China to move 1000 manufacturing firms out of Beijing

By Aman Shah

Beijing—the capital of the country that has become known as the manufacturing hub of the world—is going to shut down 1000 of the city’s firms by 2020. This was reported by the official news Agency of People’s Republic of China, Xinhua, on Saturday. These businesses will be relocated to the area outside the capital city. Government officials have planned for the relocation to take place in several stages. In 2018, Beijing authorities will close 500 manufacturing companies and 176 logistics firms.

This rather unusual move seems to be aimed as reducing congestion in the residential areas of the city. Beijing has one of the highest population densities in the world. Removing manufacturing hubs in the city will free up space and reduce traffic. Another benefit which the Chinese hope to gain is the reduction of pollution in the city’s suburban areas. Pollution is most harmful for young adults and children. Shifting factories out will protect these vulnerable groups. Additionally, universities and hospitals are being shifted to suburban areas in order to save students and patients from the polluted air.

What is the government getting out of this?

The Chinese Government has a bigger plan in mind than just de-congesting Beijing. The business closures are part of an initiative to balance and integrate the economies of the cities surrounding Beijing, Tianjin and their nearby Hebei. It is planned that industries will be shifted from congested areas in the centre to Tianjin and Hebei, which are relatively less congested. The aim is to balance industrial development in all three regions. In 2015, the government released a three-year integrated development plan for these regions which recommended the relocations.

Beijing, as the seat of the Chinese Government, is flooded with officials and party workers on regular working days. The government is planning to centralize its national planning and development agencies in the city. Most of Beijing’s industrial power actually depends on nearby Tianjin, which is itself another manufacturing hub. This city is famous for its aviation and automobile sectors, mobile phones, and alternative energy products.

Is the plan similar to the NCR/Delhi expansion?

Beijing has similar problems to those in Delhi in terms of population as well pollution. The NCR Planning Board Act of 1985 states that “….for co-ordinating and monitoring the implementation of such plan and for evolving harmonized policies for the control of land uses and development of infrastructure in the National Capital Region…” The NCR consists of four states. Each of the NCR cities has its own planning authority, but the NCRPB acts as a coordinating authority between them.

According to official statistics, 687 companies from Beijing have already started up branches in Tianjin and Hebei in 2016. This is at an average of 3.2 companies per day. The Software and Technological Park has also been established in Gurgaon and Noida. Similarly Tianjin and Hebei have their own technological parks. Thus, by the comparison, the Chinese plan can be seen as a similar project to the NCR. In both cases the plan is not only a natter of administrative changes but also aims to better integrate the regional economy.

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