BEIJING

as
A GLOBALLY FLUENT CITY
 BEIJING
as
A GLOBALLY FLUENT CITY

Brookings-Tsinghua Center for Public Policy

&
Global Cities Initiative
A Joint Project of Brookings and JPMorgan Chase

Wang Feng
Beijing’s RiseBEIJING’S
as a GlobalRISE
City AS A GLOBAL CITY

B
eijing, the political center of packed with cars above the ground, and
the world’s largest country and crowed subway cars below. In 2002, there
second largest economy, is were 1.9 million automobiles registered
now a major new global city. In in Beijing. By 2012, there were more
the last few decades, the ancient capital than 5 million. In 2000, there were two
of the middle kingdom has transformed subway lines with a total length of less
itself into one of the most modern, than 55 kilometers operating in Beijing.
dynamic, and global cities in the world. Today, slightly more than a decade later,
Beijing has 16 subway and light rail lines,
Beijing is expanding rapidly. Between with a total length of 456 kilometers,
2000 and 2010, Beijing’s resident the longest among all cities in the world.
population grew by 42 percent to almost Beijing has another over 500 kilometers
20 million people, making it the fastest- of subway lines planned by 2020. In 2000,
growing city in China. During the same Beijing welcomed less than 2.5 million
period, China’s total population grew international visitors; by 2012, that
by only 6 percent. One of every three number has more than doubled. A decade
residents in Beijing is a migrant from ago, Beijing’s airport was nowhere to be
elsewhere in China, up from one in five found on the list of the world’s 30 busiest
airports. Now, it is the second busiest,
with an annual passenger volume of more
than 77 million in 2011. And a second
international airport is already under
construction.

Beijing is just one example of China’s era

of massive urbanization, albeit a very
special one. Over the last three decades,
and in particular over the last 10 years,
China’s historically unprecedented
economic boom has been accompanied
by the largest urbanization process in
China’s history. In the first decade of the
twenty-first century, the share of China’s
in 2000. The scene of a sea of bicycles, population classified as urban shot up
an iconic feature of Beijing’s landscape in from a little over a third (36.22%) to one
Brookings- half (49.95%), increasing at an average
the past, is no longer to be found. In its
Tsinghua Center
place are congested highways and roads rate of 4% per year. Given the sheer size
for Public Policy

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of China’s population, this translates into wealth inequality. With per capita median
210 million new urban residents. And in income rising in one decade from less
2011 China’s urban population surpassed than $3,000 to over $10,000 nationwide
its rural population for the first time and to more than $12,000 in Beijing,
in history. By any measure, this is the China is seeing the rapid expansion of the
largest-scale urbanization process the population of “affluent consumers.” It is
world has ever seen in a single decade. estimated that now over 40 percent of
China’s urban residents have household
Chinese cities are growing both in incomes over $13,500, a level at which
number and size. In 2000, there were households begin to be able to afford
about 55 million people living in 7 Chinese international “middle class” goods, such
cities that had a population larger than as cars and luxury goods, and to travel
4 million. By 2009, the number of such overseas for vacation.2 In China’s large
large cities doubled, to 14, and their cities such as Beijing, at the same time,
combined population approached 100 over a third of the population are internal
million. In 2012, China housed 48 of migrants, mostly from rural areas, who
the world’s 300 largest metropolitan are critical to the city’s economy but
economies. These major metropolitan are not entitled to the same social and
areas accounted for about a quarter of economic benefits as local residents.3
China’s total population in 2012, but
generated 55 percent of nominal GDP.
Beijing and Shanghai, China’s two largest
metropolises, each registered a more
than 40 percent population expansion
in one decade’s time and each has
over 20 million residents now. A 2011
report by the McKinsey Global Institute
predicts that by 2025 over a third of the
world’s 600 largest cities will be in China,
including 100 that are not yet on the list.1

