffic White book 2002, 2004 3) interview with Professor He Xiaofeng from Beijing University

35. 3 Development Strategy Quality of life • Beijing government has issued comprehensive policies to address the pollution and congestion problems A number of measures have been taken by the government to reduce pollution and congestion Domestic immigration Traditional policies, i.e. temporary residence permit and “Hukou” registration policy are used. A new policy to limit low-end mobile population has been discussed since 2004. Resource allocation Improve the efficiency of energy utilization The national water transfer project from south to north (Beijing section) was initiated Strengthen the management of water resources (i.e. different pricing on recycle water and normal tap water, develop water saving agriculture) Measures to improve environment Implemented Europe 3rd stage standard (Europe III standard) of waste gas emission by motor vehicles in July 2005, ahead of national plan time in 2007 Industry structure adjustment Sandy-wind control projects in Beijing – Tianjin area started from 2000, to return the farmland to forestry Sources: 1) First draft of framework of Beijing 11th five year plan

36. 3 Development Strategy Quality of life Transportation System • Beijing government has realized serious pollution caused by the caremission and started promoting the use of the public transport system Types of Transportation System Better Public Transport System Provide Better Comparison of mode shares-Beijing • BRT: "Bus rapid transit" is a high-capacity transport system with its own right of way, its alignment often being elevated or running in tunnels, and typically running long trains at short headways of a few minutes. • BRT is regarded as kind of sustainable transportation system in big cities in China: • Financially sustainable: cost is much lower than that of subway but the faster and move more people than regular bus • Ecologically sustainable: use environmentally friendly energy • Equity issue: provide transportation access people who can not afford taxi or private cars 1986 2000 Bicycle Publictransport Taxi Car Other Source: Energy Foundation

37. 3 Development Strategy Quality of life Transportation System • Bus Rapid Transportation system has been adopted by Beijing government as one channel to encourage the use of public transport Typical BRT corridor in Beijing Beijing has set ambitious plan to adopt BRT Develop a BRT network with total length 200 km and complete 60 km BRT network by 2008 Increase the share of public transport from 26% to 40% by 2010 Vision Current status First Phase 5 km was open on Dec.25, 2004, second phase is scheduled to open by the end of 2005 Forecasted 100,000 daily ridership Key ingrédient for the initial success Beijing transportation commission has spearheaded the BRT development Strong supports from the mayor and other top decision makers Source: Beijing annual report 2003, 2004

38. 4 Development Strategy Pillar industries • Great achievements have been made to promote the development of service industries in Beijing Tertiary industry is playing the leading role in Beijing’s economy Finance, social services and whole sale & retail are the key sectors Beijing GDP by activity sector (2003) Share of tertiary activity segments into Beijing total GDP (2003) SocialServices Others Culture &education Finance Whole Saleand retail Research Real estate Transportation& IT Total: GDP= 45 billion USD Sources: 1) Beijing Economy Almanac 2005 2) Official websites of Yizhuang - http://www.dxyz.gov.cn/3) Official website of Zhaoyang District http://www.bjchy.gov.cn/index.htm; 4) Official website of Zhongguancun http://www.zgc.gov.cn/

39. 4 Development Strategy Pillar industries • Finance, social services, IT service and city industry will be the future growth engines of Beijing’s economy Finance and social service will keep playing an important role in Beijing’s economy Electronic information and product still take a large portion of the manufacturing industry % of total GDP % of total industrial output of manufacturing Finance Electronic informationand product Social service Whole sale & retail Petrochemical and fine chemical Transportation Culture Science and research City industry Real estate Auto Equipment Bio-medico Note: city industry includes: printing, packaging, food and clothes Source: Beijing statistical Yearbook 2002 and 2004

40. 4 Development Strategy Pillar industries Industry Clusters • To assure the future growth of those pillar industries, Beijing government has set up specific zones to develop those clusters Four key clusters have been targeted by the government Policies and measures have been made to foster those industries Industry cluster Zone Financial subsidies to specific companies (i.e. above designated scale or hi-tech firms) Tax reduction or exemption (i.e. tariff exemption for the parts or machines used in free trade zone) Take measures to move out businesses which do not fit with intended industry cluster. E.g. to reduce pollution and adjust the city function to hi-tech and capital service industry, Shougang Group (a large steel manufacturer with over 80 years’ history) has been requested to move its production capacity from Shijingshan district to Hebei province and only keeps its headquarter in Beijing. Hi-tech Zhongguangcun, Yizhuang Sports and conference Olympics/Asian game village Business service Central business district Finance (under construction) Jin Rong Street Sources: 1) Beijing Economy Almanac 2005 2) Official websites of Yizhuang - http://www.dxyz.gov.cn/; 3) Official website of Zhaoyang District http://www.bjchy.gov.cn/index.htm; 4) Official website of Zhongguancun http://www.zgc.gov.cn/

41. 4 Development Strategy Pillar industries Relocation of inappropriate facilities in downtown • Case of industry structure adjustment: relocation of Shougang Group* to Heibei province Issues and Solutions Implications • Win-win for all stakeholders is required • Central gov’t: encouraging foreign skills/technology transfer into the country • Beijing gov’t: Green city • Shougang Group: adoption of new environment-friendly equipment on the cheaper site • Habei: increasing tax revenue • Central government should promote strongly • Provided consistent support for Beijing city’s position 1. How to solve the decline of the revenue for the Beijing? • Tax revenue will go through a transitional period when the first few years’ revenue will go to Beijing with later increasing portion to Hebei. 2. How to settle those 60K employees? • Jobs are available to those who are willing to move to Hebei. Subsidies will be provided to those who do not 3. Where to get the 50 billion RMB relocation cost including the construction of the new plant? • To attract some investment from some strategic investors. Government will also provide loans with favorable interest rate 4. How to deal with the possible pollution in the new site, Habei? • The new plant will adopt new manufacturing process with new technology that will be more environmentally friendly 5. How to design the land after Shougang Group is moved out • An Industrial Museum will be built on the site. Government has started also marketing the land currently. Sources: First draft of framework of Beijing 11th five year plan * Shougang Group contributes ¼ of revenue contribution to Beijing government, but results in 2/5 industrial pollutants in Beijing

