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pp:1219ðcol:fig::4ÞED:R:Padmaja

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Habitat International ] (]]]]) ]]]–]]]

0197-3975/$ -

doi:10.1016/j.

�CorresponE-mail add

1Terms of g

used as a com

www.elsevier.com/locate/habitatint

FState policy and the globalization of Beijing: emerging themes

Yehua Dennis Wei, Danlin Yu�

Department of Geography, University of Wisconsin––Milwaukee, Milwaukee, Wisconsin 53201, USA

O

ECTED PROAbstract

An emerging body of work has attempted to capture the formation and functions of the emerging globalcities in Asia to add a new dimension to the global city literature. With economic reforms and open doorpolicy, Chinese cities have become more and more integrated with the global economy and the global urbanhierarchy, spearheaded by Shanghai, Beijing, and Guangzhou. This paper analyzes the salient features ofemerging global cities in China and highlights the role of the state in globalizing Chinese cities. We examinethe efforts of Beijing to make itself into a global city: attracting foreign investment, building a world-classcentral business district (CBD), constructing Zhongguancun as ‘‘China’s Silicon Valley,’’ and preparing forthe 2008 Olympic Games. These themes are state-directed and involve many aspects of globalizing the city,which testifies to the difference in the process and mechanisms of the globalization in Chinese cities fromtheir counterparts in the developed countries.r 2004 Published by Elsevier Ltd.

Keywords: Globalization; Global cities; Globalizing cities; Beijing

R

CORIntroduction

An extensive body of literature has dealt with the impact of globalization on cities and theformation and functions of global/world cities (e.g., Friedmann, 1986; Sassen, 1991; Short & Kim,1999) .1 However, as many have criticized, the global city discourse is derived out of empirical

UN

see front matter r 2004 Published by Elsevier Ltd.

habitatint.2004.10.002

ding author. Tel.:+1 414 229 3943; fax: +1 414 229 3981.

ress: danlinyu@uwm.edu (D. Yu).

lobal city and world city have been used interchangeably (see Hill & Kim, 2000). The term ‘global city’ is

mon term, following the recent trend in the literature (e.g., Olds & Yeung, 2004; Scott, 2001).

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studies of a few major cities in developed countries, and focuses on the characteristics of and theprocesses creating those global cities (e.g., Hill & Kim, 2000; Wei & Jia, 2003; Olds & Yeung,2004). The process of global city formation, especially the globalization of cities in developingcountries, remains under-studied. More recent work has begun to investigate emerging globalcities and globalizing cities, and critically evaluate the global city literature. The global cityliterature has been expanded from Europe and North America to developing countries, especiallyemerging global cities in Asia, such as Shanghai, Hong Kong, Singapore, and Seoul (e.g., Wu,2000; Yusuf & Wu, 2002; Olds & Yeung, 2004).Beijing has recently announced ambitious measures to make the city a top global city, and has

been undergoing dramatic transformation. Scholarly research on Chinese cities has focused on theglobalization of Shanghai (e.g., Wu, 2000; Yusuf & Wu, 2002; Walcott, 2002), while the efforts ofBeijing are rarely investigated. This paper analyzes the transformation of Beijing and its recentefforts to globalize the city. The paper begins with an overview of the development process andreform in Beijing. This is followed by an analysis of four emerging themes in globalizing Beijing:attracting foreign investment, building a world-class central business district (CBD), constructingZhongguancun as ‘‘China’s Silicon Valley,’’ and preparing for the 2008 Olympic Games. Thepaper also discusses Beijing’s problems and challenges. The global city formation in Beijing isanalyzed, highlighting the efforts of the state in the process of globalization, to broaden theliterature on global cities and emerging global cities in Asia.

UNCORRECTEDGlobal cities, emerging global cities, and Chinese cities

The global city has become a popular term widely accepted in geography, urban studies, andother related disciplines. Global cities are settings for globalization and the global–local interface,basing points of transnational corporations (TNCs), and command centers of the global economy(Friedmann, 1986; Knox & Taylor, 1995; Sassen, 1991). They are symbolized by the concentrationof TNC headquarters, the lifestyle of the rich and the famous, and glorious skylines. A global citystatus has become a goal pursued by many metropolitan governments in developing countries.The global city discourse has also generated heated debates. First, it is overly dependent upon a

theoretically globalist perspective derived out of studies of a few hyper-global cities, particularlyNew York, London, and Tokyo (Smith, 2001; Olds & Yeung, 2004). Many other global cities oremerging global cities have not been fully studied. Moreover, even these hyper-global cities arenot without divergence. Asian global cities have some unique features different from those in theWestern countries (Hill & Kim, 2000).Second, studies of global cities have focused on the ranking of cities within the global urban

hierarchy, with an Anglo-American bias (Godfrey & Zhou, 1999). As Olds and Yeung (2004)argue, there remain many unanswered questions about how global cities have ‘‘come into being,’’and what is the role of the state in intentionally deriving pathways to global city formation.Third, recent work on globalization and the city has shifted from a globalist view, which tends

to argue that globalization produces a world city system that transcends national institutions,politics and culture, to a more globalized view, which argues that globalization is embeddedgeographically, and works within national/local contexts. National institutions and local milieumatter, and sometimes even determine the process of globalization.

