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Non-capital functions: “Prohibit” “Shut Down” “Control” “Transfer” “Adjust.”

June 9, 2015

The central factor of Beijing Tianjin Hebei cooperative development: an orderly removal of the functions not essential to the capital in Beijing


Yesterday, General Secretary Xi Jinping presided over a conference of the Central Committee Political Bureau, to begin deliberations on an outline of the Beijing Tianjin Hebei cooperative development, of which transferring the functions and businesses not appropriate to the capital out to the periphery is an extremely important part.

To implement an orderly removal of the functions not essential to the capital in Beijing, it is first necessary to say what the capital functions are. In the 2nd month of last year Xi Jinping, while performing on the spot investigations in Beijing, said it was necessary to reaffirm the capital as the center of national politics, the center of culture, the center of international associations, and the center of science and technology innovation. This would bring to reality a humanities Beijing, a science and technology Beijing, a green eco- Beijing, a first-class international city, and a harmonious place to live.

These four centers are without doubt the essential functions of Beijing. But besides these, Beijing takes on and carries out other functions. If these are not removed, it will be in an impossible situation. As municipal party secretary Guo Jinlong has said, removing the non-essential functions is the only way out. Beijing must take up the task without hesitation, and distribute some of these to Hebei and Tianjin.

But in order to relieve congestion by transferring certain industries out of Beijing, it is first necessary to smash through barriers inherent in the system, in the restrictions which come about because the city administrative districts hold on to their prerogatives. Moving out the non-essential industries and adjusting the scale of industries staying in the capital must be done first, then after that, controlling and restricting the scale of the population. If the government attempts to control the population by simply trying to restrict and expel the floating population through administrative measures, this will damage the healthy development of the city organism.

This reporter has learned that in the draft due to be released by the conference, there is a list of the non-essential industries that are prioritized to be moved out of Beijing: industries in general, especially those with a high energy consumption; service industries, especially goods distribution centers and regional specialized markets; social services, including some educational and medical facilities, and also government administrative offices.

Beijing: to remove non-capital functions requires Beijing Tianjin Hebei cooperative development
PRC General Secretary Xi Jinping convened the ninth conference of the finance and economics leadership small group yesterday. The group indicated that relieving congestion by removing the non-capital functions, while pushing forward with Beijing Tianjin Hebei cooperative development, is a huge project of systems engineering.

What are the non-capital functions? Why do they need to be moved out of Beijing? How should one go about doing it? Like a single stone stirring up multitudes of ripples, this has become a hot topic on the internet.

What are the non-capital functions? In order to know, we must clearly differentiate the core capital functions from the non-core functions, and determine their relationship.

Concerning the core functions, Xi Jinping has put forward a clear cut strategy for the city: to be the center of national political affairs, the center of culture, the center of international concourse, and the center of science and technology innovation.

What are the non-capital functions? Head of the China Regional Science Committee Yang Kaizhong divides these into two major types. These are formed by considering along economic lines: the first is the relatively low-end, that of low benefit, low added value, of low influence in the economy. The second type is areas of the public sector which are not in the market.

“In government documents, the concept of Beijing is formulated in many ways: as a world cultural center, as a financial center, as a goods distribution center, etc., there are more than 20 such formulations.” Beijing has all the high level financial policy organizations: the Central Bank, the China Banking Regulatory Commission, the China Securities Regulatory Commission, the China Insurance Regulatory Commission, and the Center for Settling Accounts of Funds. Of all major colleges and universities in the country, 70% have a research center in Beijing. One third of the national focal point laboratories and engineering research centers are in Beijing. More than half of the members of the Chinese Academy of Sciences are in Beijing. Inside Beijing’s second ring there are several hundred administrative organs and state-run institutions. The functions of a number of these administrative and social service systems are not directly related to the capital. Last year, 230 million people came from elsewhere to the capital seeking medical treatment.

Why relocate the non-capital functions?

Beijing is the largest city in China by area. At the end of 2014, the population reached 21.5 million. The city is crowded. Basic resources are in short supply, environmental capacity has reached a ceiling. The “especially large city urban disease” is increasingly prominent. That there are too many functions is at the root of the problem.

Over a number of years, why have people done their utmost to push their way into the already crowded Beijing? The answer is that there are the best educational resources, the highest standard of medical care, and a huge concentration of power and authority. Netizens say that even if they build1000 more first class hospitals, quadruple subway routes and roads, spread out the city to the tenth or twentieth ring, it will be unable to solve the problem. There will still be haze in the atmosphere, traffic will be steadily worse, and the population will keep climbing, before long at 50 or 100 million.

How should one go about relocating the non-capital functions?

