In the master development plan of Beijing approved by the State Council in 2005, the goal of building Beijing a world city was already set. To reach this goal, the Beijing government is expected to include the world city strategy in its 12th Five Year Plan.

According to the Competitiveness Report of Chinese Cities published by the Chinese Academy of Social Sciences in May last year, Beijing was one of the fastest growing cities in the world and had already become a major regional city in the Asia Pacific.

Indeed, according to the Global Cities Index conducted by the American journal Foreign Policy, in conjunction with A.T. Kearney and the Chicago Council on Global Affairs in 2008, Beijing already ranked 12th among 60 major cities in the world.

A perfect world city

The Global Cities Index tries to give a complete picture of a city’s global standing by ranking the cities in five dimensions, namely (1) business activity which include the value of its capital markets, the number of Fortune Global 500 firms headquartered there, and the volume of the goods that pass through the city. (2) Human capital or how well the city acts as a magnet for diverse groups of people and talent from overseas and domestically. (3) Information exchange, i.e. how well news and information is dispersed about and to the rest of the world. (4) Cultural experience, this is to evaluate the level of diverse attractions for international residents and travellers. (5) Political engagement, i.e. the degree to which a city influences global policymaking and dialogue.

It is reckoned that no city can dominate all dimensions, but London and New York, which ranked top in the index, enjoyed high rankings in multiple dimensions. Both London and New York host the biggest capital markets, most diverse and well-educated populations, wealthiest multinationals; and the ideas, values and lifestyles of both cities in general have strong influence to other cities in the world.

Hong Kong vs Beijing as a world city

Hong Kong, with our strong financial and business links, ranked 5th in the Global Cities Index. Given the fact that Hong Kong has a small domestic market, growth of Hong Kong economy depends very much on our economic interaction with the international markets. Therefore, we maintain a very free and liberal economy to encourage all sorts of business formation and to attract foreign companies and talents. In 2009, Hong Kong had 3,580 overseas companies that used the territory as their regional headquarters or regional offices.

Among the factors affecting their choice to locate their regional presence in Hong Kong are mainly the favorable business environment that includes simple tax system and low tax rate, free flow of information, corruption free government, rule of law and independent judiciary; and the availability of financial services, business services and professional services to support their needs.

In addition, Hong Kong also tries to maintain a livable environment for the executives who represent their parent companies in Hong Kong and their families by maintaining a safe, convenient and enjoyable living environment.  For example, Hong Kong is regarded as one of the safest city in the world, our public transportation system is regarded as one of the most efficient in the world, we have good medical services, a large number of international schools, and a good varieties of entertainments, international sports events and cross-culture shopping and dinning facilities to suit the demand of the international community. One thing we need to improve is the air pollution problem. However, Hong Kong has been working closely with the Guangdong government to clean the air.

For Beijing, according to the Global Cities Index, its most outstanding dimension was political engagement which ranked 7th, yet the overall ranking was 12th.

Beijing is the political and cultural capital of China. Given the rising economic strengths and influence of China in the international arena, and the large number of embassies and consulates, major think tanks, political conferences, world class performing arts venues that Beijing has already hosted, Beijing should enjoy competitive edge in the dimension of political dimension and cultural experience.

Moreover, China’s service sector is still not fully developed as well as some other business and consumer services. To further improve the business environment and livability of Beijing, so as to attract more foreign businesses and talents, it is considerable to allow more foreign participation and competition to expedite development of the services sector of Beijing.

Adaptation to the globalization needs

It is noted that the most successful world cities have one thing in common, i.e. continuous adaptation to changing circumstances to increase or maintain their competitiveness. For example, London has a firmly entrenched global networks built on its history as capital of an empire, but it has developed successfully a very competitive creative industry to revive the economy as a result of the hollowing out of its manufacturing sector and the decline of its ports. Today, London beats other cities by its financial markets and the strength of its diverse creative class. It excels in the cultural dimension.

China enjoyed substantial growth in international trade and investment in the last three decades as a result of globalization, and saw rapid growth of a number of cities including Beijing, Shanghai, Guangzhou and Shenzhen. However, in the 21st century, the new wave of globalization and international transfer of capital, human resources and technology etc. will be, to a large extent, led by the ICT industry and service outsourcing. Therefore, the primary engine of economic development of mainland cities will shift from one based on mass-production industries and low-skill service jobs to a more sophisticated technology- and knowledge-based system for production and services.

The recent literature on technology transfer, innovations and global competitiveness have emphasized the role of foreign direct investment and its transmitting functions in transferring technology and facilitating innovations in the host country. Beijing is traditionally an important R&D center of China. As technology industries usually seek locations near research, Beijing should enjoy an edge in attracting these investments. However, to strengthen Beijing’s competitive edge, Beijing still need to develop strong services and commercial supports for technology innovation and transmission. Moreover, to become a centre of activities and node for multinational corporations, it is essential for Beijing create a free market system that would be globally linked and responsive to the competitive needs of the multinational corporations.

Domestically, Beijing can capitalize on China’s urbanization plan to attract more talents from all over the country to work and start their own business in Beijing, and try to improve the property rights registration and protection system, and establish the necessary business and professional services sector to support and encourage technology transfers and commercialization.

Faster moving, greater efficiency

An efficient infrastructure plays a pivotal role in the sustainable development of all sectors of an economy. Take transport facilities as an example. No big city can afford to ignore the traffic congestion problem because it not only directly reflects how efficiently a city is run, but also costs the economy and society dearly. It seems that traffic congestion is getting worse in Beijing. Reportedly, the average time a person is caught in the traffic jam has increased from 3.5 hours per day in 2008 to 5 hours today. In order to operate more efficiently, Beijing has to do more to improve its transport system. And these efforts should include short-term measures as well as long-term urban development and mass transit plans.

Hong Kong is known for its scarcity of land and high population density. Yet, Hong Kong ranks among the most competitive cities in the world thanks to its efficient public transport system. Hong Kong is one of the world’s most convenient cities, with transport fares among the world’s lowest. Hong Kong’s highly efficient transport network is attributable to the huge effort put in the mass transit system over the years. It is estimated that over 90% of the daily journeys are on public transport in Hong Kong. As one of the few profit-making railway operators in the world, the Mass Transit Railway Corporation (MTRC) exemplifies the success of Hong Kong’s public transport system.

Apart from building a highly efficient mass transit system, improving the overall urban planning is also very important. For instance, government offices and business districts are concentrated in downtown areas of Beijing whereas residential areas are primarily located in the suburbs. There are bound to be rush hours and off-peak hours as far as traffic is concerned. These problems can only be resolved by urban planning over the long term. For example, developing more self-contained core districts within the capital city can be an option. The governments of Beijing and Hong Kong can certainly share their experiences in the planning and development of satellite towns.