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Lastly, the function of the state varies geographically, and in Asia, governments play a criticalrole in globalizing their cities. Primarily stimulated by the global cities’ association with powerand wealth, becoming a global city is a goal sought by many governments in Asia. Singapore,Seoul, Taipei, Hong Kong, Shanghai, and Beijing have implemented a series of policies to remaketheir cities into global cities. Hill and Kim (2000) pointed out that Tokyo and Seoul are differentfrom global cities like New York and London, mainly because of the state functions. ‘‘Theeconomic base, spatial organization and social structure of the world’s major cities are stronglyinfluenced by the national development model and regional context in which each city isembedded’’ (Hill & Kim, 2000, p. 2188).Beijing is an emerging global city, or a globalizing city, not yet a hyper-global city. Firstly,

emerging global cities are global cities of tomorrow, and are striving to become global cities. Astudy of the process, often led by the state, might provide insights on global city formation,instead of simply asserting global cities are products of economic globalization (Olds & Yeung,2004). Secondly, they currently serve as regional nodes of global–local interface; their influenceand reputation are regional, and usually situated in the third or fourth tiers of the global urbanhierarchy (Friedmann, 1986; Taylor, 2003). Thirdly, global competition forces emerging globalcities to gain significant resources from their home countries as well as multilateral institutions.They depend much more on inward flows of foreign capital, global elites, and global businessservices, and act as hosts for inward investment, as well as regional nodes in the global economy.Lastly, while global cities compete globally, emerging global cities might face more competitionswithin the home country, both in gaining support from the home country and in attracting moreinflows from the global economy. The nation-state often plays a significant role in resourceallocation and regulatory changes in developing the most promising cities into global cities.The globalization process in leading Chinese cities well reflects such trends. This article focuses

on the process of globalization in Beijing, especially the significant role of the state. Beijing, likeSeoul and Tokyo, is also a society strikingly at odds with Western liberalism. The state in Chinaused to have mighty power in controlling, planning, and guiding urban development. Althoughthe reform promotes marketization (Wei, 2000), the state is still a key factor influencingglobalization and the development trajectory of Chinese cities like Beijing. As the capital of thenation, the contradiction of conservatists and reformers is well reflected in the process of the city’stransformation. Through an analysis of the process of development and globalization in Beijing,the paper illustrates the state initiatives to globalize the city. This will add to the understanding ofthe global city formation, enrich the conceptual framework for studying emerging global cities,and add more substance to the global city literature.

C

UNBeijing: development process and reform policy

Located in North China, Beijing neighbors the Hebei Province and Tianjin Municipality (Fig.1). In 2002, it was composed of 16 districts and 2 counties, with a total land area of 16,808 km2.The total registered population was 14.95 million, of which, 9.45 million lived in the urban andinner-suburban areas (Table 1, Fig. 1) (Beijing Statistical Bureau (BSB), 2003). The developmentand globalization of Beijing has a deep root in its history and political position. The city has about

ECTED PROOF

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@Inner Suburb

OuterSuburb

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ETDZ: Economic - Technological Development Zone

Labels:HR: Huairou District MY: Miyun CountryYQ: Yangqing CountryPG: Pinggu DistrictCP: Changping DistrictSY: Shunyi DistrictMTG: Mentougou DistrictHD: Haidian DistrictCY: Chaoyan DistrictTZ: Tongzhou DistrictCC: City CoreSJS: Shijingshan DistrictFS: Fangshan DistrictFT: Fengtai DistrictDX: Daxing District

Country

M T G

F S

Hebei

Tianjin

Hebei

Country

Fig. 1. The location of Beijing.

Table 1

Population in Beijing in 2002 (in million)

Total population Permanent residents Temporary residents

Beijing 14.95 11.36 3.59

Urban core 2.86 2.41 0.45

Inner suburb 6.59 4.49 2.10

Outer suburb 4.78 3.78 1.00

Counties 0.72 0.69 0.03

Source: BSB (2003).

Y.D. Wei, D. Yu / Habitat International ] (]]]]) ]]]–]]]4

UNCORR3000 years of recorded history and also has been, with but a few interludes, China’s capital sincethe 13th Century (Hook, 1998).The spatial structure of the city conforms to the Chinese cosmology and geomancy: street

networks and monumental architecture were aligned with the cardinal directions, and massivecrenellated walls bounded most of the site (Gaubatz, 1995). The physical building structure alsoreflects the feudal ideology that the emperor is at the center of the universe. The Forbidden City,where the emperors lived, is surrounded by the heaven, earth, sun and moon altars. This patterndates back to the Ming dynasty (1368–1644 AD), and remained nearly unchanged until the lateQing Dynasty (late 1800 AD). The city was rarely challenged by the outside world and served asthe absolute power center of the nation.However, the Opium War in 1840 and the following Western invasions forced Beijing to open

its doors to the West. It became a semi-colonial city, as well as an international city (Hook, 1998).Many new Western-style buildings and institutions were established, such as embassies, churches,hospitals, banks, and schools. The areas east to the Front Gate of the Forbidden City (currently

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the Embassy District) were mainly controlled by the Westerners. The railway system wasintroduced into the city, and sparse modern industries were established as well. As a politicalcenter, Beijing was not a typical site for trade and economic growth. The city does not have acoastline, making it a less favorite site for modern industrialization than coastal cities such asTianjin, Shanghai, Guangzhou, and Hong Kong, which were first opened as treaty ports byWestern forces. Beijing was an arena for political struggle and negotiations instead of aneconomic or industrialized locale.When the Communist Party took control of Beijing in 1949, the city was in a state of decay. The