In 2014, the largest clothing wholesale collecting and distributing center in northern China, the Beijing zoo area clothing wholesale markets, are in the process of relocation. The 10,000 merchants who have gathered here over 30 years, and paid tens of millions in taxes, are formally taking their leave of the capital. Behind this move, is a vision for the transformation of Beijing.

Last year, Beijing took the initiative in issuing a list of 147 industries that are either forbidden or limited. It has shut down or evacuated 392 individual polluting industries, and is pushing forward with 53 more. It has torn down 36 large markets in the center city. At the same time it has made an effort to shift to a so-called “high-grade, precision-based, and advanced” economic structure, deepening the reforms first tested out at Zhongguancun (Beijing’s silicon valley).

Moving out industries to relieve congestion is not a simple matter. If one examines carefully, one can end up with a list of one thousand separate businesses that need to be moved out of the city. To form a complete set, each district must sufficiently cooperate. Beijing city, to prepare properly, has to check each district’s assessments and methods, and for each itemize how many people and businesses are to be moved. When the industries and businesses are moved, the full component of people must move with them. But to only transfer out industries is not at all adequate, that is alleviating the symptoms, not a cure. Government offices, state-run institutions, scientific research facilities, colleges and universities, even the offices of the armed forces must also relocate to the periphery. Only then will Beijing’s urban disease undergo a thorough cure.

The detailed list of functions and industries to be relocated is in the process of being drawn up. These include “one batch of manufacturing industries” “one batch of wholesale markets in the city center,” “one batch of educational facilities” etc. It states no more large hospitals will be built in the center city.

At the close of this year’s People’s Congress at the end of January, the Consultative Conference determined that Beijing would close 300 businesses in 2015 considered to be polluting (such as home furniture manufacturers), and to accelerate construction of the Tongzhou supplementary city center. The plan is to invest 1.03 billion yuan to relocating industries and dispersing the population. There is a fund of 45.24 billion to speed up innovation and development in key technologies: new energy resources, new materials, biomedicine, also to stimulate new ideas in information technology and traffic systems.

Giving up or renouncing certain things and acquiring others, is the guiding spirit of the joint Congress on these matters. Orienting the new southern airport toward Hebei, for instance. The Beijing mayor: “if there is a polluting business that does not relocate, we’ll pull the plug on it.” And, “Businesses that relocate will generate tax revenues. Beijing does not intend to keep all those revenues for itself.”

Five methods to redistribute industry
“Prohibit” “Shut down” “Control” “Transfer” “Adjust.”

Prohibit: to prohibit building new factories, or expanding existing factories, of industries on the forbidden list, especially those that fall in the category of manufacturing industry.

Shut down: to immediately shut down any factory that generates a high level of pollution, or that has a high energy consumption, or a high water consumption. Overall to take administrative action over the industry compounds in towns and villages, to accelerate cleaning up small-scale, messy factories.

Control: this is directed toward the disposal of waste materials, including refined oils and food processing wastes, to safeguard the city environment and peoples’ daily lives.

Transfer: those industries which do not correspond to the capital city –manufacturing industries which rely on natural resources and are labor intensive — are to be transferred out of the city

Adjust: among high end industries, those which do not have a comparatively advanced and superior manufacturing arm, will implement adjustments.This will take place in terms of the Beijing-Tianjin-Hebei ongoing coordination of the rearrangement of the distribution of industries across the entire area.

Beijing city has made a plan, to invest 10 billion yuan in 2014-2018, an investment fund for Beijing-Tianjin-Hebei cooperative development.
非首都功能 non-capital functions
高精尖 high-grade, precision-based, and advanced


In attempting to constrain or reduce the population of Beijing, there have been measures aimed at getting portions of the floating population to return to their native places. By closing off school admissions to families without a Beijing household registry, at least the mothers and children have to leave. In practical terms, it is mothers and children who use more of the city social services than the father. The father, remaining in the city, contributes his productivity (although of course mothers are usually employed too), while the rest of the family, considered a drain on city services, depart.
However, “hard” policies like these cause social tension. The problem is rethought: instead of targeting the floating population, move whole industries, those at the “low-end” of the economy, and all the people associated with them, out to the periphery. In addition, move some social services out as well. The organic fabric of the city will not be rent apart, but will be lifted whole and intact, to a new location.

In the vision of Beijing after all this relocation, it will still be “the center of scientific and technological innovation.” Of course, those on the periphery also want to build high-tech industrial parks and research centers. Yongqing officials, while welcoming the construction of an International Clothing City to absorb the wholesalers displaced from Beijing, would actually rather have a high-tech center of their own. How many high tech research centers can there be, gleaming in the sun by day and sparkling with lights at night? As many as it is possible to imagine, it seems.

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