Hubertus von Grünberg, Chairman of the Board of Directors, ABB Ltd


1.Introduction

Urbanization is making China more prosperous, but at the cost of putting its cities under intense pressure to expand the availability of social services, land, energy, water and a decent living environment. Large centers like Beijing also want to expand their industrial landscape to include more value-added and service-centered enterprises.

If Beijing is to achieve its goal of becoming a world city on a par with London, Tokyo and New York, it must maintain the momentum of environmental, infrastructure, industrial and quality-of-life improvements achieved in the lead up to the 2008 Olympic Games.

The city must continue to build a solid base of high value-added research and knowledge-based manufacturing, augmenting these twin attractions with a world-class quality of life in order to attract the talent needed to energize and grow these competitive sectors.

ABB supports Beijing's ongoing efforts to shift its industrial focus and become a more attractive place in which to live. For this report, I would like to suggest steps that could be taken to counteract some of the ongoing pressures of urbanization in Beijing, with added focus on expanding the number of high value-added businesses in the city, as well as improving services, infrastructure and quality of life in China's ancient capital

2.Improving Beijing's industrial structure

The guidelines of Beijing's 11th five year industrial development plan (Nov 2007) sets out the service and high technology industrial sectors as double engines of the city's growth. These engines are supported by a foundation of modern manufacturing (e.g. auto and equipment), basic services (e.g., education and health).

Between half and three-quarters of all wealth world-wide is now created not by making physical things, but by performing services.

Beijing's service industry has accounted for more than 70 percent of its total GDP since 2006, which is 30 percent above the national level and an indication of just how important and developed the service sector already is in the city. This is not unique. Service industries generate over two-thirds of GDP and employment in developed countries, and their importance is growing in developing countries. It is therefore very important to understand how services have developed, in what direction they are now developing, and how to improve service management.
Services were the main activity of 14.5 million enterprises in the EU-27 in 2005, which generated a turnover of 11,974 billion euros, employing 76 million people.

Services industries in Beijing include retailing and distribution; financial services (banking and insurance); hotels and tourism; leisure, recreation and entertainment; professional and business services, including accounting, marketing and law.

Beijing can profit by encouraging the expansion of existing service areas like finance, culture, the creative industries and tourism. Other service venues can be further cultivated, such as business services, sports and recreation, or improved, such as logistics, commerce and real estate.

•Capitalize on Beijing’s cultural and historical resources

In the area of culture and history, for example, Beijing enjoys clear natural advantages over other cities, inside China and outside as well. As the capital city of eight dynasties and the modern capital, it is rich in cultural and historical landmarks, and there exists huge potential to develop these cultural industries.

Citizens of Paris (pop. 2.1 million, 12 million greater Paris) have 157 museums and landmarks (including 19 national museums) to choose from in the city and nearby region. The Washington capital region (pop. 5.3 million) has more than 150 museums, centers and landmarks. London (pop. 7.5 million) has 184 museums, including 22 national museums. By comparison, at the end of 2009, Beijing (pop. 17 million) had 151 museums for its citizens to visit, but many of these need to be improved and updated, either in the way they are managed or the exhibits are presented

Beijing's municipal museum director says the city's existing museums will be updated, and there will be a significant increase in the number of private museums.  This is a good first step, and should continue. Ten years ago, for example, Shanghai began to realize the importance of cultural attractions, and started its 100-museums plan, which is almost fully realized today, even though Shanghai cannot compare to Beijing in terms of the volume of cultural resources available

Beijing's culture, sports and entertainment sectors grew by nearly 30 percent in 2008, but still accounted for only a miniscule part (4 percent) of the total value of service in the city. This shows there is much room for growth yet in these sectors.

The service sector is dominant in the economy of world cities. Take New York or London as examples, the share of their service sectors has exceeded 85 percent .

•High-tech and modern manufacturing

Modern service industries normally require a great deal of high technology input, and so the pairing of service and high technology is not only logical, but highly desirable.