establishment of the new Republic with its capital in Beijing infused new energy into the city’sdevelopment. Following the central government’s guidelines, the municipal government set upBeijing Urban Planning Commission in 1949 to redevelop the inner city, and transform Beijingfrom a capitalist ‘‘consumer city’’ into a socialist ‘‘productive city’’ (Lo, 1987). In 1952, Beijingwas among the key cities targeted for new industrial initiatives, even though they conflicted withBeijing’s historical role as a political and cultural center. Massive investment went to Beijing,which quickly strengthened the city’s industrial base. From 1949 to 1978, the city recorded thefastest industrial growth among its peers, with the gross industrial output increasing 171 times.Beijing quickly emerged as one of China’s most important industrial bases, joining the list ofleading industrial cities such as Shanghai and Tianjin. On the other hand, under the influence ofthe self-reliance policy, Beijing had virtually no economic interactions with the global economy,although in the early 1970s, with the normalization of China–US relations, the city cautiouslystarted trade with the West. However, the trifle of international trade had little impact on thecity’s economy.The situation did not change much in the first decade of the reform, since the reform focused on

rural areas and provinces in South China. The industrial ownership structure was domestic-oriented and heavily controlled by the state. Even in 1990, the output of the state-owned-enterprises (SOEs) and collective-owned enterprises (COEs) still accounted for 62.7% and 17.2%of the total gross industrial output, respectively (Table 2). In addition, the intensive developmentof heavy industry in the pre-reform era placed a heavy burden on the urban environment andinfrastructure, and prevented the city from adjusting its economic structure easily. As the capital

UNCORRTable 2

Major indicators of economic development and globalization in Beijing

Year Gross industrial output

(billion yuan)

State-owned

enterprises (%)

Collectively

owned

enterprises (%)

Other

enterprises

(%)

Foreign direct

investment (US$

million)*

Foreign tourists

(in thousands)

1979 21.34 83.5 16.5 0.00 — 252

1980 23.43 81.8 18.1 0.01 — 286

1985 32.42 76.7 21.4 1.90 — —

1990 74.34 62.7 17.2 20.1 276.96 1001

1995 166.54 52.7 21.1 26.2 1402.77 2069

2000 277.42 28.7 9.5 61.8 2458.49 2821

2001 309.64 27.9 4.8 68.2 1768.16 2858

2002 338.31 18.9 4.2 76.9 1792.57 3104

Source: BSB (2003).

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of the nation, the central government treated Beijing with high precaution during the reform.Beijing’s overall position in the nation, as depicted by the location quotient of GDP per capita,2

declined from 3.51 in 1978 to 3.38 in 1990 (Yu & Wei, 2003).China deepened the reform during the 1990s to develop a ‘‘socialist market economy,’’ and

preferential policies were expanded beyond the open coastal cities (OCCs). Pushed by the reform,Beijing embarked on a more radical market transition and better integration within the globaleconomy. During the early 1990s, the focus of the reform was on the troubling SOEs. In late 1991,aiming at establishing more market-oriented modern enterprises, Beijing’s municipal governmentintensified enterprise reform. The reform focused on changing the institutional structure of theenterprises from government-responsibility to enterprise-responsibility, and from state-ownershipto multiple-ownership. Originally controlled by government departments, the enterprises began tosign contracts of responsibility with their government departments. The government wasparticularly interested in attracting multiple investors, including foreign investors, to infusecapital and introduce modern management systems into SOEs. By the end of 1992, 70% of thelarge and medium-sized SOEs had signed agreements with various departments of the municipalgovernment, and had been transformed into shareholding enterprises, which improvedproductivity and competitiveness considerably.Besides reforming SOEs, Beijing started to notice the achievement of the hyper global cities,

and realized the need to compete globally and join the list of the elite cities. In the early 1990s,Beijing proposed to develop the city into a global city. Beijing’s Master Plan 1992 (for the1991–2010 period) announced that Beijing should not only be the political and cultural center ofChina, but a first-class, modern global city (Beijing Institute of Urban Planning and Design(BIUPD), 1992). Scholars in China also promoted Beijing’s globalization strategies and arguedfor the benefits of Beijing as a global city (e.g., Yang & Li, 2000; Zhou, 2000). The efforts of thestate in globalizing Beijing intensified in the mid-1990s. Interviews with various scholars andBeijing municipal government officials confirmed our postulation that globalizing Beijing is aheavy state-involved process. The statement by Professor Hanying Mao in Institute ofGeographical Sciences and Natural Resources during our interview in summer 2003 reflects theposition of many scholars in China:‘‘yBeijing is developing towards a global cityybased on myexperiences of Beijing, Shanghai and Hong Kong, I would say Beijing has been catching up duringthe last decade. The city has the resources and the potential, but most importantly, thegovernment sees the benefits of a globalized Beijing. Not only has the municipal government seenthis, but the central government as well.’’In the following sections, we detail the efforts of the state to globalize Beijing via four major

themes: the open door policy and foreign investment, the construction of the CBD, thedevelopment of Zhongguancun Science Park, and the preparation for the 2008 Olympic Games.While Beijing’s efforts to globalize the city have many dimensions, these themes are directly

U2The location quotient (LQ) for GDP per capita is calculated as

LQi ¼xi=

Pxi

yi=P

yi

;

where xi is the ith province’s GDP per capita, and yi is its population. It is actually a quantity measuring the average

position of a province (or municipality)’s GDP per capita in respect to its population.

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related to the notion of transforming Beijing into a global city, and well represent the efforts of thestate in globalizing Beijing.