This rapid process of urbanization has

sparked the growth of a formidable
middle class, along with rising income and

Beijing as
a Globally
Fluent City

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 CITIES WITH GLOBAL FLUENCY

T
he concept of global fluency, originally applied in Chicago by Mayor Richard M.
Daley, is based on the belief that there is a tremendous untapped potential
for cities to use the forces of globalization to advance urban economic
development goals. In the age of an increasingly interconnected world,
cities with global fluency are more competitive. Moreover, they stand to benefit from
new opportunities brought about by technological and economic connectivity, from
scientific and cultural innovation, and from an expanding urban middle class that can
serve as the foundation of a diversified, vibrant and affluent society. Researchers with
the Global Cities Initiative have identified ten traits of globally fluent metro areas.4
Global cities can be large or small, but they all share certain characteristics, such as a
leadership that has a worldview, a legacy with global orientation, a government that
serves as a global enabler, and a distinct economic specialization that is used as a
platform for diversification. Successful global cities can also adapt to changing global
dynamics, and possess a culture of knowledge and innovation. These cities are well
connected both in people and in
goods with the rest of the world,
and over time, establish a global
identity and appeal that allow them
to attract talent and to secure
investment.

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FOUR QUESTIONS FOR BEIJING

B
eijing is without any doubt already a global city. As a symbol of China’s
emergence as a global power, Beijing ranks among the world’s most
influential and important cities. The ascendance of Beijing as an important
global city in a relatively short time has clearly benefited from the ambition
and determination of both the central Chinese government and the Beijing municipal
government to elevate Beijing’s global profile; from Beijing’s legacy and position as
China’s political and cultural center; and from massive investment in infrastructure to
support business and innovation activities and to enhance Beijing’s global connectivity.

Beijing’s rise as a global city is still incomplete. Beijing’s global influence in terms of
economic competitiveness and financial interconnectedness still do not measure up
to the top cities in the world.5 What kind of global city does Beijing aspire to be in the
future? What traits does Beijing share with more established global cities such as New
York, London, Tokyo, Paris, Hong Kong, and Singapore?6 What meaningful strategies
can Beijing employ to fully leverage its potential as a global city? To anticipate Beijing’s
further ascendance as a top tier global city, the following four questions need to be
addressed: 1) What kind of city does Beijing aspire to be? 2) How can Beijing improve
its governance? 3) What it takes to build a more vibrant economy? And 4) How can
Beijing’s global identity be further enhanced? Beijing as
a Globally
Fluent City

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 Q1. Size: Can Beijing Get Any Larger?

Beijing is already China’s largest city, and

the fastest growing in the last decade.
The first question Beijing encounters
as a global city is an old one, which is,
“can it get any bigger?” The answer to
this question is both a “yes” and a “no.”
Beijing’s rapid and ongoing expansion
has already shown the challenges the city
and its residents face, on a daily basis,
from exorbitantly high housing price,
on Beijing’s population, but it has failed
congested traffic, to unprecedented level
every single time.
of air pollution. Beijing’s rapidly growing
population and economy also face
Beijing’s heavy concentration of resources
another hard constraint, water supply. So
and modern infrastructure makes it a
a natural reaction to the future of Beijing
suitable site for even greater expansion.
is not to make Beijing any bigger.
In addition to the infrastructure is has
built and that which is currently under
Yet, there are reasons to argue that
plan, Beijing also dominates among all
Beijing can get bigger. In fact, with the
Chinese cities in its concentration of
high concentration of resources and
globally connected companies. Of the
opportunities present, economic and
world’s 500 largest companies, 256
cultural, let alone political, there is hardly
had invested in Beijing by 2010, with
anyway to prevent Beijing from getting
a total of 598 projects. As of January
bigger. The Beijing government has tried
2013, 84 Fortune 500 companies have
repeatedly in the past to impose a cap
their regional headquarters in Beijing.
Of the 95 Chinese companies on the
Global Fortune 500 list, 47 are based in
Beijing. This places Beijing second only
to Tokyo among global cities in terms of
As a large city, Beijing’s
population density is
not high, and its urban
development has been
more extensive than
intensive.
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the number of major corporations that and research academies, a fact unlikely
to change in the foreseeable future. But
call it home. In one decade, foreign direct
investment rose from a little over $2 should Beijing also be China’s financial
billion in 2000 to over $7 center, film and music
billion in 2011.7 production center,
health-services center,
The right question automobile production
should not be the size center, and high tech
of Beijing itself, but A distributed and industry center? Beijing
what kind of city Beijing multi-centered model needs to rethink its
aspires to be, or in what aspiration to be China’s
ways it gets bigger. As
of economic, cultural, top city in every aspect.
a large city, Beijing’s and technological A distributed and multi-
population density is resources better centered model of
not high, and its urban serve a nation’s need economic, cultural, and
development has been technological resources
more extensive than
for technological and better serve a nation’s
intensive. The spread economic growth and need for technological
of urban space in all the quality of life of and economic growth
directions, without its population. and the quality of life
major efforts to relocate of its population. This is
economic and civic especially the case for a
functions outside the large country.
city core, contributes to
increasingly worsening traffic congestion, Beijing’s urban development master plan
low efficiency, and poor life quality. for 2004-2020, enshrined in Beijing’s new
Similarly, improvement in the city’s road urban planning and exhibition hall in the
and traffic design, rather than restrictions center of the city, provides a longer-term
on population size and the number strategic vision for Beijing’s development.
of vehicles on the road, can be more As Beijing’s international orientation
effective in alleviating pollution and traffic is largely due to the city’s perception
congestion. of itself as a city which represents all
of China, and aspires to essentially be
In addition to size, the other perennial the top Chinese city in virtually every
question for Beijing is what type of city dimension, Beijing’s plan does not spell
it aspires to be. Beijing’s position as out a clear vision of where its unique
China’s political center is indisputable talents and competitive advantages lie,
Beijing as
and irreplaceable. Beijing also has China’s or of how it can differentiate itself from a Globally
highest concentration of top universities other leading global cities by pursuing a Fluent City

