While China has impressed the world with its 10-percent average annual growth rates over the last 10 years, Beijing, the country’s capital, has delivered growth normally one to two percentage points in excess of the national average. This equates roughly to doubling the size of the economy every seven years and tripling it every 11. (To put this into perspective, the current two percent growth rate in the United States and in Europe would require more than 30 years before doubling.)
As a result, Beijing has been an attractive investment destination for a long time, due both its impressive growth and power as the center of Chinese government. Going forward, however, both China’s central and municipal planners in Beijing have put an emphasis on quality over quantity. The national annual target growth rate for the next five years is set at seven percent and Beijing’s at 8 percent. Beijing is also aiming to grow the service industry to represent 78 percent of the economy by 2015.
The population in Beijing ranges from 12 million to 18 million, making it one of the top five most populated cities in the world. Wages in Beijing, while still low compared to developed countries, are some of the highest in the country. The average city wage was $650 per month in 2010. That said, there are considerable discrepancies between the migrant working class, the rising middle class and the nouveaux riche. To address China’s need for rebalancing, Beijing has increased its minimum wage by more than 20 percent in both 2010 and 2011 and has restructured its income tax regime in 2011 to benefit lower wage earners.
While the foreign population has been steadily growing, it only comprises about one-half percent of Beijing’s populous. Many foreigners are coming to Beijing to study and/or in hopes of finding gainful employment; however, the costs for hiring foreigners is increasing as employers, since October 15, 2011, are now obliged to make social security payments on their behalf. Furthermore, authorities are also tightly enforcing a minimum two-year overseas post-graduate work experience requirement before granting a work visa. Spouses of diplomats are also typically not allowed to work in China.
Not surprisingly, Beijing’s growth has come at the cost of environmental degradation and a new mix of ambient pollution, ensuring that the city remains on the list of the world’s more polluted cities. During the 2008 Olympics, Beijing demonstrated its capability of ensuring better air quality by taking such measures as moving heavy industries out and further away from the city. In 2010, Beijing was the first city in China to adopt the Euro IV emissions for vehicles. That said, pollution levels and air quality are a frequent source of conversation. While Beijing publically reports its own quality index, the U.S. Embassy’s monitoring station is considered to be the preferred source by expats and increasingly by more Chinese. What Beijing reports as “slightly polluted” is sometimes reported as “hazardous” by the U.S. Embassy.
Beijing’s recently released Five Year Plan has placed a heavy focus on meeting environmental goals. Of Beijing’s 15 compulsory macro-economic targets for the next five years, no less than 10 of these targets are environmental, including energy, carbon dioxide and waste water intensity targets, thus creating opportunities and demand for companies with advanced technology in this area.
The United States and Japan have the highest number of multinationals by revenue in the world, with 133 and 68 multinationals respectively according to the Fortune Global 500. China ranks third with 61 multinationals. However, within China, Beijing is home to 41 of these multinationals, making it the second largest multinational-headquartered city in the world after Tokyo with 47.
While Shanghai is recognized as the financial capital of China, Beijing is home to 10 of the 12 national banks and is also home to China’s three largest. Beijing aims to turn the Chaoyang Business District (CBD) into an international financial city by 2015. Currently, the district has 1,213 financial institutions, of which 252 are foreign entities.
Beijing is also one of the homes to China’s heavily speculated property market. Housing prices in China have tripled on average in the last five years. In Beijing, price-to-income ratios for real estate is 27 to one years, five times the international average. To control property speculation, the government requires as much as 50 percent down payment for second homes and has begun a pilot project introducing property taxes for the first time that will likely soon include Beijing.
At the same time, Beijing’s construction boom has allowed it to become a wonderland to some of the most innovative and daring architecture, including the National Olympic Stadium (the Bird’s Nest), the National Aquatics Centre (the Watercube), the National Theatre for the Performing Arts (the Egg) and the less affectionately nicknamed CCTV Tower (aka Big Underpants) to name a few.
In 2010, China became the world’s largest automobile market in terms of units sold. Despite the ever increasing number of ring roads around the city, transportation has become a bottleneck due to the more than four million vehicles on Beijing’s roads. Beijing officials have tried to resolve congestion by limiting the number of new car license plates, increasing parking fees and public transportation lanes during peak hours, and even creating no-drive days once a week for private vehicles. Beijing’s subway infrastructure is currently the world’s fastest-growing system. In 2000, Beijing had just two lines. Today it has 15 lines and nearly 200 stations. By 2015, Beijing is expected to have 19 lines and 660 kilometers of track, thus making it the world’s largest subway system.
China has the world’s largest high-speed train network in the world and is expected to have more high-speed rail track than the rest of the world combined by 2012. The Beijing-to-Shanghai line opened in the summer of 2011 and takes just over four hours.
Beijing now has the world’s second-busiest international airport. The city hosts five world cultural heritage sites: the Forbidden City, the Great Wall, Peking Man, the Temple of Heaven, the Summer Palace, and the Ming Tombs. In 2010, cultural industries contributed 2.78 percent to China’s GDP. The Chinese government has made cultural industries a strategic industry and expects this figure to rise to 5 percent by 2016. While tourists to Beijing continue to increase by roughly 20 percent per year, in 2010 outbound Chinese tourists surpassed inbound foreign tourists to China for the first time in modern China’s history.
Beijing is a city of contrasts, targets, changes, numbers, growth, power, people, history, and determination—all of which makes for an extremely fascinating experience and a distant point of reflection.
Adam Dunnett is the deputy manager director of APCO Worldwide’s Beijing office and the former general manager of the European Chamber in Beijing. He has lived in Beijing since 1999.