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The open door policy and foreign investment

Attracting foreign investment is a major effort of developing countries to integrate with theglobal economy and capitalize from globalization. For emerging global cities, foreign investmentprovides the capital needed to finance economic and infrastructure development. Since the reform,the Chinese government has implemented the open door policy to enhance foreign investment andtrade. Beijing is a latecomer to the open door policy, as evidenced by Table 2, but has madetremendous efforts to attract foreign investment and globalize the city. Although the inflow offoreign direct investment (FDI) fluctuates somewhat during 2000–2002, foreign tourists havetripled since 1990 (Table 2). An Assistant Mayor in Beijing whom we interviewed in summer 2002indicate that ‘‘we did a lot of job to create an image of Beijing not only as a ‘political capital’ ofChina, but a potential ‘goldmine’ of business locale for the world’s businessmen.’’In 1993, the municipal government established the Foreign Investment Utilization Office, which

acted as the agency to attract and coordinate various channels for foreign investment. FDI inBeijing jumped from US$244.8 million in 1991 to US$349.8 million in 1992 to US$666.9 million in1993, a dramatic increase. In February 1995, the central government granted Beijing the samepolicy package as the OCCs, and approved the establishment of foreign financial institutions inthe city. In April 1995, the National Foreign Trade Commission approved the expansion ofBeijing’s high-tech-industry experiment zone, followed by granting a series of preferential policies.Policies towards development zones and industrial parks are much more preferential than other

commercial areas. In addition, the government increasingly invested in the infrastructure of thesezones/parks to improve the investment environment. By 2000, there were 30 development zones(including industrial parks) operating in Beijing, with a total land area of 48.4 km2, and anaccumulative registered capital of 71.7 billion yuan (approximately US$ 9 billion). Among them, 5zones are directly under control of the central government, and 10 zones by the municipalgovernment. Fixed asset investment in various development zones increased from 1.65 billionyuan in 1993 to 10.8 billion yuan in 2000, an average annual growth rate of 30.8%. In 2002, FDIin Beijing was US$1.79 billion, surpassing Tianjin (US$1.58), although it was still less thanShanghai (US$4.27) (State Statistic Bureau (SSB), 2003). By 2002, there were 9172 foreign-invested enterprises in operation, with total foreign capital of US$17.89 billion. Table 3 is asummary of foreign investment in major development zones, led by Wangfujing CommercialZone and Beijing Economic-Technological Development Zone (ETDZ) (Fig. 1).The municipal government has been making great efforts to attract TNCs, and establish

investment and trade relations with many foreign countries. The regional sources of FDIexpanded gradually from Hong Kong and Taiwan to other countries, especially Japan, NorthAmerica, and Western Europe. By the end of 2002, more than 90 countries and regions hadinvestments in Beijing. Hong Kong, Japan, and the United States are major sources of FDI, andtogether they accounted for 53.8% of the FDI in 2002 (Fig. 2). More than two-thirds of thecompanies in the development zones are foreign companies, including world-class TNCs, such asMotorola, Sony, Panasonic, Citizen, Airbus, and Ericsson.

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Fig. 2. Country/regional sources of FDI in Beijing, 2002. Source: BSB (2003).

Table 3

Investments in major development zones, 2002

Development zones Total accumulated

investment (million yuan)

Accumulated foreign

direct investment

(US$ million)

Percentage of FDI on

total investment (%)

Wangfujing commercial zone 28522.88 1510.53 44.0

Beijing economic & technology

development zone (ETDZ)

35583.93 1308.25 30.5

Tianzu airport development zone 10017.95 311.57 25.8

Zhongguancun High-Tech

Park––Changping

9830.00 120.00 10.1

Zhongguancun High-Tech

Park––Fengtai

16934.25 163.73 8.0

Source: BSB (2003).

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UNCOThe political capital function of Beijing has made it a favored place for foreign embassies, andregional headquarters and representative offices of TNCs, with increasing FDI in finance,banking, and other services. Compared with Shanghai, Beijing has much fewer foreign-ownedbank branches, and more foreign representative offices (Zhao, Zhang, Li, & Wang, 2004).3 Mostglobal marketers and fast food chains have established their ventures in Beijing. The municipalityhas a large number of foreign specialty stores, restaurants, nightclubs, and like Shanghai, it is wellrepresented by world-class hotels (Wei, Leung, & Luo, 2004).

3An assistant director of the representative office of a major TNC interviewed reported that the major functions of

the office are to network with the central government and to host the visitors from the parent firm.

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Foreign trade has become an important source of economic growth, another indicator ofBeijing’s integration into the global economy. The city’s gross export value accounted for 27.7%of the GDP in 1996, which increased to 40% in 2000 and 32.6% in 2002. The contribution ofexports to industrial growth also increased from 10% in 1992 to 33% in 2002. The city is muchmore integrated with the global economy, and has made tremendous progress in attracting FDI,foreign political and cultural institutions, and regional headquarters and representative offices ofTNCs. Beijing, however, faces direct competition from its southern peers, represented byShanghai, Tianjin, Hong Kong, and Guangzhou. Shanghai is favored by foreign-owned bankbranches, and Taiwanese investors, who tend to keep low profiles, do not favor politicallysensitive cities like Beijing.

F

ECTED PROOInfrastructure investment and Beijing’s CBD

Infrastructure investment is a major theme of Beijing’s efforts towards globalization and urbantransformation. Before the reform, like other cities under state socialism, Beijing ignoredinfrastructure investment while emphasizing industrialization. The effects of urban growth andthe relaxation of the household registration (Hukou) system in the late 1990s stimulated urbanpopulation growth and exacerbated the shortage of urban infrastructure. Insufficiency of urbaninfrastructure was often mentioned in government’s reports and has always been considered oneof the major tasks of the government. Realizing the bottleneck effect for further development andglobalization, the municipal government invested heavily on road, subway, telecommunication,and public services. The annual growth rate of infrastructure investment was 27.3% (Fig. 3),which was greater than the growth of total investment in fixed assets (21.9%). The large amountof infrastructure investment represents one of the state efforts to make the city a global city, since‘‘we intend to create the best investment environment to attract business,’’ said the AssistantMayor we interviewed in summer 2003. The length of highways increased from 6562 km in 1978 to14,359 km in 2002, an average annual increase of 3.3%, faster than the national average of 1.7%.The total revenue of postal and telecommunication industries increased from 90.5 million yuan in

UNCORR

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Fig. 3. Infrastructure investments in Beijing, 1990–2002. Source: BSB (2003).

