Rethinking bullet trains, dams and TV
edifice By Antoaneta
Bezlova
BEIJING - Casting a fresh eye on the
social cost of rapid economic growth and worried about
the overheating of China's economy, the country's
leadership is rethinking a series of high-profile
projects initiated by its former leaders.
With
little fanfare, but enough publicity to drive home the
message, the team of President Hu Jintao and Premier Wen
Jiabao has signaled that unlike their predecessors, they
do not see China as a testing ground for the latest
technology.
They also have indicated a wish to
adjust government spending to reflect their pursuit of
more sustainable economic development and a new emphasis
on a "people first" policy.
According to
industry insiders, at least three major economic
projects have felt the implications of this new populist
style of leadership.
Among these is the
forerunner of China's high-speed mass transportation -
the high-speed railway link between Shanghai and
Beijing, long projected to be up and running for the
2008 Beijing Olympics Games. This has now been put on
the back burner as the central leadership is busy
tackling low rural incomes and growing social
inequality.
Amid concerns about over-investment,
not only the date for breaking ground on the project has
been pushed back, but debates inside the government
about which technology ought to be used also have taken
unexpected turns.
The new headquarters of the
government-controlled China Central Television (CCTV) -
a US$600 million (4.96 billion yuan), 530,000 square
meter building in downtown Beijing designed by Rem
Koolhaas and Ole Scheeren of the Rotterdam-based firm
OMA - has also been criticized by Premier Wen because of
its steep cost. Cost-cutting redesign of TV
headquarters Although awarded to OMA by a
Beijing-organized architectural jury and CCTV leaders in
December 2002, the project is now caught up in
controversy after the central leadership reportedly
demanded its redesign in order to cut costs. Leaders
also have questioned the wisdom of the new CCTV
headquarters' location in the capital's prime central
business district.
"We do understand new
leaders' strategy to revisit all megaprojects of the
state and rethink all the money spent on the Olympic
effort," says Ole Scheeren, the CCTV headquarters
project manager at OMA.
"Yet we believe that
there is a consensus among the leaders that they can't
discard everything and must carry through with some of
the projects. I'm confident that our project would go
ahead as scheduled and retain its original design,"
Scheeren adds.
Another project that has been
affected by popular concerns is the construction of 13
dams on the Nu River in China's southern Yunnan
province.
Despite continuing power shortages, in
April Premier Wen put on hold controversial plans to
build the cascade of dams on one of China's last
free-flowing rivers, in an area designated a world
heritage site for its biodiversity. The surprise move
followed a petition campaign by environmentalists and
activists.
In the written suspension order, Wen
said that the government must proceed carefully and
investigate the dam plan thoroughly, particularly since
the scientific and environmental communities have
expressed alarm over the project.
Chinese
leaders' recognition of the need to cool down sectors
that are overheating and to bring the overall gross
domestic product (GDP) growth rate down to a sustainable
level was summarized best by Premier Wen. In his work
report to the annual meeting of China's legislature in
March, Wen said that the government GDP growth target
for 2004 is just 7 percent.
Reining in
rampant economic growth This is a remarkably
modest target given that the economy grew by 9.1 percent
in 2003 and clocked 9.7 percent growth in the first
quarter of this year. Beijing has indicated that more
steps will be taken to cool down the economy if current
policy tightening measures fail.
Since mid-2003,
the People's Bank of China, the country's central bank,
has raised bank reserve ratios twice, forcing banks to
keep more cash on hand instead of lending it. Beijing
also has banned new projects such as aluminum smelters
and has cited steel, cement, real estate and automobiles
as other areas in need of tighter regulation.
"The Chinese government will gradually phase out
its expansionary fiscal policy and slow investment in
government-sponsored projects," the Asian Development
Bank said in its annual economic forecast released at
the end of April.
Yet, more interesting than
this commitment to abandon what the government is now
calling "the blind pursuit of GDP growth" is Beijing's
newfound emphasis on the rights of the people and their
potential implications for economic policy.
This
emphasis is in part a reflection of Chinese President Hu
and Premier Wen's attempts over the past year to portray
themselves as "men of the people".
But lending
an ear to popular concerns is more than just a political
move by the new leaders to consolidate their power base.
Rapid growth can also lead to social
unrest Beijing is also worried about the
escalating social cost of rapid economic growth, as
evidenced by its pledges to redress the uneven
distribution of wealth. A failure by the Communist Party
of China to curb the destabilizing effects of China's
rapid growth could result in social unrest and threaten
the party's future grip on power.
Perhaps most
illustrative of Chinese leaders' new policy concerns is
the story of twists and turns surrounding the future
high-speed railway between Beijing and Shanghai (the
Jinghu line).
The construction of the 1,307
kilometer, $14 billion Jinghu line will be awarded
through an international bidding process scheduled to
begin before year's end. Industry insiders suggest,
however, that the two front-running bidders for the
project have been losing a competitive edge as Chinese
leaders are rethinking their decision-making policy to
reflect their "people first" concerns.
The
appeal of German-designed magnetic-levitation technology
- once thought to be the ultimate favorite for this
high-profile engineering project - has been losing
luster. China's leaders appear to be less impressed with
its technological novelty and more worried by its steep
cost ($40 million per kilometer) and its incompatibility
with a large and existing infrastructure network.
"Had Zhu [Rongji] stayed in power, we would have
been very confident of winning the Jinghu line," says a
German official involved in the negotiations about the
project. "But the new leadership is less in love with
technology. Their priorities have changed and they want
to leave a different mark."
Japan's Shinkansen
bullet train system also had been a strong candidate as
a contractor for the Jinghu line. The train has proved
to be a champion in profitability and management
efficiency in Japan.
Yet, in another sign of a
government more in tune with popular concerns, the
central leadership has given little recent indication
that it favors Shinkansen's technology.
As it
is, the Japanese bid has generated an outpouring of
angry nationalistic sentiment. According to media
reports, some 80,000 Chinese signed an online petition
in August, calling on the government not to award such
prestigious project to the country's former invader.