High-tech and modern manufacturing already constitute 23.8 percent and 38.6 percent respectively of Beijing's industrial sector. The goal is to increase this ratio and develop a 'Silicon Valley' cluster development concept, populated by an inventory of sustainable, high-value added, knowledge-centered industries modeled on the successful electronics, software and Internet services businesses that have flourished for decades in California's Silicon Valley.

Beijing has done a lot already towards accomplishing this goal, but needs to go further to continue to attract and support the kind of businesses that can drive an innovative, knowledge-based economy. High value-added business is more productive and less polluting, and innovation is all but synonymous with economic competitiveness.

Beijing is already rich in some of the key elements needed to make this happen. The city boasts excellent universities and large numbers of post-graduate students, both very attractive to the kinds of industries the city hopes to nurture.

Zhongguancun Technological Park, situated in the northwest of the city, benefits from its location between two of China’s top universities and the support of the Chinese Academy of Sciences. These associations are a major enticement to entrepreneurs wanting to set up high-tech businesses in China. Already dubbed "China's Silicon Valley," the park has become a major innovation center for China's electronics and computer sectors, as well as pharmaceuticals research.

To replicate the success of Zhongguancun in other parts of Beijing, industrial centers need to be transformed to provide the kind of infrastructure high-tech industries need. As the example of Zhongguancun Technological Park shows, this type of transformation is most efficiently achieved with a combination of education and research facilities.

This formula has also worked in the US city of Pittsburg. The seeds of change in the former industrial powerhouse were planted in the 1980s with a development plan using local universities to funnel state funds into technology research. Entrepreneurship blossomed in sectors such as computer software and biotechnology. Two of the biggest sectors in the city's economy today are education and health care, which are less susceptible to recessions than other sectors.

Formerly a steel-making center, Pittsburgh's most precious asset today is education, and the innovation education breeds. Although not large (pop. 312,000, 2.5 million metropolitan area), the city is home to numerous colleges, universities and libraries, and is one of the few regions in the US to boast a number of nationally-recognized research universities in one location, including Carnegie Mellon University, the University of Pittsburgh, and the University of Pittsburgh Medical Center.

The value of top-level education and research to a city and region should not be underestimated. The University of Pittsburgh Medical Center (UPMC) is one of the best hospitals in America, where Jonas Salk developed the polio vaccine, and Thomas Starzl perfected transplant surgeries.

By carefully seeding high tech "enablers" like these throughout Beijing's 16,800 sq km area, the city can surely make it easier and more practical to transform its industrial mix. It is clear that innovation clusters focused on specific fields of expertise and interrelated business domains can create substantial opportunities for industrial and economic growth in a city, no matter what its size. The importance of building a foundation of educated innovators who can attract investment to these areas cannot be overestimated.

China is putting great effort into nurturing small and medium-sized companies capable of commercializing technology. Some 500 technology business incubators are scattered throughout the country to support such companies, and China's leading science and technology parks, technology business incubators and business incubators are located in Beijing.
Beijing should continue to encourage private equity investment firms to build up their businesses in the capital and invest in the high-tech, high value-added sectors that it needs to achieve its development aims. Governments can help speed the development of innovation clusters by funding universities to pursue “blue sky” projects that are too futuristic for other investors. They can kick-start innovation, boosting ideas from “technically feasible” to “commercially interesting,” developing a field to the point where spin-off applications or indeed mainstream activities become viable prospects for outside investment.

They can also help by encouraging partnerships between industry and academia. Enabling business to tap into promising projects in academia puts those projects on the road to commercialization, a process that is better understood by business partners with close relationships to end-users and insight into the markets. In some cases, governments can reduce the uncertainty of market demand for emerging technologies by becoming early consumers or development partners themselves.

A prime example of the innovation benefits this yields is the United States. Washington for many years has been the main support of basic research in the US and the main conduit of funding for applied research. No country has invested more in basic research since 1945 than the US and three-quarters of this funding - $1.2 trillion since 1953 (adjusted for inflation) - has come from the federal government.

By funding knowledge, supporting skilled scientists and technical personnel, and underwriting vibrant research universities that have acted as magnets for the laboratories of private enterprises; the American government has been a vital stimulus for commercial innovation in the United States.