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1978 to 25,405 million yuan in 2002, a 26.5% annual increase. Most of the investment has beenallocated to the city core, including the CBD and its related transportation improvement.CBDs serve as nodes of global flows and concentration places of business activities; a world-

class CBD is one of the symbolic landmarks of a global city (Sassen, 1991). It was a bit hard tofind a discernable CBD in Beijing before the 1990s. As noted by Zhou (1998), there are threereasons for the lack of a CBD: (1) Beijing’s position as political center prevented the city fromdeveloping a significant business sector; (2) the land was publicly owned and almost rent free untilthe mid-1980s, which provided little incentive for investors to develop a CBD; and (3) in order toprotect the ancient urban landscape and the historical heritage, the Beijing master plan had longcontrolled the building height within the Second Ring Road, where most of the financialinstitutions are located, which actually prevented the formation of a CBD.Scholars have argued that characteristics of an international city would necessitate the

establishment of a CBD in Beijing (Wu, 1995; Zhou, 1998; Gu & Shen, 2003), which convinced themunicipal government to consider CBD development as a strategic choice for making Beijing aglobal city. In the 1992 Master Plan, the municipal government officially promoted the concept ofa CBD, and tried to use CBD to attract FDI and TNCs to boost the economy and better integratewith the global economic system (BIUPD, 1992). The efforts were well reflected in the plan of theCBD as a multi-functional business district, i.e., the center of finance, trade, and culture.Although scholars argued that there has been a dual CBD structure in Beijing (Zhou, 1998), theofficial CBD refers to the area east of the old Beijing city.4 It is located in Beijing’s ChaoyangDistrict, from East Daqiao Road in the west to West Dawang Road in the east; the southern andnorthern boundaries are the Tonghui River and Chaoyang Road, respectively (Fig. 4). The CBDis 5 km east of Beijing’s urban center––the Tiananmen Square, and only 15 km from the BeijingCapital Airport (Fig. 1), with an original land area of 4 km2. Moreover, some land within theplanned CBD was occupied by old factories built in the 1950s, which could be transformed toservice land use.To construct a world-class CBD, the municipal government initiated institutional reforms. To

attract international attention and maintain high international standards, the government invited8 well-known national and international planning agencies to participate in the CBD planningand design (Liu, 2003). In August 2001, the government established the Beijing CBD

Administrative Commission (CBDAC) in charge of formulating development plans, directing thedevelopment process, and performing daily management duties. Half a year later, the Master Planof Beijing CBD was approved by both the central and municipal governments. The plan clarifiedgeneral functions, spatial structure, public space, underground usage, and transportation of the

UNC4The other often-mentioned CBD is located in the west side of the Second Ring Road, and is usually referred to as the

‘‘Financial Street’’ because of the clustering of some of China’s major bank headquarters and insurance companies

(Zhou, 1998). However, in this paper we mainly investigate the official CBD of Beijing for three reasons: first, our paper

focuses on the analysis of the role of state in globalizing Beijing, which is well reflected in the promotion and

construction of the official CBD; second, compared with the Financial Street, the official CBD is almost universally

preferred by foreign companies because of its well-established communication network, Western-style hotels, shopping

malls, and entertainment facilities (Zhou, 1998); last, the Financial Street represents the earlier efforts of Beijing to

develop the city, and with the recent efforts of globalization, it has lost momentum in development. The analysis of the

official CBD excluding the ‘‘Financial Street’’ will facilitate the discussion of globalizing Beijing in the context of this

paper.

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UNCORRECCBD. The construction areas are limited within 10 km2, half of them for office buildings. Thecore-building group in the CBD is one of the most important symbols of Beijing’s emerging globalcity status. The government of the Chaoyang District, where the CBD is located, has also beeninvolved in the CBD development process by actively promoting the CBD and offering policysupport.The construction and promotion of the CBD greatly enhanced Beijing’s integration into the

global economy. By the end of 2001, the total number of enterprises in CBD reached 1750, amongwhich, 457 were TNCs. There were 570 foreign representative offices, 150 foreign-funded banks,insurance companies and agencies, and 192 intermediary services (BJCBD, 2003). More than3 km2 of the existing business facilities, including China World Trade Center, Motorola Plaza, theKerry Center, Hewlett Packard Plaza, and Jianguo Hotel, accommodate hundreds of well-knownTNCs, such as Motorola, Hewlett Packard, Ford, Samsung, BNP Parisbas Group, UBS AG, etc.In 2001, more than 120 of the world’s top 500 enterprises (listed in Finance in 2001) set up officesin Beijing’s CBD. Moreover, there were 14 projects under review or construction, with a totalinvestment of 47.6 billion yuan. Ministries and centrally controlled companies have also builtmany modern offices buildings, since almost all of the largest SOEs in China have headquarters inBeijing.

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The CBD has become the focal point and action center of making Beijing a global city, but hasalso incurred critics. It is charged that CBD development serves the interests of investors and realestate developers, while many residents were dislocated with poor compensation; these interestgroups also pushed for expanding land area of the CBD. Beijing faces challenging problems intraffic congestion and air pollution. Much of the CBD is occupied by hotels, residential buildings,and low-order services.

