The Hindu Business Line : Urban planning: The Chinese way

China’s roads, with scores of flyovers, the well-maintained gardens along the highways, rows of multi-storey blocks to house those displaced from land taken over for industries, Special Economic Zones and the disciplined way the people go about their their daily chores keeping in mind the collective needs of society, are something India cannot hope to attain even in the next 50 years.

Not only Beijing, but Shanghai, the business capital, and several smaller metros such as Chengdu in the west, bordering Tibet, Nanjing, the old capital, and Chengzou located in Wanju, one of the largest industrial districts, boasting of no less than 95,000 SMEs (small and medium enterprises), display a pace and scale of construction activity that has to be seen to be believed. Beijing itself is in the midst of a vast construction boom to prepare it for the Olympics due next year and its metro system is adding the fourth line while master plans are on to reach 13 lines!

Like the 5,000-km long Great Wall of China, perhaps one of the largest civil engineering projects, the nation seems to be in the grip of a vast construction boom unparalleled in its illustrious history. A random visit to any city in China would reveal the skyline dotted with tower cranes busy building multi-storey structures, with a never-ending string of road projects, all along the highways!

Where is the money coming from?

What is fuelling this growth? How deep are the Chinese pockets? Will this dizzying pace ever slow down? Setting up world-class infrastructure also needs tonnes of cash to finance it. Where has all the money come from and how long will this bonanza last?

About 50-55 million non- resident Chinese (NRC) last year invested about $70 billion into China, Hong Kong and Macau. Compared to this, 20-25 million non-resident Indians contributed a measly $0.2 billion. Though they are perhaps richer as a group than the NRC, they like to spend their hard-earned money hoarding gold (India imports annually nearly $8-10 billion worth of gold) and, of course, investing in the booming real-estate sector in India, so that they can return whenever they have had enough of life abroad!

However, for China, it has not been a smooth path to economic growth. Ever since Mao Tse Ttung and his Communist Party of China took over power in 1949, there have been quite a few disastrous attempts to boost the economy. The much-publicised ‘giant leap’ of the early 1970s, when attempts were made to increase steel production by setting up inefficient smoke-belching foundries in the rural areas, more or less as a cottage industry, proved to be a disaster.

It was only in the late 1970s that real economic reforms in the form of a free-market economy was introduced. Following the Tiananmen Square mass demonstrations in 1989, Deng Xiao Peng set in motion his famous socialist market economy growth juggernaut. At that time, Margaret Thatcher, who was at the height of power, is reported to have commented that there is no such animal as a ‘socialist market economy’. Of course, subsequent to her stepping down as the Prime Minister, on one of her talking tours in East Asia, she had to admit that she was wrong since the Chinese economy had really taken off !

The economy

China’s economic engine has been running in top gear for much of the last two decades. Its GDP is growing at an average 10 per cent a year. Industrial production is speeding ahead at an annual rate of 17 per cent. China’s economy is now the second-biggest in the world, next only to the US.

Since the adoption of its four pillars of modernisation — agriculture, industry, science and technology, and Defence — China’s share of world economic output has grown from 3.4 per cent to almost 12 per cent in 2000. In order to sustain its construction boom, China is consuming and importing at a frantic pace. It is now the world’s biggest consumer of copper and aluminium, and reportedly half the world’s cement and nearly 20 per cent of steel production is destined for China to fuel its booming economy.

As has happened in India, over the last couple of decades, China’s economic transformation has helped to create a large middle-class. Once again, as in India, China’s wages too have risen, but still remain well below those in the rest of the industrialised world, which keeps their goods competitively priced and allows it to make major inroads into Europe and the US.

The one-party system may discourage dissension and airing of varying points of view, but on the plus side, once a course of action is set, things do happen. Unfortunately, with coalition politics, a price India has to pay for being called the world’s largest democracy, it is unlikely that we can achieve anything on this scale in the same time-frame.

Transforming villages

In the past two years or so, cities across China have announced plans to ‘transform’ the so-called “villages within cities” , by constructing multi-storey buildings. Beijing faces a particularly tight deadline because of the Olympics in August 2008, and the aim is to “renovate” 171 urban villages by the end of this year. Between 2005, when the campaign was launched, and the end of last year, 114 villages were thus transformed.

Master plan

What particularly strikes any visitor to China is not only the scale of the construction activity but the fact that it has been neatly dovetailed, with the demolition process also being undertaken, as per the broad master plan for urban renewal. The all-powerful central planning body does not tolerate piecemeal or slipshod planning, which can be changed midway to meet populist demands!

(The author is a former Member — Mechanical — Railway Board.)

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