Xi's Megalopolis Plan Is Good News for Village Left in the Cold

  • Beijing-Tianjin-Hebei integration brings hope to poor Qujiamo
  • Gini coefficient in the region is above the UN warning level

Wang Shouming points at his dilapidated ceiling, fuming over the lack of repair help from village officials when about 200 meters away houses in a neighboring village have insulated walls paid for by the government.

"We live under the same sky and yet we are treated so differently," says Wang, 57, his voice shaking with anger. "If I lived over there I would feel so different."

Wang’s home is in Qujiamo, in a relatively poor province about 90 minutes drive from central Beijing. His neighbors across a field in Zhengjiamo village live under the jurisdiction of the capital. The two could hardly be closer physically, yet remain far apart in wealth and income -- with basic pensions on the Beijing side five times those on the other side.

Now, hope is emerging for a brighter future for Wang and Qujiamo. Hebei province is part of China’s biggest regional integration plan, a flagship project of President Xi Jinping that will link the province with Beijing and nearby Tianjin city into one giant megalopolis. It’s a gigantic infrastructure development plan intended to squeeze greater efficiencies from urbanization and help the three places move into higher-valued added industries.

"The integration plan will grant enormous infrastructure investment opportunities as the three regions seek to integrate their transportation systems," says Tong Yiling, Asia analyst at BMI Research in Singapore. "An acceleration in the pace of urbanization in Hebei could also lead to a booming property market and boost consumption."

The plan, backed by Xi in 2014, is a test case for whether China can build more efficient cities, curb air pollution and squeeze greater productivity from higher densities. It aims to ease population pressure on Beijing, link key cities via high-speed railways and highways, and shift lower value-added industries from Beijing and Tianjin to Hebei. Beijing and Tianjin are two of China’s four direct-controlled municipalities, or cities with provincial-level status.

Wang Shouming at home.

Photographer: Kevin Hamlin/Bloomberg

Successful implementation is crucial to demonstrate the capability of the central government and to provide a national template for urbanization, says BMI, a unit of Fitch Ratings Ltd.

For Qujiamo there already are positive signs. About four kilometers away, the Beijing-Laishui New City in Hebei is under construction -- a 175-square kilometer area aiming to attract entrepreneurs. It’ll include a logistics park, an electronic and information park and innovation center. Linked to Beijing last year by a new highway, it will include apartments, an international school, and an upmarket shopping mall.

"This will help drive the local economy," says Qujiamo party secretary Huang Changshun, 52. "Things will be better and better when the new city is built. Provincial and city leaders are very much focused on this project and require that we develop it with all our force."

China has never in recent decades had a problem building infrastructure. The challenge is doing so without worsening the nation’s excess industrial and housing capacity. For an illustration, look no further than Tianjin’s efforts to build an equivalent to New York’s Manhattan, which is still struggling to find tenants years after its first building was finished.

For a look at Tianjin’s plan for a whole new business area, click here

Beijing, Tianjin and Hebei -- known as Jing-Jin-Ji -- account for about 10 percent of China’s gross domestic product and have a combined population of about 130 million people, according to the Paulson Institute, the Chicago-based research group founded by former U.S. Treasury Secretary Henry M. Paulson. That makes it about triple the size of Tokyo-Yokohama and almost as big as the combined populations of the world’s top five urban areas -- Tokyo-Yokohama, Jakarta, Delhi, Seoul and Manila -- according to Demographia.

While opportunity beckons, for now inequality is stoking social tensions.

The Jing-Jin-Ji region has a Gini coefficient of 0.698, according to the Survey and Research Center for China Household Finance at Southwestern University of Finance and Economics in Chengdu in Sichuan province. The measure of income differences is above the 0.4 level that the United Nations has said is a predictor of social unrest.

Haves, Have-Nots

The disparity rankles with retired Qujiamo school teacher Cheng Jiaxiang, 60, who receives about half the 6,000 yuan ($900) monthly pension paid to teachers in Zhengjiamo, she said.

"I wish I was born on the Beijing side," she says. "It wouldn’t hurt so much if we didn’t live so close.”

Wang, who works on Beijing construction sites mixing concrete for about 100 yuan a day when jobs are available, envies the way the neighboring Zhengjiamo government looks after its residents, saying they provide support for a good life from cradle to grave.

There’s no dispute about that among Zhengjiamo residents, who receive a minimum pension of 420 yuan per month. Sitting on a doorstop chatting with neighbors, Mu Junting and her friends chuckle in disbelief at the minimum 80 yuan a month pension paid across the vegetable patch in Qujiamo.

"Even if you spent all that money on salt, your food still wouldn’t be too salty," says Mu, 55.

The locals say Qujiamo women often marry wealthier men, but it’s unusual for a Zhengjiamo woman to marry a man from Qujiamo.

"I haven’t heard of any Beijing girl marrying here recently," said party secretary Huang. "People want to go to wherever conditions are better."

Closing Gap

He says the village has been striving to close the gap with its wealthy neighbor. 

Back in 2012, it was selected out of 28 township villages to be a pilot for poverty alleviation. The county government offered about 120,000 yuan to paint the walls of all the households this year, pensions have increased to 80 yuan a month from 50 yuan a month two years ago and the salaries of local officials were doubled last year to almost 800 yuan a month, he said. The government also increased critical illness benefits last year.

Entrance to Zhengjiamo village.

Photographer: Kevin Hamlin/Bloomberg

"There are definitely differences between benefits and pensions in the two villages and people are definitely unhappy about that," Huang says. "You would expect some differences in the development between regions with different circumstances."

As for Wang, he remains apoplectic over the lack of government support for his ceiling, which he says leaks when it rains and should qualify for financial aid from a fund for repairing dangerous houses.

"So far the average village has seen no change from the the Jing-Jin-Ji integration project," says Wang. "But when you look at the future, there are some good prospects."

— With assistance by Xiaoqing Pi, Kevin Hamlin, and Hannah Dormido

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