7
 specialized economic strategy. For Beijing advantages, as well as the constraints
to establish itself as a leading global city, it faces, environmental, economic, and
it has to make decisions not just about political.
what it wants to be, but also what it does
not and should not to be. Such choices
need to be made in reference to Beijing’s
existing national and global competitive

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Q2. Positioning: Should Beijing be Primarily a National Capital?

China’s decades of spectacular economic become a more prominent global city the
growth has clearly benefited from its leadership needs to have an open mind,
policies of reforms and opening to the a mind that has a clear global view, and a
outside world. Both China’s central mind that cannot be selectively open.
leadership and that of Beijing clearly
recognize this and have made a deep Beijing’s current government plan still
commitment to continue on such a path. promises to place a high priority on
elevating the city’s profile on the world
For Beijing, as both a capital city and a stage. Beijing’s 12th Five-Year Plan,
large metropolis, a question is always the principal blueprint for the city’s
what and whom it should economic development,
serve primarily. Beijing’s sets the overarching goal
municipal government of transforming Beijing
leaders in other words into a “world city with
Governments
face a challenging choice Chinese characteristics.”
of positioning, namely to alone cannot The 2004-2020 master
govern Beijing mainly to create a global city. plan, a longer term
serve the political functions Citizens do. strategy document that
of the central government, guides the city’s spatial and
or to lead it to become a economic development,
truly global city that serve sets a medium-term goal
primarily the economic and of establishing Beijing as a
quality of life needs of its high-profile international
residents. The former requires a mindset city by the year 2020 and establishing
that is more inward while the latter is Beijing as a global metropolis with a
more outward. These two functions – focus on modern services and advanced
“national center” and “local center” do manufacturing. Moreover, the master
not have to be mutually exclusive, as plan envisions Beijing as the principal
can be seen from the successful cases of location for high-level international
London and Paris. The challenge is how exchanges, as a center for media, culture,
to do both well. Beijing’s dilemma, and education and scientific research, as a
the shifting emphasis between these two center of government and economic
mindsets, can be seen in the changes that planning, and as an intercontinental
took place in Beijing around the 2008 transportation hub. There is therefore no
Olympics Games. Whereas in the time doubt that Beijing enjoys the full support
leading to the Games Beijing launched of both the national and municipal
a campaign to make it more globally governments in achieving these goals.
Beijing as
appealing, such efforts faded away after a Globally
the Games ended. To lead Beijing to Governments alone cannot create a Fluent City

