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 The plans, expected to be considered by Cabinet on Wednesday, will
be the first time that standards for customs, tax, pollution and
industry have been unified across local government areas, the
sources say.
Combining bloated Beijing, the smog black spot of Hebei province and
the port city of Tianjin will create a region with a population of
110 million and an economy the size of Indonesia's in a move that
encapsulates President Xi Jinping's ambition to overhaul the world's
second-largest economy.
By challenging the power of local leaders, Xi wants to produce
better allocations of wealth and investment, and get an
environmental dividend.
Academics involved in the policy discussions said the government
wants to improve the "layout" of the region by shifting industries
such as car manufacturing and chemicals out of the capital, giving
polluted Hebei an incentive to clean up and congested Beijing the
breathing space it needs.
The integration will be driven by unified customs regulations,
social service provisions, industrial standards and environmental
rules across the three local governments, as well as cross-regional
markets for labor, resources and investment, researchers and
officials involved in drawing up the plans said.
They say China's "every region for itself" approach to economic
growth is a cause of a wide variety of problems, including over
investment, pollution and corruption.
"Right now, every official will think of his own region first - from
the construction of projects to investment," said Zhang Gui,
deputy-director at the Centre of Beijing-Hebei-Tianjin Development
Research at the Hebei Technology University.
"Officials think this is 'our money' that belongs to 'our region',
and they are not going to think about investing Beijing's money in
Hebei or vice versa - this is quite a normal way of thinking," he
said.
MANUFACTURING UNITY
Hebei, after years of defying central government edicts on issues
such as industrial overcapacity, has been the prime target of a
campaign to smash "fortress economies" and put an end to the growth
fixations of local bureaucrats.
China has 34 provincial-level governments, including those that run
the cities of Beijing, Tianjin and Shanghai.
"Breaking down these administrative barriers needs to be planned and
coordinated by the central government - we cannot be selfish because
that will hurt everyone," Qin Boyong, the vice-governor of Hebei,
said in Beijing in mid-June.
"Regional competition is normal, but if you ignore one's own
conditions, the comparative advantages are wasted," he said.
Unlike the Yangtze River or Pearl River deltas, cross-regional
cultural and economic ties in Beijing, Hebei and Tianjin are
effectively being created from scratch, said Zhang of Hebei
Technology University.
"The biggest challenge, one that will take years to overcome, is the
formation of a unified, effective, lively regional market -- that's
what integration means," he said.
The relocation of industries, already taking place, will help better
distribute the spoils of growth. A number of car and chemical plants
are scheduled to move, including those belonging to the Beijing
Automotive Group, which said earlier this year that it was moving
its plants to the city of Huanghua.
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Zhang said the eventual aim was to move all of Beijing's
"non-capital functions", including all primary and secondary
industries, out to Hebei.
Xiao Jincheng, researcher with the Regional Economy Research
Institute at China's National Development and Reform Commission (NDRC),
said the rapid growth of Beijing has not spilled over into Hebei,
with the capital's per-capita income now more than double that of
its neighbor.
"That there are so many poverty-stricken people on the outskirts of
such big cities is outrageous - the surrounding regions of big
cities are normally highly developed," he said at a conference in
the steel making city of Tangshan in June.
"BIG CITY SYNDROME"
For Beijing residents, the payoff of spreading their wealth would be
some relief from what policymakers call the "Big City Syndrome",
where its drive to be all things to everyone has generated a
congested, chaotic, polluted industrial metropolis.
"People have always said Beijing is absorbing too much resources and
attracting too much of the flow of people and energy, and other
regions have not benefited enough," said Wang Tao, climate and
energy researcher at the Carnegie-Tsinghua Center for Global Policy.
Beijing's addiction to industrial growth has seen its output rise
sixfold and its population soar by two-thirds in 14 years.
The plan would not only shift Beijing's industry and some of its
government functions, but could also involve the relocation of as
many as 5 million residents, according to local media reports citing
Beijing government officials.
"The Beijing municipality has limited space and resources but it
enjoys advantages in high-tech industries and in scientific research
and development," said Yu Jianhua, head of the air pollution office
at Beijing's Environmental Protection Bureau.
"If we can keep the design functions of these industries in Beijing
and distribute the specific aspects of the sector in spacious areas
in Tianjin and Hebei, such an integrated approach will contribute
towards the improvement of our economic structure as well as air
quality," he said.
(Editing by John Mair)
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