The Front Porch and Living Room of China
"If China is a house, Shanghai is the living room, and the Yangze River Delta is the front porch welcoming and showing China's best side to the visitors" ---Mr. Vibul, Thai Consulate General, Shanghai, September 2002
For first time visitors to China, one of the most stunning entry points is Shanghai. The view from the mouth of the Yangze River, which looks out over Shanghai and other cities, reveals an incredible urban and industrial panorama, clearly one of the most rapidly developing areas among all the cities of the world. I recently spoke with a group of journalists and photographers from Thailand, one of whom was writing "Shanghai, the SIM city," for a Thai marketing magazine (The Marketeer). They had already seen the panorama of the Yangze River Delta and were awed by such sighs as the "walking street" (Nanjing East Road). From an outsiders' perspective, it all looked like a marvel of integrated urban development.
The reality, however, is that there has been a great deal of competition between Shanghai and other cities. It is true that there have been efforts to coordinate and cooperate, as for example in projects trying to link transportation, human resources, and administrative services systems into one huge Delta Region. Ultimately, however, there has been a great deal of mutual exclusivity. Consider, for example, this story of two bridges.
Two of the World's Longest Bridges
Two of the world's longest bridges are situated in the Bay of Hanzhou, just a stone's throw apart. Each bridge cost more than $1 billion, started construction less than a year apart.
The Hangzhou Bay Bridge (36 km) connects Cixi, Ningbo with its deep sea port, Beilun to Jiaxing, a Zhejiang city just south of Shanghai city's administrative zone. This bridge underwent various feasibility studies for a decade before construction was finally approved and begun in September, 2003. Total investment, all from private companies in Ningbo, is estimated at more than 10 billion yuan ($1.25 billion). The bridge has to connect to Jiaxing on the northern coast of the Hangzhou Bay; the city of Shanghai would not permit it to land in that city's territory.
Beilun is a small fishing town on the easternmost edge of the southern coast of Hangzhou Bay. The presence of a deep sea lane with year-round minimum depth of 17 meters stretching along the coast of Beilun motivated the Central Government to build one of the nation's largest deep sea port here. The port is further protected from storms by the mountainous islets of Zhoushan just off the coast of Beilun. Beilun port, which has grown up since the early 1990s, has earned the nickname "Rotterdam of the East" because of its natural, storm-free deep water lanes. 14.31 billion yuan has already been invested in the Beilun port. It should be noted that in 1991, it was proposed that Beilun port be managed by the Shanghai port authority. That would have been a logical move given that Shanghai's own port and water lane - a mere 11 meters deep - can only accommodate container ships and freighters of 50,000 DWT or less. Swift and dangerous undersea currents also contribute to an inefficient port that costs the city a great deal to keep open, and even then it is often only usable during high tide.
The challenge for economic development in the region has been the expensive detour from Beilun to Southern Jiangsu and Shanghai along the coast of Hangzhou Bay. The Hangzhou Bay Bridge would have reduced that 400 km trips from Beilun to about 80 km. Although the high speed superhighway along the coast takes only slightly more than 4 hours to Shanghai, the building of the bridge will make it possible for Shanghainese to drive to Ningbo for some seafood dinner and drive home in time for the 10 o'clock evening news.
The East China Sea Bridge (31 km), situated on the eastern edge of Hangzhou Bay, links the small Shanghai town of Lucaogang with a small, uninhabited island, Da Yang Shan. Total investment on the bridge alone, exclusive of the cost of infrastructure on the island and port facilities, will be 7.11 billion yuan (nearly $900 million. A further 200 billiion RMB will be invested on Da Yang Shan to make it an international deep sea port. This bridge's approval and construction was expedited to enable it to begin a year ahead of the Hangzhou Bay Bridge with scheduled completion in 2005, three years ahead of the Hangzhou Bay Bridge.
The construction of the East China Sea Bridge remains more than two years from completion. Indeed, the port authority of Shanghai has already signed an agreement for a joint venture with the city of Yi-u, Zhejiang, approximately 120 km south of Hangzhou, just off the ear of Ningbo, for a container yard to handle 200,000 containers from that city each year. Shanghai has also reached agreement on container yard project with many other cities in its ambition to become one of the major container shipping ports of the world.