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China’s ‘‘Silicon Valley’’: Beijing Zhongguancun Science Park

Global cities also serve as sites for the production and markets of innovations (Sassen, 1991),and many of them are centers of the high-tech industry, such as London. This is especially the casefor major Asian cities, such as Tokyo, Seoul, and Taipei, while others are competing to becomehigh-tech centers, such as Shanghai, Hong Kong, Shenzhen, and Kula Lumpur (Ng & Hills, 2003;Ng & Tang 2004). America’s first-tier global cities––New York, Los Angeles, and Chicago—allhave a strong high-tech sector. Beijing recognizes that increasing global competitiveness requiresgreat efforts to boost the high-tech industry. During Mao’s era under state socialism, stateinvestment was heavily allocated to defense spending in the interior, with very limited resourcesfor advancing technology and upgrading industrial equipment. Beijing deems the development ofhigh-tech and IT-related industries the new growth sector of Beijing’s development and an engineof its becoming a global city. In the Master Plan of Beijing (1991–2010), the municipal governmentexplicitly announced that ‘‘industrial development [of the city] will concentrate on high-tech, highvalue-added industries’’ (BIUPD, 1992). During the 1990s, high-tech industries and servicesectors, which are considered key to a global city’s status, emerged as the focus of the municipalgovernment’s policies. Under such reform efforts, from 1978 to 2000, Beijing was transformedfrom a city centered on heavy industry, to a city oriented towards the high-tech industry and theservice sector. Producer services, such as advertising, accounting, real estate, law, have emerged asa result of institutional reforms. The shares of the secondary sector in GDP shrank from 71.1% in1978 to 34.8% in 2002, while the tertiary sector increased from 23.7% to 62.2%.Beijing Zhongguancun Science Park (ZSP) provides an interesting window to look at how the

municipal and central governments promote local milieus to enhance global competitiveness. Asearly as May 1988, the construction of the Beijing New-Tech Experimental Zone, which laterevolved into ZSP, was approved by the State Council. During the 1990s, when the knowledgeeconomy became popular among scholars and government officials in China (e.g., Wu, 1998;Zhang & Qian, 1998; Zhong, 1998), the state intensified the development of the high-techindustry. The ZSP became the first national-level high-tech zone in China, intended to becomeChina’s Silicon Valley.Located in the northwest inner suburb of Beijing and the southeast part of the Haidian District,

the science park was started along the Zhongguancun Road by a group of researchers fromnearby universities and research institutions in the early 1980s (Fig. 4). With a radius of about1.3 km, this area has long been the largest intellectual area in China where many top nationalresearch institutions are located, such as the Chinese Academy of Sciences, Beijing University, andTsinghua University. These institutions, as well as research institutions of ministries, enjoy hugefinancial and policy support from the central government, which are not available to other

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institutions. In the early 1990s, the municipal government established a highly authoritative ZSPAdministrative Commission as a regulatory institution handling licensing, taxing, internationaltrade, finance, employment, and intellectual property rights for high-tech firms (Gu, 1996). TheCommission has also invested directly in the infrastructure and research facilities needed for start-ups, provided initial capital and managerial guidance, and acted as a bridge between fundingagencies and high-tech firms. The Commission devotes much of its attention to promoteentrepreneurship and improve the area’s image as China’s Silicon Valley. It has implemented aseries of incentive policies to encourage innovations, such as tax exemption/reduction, finance,and training. Its incubators also provide free spaces for R&D, high-tech start-ups (Wang &Wang,1998). In addition, to encourage innovation, the Administrative Commission even tolerates someof the ‘‘mis-operations’’ such as buying quotas from the SOEs to import computer componentswithout permission from the government.To attract foreign investment for high-tech development, the municipal government provides

many preferential policies. In the 1999 Beijing Municipal Government Official Document (JingZheng Fa), Article 4 explicitly stated that ‘‘[i]f a foreign investor y uses the profits earned to re-invest directly in an enterprise with advanced technology or an enterprise producing products forexport for a period of not less than 5 years, the income tax already paid on the reinvested portionmay be refunded in full.’’ Article 15 states that ‘‘yexpenses arising from purchasing domestic andforeign advanced technologies, inventions and patents by new and high-tech enterprises may bedisbursed from the cost in lump sum or in installments;’’ article16 declares that‘‘y[n]ew and high-tech enterprises with foreign investment shall be exempted from local income tax’’ (ACZSP,2003a). These preferential policies strongly support the initial development of high-tech firms andencourage foreign investment in the high-tech industry in the ZSP.Besides the municipal government’s efforts, the central government also has an incentive system

that aims at stimulating innovation and the development of high-tech firms in the ZSP, includingthe State Invention Award, the State Torch Award, the State Award for Science and TechnologyAdvances, and the State Natural Science Foundation. Such incentives not only provide initialfunds for small high-tech firms, but also promote the image of technology in the media and createa better social atmosphere for innovation and the growth of high-tech firms. According to theagreement between the Administrative Commission and the National Development Bank andBeijing Commercial Bank, firms that have an annual retail income between 20–500 million yuancan obtain 10 to 30 million yuan loan from these banks annually (ACZSP, 2003b). The strongsupport from the central government can hardly be matched by any other Chinese cities. Inaddition, in order to increase the flexibility of capital accumulation, the government hasintentionally reduced its direct intervention in the operation of firms in the ZSP.By the end of 2002, a group of high-tech firms emerged, such as the Fangzhen Group Inc.