Government-funded research has spawned innovations such as hybrid corn that enormously boosted agricultural productivity. It also contributed heavily to building American science and engineering capability in semiconductors, chip design, aeronautics and satellite communications, the types of businesses Beijing wants to host.

In addition to maintaining top levels of education and academic research to bolster high-tech industries, governments can help by providing the kind of infrastructure on which a knowledge-based economy depends, which includes extensive and efficient physical infrastructure.

•Continue to develop modern industries and increase energy efficiency

Finally, Beijing should continue to focus on developing and growing its base of modern industries, choosing enterprises that possess clear competitive advantages such as the automobile and equipment industry.

The focus here could be automation technology, research and development
and systems integration. Digitally automated machine tools, intelligent instrumentation and automation, power transmission and distribution equipment, printing machinery, electronics and information systems are the kinds of high-end, secondary industry that could support the service and high-tech economic engines.

One specific area here would be electric-powered engines, as well as automation and electrical equipment such as converters that support e-mobility (ie, the electrification of transport), which along with the appropriate infrastructure would also help reduce carbon dioxide emissions and air pollution.

With a strong service and high-tech sector, there is indeed scope to cultivate high-end manufacturers in other fields, such as biotechnology and medicine, and the new energy and environmental protection industry, encompassing equipment suppliers to wind and solar sectors.

Beijing made huge efforts to reduce air pollution before the Beijing Olympics, relocating some of its heavy industry to other areas, and setting policies in place to reduce traffic in the city.

Many businesses have become much more aware of the need to reduce and control energy consumption, but more can be done. ABB believes an important first step in this process is the energy audit, which comprises a detailed analysis of energy consumption, and a detailed plan for improvement.

This can help industries that use a great deal of energy, such as iron and steel, cement, paper making and so on, identify areas in their production processes where energy savings can be implemented.

ABB applied this approach to our transformer factory in Chongqing, where an energy audit in 2007 found that savings of 10-20 percent could easily be made with low cost measures. Between 2002 and 2007, ABB reduced electricity consumption of our Chinese companies by 48 percent per unit of revenue, despite the expansion of our production capacity.

ABB signed an agreement in 2006 with the province of Guangdong to provide advice about ways to improve the energy efficiency of companies in the region. The agreement's aim is to  help Guangdong achieve its goal of reducing energy consumption by 16 percent per unit of GDP by 2010.

ABB has so far provided training on saving energy to more than 1,000 companies in industries that are heavy energy users, such as petrochemicals, building materials, steel, textiles, and pulp and paper.

The first comprehensive energy management project was done for Guangzhou Paper Group, starting with an energy audit. The audit identified 18 major power saving opportunities at the largest newsprint paper company in south China through a field assessment of its energy efficiency practices, resulting in a potential annual cost reductions of up to $2.7 million.

ABB has helped many companies improve energy efficiency in their plants in Europe, starting with energy audits to assess losses and identify possible solutions and intervention areas. In 2009, the company received an award from European Commission recognizing its contribution to the EC's Motor Challenge program, which was launched in 2003 to help companies improve energy efficiency in their motor-driven systems.

ABB believes government has an important role to play in this area. Just recently, the company entered into a cooperation agreement with China's Ministry for Industry and Information Technology and the WWF to implement training in energy efficiency. Beijing is one of the key cities identified in this program to help municipal governments establish energy auditing programs within their regions.

3.Strengthen physical infrastructure

Stories about Beijing's traffic jams and limited housing stocks are well documented. Congested roads, polluted air and lack of affordable housing are bad for business, making it difficult to attract the kinds of businesses and the types of individuals Beijing needs to achieve its world city status.

While efforts are being made to move polluting industries out of residential areas and the growth of renewable power generation in China is accelerating rapidly, large improvements could be made to Beijing's air quality, and the ability of residents to go about their daily business, simply by tackling the issue of local transport. Beijing Municipal Transportation Administration Bureau's command center calculates more than 90 percent of Beijing's roads are currently overloaded.

