November 23, 2015

China putting $45.5 billion to start integrating Hebei province, Beijing and Tianjin

China on Friday earmarked 290 billion yuan ($45.45 billion) for manufacturing and industrial park projects to support its efforts to integrate Beijing, Tianjin and Hebei province into a megacity.

The government hopes to ease pressures on its crowded capital by transferring industries further out into the integrated metropolis, which it says has a combined population of about 110 million people. It dubbed the area "Jing-Jin-Ji" last year, using shortened versions of the names of the cities and province.

Companies that signed agreements with the three local governments and the Ministry of Industry and Information Technology for the 51 projects include Chinese server maker Inspur and carmaker Beiqi Foton Motor, the official China National Radio reported on its website.

By 2020, the population of eijing, Tianjin and Hebei province will likely be about 120 million

  • By 2025, Beijing will have over 7 million households earning over US$20,000 per year. This will make it third or fourth on the global rich cities list.
  • The Beijing mega-city is already happening. Beijing’s seventh ring road, currently under construction, is basically in Hebei at this point. And Tianjin is a fast 30-minute train ride away. So these cities are already connected in terms of hardware – roads, trains, and infrastructure. Now it’s about integrating the software - policies, companies, services, families, and so on.
  • The Beijing mega-city population is approximately 100 million people and this is rising fast. Between 1990 and 2010, Beijing’s population has grown more than three times as fast as China’s population. This is both from migrants and people having babies.
  • The economic output of the Jing-Jin-Ji cluster is about 10 per cent of China’s GDP. But by 2025, Beijing will be the world’s fifth largest urban economy. Add in Tianjin at number 12 and the Jing-Jin-Ji cluster will then be larger than London, Tokyo or New York.

President Xi Jinping has a signature project to link 130 million people across Beijing, Tianjin and Hebei province into a single megalopolis, the so-called Jing-Jin-Ji region. Xi has held out the model as a template for China's urbanisation in the future. For the project to work, he will need to align policy and interests that are often in conflict - ones that touch on urban planning, industry, state and private enterprises, and environmental protection.

Xi's plan calls for the three northern areas to be united into one economic sphere. The Bohai Bay area would become a key growth plank, similar to the Yangtze River Delta and Pearl River Delta. Vice-Minister of Finance Wang Baoan has said the new metropolis would require an investment of 42 trillion yuan (HK$52.7 trillion) over the years.

High-speed rail is moving toward smaller cities. One line is opening this year between Beijing and Tangshan. Another is linking Beijing with Zhangjiakou.

Shanghai and the Yangtze river delta region will also become a 200+ million person megacity in the 2020-2025 timeframe. It is 65% urban now and will be 75% urban by 2020. Of the 160 million people in the area about 100 million are in a somewhat connected megaregion.

Shanghai is at the core of the larger Yangtze River Delta, home to nearly 160 million residents crowded into an area the size of Oregon. The Yangtze Delta includes the provinces of Zhejiang, Shanghai and Jiangsu and stretches from Ningbo, through Hangzhou, Shanghai, Suzhou, Changzhou, and Zhenjiang to Nanjing.

With 20% of the GDP of China, this area already has about $2.2 to 2.5 trillion (nominal) in GDP and should be about $3 to 3.5 trillion in 2020 and about the level of Japan's GDP before 2030.

The Pearl River Delta (Hong Kong, Shenzhen and Guangzhoua and others in the area) is the third Chinese megacity.

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