Urban clusters release growth potential

Integration helps transform industries and improves coordination in the Yangtze delta

Regional integration, transportation and, in particular, economic coordination, will be priorities for the Yangtze River Delta urban cluster as a new development plan ramps up economic transformation and looks set to grab global attention, experts said.

After nearly two decades, the cluster has expanded to 30 cities in Shanghai and Jiangsu, Zhejiang and Anhui provinces.

The region accounts for just 3.69 percent of China's land area, but what it lacks in size it more than makes up for in economic clout. It generates more than 20 percent of the country's GDP, topping the rankings for China's three biggest urban clusters. The other two are the Beijing-Tianjin-Hebei cluster in the north and the Pearl River Delta cluster in Guangdong province in the south.

At the executive meeting on May 11, the State Council, China's cabinet, approved the new plan to further promote the Yangtze River Delta urban cluster to achieve a global reputation by 2030.

Six years ago, the central government decided the Yangtze River Delta region was to be a center for modern services and advanced manufacturing and a gateway to the Asia-Pacific region by 2018. Under the new plan, the cluster will focus on high-end manufacturing and modern services.

Lyu Bin, director of the Urban and Regional Planning Department at Peking University, said: "The new plan shows the central government's determination to transform traditional industries and cultivate new momentum to combat the economic slowdown."

The plan also targets forming an integrated market and enhanced innovation for the financial, technological research and development and logistics sectors.

The cluster will prosper if it can overcome several obstacles that stand in the way of regional integration, said Lyu, who was one of the specialists to assess the plan, formulated by the National Development and Reform Commission, before it went to the State Council, China's cabinet, for approval.

So far, 13 of the 30 member cities in the cluster are in Jiangsu, 11 in Zhejiang but only five are located in Anhui.

Experts said intercity transportation will be key in overcoming this gap and more high-speed railways should be built to facilitate travel within the cluster.

Ge Jiong, a 30-year-old salesman, commutes between Shanghai and Kunshan, a city in Jiangsu neighboring Shanghai. Each morning, he pays three yuan ($0.46) to take the 10-minute ride on the subway from his home to his office in Shanghai. The subway opened in 2013.

The salesman enjoys his daily trips but it is an unorthodox mode of transport for most city dwellers in the Yangtze River Delta because of the inconvenience in intercity transportation. That's why Lyu suggested smaller clusters of two or three cities be connected in a faster and more convenient intercity transportation system.

"Transportation projects should go before all other measures to facilitate travel and transporting goods," Lyu said, adding that these sub-clusters would make industrial cooperation and other exchanges easier and in turn boost development of the whole delta region.

Lyu said decision-makers in the cluster should consider many factors, such as disparities in economic output and growth rates. Therefore, coordination mechanisms are another key step to combat disparity among the four neighbors, which Lyu said caused variations in many fields, such as public services.

In terms of GDP and social welfare, Anhui lags far behind its neighbors. The positive side lies in the fact that Anhui's growth rate has outdone them in recent years. Anhui enjoyed 8.6 percent GDP growth year-on-year last year, higher than Jiangsu and Zhejiang, while Shanghai grew by 6.9 percent.

"Qualified people will probably choose a city like Nanjing, capital of Jiangsu province, which can provide better opportunities and services in education and healthcare. This blocks integration and needs provincial governments to compromise for more balanced economic plans," Lyu said.

Lyu's views were echoed by Xiao Jincheng, vice-president of the Region Science Academy of China, who said the urban cluster has improved cooperation among cities that previously competed for investments or expertise instead of cooperating.

The Yangtze River Delta region holds an annual coordination meeting, which is attended by the executive deputy heads of government of Shanghai and the three provinces. "The mechanism should continue and needs more support," Xiao said.

Lyu said he is optimistic about the urban cluster's future, because the region has the country's most qualified people and soundest market mechanism.