The experience of Los Angeles in the US has shown that just building more roads to deal with an increasing number of cars does not solve the problem of traffic congestion. Los Angeles area traffic jams are legendary, with the average driver spending 72 hours annually stuck in traffic delays, the worst record in the US.  The only advantage Los Angeles can offer its commuters is a short distance to drive – the development of numerous commercial complexes outside the city center means that many commuters do not need to leave their home suburb (which makes the traffic delays they suffer all the more frustrating).

Currently, Beijing car owners drive further than their counterparts in large cities like Los Angeles, Tokyo and London, and travel more frequently to Beijing's core urban areas, which contain most central and local government offices, as well as the city's main commercial and cultural destinations.  Spreading commuter destinations more evenly around the city (as seen in Los Angeles) is a possible solution to the paralyzed traffic conditions of the core.

Another possible solution is to encourage greater use of public transport. Despite the distances traveled, average public transport use in large Chinese cities generally is far lower (10-35 percent) than in cities of similar scale in developed countries. 

There are 13.6 million passengers currently using Beijing's public transit every day, a rise of around 11 percent over 2008. However, much of this increase could be due to a rise in the general population rather than residents abandoning their cars. Many users and potential users are put off by the plodding reality of Beijing public transport, which includes an average speed of 10 kph (slower than a bicycle), long waits, an inconvenient and confusing transfer system, and a lack of punctuality. 

Beijing should make maximum use of bus-only lanes, providing a faster and more cost effective alternative to car use, particularly for those traveling during rush hours.

For example, cost effective bus rapid transit systems like the TransMilenio in Bogotá, Colombia, are used for an average of 1.6 million trips per day, and allowed the city remove 7,000 small private buses from its roads, reducing fuel consumption and associated emissions by more than 59 percent since the system was initiated in 2001.

With an extensive route system and buses that run on efficient diesel engines, it moves more passengers per mile every hour than almost any of the world's subways, which cost more than 30 times as much per mile to build, and three times as much to maintain.

Beijing should continue to develop and expand its rapid transit systems, including its commuter rail service, and bind the city center to outlying districts and counties that are beyond the reach of the subway network. Thirteen new subway lines are under construction in addition to six already operating, so by 2015 the city's subways will stretch 561 km. By comparison, the London Underground, which now struggles to meet the rush hour needs of a population of less than 8 million, has a network of 400 km.  While the rate of growth in the Beijing Metro is impressive, if the city is to provide an adequate transit service for its vast population and keep pace with population growth in a region that is 16,800 sq kms in size, these efforts must run in parallel with other initiatives to build a wide-area, integrated public transport network.

Increasing the supply, quality, efficiency, integration and speed of public transport will encourage more users. In London for example, the passenger rail system supplies 76 percent of the city's transport needs; passenger cars supply 13 percent. In Beijing, passenger rail system supplies 6 percent of the city's transport needs; passenger cars supply 37 percent. 

Last but not least, Beijing should develop an adequate electric power supply grid to support e-mobility (as mentioned in previous chapter), which would give the city additional advantages in terms of pollution reduction and advanced transport technologies. 

Challenges like this can become opportunities to solve local problems and further reinvent the city's industrial landscape. For example, in addition to developing expertise in zero-emission cars, Beijing could become a center of excellence for mass transit design, applying lessons to real problems on its own doorstep, and exporting this expertise to other parts of China and the world.

Transport is a major issue in Beijing, as is housing.

Housing prices in Beijing have soared in recent years. To put it in perspective, the average price of housing in Beijing is about $3,700 per sq m, similar to housing prices in Tokyo, except the average income in Beijing is less than 10 percent of income in Tokyo.

House prices in China's 70 large and medium-sized cities, including Beijing, Shanghai and Guangzhou increased by 11.7 percent in March from a year earlier. There is anecdotal evidence that white collar workers in Beijing and Shanghai have begun to think about moving to second- and third-tier cities where the cost of living is lower.

There is no value in building one of the world's most desirable cities if working people cannot afford to live in it. While Beijing is still an attractive tourist destination, it is now one of the world's 10 most expensive cities to live in, while quality of life in the city is far below its competitors (ranked 113 out of 143 cities on a scale of quality of living).