(based on Beijing University), Legend Group Inc. (from the Institute of Computation at theChinese Academy of Sciences), Tsinghua Ziguang Co. (Tsinghua University), Tsinghua TongfangCo. (Tsinghua University), etc. The ZSP has become the alias of China’s IT center, although itfaces problems in providing venture capital, protecting intellectual property right, andstrengthening research and innovations. Enterprises in China have experienced a switch fromspending more on imported technologies to more in-house R&D (Sun, 2003). The fast growth ofChina’s high-tech industries and the benign investment environment has attracted the interest offoreign investors. By the end of 2002, there were more than 8200 registered high-tech enterprises,

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among which, more than 1000 were foreign companies. Most of the world’s high-tech leaders suchas IBM, Hewlett-Packard, Dell, Microsoft, Lucent, Motorola, Intel, General Motor, Panasonic,Nokia, and SUN, have established their R&D facilities in the ZSP, either wholly owned or jointlyrun with local universities or research institutions. ZSP has become not only the engine ofeconomic growth for Beijing, but also a high-tech window through which the city integrates withthe global economic and urban system.

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Preparation for the 2008 Olympic games

The relationship between global cities and spectacles is widely cited and reported in the media.Short and Kim (1999) pointed out that the modern Olympic Games, especially the summer one, isone of the most important global spectacles. The experiences of the hosting cities indicate that theOlympics have become one of the single greatest marketing opportunities for the cities and theirhost countries. The sheer size of the Olympics and its worldwide participation help to raise theprofile of the hosting city and to confirm the official image of a world-class city (Rutheiser, 1996).Such an image and the connections established with participating nations provide enormousopportunities for business and real estate deals for the hosting city (Short & Kim, 1999). Shortand Kim (1999, p. 93) cited the South Korean Sports Minister Lee Yeung Ho’s comments on howthe 1984 summer Olympic Games impacted on Seoul: ‘‘Hosting the Olympics gives usinternational recognition and a psychological boost for our next step to join the advancedcountries within the next decade.’’ This comment reflects the intention of many cities competing tohost the Olympics. Beijing is no exception.Hosting the Olympics serves as a great opportunity for Beijing to join the list of global cities.

The Chinese Government believes that hosting the Games will promote the hosting city’s imageand propel its global city rank. More importantly, the Games can promote the global reputationof the whole nation and improve its degree of global participation. To promoting the city’s globalreputation and participation, both municipal and central governments have actively organizedand participated in a series of international exhibitions, economic development forums, and otherinternational events, such as the Asian Summer Sports Games in 1990, the fourth United NationWorld Women Summit in 1995, etc. Bidding and hosting the Olympics marks the high-tide ofBeijing’s efforts to gain global reputation and recognition.Unlike the competitions in the United States, where several potential cities may compete with

each other, in China, it is almost unanimously agreed, and decided by the central government,that the first city hosting the Olympics should be its capital. There is little doubt that the stateplays a decisive role in such an event. From the bidding for the host to preparing for the Games,not only the municipal government, but the central government as well, stands out to be the leadplayers. Beijing lost its bidding for hosting the Games in 2000 to Sydney for only one vote. Thesuccessful bidding for the 2008 Olympics in July 2001 stimulated Beijing’s development in variousways. The success was not only the winning of the bid, but also the changes anticipated in theprocess of preparing for the Games. The total investment for preparing and hosting the Olympicsis estimated about 280 billion yuan (People’s Daily, 2003). The municipal and centralgovernments have explicitly expressed their goal of creating a new image for Beijing––theOlympic construction projects will be treated as a vehicle to further reform and globalize the city.

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They also expect the Olympics to become a valuable channel for the city to exchange and learnadvanced management and technological skills from Western countries.The role of the state in Beijing’s preparation for the Games is well reflected in the government’s

themes: a ‘‘green,’’ ‘‘scientific and technological,’’ and ‘‘human (cultural)’’ Olympics. To greenBeijing, the municipal government approved a US$ 12.2 billion budget soon after the city won thebid, which was equivalent to 41.2% of Beijing’s GDP in 2000. With the strong financial support,Beijing promised to provide a clean environment for the athletes and make the city greener,cleaner and more beautiful. Twenty major projects aimed at improving the environment will becompleted in 2007. In addition, the government has also set up priorities and action plans toachieve the goal of greener Beijing. Environmental protection in the planning, design, andconstruction of Olympic venues and facilities is treated as a high priority, with strictenvironmental standards and extensive use of environmental technologies. Equally important isthat the municipal government aims at raising the environmental awareness of the people,encouraging the public to consciously opt for green consumption, and to get involved in activitiesto improve the environment. It is anticipated that, apart from an agreeable living condition forcitizens of Beijing, the improved amenity of the city will also attract more foreign investment andcompanies to Beijing, which will enhance Beijing’s global city status.The governments actively encourage the development and use of science and technology in

preparing for the Games. In the official Action Plans for Olympics, the municipal governmentpromised to fulfill seven major science and technology related tasks from 2000 to 2008. With thefulfillment of these tasks, the government believes that the 2008 Olympics will have a high level ofscience and technology. These tasks mainly cover three aspects: traffic and transportationmanagement, energy and environment technologies, and information, telecommunication, andsecurity technologies.In traffic and transportation management, the government promises that more than 50% of the

sports venues will be accessible within 5min from the Olympic Village. The government hasalready begun the Intelligent Transportation System (ITS) project, which aims at creating a set ofhighly effective intelligent transportation networks. As a result, from 2000 to 2001, the man-controlled police boxes decreased from 1880 to 1447, while the automatic traffic lights increasedfrom 1036 to 1195, and the surveillance intersection by TV increased from 120 in 2000 to 212 in2002. The development of clean energy and environment technology is also one of the core tasksfor ‘‘Green Olympics.’’ The municipal government launched a clean energy transportationproject, which aims that in 2008, Beijing will be a model city in employing electricity-driven buses.According to the plan, 90% of its buses and 70% of its taxies will use environment-friendly fuel bythe end of 2007. Other environment-related technologies include trash recycle technology andwater quality improvement technologies. The municipal government has set the goal that 30% ofthe urban trash will be recycled, and water quality will reach the standards of the World HealthOrganization in 2007. Lastly, the municipal government intends to use the Olympics as anopportunity to further promote the development of information, telecommunication, and securitytechnologies.Humanity (culture) is the third focus of Beijing’s preparation for the Olympics. With its 3000-

year history, Beijing has been making efforts to preserve and promote its cultural heritage throughthe arena of the Olympics. To improve the cultural environment for the Olympics, the municipalgovernment is promoting the concept of the ‘‘people’s Olympics.’’ Focused on ‘‘improving your

