Businessman's lament for Beijing

When you consider Beijing and Shanghai there is just no comparison, longtime resident says

For Mats Harborn, Beijing is not a bad city. In fact the 25 years that he has lived in the Chinese capital suggests that the Swedish businessman has a special attachment to the place.

And yet Harborn can understand why, when people think of world cities, Beijing does not quite come up to scratch.

Harborn says local and national issues are holding back Beijing. Provided to China Daily

"I think Beijing has an image problem," Harborn, vice-president of the European Union Chamber of Commerce, says at the press conference of the European Chamber of Commerce's launch meeting of its Beijing Position Paper in the city on April 9.

"If we look at Beijing itself, it is looked at as the center of government, the center of culture, the center of international exchange and the center of technology," he says.

"Beijing has become synonymous for big Government. This image needs to change."

Harborn says that some of his business friends overseas do not even consider Beijing to be a global business center. His 19-year-old son has abandoned the city in favor of a better environment in Europe.

Harborn regards Beijing as a second hometown and even managed to get a statue from Sweden that is a symbol of peace erected in the city's Chaoyang Park.

However, unlike the bustling commercial center that is Shanghai, Beijing has yet to be recognized as a major commercial hub worthy of its name and size, he says, and that is because many issues, local and national, are holding it back.

But as the authorities press ahead with plans to revitalize the region, in the shape of the Beijing-Tianjin-Hebei integration initiative, the city has a great opportunity to build its image as a business center and as a role model for sustainable development, he says.

The chamber's position paper, its first on Beijing, advises Beijijng government how it can make the city much more globally competitive.

The chamber has about 1,800 member companies, of which 470 are in Beijing. The city hosts headquarters of 127 multinational companies, of which 52 are Global Fortune 500 companies.

"Beijing still clearly lags behind China's established commercial centers such as Shanghai and Guangzhou," Harborn says.

"A continent-sized country like China must have several centers of business, and Beijing should certainly be in the top tier of these. More business-friendly regulations need to be forthcoming."

Harborn says that if Beijing is to make itself a more commercial city it has a long way to go in many areas, including improving registration of companies and tax policies and quickening its Internet speed, which is well below par internationally. It also needs to improve its financial services to make the economy more vibrant by supporting the development of small and medium-sized enterprises, while making State-owned company reforms. Foreign companies would like to be more involved in the process, he says.

Environmental problems have become a concern for many foreign companies in China, he says, adding that in a business confidence survey last year about 22 percent of respondents said that in attracting staff, companies considered air quality in Beijing a top issue.

"The purpose of this position paper is to say that now is a golden opportunity for the government to think in a more realistic way, and to think about not only solving the problems, but actually taking on a vision for Beijing and the Beijing-Tianjin-Hebei area to become a role model."

The region is the third growth area of China after the Pearl River Delta and the Yangtze River Delta. Its total gross domestic product accounted for about 10 percent of the country's GDP last year.

President Xi Jinping proposed the initiative for getting Beijing, Tianjin and Hebei province to work more closely together in February last year. The aim is to balance development, the environment, population and resources, while building an economic zone surrounding Beijing.

More than 100 million people live in the region, which covers 216,000 square kilometers.

Yet there is a big development gap between Beijing and Hebei. Heavily-polluted Hebei still has several million people living in poverty, and it faces the challenge of cutting its excessive iron, steel, cement and glass capacity.

"The national government's drive to integrate Beijing with the city of Tianjin and Hebei province needs careful management and oversight or it could worsen pollution and strain already scarce resources such as water and arable land," he says.

"The good news is that many of the issues Beijing faces can be solved by turning problems into opportunities utilizing the help of all stakeholders, including foreign business."

Harborn says Beijing has a GDP of about 260 billion euros a year, equivalent to that of Denmark, a model of sustainable living.

The city, as the center of the Beijing-Tianjin-Hebei region, has great potential for economic growth and sustainable living.

Harborn says his family regards Beijing as home.

"It is not only the place we work. So the most important thing is for it to become livable, because the city needs to attract people. It needs to be a place that people can move in and out of. It needs to be a place of human mobility, have efficient bureaucracy and be connected to the world. It has to have complete infrastructure and a vibrant economy."

Beijing needs to better regulate what industries it allows to be set up and where they are located, he says. The city should attract companies that are more value-added, which in turn will help reduce pollution.

"Beijing has pollution problems, but we believe now that if the challenges can be conquered it will become a role model for the world."

At the moment, Beijing has an abundance of professional talent, and this should be better made use of, he says.

Ten percent of China's total research and development investment is in Beijing, and the city has 550 research and development centers. In 2013, about 20,700 patents for inventions were filed in Beijing. China is producing the largest stock of talent in the fields of engineering, mathematics, science and technology, and many of them are in Beijing, he says.

Beijing needs more foreigners working in research and development, and in that field more people with different backgrounds and of different ages are needed. But policies on visas and residence permits, are holding back the movement of workers that would greatly benefit Beijing.

Many foreigners whom foreign companies recruit in China are graduates of Chinese universities, he says, but they need to have at least two years' experience to obtain a working visa, meaning their expertise cannot be used in research and development.

Foreign companies have other problems in recruiting and retaining experts from overseas, he says. For example, every year when he applies to have his visa extended, it takes 15 working days, a period during which his movements are severely limited.

"If Beijing wants to be a headquarters city, this doesn't work. For me to stay in Beijing for even three weeks is almost impossible. I'm traveling all the time."

Li Guoping, president of the Capital Development Institute of Peking University, says the central government regards the Beijing-Tianjin-Hebei area development as a national-level policy, which means the region is destined to grow rapidly.

"Given that Beijing is at the center of all that, more steps are obviously going to be taken to streamline procedures so that it can play its proper role, transform and upgrade its industry and improve its natural environment."

If the city can seize the opportunity to improve itself and be more innovative it will be more powerful in introducing economic growth to the surrounding area and be more competitive globally, Li says.

http://www.chinadaily.com.cn/beijing/2015-04/11/content_20403047.htm