The survey examined 143 cities on six continents and measures the comparative cost of more than 200 items in each location, including housing, transport, food, clothing, household goods and entertainment.

The central government has taken proper steps to curb property speculation, and to divert 70 percent of land allocated for property development to low-income housing, small and medium sized homes, and renovation of existing low income housing stocks,

The government will also increase the land supply available for residential property development, in a bid to curb speculative housing purchases which are widely blamed for driving up property prices.

The Chinese government has launched a number of measures to curb and control property speculation and housing costs - things like higher minimum down payments and interest rates, as well as residency requirements for buyers. It could also be useful to look at the experience of Germany, one of the world's most stable property markets.

In Germany a speculation tax is applied to any property that is owned for less than 10 years and sold for a profit. Many countries use some form of this tool to curb property speculation with a stiff, progressive tax on the profits resulting from speculation. The amount of tax is usually calculated based on the length of time the property is owned and the percent of profit realized.
In other parts of the world, local municipalities also control excessive speculation through land and growth management laws, such as impact fees (the cost of new infrastructure that must be built or increased as a result of the development), zoning ordinances and subdivision regulations.

The difficulty of finding a place to live and work means Beijing risks losing members of a vast army of young, underemployed, underpaid or unemployed Chinese university graduates who have moved to city in the hopes of a better life, the so-called "ant tribe" written about by Chinese sociologist Dr. Lian Si.

The financial crisis and housing shortage have combined to increase pressure on graduate employment, and Beijing's ministerial and regional authorities should put college graduates at the top of their employment agenda.

The city should also consider expanding measures that will encourage degree-holders to stay in town after graduation; for example, internship programs with local employers and improved amenities for recreation, entertainment, culture and health care, and continually cleaning up the environment.

4. Improve services and non-physical infrastructure

Singapore is a good example of a city that has remade itself to encourage the growth of knowledge-based, high-value-added business. In addition to the city state's stable infrastructure, low-tax investment incentives and good quality of life, other factors cited by companies setting up operations and regional or even global headquarters here include a lack of bureaucracy – it takes six days to set up in business in Singapore, versus 35 days in China. 

New subsidies to encourage companies to register or relocate to Beijing could be extended or expanded, and the burden of paperwork could be reduced.  

There is no magic formula for building a high-value-added business infrastructure, but easing bureaucracy, guaranteed intellectual property rights and a well-trained labor forces are three vital components.

Aspiring to become a world city and global center of high-value-added business means that the education and training in China’s schools of higher learning should be more focused on augmenting global skills. English, for example, is today’s global language, and is one important asset that Beijing should help to cultivate among its residents.

Leading scientific journals all publish in English and Chinese researchers need to master the language to stay abreast of the latest knowledge in their fields.

Compared to their counterparts in Europe and North America who work in teams to achieve practical solutions, Chinese students get little practical experience in projects or teamwork, which they will need to have if they are to work for a multinational company.

Progress has been made in the establishment of intellectual property (IP) laws, and further strengthening the enforcement of IP protection is one of the most important ways of attracting much-needed capital into knowledge-intensive businesses.

There are signs the situation is improving. This year, a UK company successfully sued two Chinese manufacturers over patent infringements involving electric controls. Microsoft was recently awarded intellectual property damages after a local court in Shanghai ruled a state-backed insurer was guilty of using pirated copies of Microsoft software.

Any incident that shows the rule of intellectual property law is being upheld in China will encourage investment in new technologies.

Intellectual property rights, particularly patents, provide the primary means for assuring necessary private sector investment in the invention, development and deployment of technologies needed to reduce emissions,  according to the International Chamber of Commerce at a United Nations conference on the development and deployment of technology to fight climate change.

Businesses will invest if they have a reasonable certainty that they will benefit from their success, and this is provided by the ability to protect revenue through intellectual property rights. (IPR).The focus of local regulations should also be to attract and protect existing IP of foreign companies to establish a strong and sustainable “technological” environment which will also enable the development of home grown IP.

