Leaders in China hope to transform a wasteland that used to be dotted with salt farms and reed marshes into the next growth engine of the world’s second-largest economy.
Since opening up to the world in the late 1970s, China has developed Shenzen special zone in 1980s and the Shanghai Pudong New Area in the 1990s.
Today, China hopes that a new district called Binhai New Area would “become the third economic powerhouse in the 21st century …,” according to a promotional video produced by the Tianjin local government.
Tianjin, which means “port of the emperor,” was first opened to Westerners in 1860 as a trading area, according to the local government website. The source added that by 1930, Tianjin had become the largest commercial and financial center in northern China.
Chinese officials said that when emperors ruled China, foreigners were forbidden to live in Beijing. So instead, the foreigners settled in Tianjin.
In the 1990s, the local government decided to develop the Tianjin Binhai New Area. By 2006, the project was supported by the State Council as a state-level pilot area.
Modern gateway
China aims to make Tianjin Binhai New Area a gateway to the country, “a grade-A modern base of manufacturing, R&D and incubation [hub] as well as shipping and logistics center of North China,” according to the local government video.
To date, the area has established eight “pillar industries” that include aviation and aerospace, electronic information, oil and chemicals, automobile and equipment manufacturing, modern metallurgy, bio-pharmaceuticals, new energy and materials, and light industry and textiles, the video added.
“Binhai New Area enjoys rich natural resources,” according to the promotional video. “There is over 1,000 square kilometres of wasteland to be developed, over 10 billion tons of oil, and more than 190 cubic meters [of] natural gas in Bohai Sea, to be explored.”
To date, China has committed to invest 1.5 trillion yuan in the new district.
The infrastructure projects built in the district include an international airport, which is the biggest cargo airport in northern China; and the Tianjin Port, which is the fifth-largest seaport. There is also a high-speed train connecting Tianjin to Beijing, which is 137 kilometers to the northwest.
China’s efforts seem to be paying off, attracting a number of investors including Airbus, Siemens, Motorola and Toyota – in total, 120 Fortune 500 companies so far. In 2010, foreign direct investments in the district reached $7.04 billion, an increase of more than 25 percent.
Also, the new district has already hosted international conventions, like the Summer Davos Forum, the China-Arab Forum, and the Eco-city Forum.
When Premier Wen Jiabao visited Binhai New Area in 2010, he ordered that the district be made into “a concentration area for high-end industry, a leading area for technological innovation, a demonstration area for ecological development, a pilot area for development and opening-up, [and] and example area for a harmonious society,” the promotional video said.
By 2015, Chinese officials predict that the new area’s gross domestic product (GDP) would reach $1 trillion, and by 2020, $2 trillion. GDP, a key economic indicator, is the total cost of all final goods and services produced in a year.
It remains to be seen, though, how the new district and other areas in China would weather the looming real-estate bubble.
In a recent column by Robert Samuelson of the Washington Post Writers Group, he wrote, “The danger from China is a collapsing real estate ‘bubble’ that, if it occurred, would result in bankruptcies of developers, loan losses to banks, and slower economic growth.”
And earlier this week, Xinhua New Agency reported that some Western analysts including Nobel Laureate Paul Krugman have warned of a possible crash of the Chinese economy soon.
“They claimed that slowing growth and declining stock and commodity prices were signals that the country’s property bubble was set to burst,” Xinhua added.
But Xinhua also reported, “Such warnings, however, are simply far-fetched and do not reflect the reality of China’s economy.”
An undetermined number of commercial and residential buildings have been constructed in the Binhai New Area, and even more construction projects are underway. But few buildings that were shown to visiting journalists in December 2011 were actually empty – save for large scale models featuring the development plans for the district.