This article was originally published in the December 2011 Global Cities issue.
a global affairs media network
Beijing: A City of Numbers
January 13, 2012
While China has impressed the world with its 10-percent average annual growth rates over the last 10 years, Beijing, the country’s capital, has delivered growth normally one to two percentage points in excess of the national average. This equates roughly to doubling the size of the economy every seven years and tripling it every 11. (To put this into perspective, the current two percent growth rate in the United States and in Europe would require more than 30 years before doubling.)
As a result, Beijing has been an attractive investment destination for a long time, due both its impressive growth and power as the center of Chinese government. Going forward, however, both China’s central and municipal planners in Beijing have put an emphasis on quality over quantity. The national annual target growth rate for the next five years is set at seven percent and Beijing’s at 8 percent. Beijing is also aiming to grow the service industry to represent 78 percent of the economy by 2015.
The population in Beijing ranges from 12 million to 18 million, making it one of the top five most populated cities in the world. Wages in Beijing, while still low compared to developed countries, are some of the highest in the country. The average city wage was $650 per month in 2010. That said, there are considerable discrepancies between the migrant working class, the rising middle class and the nouveaux riche. To address China’s need for rebalancing, Beijing has increased its minimum wage by more than 20 percent in both 2010 and 2011 and has restructured its income tax regime in 2011 to benefit lower wage earners.
While the foreign population has been steadily growing, it only comprises about one-half percent of Beijing’s populous. Many foreigners are coming to Beijing to study and/or in hopes of finding gainful employment; however, the costs for hiring foreigners is increasing as employers, since October 15, 2011, are now obliged to make social security payments on their behalf. Furthermore, authorities are also tightly enforcing a minimum two-year overseas post-graduate work experience requirement before granting a work visa. Spouses of diplomats are also typically not allowed to work in China.
Not surprisingly, Beijing’s growth has come at the cost of environmental degradation and a new mix of ambient pollution, ensuring that the city remains on the list of the world’s more polluted cities. During the 2008 Olympics, Beijing demonstrated its capability of ensuring better air quality by taking such measures as moving heavy industries out and further away from the city. In 2010, Beijing was the first city in China to adopt the Euro IV emissions for vehicles. That said, pollution levels and air quality are a frequent source of conversation. While Beijing publically reports its own quality index, the U.S. Embassy’s monitoring station is considered to be the preferred source by expats and increasingly by more Chinese. What Beijing reports as “slightly polluted” is sometimes reported as “hazardous” by the U.S. Embassy.
Beijing’s recently released Five Year Plan has placed a heavy focus on meeting environmental goals. Of Beijing’s 15 compulsory macro-economic targets for the next five years, no less than 10 of these targets are environmental, including energy, carbon dioxide and waste water intensity targets, thus creating opportunities and demand for companies with advanced technology in this area.
The United States and Japan have the highest number of multinationals by revenue in the world, with 133 and 68 multinationals respectively according to the Fortune Global 500. China ranks third with 61 multinationals. However, within China, Beijing is home to 41 of these multinationals, making it the second largest multinational-headquartered city in the world after Tokyo with 47.
While Shanghai is recognized as the financial capital of China, Beijing is home to 10 of the 12 national banks and is also home to China’s three largest. Beijing aims to turn the Chaoyang Business District (CBD) into an international financial city by 2015. Currently, the district has 1,213 financial institutions, of which 252 are foreign entities.
Beijing is also one of the homes to China’s heavily speculated property market. Housing prices in China have tripled on average in the last five years. In Beijing, price-to-income ratios for real estate is 27 to one years, five times the international average. To control property speculation, the government requires as much as 50 percent down payment for second homes and has begun a pilot project introducing property taxes for the first time that will likely soon include Beijing.
At the same time, Beijing’s construction boom has allowed it to become a wonderland to some of the most innovative and daring architecture, including the National Olympic Stadium (the Bird’s Nest), the National Aquatics Centre (the Watercube), the National Theatre for the Performing Arts (the Egg) and the less affectionately nicknamed CCTV Tower (aka Big Underpants) to name a few.
In 2010, China became the world’s largest automobile market in terms of units sold. Despite the ever increasing number of ring roads around the city, transportation has become a bottleneck due to the more than four million vehicles on Beijing’s roads. Beijing officials have tried to resolve congestion by limiting the number of new car license plates, increasing parking fees and public transportation lanes during peak hours, and even creating no-drive days once a week for private vehicles. Beijing’s subway infrastructure is currently the world’s fastest-growing system. In 2000, Beijing had just two lines. Today it has 15 lines and nearly 200 stations. By 2015, Beijing is expected to have 19 lines and 660 kilometers of track, thus making it the world’s largest subway system.
China has the world’s largest high-speed train network in the world and is expected to have more high-speed rail track than the rest of the world combined by 2012. The Beijing-to-Shanghai line opened in the summer of 2011 and takes just over four hours.
Beijing now has the world’s second-busiest international airport. The city hosts five world cultural heritage sites: the Forbidden City, the Great Wall, Peking Man, the Temple of Heaven, the Summer Palace, and the Ming Tombs. In 2010, cultural industries contributed 2.78 percent to China’s GDP. The Chinese government has made cultural industries a strategic industry and expects this figure to rise to 5 percent by 2016. While tourists to Beijing continue to increase by roughly 20 percent per year, in 2010 outbound Chinese tourists surpassed inbound foreign tourists to China for the first time in modern China’s history.
Beijing is a city of contrasts, targets, changes, numbers, growth, power, people, history, and determination—all of which makes for an extremely fascinating experience and a distant point of reflection.
Adam Dunnett is the deputy manager director of APCO Worldwide’s Beijing office and the former general manager of the European Chamber in Beijing. He has lived in Beijing since 1999.
This article was originally published in the December 2011 Global Cities issue.