42. 4 Development Strategy Pillar industries Fostering clusters • Government policies effectively support technology development as well as creating markets for environmentally enhancing technologies Government, universities and enterprises worked together for this effort Implications • For the rapid establishment, government’s strong support is needed • Provided best environments for the development of clusters (land, financial subsidy, policy, tax reduction, etc.) • Supported only high-value industries, specifically hi-tech • Strict policy help the formation of tension • Take measures to move out businesses which do not fit with intended industry cluster Role of government The first state level high tech zone with preferential policies in tax rate reduction Financially supporting some key state hi-tech companies such as the sate-owned enterprises: Legend (Zhong Guancun started with some domestic enterprises, this is the key) Role of universities Four top universities nearby provides research activities benefiting those small firms They specifically set up some University incubators for overseas students and some MNCs Role of enterprises The first few multinational computer companies such as IBM, HP, Microsoft, Compaq attracted subsequent firms to be located around them, creating the increasing return effect Source: Beijing statistical Yearbook 2002 and 2004

43. China Beijing Shanghai 5 Development Strategy International integration • Attracting MNCs to invest in its service industry and holding high profile international events are conducive to Beijing’s international integration Beijing has attracted most FDI to its service industry Beijing strengthens its international integration by holding high profile events FDI allocation among three industries in 2002 • Cultural events • Annual Bejing new year concert; numerous national film festivals; Beijing international book fair • International events • 11th Asian Game (1990); Sino-France Cultural Year (2003); 2008 Olympics game • Numerous national level government exchanges Primary industry Secondary industry Tertiary industry Source: 1) Beijing annual report 2003, 2004 2) China statistics 2003

44. Beijing Tianjin Heibei 6 Development Strategy Local integration • Greater Beijing development strategy emphasizes Beijing’s integration with Tianjin and Hebei province Greater Beijing area covers Beijing,Hebei and Tianjin Local integration has been initiated by the central government Beijing’s developed should be integrated with that of Tianjin and 8 cities in Hebei provinces Fostering the construction of cross-city project, especially in the areas of infrastructure, environmental and natural resource, industry structure) activities Vision & strategy Organisation and Process Greater Beijing development coordination commission led by the central government will be set up and the work will start from 2006 (top-down method) The largest port in in Northern China is in Tianjin Strong manufacturing base in Hebei Culture and service industries in Beijing Resources Sources: 1) First draft of framework of Beijing 11th five year plan 2) interview with Mr. Lu Yingchuan from Beijing development and planning commission

45. International Symposium for Capital Region Development - Shanghai - October 25, 2005 Arthur D. Little Shanghai

46. Agenda 1 Status and Competitiveness 2 Development Strategy

47. Agenda 1 Status and Competitiveness 2 Development Strategy

48. Status and Competitiveness • Shanghai is one of the four municipalities in China and enjoys a favorable geographic location Shanghai is located on the mouth of Yangzi River, offering an ideal natural port location Basic Information (2004, % is proportion to whole country) People’s Republic of China Shanghai Central Part Pudong New Area Shanghai • Gross area (㎢) 6,341 (0.1%) 523(0.005%) 1,184 (0.01%) • Population (10 thousand) 1,711(1.3%) 177(0.1%) 872(0.7%) Shanghai Municipality GDP(million $) 77,170(5.3%) 16,865 (1.2%) 38,900(2.6%) AdministrativeSystem Puxi Shanghai MunicipalCity Sub-city / District Governments Pudong Shanghai municipal government and sub-city governments makes development strategy. The national central government establishes policy for Shanghai and specifically for Pudong New Area, as well. Source: Shanghai Statistics Yearbook 2004

49. Export 1/4 Status and Competitiveness • Shanghai is China’s undisputed commercial capital Shanghai has experienced rapid economic growth since 1991 Shanghai is playing an important role in China’s economic growth Shanghai GDP over past 20 years Rest of China Portion of Shanghai (USD billion) Industrial output Financial revenue 1/12 1/8 Port cargo handling 1985-1990 1990-2003 1/6 CAGR: 6% CAGR: 12% China CAGR: 7.9% China CAGR: 9.7% Source: 1) Shanghai Statistics Yearbook 2005 2) Y.C Richard (2002); 3. Shanghai government website: www.shanghai.gov.cn

50. Status and Competitiveness • Shanghai’s vision is to become “an international metropolitan city and an international economic, finance, trade and shipping center by 2020” Shanghai’s competitive position within northeast Asia Vision & Strategy of Shanghai ( ~2020) GDP in 2003 Vision (USD billion) Build Shanghai into an international metropolitan city and an international economic, finance, trade and shipping center 445 Objectives GDP per capita to reach USD 7,500 in 2007 and GDP to reach the level of other world international metropolitan cities by 2020 Build a high class comprehensive infrastructure network with port, airport and information port; the express train and express roads Improve the living environment with focus on reducing pollution and congestion 186 163 155 Strategies 77 45 Adjust the industry structure and foster the Shipping, IT, Auto, Finance, Trade and other knowledge based industries. This has been written in its city development plan and relevant bureaus have been asked to prepare specific action plans HongKong Beijing Shanghai Seoul Singapore Tokyo Source: 1) interview with Dr. Guobiao Yang 2) http://www.china.org.cn/chinese/zhuanti/2004cxfz/514859.htm