Why are the two cities a bay apart not joining each other in their bridge and deep sea port project? The situation should be understood in the context of rapid economic growth and inter-city competition. The Chinese have always described themselves as "A plate of scattered sand grains" that would never join or unite with each other. Consider some of the following tales of province and city level economic growth in today's explosive Chinese economy.
The Tale of Three Kingdoms, Modern Version
The economic miracle of the reformed, opened-up China has fueled the growth of three prominent centers of economic activity situated around Hangzhou Bay and the Yangze River Delta: Southern Jiangsu, Northern Zhejiang, and Shanghai.
Southern Jiangsu. Situated on both the north and south banks of the mighty Yanze River as it makes its way to the sea, Jiangsu has carved out a niche as a center for goods and transportation for the 350 million people who live along the river. For the last decade, Jiangsu has sought ways to deepen its river lane to accommodate larger container lines and freighters. Among the key cities of the southern part of Jiangsu province are Suzhou (GDP $25.2 million), Wuxi (GDP $19.4 million), and Nanjing (GDP $15.7 billion). (Jiangsu has had on the drawing board for many years a long bridge linking its city of Nantong to Shanghai).
Northern Zhejiang. Economic growth is also apparent in Zhejiang province, where five cities accounted for over $10 billion in GDP in 2002: Hangzhou, Ningbo, Wenzhou, Shaoxing, and Taizhou. The cities, which are often referred to as the "Five Little Dragons" of Zhejiang, are reimiscent of the aspiring Asian dragons of the late 80's.
Shanghai. Shanghai's estimated year 2002 GDP was $65.5 billion - the highest in the country and more than 80 % higher than Beijing or Guangzhou (which ranked second and third). Shanghai hosts the regional headquarters of more than 300 Fortune 500 firms, in most cases including head administrative offices and financial management centres. However, it is out of those Shanghai regional headquarters that far-flung production facilities spread from Shanghai to Southern Jiangsu and Northern Zhejiangand into the very heartland of China are managed. No wonder Shanghai is now enjoying an international reputation as a dynamic, modern city and an excellent site for foreign investment!
"The Tale of the Three Kingdoms" tells of heroes rising from everywhere like the breaking surf and waves. Modern China has more than its share of municipal heroes, if not exactly rising from everywhere then certainly playing an increasingly important economic role.
The chain of cities from Kunshan to Suzhou, Wuxi, and Nanjing on the southern bank of Yangze River has been blessed with a combination of relatively easy access to the deepest heartland of China, plentiful and high quality human resources, favorable treatment by local governments, and proximity to Shanghai. Foreign investors have taken note, as in the case of Kunshan, a city under the Suzhou city administration, which appears to have one of the highest concentration of Taiwanese factories and firms.
Zhejiang Province. Another rising hero is Zhejiang province, which has a disproportionate number of businesspeople and entrepreneurs. In many cases, they are using innovative marketing strategies such as the "rurals surrounding the cities" cited in my previous Dragon column. More than half of China's leading brands of shirts, men and ladies' apparels are made in Zhejiang. Zhejiang leads all Chinese provinces in the production of motorcycles and washing machines.
Ningbo: Proud Past and Affluent Present. Many prominent and successful businessmen in Hong Kong and Shanghai trace their roots to Ningbo, a city whose 7000 years of cultural history predates the history of China itself by two millennia. Ningbo is now an economic leader, with the highest per capita volume of housing purchases in China. Ningbo's economic muscle is reflected in the way it handled its city government city redevelopment plan in 2001. In most Chinese cities, the city government buys up sufficient new housing units to give to families whose residences would have been reclaimed for the city's redevelopment plan. Ningbo, however, was forced to postpone some of its redevelopment projects because the city government had bought up so many properties there were not enough left to relocate residences in the targeted areas.