IPRs provide a framework around which legal agreements for the transfer of technology can be structured. IPRs can also enhance, in the case of early patents, research and development and also encourage technology diffusion. Patents require the publication of technology, a valuable tool for research and development. Evidence of the correlation between IPRs and foreign direct investment projects has been evident in Eastern Europe and the former Soviet Union where, according to the World Bank,

 "An increase in IPR protection shifts foreign investors' preference away
 from projects focusing solely on distribution and towards setting up
 manufacturing activities. The results suggest that weak IPRs have a
 negative effect on the likelihood of investments being made. In
 addition, the enforcement of IPRs affects the type of investments
 made: companies tend to avoid investing in local production if IPRs
 are weak, and concentrate on distribution facilities instead. These results
 are consistent with the notion that intellectual property protection stimulates
 formal technology transfer." 

5. Focus on making quality of life attractive

Pollution is a major consideration for individuals choosing where to live, particularly if they have young children. China's carbon dioxide emissions have doubled in the past decade and Beijing suffers the impact of many small factories, heavy trucks and an overwhelming number of cars.
In addition to the alternative transport initiatives discussed above, dealing with Beijing's pollution today requires strengthened local enforcement of existing pollution and energy efficiency standards.

Pollution is costly. In a 2007 poll, 52 percent of the 274 Hong Kong companies surveyed said they have to pay higher benefits to attract expatriates moving to Hong Kong because of the rising air pollution levels.  In the same survey, 44 percent of respondents cited air pollution as a contributing factor causing expatriates to leave the region.

While the major quantifiable improvements in the Beijing environment will come from reducing heavy industry and vehicular emissions, an expansion of the cities green spaces will go a long way to improving the city's look and feel.

In the 1980s, Beijing still possessed fields and natural wetlands, but the city has expanded exponentially since that time and many of these spaces have disappeared. The experience of other large cities shows, however, that with careful planning, many natural assets can be reclaimed.

This matters, because urban parks and open green spaces are strategically important to the quality of urban life. Urban parks, forests, green belts, trees and water purifies the air and water, filters wind and noise, and helps stabilize microclimates. They also provide unique social and psychological services crucially important for the well being of urban dwellers.

New Delhi, India (population 15 million) has increased its green cover and vastly improved the look of the city in the past decade. Massive government planning and planting (1.5 million saplings planted annually, and a law requiring ten new plantings for each tree cut down  ) has resulted in the emergence of 27 city forests in the past three years, including 7 sq km of very dense forest where there was none two years ago.

More than 20 percent of the city is now under tree and forest cover, representing a total of more than 300 sq km, according to the Forest Survey of India. Beijing's afforestation committee has similarly greened thousands of hectares of land and planted millions of trees. These efforts should continue and be expanded wherever possible.

In recent years, urban agriculture has been creating a big impact in some thickly-populated areas, a practice that should be encouraged. In the 1990s, the Beijing government decided that urban agriculture was an important way to meet the city’s food needs. Today, farming in, around, and near Beijing not only provides residents with safer, healthier food, it also keeps farmers in business.

The urban sprawl of Beijing that has swallowed up so much green space could also be countered by creating a growth boundary, and concentrating growth within it. Research says that populations concentrated in cities use energy 18 percent more efficiently than more dispersed populations. 

Urban containment policies to limit sprawl create an urban edge that protects natural resources nearby and encourages growth within the boundary. Portland, Oregon in the US established an urban growth boundary as far back as 1980, which strictly limits development at the city's fringe. Instead of stifling the city's economy as critics expected, the boundary increased jobs in the metropolitan area as high-tech companies and industries sprang up inside the urban boundary.
Hewlett-Packard, Intel, and Hyundai were among those companies attracted by forests, orchards, and creeks on the nearby outskirts of a livable urban area. According to the New York Times, employers wanted to attract "educated workers who were as interested in the quality of life as a paycheck."

