2005-2006

The abstract of Annual Report on Urban Competitiveness (No.6)

“Blue Book of Chinese Urban Competitiveness 2008: Annual Report on Urban Competitiveness (No.6) " was issued in Beijing on March 28th, 2008.With Professor Ni Pengfei from the Institute of Finance and Trade Economics, CASS being the principal, this report is jointly finished by experts in the field of city competitiveness from the mainland, Hong Kong, Macao and Taiwan, including nearly one hundred experts from famous universities, national authoritative statistical departments and local scientific research institutes. The whole project lasted more than half a year. The rankings of Comprehensive and Sub Item Competitiveness are shown in the table below:

Table 1: Ranking of Comprehensive and Sub Item Competitiveness

2007 is a crucial year for the urbanization and development of cities in China.The urban development and competition showed new features, new trends, new lessons, new opportunities, new problems and new challenges. The report is divided into four parts, that is, quantitative study findings, case studies findings, theme study findings and retrospect and prospect of urban development in China.

Generally speaking, cities of large scale, population and high-level administration are obviously more competitive; core cities of economic circles are more competitive; the competitiveness of growth of small and medium-sized cities is strong.

From the perspective of locations, the number of cities belonging to different areas differs in the proportion of the top 50 cities. The southeast has the most cities that are in the top 50, followed by central China, Bohai coastal area, northeast and northwest.

From the perspective of stages, urban development can be divided into four stages, that is, pre-industrial stage, early-industrial stage, mid-industrial stage, late-industrial stage and post-industrial stage, according to the criteria of GDP per capita provided by "China's Industrialization Process Report–Research and Evaluation of Provincial Industrialization Level from 1995 to 2005”. According to the four stages plus resource-based (where the number of employees in extractive industries accounts for more than 10% of the employed population), then the 200 cities (including H.K., Macao, Taiwan) can be separated into five groups. The results showed that most cities are in the mid-, late- and post-industrial stages. In terms of growth indicator, the mid-industrial cities have outstanding performances, because these cities are undergoing transformation and rapid development. Resource-based cities are also growing fast due to their resource advantages.

City competitiveness is a chaotic system. After doing comparative and comprehensive analysis into the 210 kinds of subject and object data of the 52 relatively competitive cities from different aspects and levels, we found that of the 8 factors that impact on a city's comprehensive competitiveness, talent competitiveness, innovation environment competitiveness, corporation competitiveness are the most influential. The top 3 are followed by the living environment competitiveness and the public sector competitiveness which lie in the 4th and 5th place. And business environment, main industries and social environment stay at the 6th, 7th and 8th position.

Table 2: Top 10 Cities according to Comprehensive and Sub-Item Competitiveness

The second part of the report is case studies. It drew lessons from the practices of increasing competitiveness in some cities in recent years, and picked up 10 best cases. Dongguan: making the manufacture industry in township as the driving force to integrate urban and rural development; Shanghai: competing with international cities, being the regional leader; Liuzhou: Putting industry at the priority with its innovative transform. Qingdao: learning from others, developing performance management; Yangzhou: developing habitat and industry at the same time, keeping ecosystem and humanity in harmony forever; Hohhot: based on comparative advantages, promoting the overall development; Yiwu: carrying forward mercantilism, cultivating multiple cultures; Rizhao: improving market efficiency, ensuring fairness by monetary subsidies; Hefei: insisting market-orientation, encouraging high-tech innovation; Zhumadian: focusing on "three constructions", coordinating "peaceful rise ".

From the point of view of international competition, it is actually city groups or urban agglomerations that represent a country to take part in the international competition. City groups become a basic geographic unit by which a nation participant in global competition and international division of labor. And it has a profound impact on the development of the international competitiveness, the urbanization level and quality and the sustainability of national economic development of a country.

The report first reviewed the history and current situation of development of urban agglomeration in the world and made an in-depth analysis of the urban competitiveness. It sorted out 33 city groups in China such as the Yangtze Delta agglomeration, the Pearl River Delta agglomeration, Beijing-Tianjing-Hebei agglomeration, etc. According to China’s important railways, two major rivers, and coastal features, China can be divided  into nine major economic zones: coastal economic belt, the Beijing-Kowloon Economic belt, the Beijing-Guangzhou economic belt, Longhai-Lanxin economic belt, the Yangtze River economic belt, the Yellow River economic belt, the Beijing-Harbin economic belt, the Hubao-Baolan-Lanqing economic belt, and Nanning-Guiyang-Kunming economic belt.

After careful analysis of the 30 city groups' competitiveness indices and their rankings, the report came to the following conclusions:

 (1) The pattern of Chinese urban comprehensive competitiveness is: sharp regional differences, with eastern part being the most competitive, followed by northeastern and central parts, and the western region the weakest. The gap between the top three cities is small, but the trend of urban competitiveness polarization still exists.

(2) The city group’s comprehensive competitiveness is closely related with the competitiveness of growth.

(3) The three potential city groups: Hebei-Shandong-Henan agglomeration, Hubei-Henan agglomeration and Henan-Anhui agglomeration are worth cultivating. As can be seen from the table, although their ranking of overall competitiveness is relatively low, their ranking of congenital competitiveness is obviously higher than their overall competitiveness ranking. According to the mechanism of agglomeration formation stated in Chapter III, the three urban agglomerations are also worth planning and cultivating. They might become new city groups in the central part. As a densely populated Huang-Huai region, the rise of the three major city groups will contribute to China’s urbanization.

It is expected that in 2030, from the perspective of scale, urbanization rate will be above 65%, and the urban population will reach 10 million or so. The number of cities will amount to nearly 1,000, and the number of small cities and towns will reach between 1,500 and 20,000 with tens of thousands of residential centers. From the perspective of level: 1 top cosmopolitan city, 3-5 global cities, about 15 international cities, 50 national cities, and a large number of regional cities. From the perspective of location, the urban system can be expected like this: the eastern cities will be all connected closely together; those in the north-eastern and central parts will form some city belts; and those in the western part are distributed in groups or points.

9 major economic zones are formed based on the 33 city groups; 9 coastal city groups form the coastal city belt; the system of China’s city groups is taking the shape of 9 Chinese Dragons (9 economic zones) flying together and 33 diamonds beset (33 city groups) in series.

But the development of China’s city groups are confronted with many problems and challenges: 1, the overall scale is small, 2, core cities are relatively weak, 3, the structure of different levels is unbalanced, 4, the competition within a group is disordered, 5, resources and environment problems are getting serious, 6, the infrastructure is overlapped, 7, industries are inefficient and lack of diversity, 8, markets are seriously isolated, 9, the urban construction is imprudent, 10, transportation between each city is lagging behind.

Aiming to address these problems, the report put forward 4 strategic suggestions for the development of China’s city groups in the future:
1, work out the strategic plan for the development of China’s city groups before 2030;
2, reform systems and policies on household registration, finance, land, social security and market supervision in order to promote the free flow of factors of production( such as labors, capital, technology and so on), goods and services between regions and city groups, and ensure that they are open to each other. Then the institutional framework of China’s city groups will be innovated;
3, China's policy framework for city groups must be established based on the financial, fiscal, industrial and land situation;
4, a new framework of managing China’s city groups should be like this: relevant institutions are set up at the central government level to direct the management of city groups; the Deputy Prime Minister or state councilors are in the leadership; relevant departments of the central government participate in the management together.