Da Yang Shan Island. Dayang Shan (The Big Ocean Mountain) and Xiaoyang Shan (The Small Ocean Mountain) are little more than two small rocks peaking above ocean level, hardly enough to be called "islands." They are located 27 km off the coast of Lucaogang town on the northern coast of Hangzhou Bay, under the administration of Shanghai city. However, Dayang Shan itself is under the administration of Zhejiang province, along with the achipelagoes at the mouth of Hangzhou Bay in East China Sea. While Shanghai's port authority had good reasons for choosing this location seven years ago when the idea of building Shanghai's own deep sea port began, problems have already surfaced. The island's sites for deep sea ports only have a depth of 15 metres, enough to accommodate only the fifth and sixth generation container liners. However, the sea lane depth of only 12 m will certainly limit access of larger ships. Unlike Beilun, which has the large Daxie Island to shield it from the wind, Dayang Shan will have to brave the weather by itself, right in the middle of the Bay of Hangzhou.
While Shanghai grabbed the containers from the throat of Beilun in Yi-u, the provincial government of Zhejiang (with strong support from wealthy Ningbo businessmen) has moved forward to build up the high speed highways linking Hangzhou with Nanjing, Wuxi and Suzhou. For these cities, Beilun port, with the new bridge much nearer and faster than the alternative of going to Dayang Shan Island via the East China Sea Bridge, represents an attractive alternative.
As the construction of the two bridges proceeds, the true color of these two little dragons will continue to be unveiled before the eyes of 1.3 billion Chinese and the international business community.
It has been noted by some astronauts that, looking down at the earth from orbit, the only significant manmade construction visible is the Great Wall of China, a massive structure that snakes along for thousands of kilometers. In the future, perhaps, the two bridges will be a new sight from outer space.
While the Great Wall was built to keep the enemies of Chinese people out of the country, in reality it never really served such a purpose for China. Socially, however, the Great Wall still segregates "insiders" from "outsiders" among Chinese. The two new bridges may be seen in much the same way. They are being constructed - in theory - to link people together and contribute to economic integration. However, it appears that are actually built to exclude certain groups and to wall off the competition, consistent with the old Chinese saying: "Let not your fertile water flow into others' land."
The key question will be whether, as projected, the two bridges and their corresponding ports will really handle over 10 million containers per year, making them among the world's busiest container sea ports. Both Shanghai and Ningbo will certainly need a lot of container transportation businesses from others' land.
Chang Hong is a housing estate built by Chinese government exclusively for foreigners in the early 1990s. However, upon completion, it was found to be below acceptable standards; the estates were then marketed and sold to Chinese residents, mostly working in the field of education and science. "Chang Hong" consists of a block approximately 300-400 meters long separating the Shanghai Teachers Training University and a big cluster of schools, a market, and kindergartens. The thousands of families of the University faculty and staff grew accustomed to sending their children to school and shopping for daily food from the market.
However, the SARS scare (April-June 2002) led to policy changes, with all of the estates locking up their north gate facing the university for most of the day in order to reduce traffic and thus the possible of spread of the dread disease. During the same period, the university locked up its gate to maintain the separation between students and faculty and outsiders. After China was given a clean bill from SARS, however, the gates of Chang Hong estate remained locked, with guards on duty and a notice denying non-residents access. This policy has caused great inconvenience for students and parents, who must make a detour of more than half a kilometer to access the school clusters and the market. The property management company of Chang Hong hired lawyers to defend its decision.
Recently, I passed through the gate of the university (as I usually do, taking advantage of my appearance that can easily be taken as a "foreign teacher"), I noticed a board written in a rather crude handwriting (apparently from some angry detour-ers):
"University village is a private property, No Chang Hong residents or their dogs are allowed to enter."
The sign disappeared after a week.
Just as I was finishing this article, on the bus, I sat in the back watching a middle age lady and her grandson board the crowded bus with its onrushing crowd trying to squeeze in ahead of one another (see ** for a description of how people virtually tackle one another on public buses). In this particular instance, the old lady was not quite quick or nimble enough, and lost out in the squeezing match for the few available seats. Instead of being irritated at the crowd or the rude people who had out-elbowed hi grandmother, the young boy shouted in protest to his grey-haired grandma: "YOU let other get ahead of you again! Why let them get ahead of you again?"
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