“New urbanism” adheres to similar spatial principles, but at the scale of the local neighborhood. It promotes a vision of cities with fine-grained mixed use, mixed housing types, compact form, an attractive public realm, pedestrian-friendly streetscapes, defined centers and varying transport options. Facilities such as health and retail centers, libraries and government services cluster around key public transport stations and intersections to maximize convenience.
Some planners recommend the creation of compact cities, 'nodes' of mixed use that are near enough to each other that people can walk or bike from residence to job to leisure activities. Connecting each of these compact nodes by mass public transportation creates an efficient way to live and move about a larger region, without needing to resort to private cars for transportation needs.  

An example of a compact mixed-use node of city living is the RiverParc project in Pittsburg - a six-acre neighborhood with about 700 residence units, hotels, art galleries, retail and office spaces, as well as parks and green spaces. Residents live and work in the area, which is entirely walkable Tokyo has densely populated residential communities that are served by highly advanced public transportation systems. Energy consumption per capita in Tokyo is actually the lowest in Japan, because people in the city are able to walk and bike to many destinations.
To be a true world city, Beijing should also encourage the establishment of more cultural outposts such as Song Zhuang , the artists' village in the eastern suburbs. A strong base of cultural activity like this helps a city become a more dynamic and attractive place to live.
Since its start in 1994, Song Zhuang has become one of the biggest and best known artist communities in China, and as home to more than 2,000 artists is certainly the biggest arts colony in Beijing. The colony has achieved international praise and success, generating an annual art festival, a newly constructed museum, and an arts center.

The concept of creative and cultural zones, such as the new Olympic Park and Animation City sites, could also be expanded throughout the city. Similarly, the city should encourage projects like the Shijingshan Amusement Park, which will expand to become China's largest outdoor recreation complex. Companies that can locate anywhere they want will go where they can attract good people in good places. A world city needs good highway, transportation and infrastructure to handle the population that lives there. Inevitably, the question is how to balance the great public works needed by huge cities against the values a city ought to preserve, such as community, neighborhood, a sense of history and home.

Finally, even where automobiles have ruled for many years, there is still hope for a return to a more sustainable way of life. The city of Seoul transformed a 6 kilometer long elevated expressway in the center of the city into a 1,000-acre park, and restored a green-banked river that had been buried under concrete for 45 years.

Traffic congestion eased because of related transportation changes such as expanded bus services, restrictions on cars and parking fees. Small particle air-pollution dropped by one-third along the corridor.  Amazingly, the ecosystem rebounded - fish, birds, insects and plants have returned, as have people. On an average day, about 90,000 pedestrians visit the stream banks, in place of the former highway’s 160,000 cars and trucks.

What emerges from any development should be at least as good, and hopefully better, than what it replaced. 

6. Conclusion

In Asia, plans become actions with staggering speed. China, Japan, and South Korea have already passed the United States in the production of virtually all clean energy technologies. Over the next five years, the governments of these nations will out-invest the United States three-to-one in these sectors.

Beijing can encourage and accelerate the high-tech growth it covets by focusing on and developing specific areas of expertise, and by resolutely encouraging the factors which make it a more attractive place to live and work, and which unleash the creative potential of its residents:
•To build and maintain a high value-added economy, Beijing must leverage its strengths (center of education and government, strong ICT, R&D and finance support). Investment in each of these areas is the primary means by which firms acquire leading-edge technologies, and is essential for building an innovative, high value-added economy.

•Beijing must also swiftly improve its weaknesses (clogged infrastructure, polluted environment, rampant living costs) before it can reap the full benefits of a world city.

•Actively create an atmosphere in which innovation thrives - including a clean physical environment in which people want to live, and an open cultural environment that encourages experimentation, and views failure as an opportunity to learn.

•Expand on its strengths. For example, Beijing already has an excellent and well-developed education system, attracting China's best and brightest students and graduates, who are the bedrock of high tech, high value-added business.

•Create a level playing field by strengthening market institutions, such as IP protection.
Only a firm commitment to support all the elements of technological innovation, from quality education and research to the encouragement of seed capital and an unbending respect for the law and the quality of life will make this growth possible, in Beijing or anywhere else in China.