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health through sports and bettering your soul through culture’’ and ‘‘invigorating the economywith the Olympics and enriching the capital with civilization’’ (BOCOG, 2003), the city expectsbroad citizen participation and uses various resources to enhance cultural value and therenaissance of the ancient capital. The municipal government puts a great effort into buildingBeijing into a modern global city with ‘‘concentrated cultural talents, complete cultural facilities,developed cultural markets, advanced cultural industries, and rich cultural styles’’ (BOCOG,2003). It is hoped that a rich cultural environment with ‘‘ancient capital charm, Chinese style andeastern grandeur’’ will be created, which will not only allow Beijing to host the most successfulOlympic Games in history but also present to the world a new image of Beijing as an emergingglobal city, with prosperity, advanced civilization, and highly motivated citizens.The most salient changes during the preparation include the aforementioned massive

investment to improve the city’s infrastructure and urban environment, vigorous culturalrenaissance activities, and improvement in transportation systems. The city is facing the problemsof corruption and wasteful spending, and the skyrocketing property values of the areassurrounding the planned Olympic village. The huge profits in design and construction have alsocaused many conflicts among planners, designers, developers, workers, and managers, as well asbetween domestic and foreign firms, some of these problems were admitted by People’s Daily.Although the source of finance remains a black box to be opened, the Olympics is viewed by someas a way for Beijing to extract resources from the state coffer, which draws the tax revenuesmainly from coastal provinces.5 The massive investment and over-heated economy forced thegovernment to cut the investment in sports facilities by 6 billion yuan, as reported by the Chinesemedia.

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UNCORRECTConclusion

Emerging global cities are cities with great potential to become global cities, yet the efforts andprocesses towards global cities are under-studied. This paper has analyzed four major themes ofthe state efforts to make Beijing a global city. Beijing has long been a political center of China,and was a semi-colonial city as well as an international city during 1840s–1940s. During Maoistperiod, Beijing benefited from its position as the national capital, and Mao’s industrializationpolicy. However, with an emphasis on self-reliance, Beijing was largely cut off from theinternational economy. The reforms from the late 1970s to the mid-1980s did not bring muchchange to Beijing, because of its cautious attitude towards reforms due to its position as thenational capital.Since the early 1990s, Beijing has made tremendous efforts to globalize the city and transform it

into a global city. Like many other cities in the Asian-Pacific region (such as Hong Kong,Singapore, Seoul, etc.), Beijing is eager to join the list of the top global cites in the world. Asignificant force driving Beijing’s globalization is the state, which is globalizing the citypurposefully. We have analyzed four major themes of the state efforts: attracting FDI,

5A survey found with surprise that many people in Shanghai were not enthusiastic about Beijing’s successful bid for

the Olympics, since they were concerned that such an event would reduce the resources of the central government

allocated to Shanghai and strengthen Beijing’s competitiveness for China’s global city status.

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constructing the CBD, developing the Zhongguancun Science Park, and preparing for the 2008Olympic Games. We believe that these themes are the most salient forces representing the state’srole in globalizing Beijing. These themes are state-directed and involve many aspects ofglobalizing the city, which testifies to the difference in the process and mechanisms of theglobalization in Chinese cities from their counterparts in the developed countries. The municipalgovernment has acted as the front man in running the show, with active participation of centraland district governments. The central government provides strong support to the efforts, mainlythrough favorable policies and financial resources.Beijing has been undergoing dramatic transformation and globalization, with impressive

records. The road towards a global city, however, is not an easy and smooth one. At the nationaland regional scale, Beijing is competing with Shanghai, Hong Kong, and many other Chinesecities for resources and policies. The Greater Beijing Region is more heavily controlled by thestate, and is less dynamic than the Yangtze Delta and the Pearl River Delta in economic growthand foreign investment. Beijing’s pursuit for a global city status has generated new problems andchallenges, such as skyrocketing real estate prices, traffic congestion, air pollution, costly urbandevelopment projects, and hasty construction.This paper has illustrated that Beijing’s globalization is not only an economic process, but also

a political maneuver. This is to some extent similar to the situation in Tokyo and Seoul asanalyzed by Hill and Kim (2000). With its entrance into the WTO, China has further opened upits domestic market for foreign investors. However, it does not mean the government is willing tolet the market operate without any intervention. Both the central and local governments arecommitted to pursue China’s interests, and continuously promote national and regional policies.Indeed, Beijing’s opening up is a ‘‘managed openness’’ (Weiss, 1999). Apart from the ‘‘invisiblehand,’’ there is a visible hand—the central and local governments—in the globalization of Beijing.

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ORRECAcknowledgments

An earlier version of this paper was presented at the Annual Meeting of the Association ofAmerican Geographers, New Orleans, March 5–8, 2003. We would like to acknowledge agraduate travel award from the M.J. Read Foundation at the Department of Geography, UWM,and a grant from Geography and Regional Science, and China, Taiwan, Mongolia, and SoutheastAsia Programs, National Science Foundation (Grant BCS-0004357).

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