9
 global city. Citizens do. Beijing cannot be involvement of its residents in civil affairs,
a great city simply by attracting global and to have a structure of transparent
Fortune 500 companies. Its citizens governance where the government, the
need to feel that they are living in a business community, NGOs, international
great city, and need to be connected organizations, and the civil society can
to the city in meaningful ways. A great work together in addressing the many
global city is first and foremost a vibrant challenges. Within such a new structure,
city for its own residents, not just organizations previously not present,
for others. Beijing’s rapid expansion such as housing associations, can have
makes it imperative for the first time their place, and platforms for residents
in its history to have a new structure to evaluate public policies need to be
of governance. In addition to clarifying created and eventually must become
relationships between central and a regular part of policy debates and
municipal governments in administrative, evaluation.
fiscal, and managerial matters, Beijing
also needs to see an increased and true

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Tsinghua Center
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Q3. Adaptability: What are Beijing’s Competitive Advantages?

A dynamic and adaptable economy will Beijing has also made huge investments
be the basis for Beijing to continue to to promote greater physical and digital
be a great global city. Such an economy connectivity. Air traffic passenger flow is
needs to be innovation oriented, and projected to reach 120 million by 2015.
to be connected to the world. Beijing’s The city’s 12th Five-Year Plan (2011-
concentration of China’s higher 2015) calls for making the city more
educational and R&D facilities in China livable by increasing the share of public
already positions itself extremely well transportation to 50% of total center
to be an innovation center. In addition city trips, and by reducing center city
to the unrivalled concentration of commute times to average less than 1
higher educational institutions in China, hour. It also sets goals for improving
Beijing received 45% of China’s central citywide access to high speed Internet
government spending for major science and the promotion of citywide high-
and technology projects between 2006 speed wireless Internet coverage. From
and 2010. a regional
Nearly a perspective,
quarter of the city’s
all China’s 2004-2020
certified master plan
high-tech sets regional
companies planning and
are in Beijing. integration as
By the end a top priority,
of 2010, and calls for a
preferential coordinated
policies regional
favoring logistics
relocation of regional headquarters and framework to take better advantage of
R&D centers to Beijing had begun to pay ports in the neighboring cities of Tianjin,
off, with 353 R&D centers established by Tangshan and Qinhuangdao. Despite
multinational corporations. In high tech this, Beijing still faces serious problems
industries and other knowledge-intensive in connectivity. Automobile congestion
industries such as the financial sector, this is one example: despite aggressive
move to promote the city as a destination measures to ration road space, the city’s
for regional headquarters has helped to traffic is among the worst in the world.
attract technology, know-how and human In 2011 IBM ranked Beijing’s traffic as
capital from overseas and is an important the third worst in the world according
Beijing as
factor in the development of a highly to subjective measures of commuter a Globally
skilled workforce. dissatisfaction. A study from the same Fluent City

11
 year by Beijing Union University showed receipts, up from 10% only five years ago.
that the city had the longest commute
times of any city in China. At the same time, China lacks robust
financial markets and places restrictions
Beijing is also well positioned to be a on the conversion of foreign exchange.
center of financial services. Beijing has China’s two stock exchanges are located
been very successful over the last decade in Shanghai and Shenzhen, and not in
in attracting the headquarters of financial Beijing. The financial sector in Beijing
institutions. Between 2006 and 2010, the remains dominated by the state, and
number of financial institutions in Beijing private companies, particularly small and
doubled. Financial capital increased nearly medium enterprises, continue to find
4 times, making Beijing number one in it difficult to obtain financing. Beijing
the country. Independently registered has the potential to be a global financial
foreign financial institutions grew to center, but the successful experience of
43 and joint financial organizations London after the 1980s and the failure of
increased to 180. In 2012 alone, Beijing’s Tokyo suggest that a high concentration
Financial Street neighborhood registered of financial institutions does not
70 new financial institutions. About 400 necessarily transform a city into a world-
international financial institutions have class financial service center. Openness is
offices in Beijing. Tax revenue from the the key.
financial sector now is the second largest
source of local government tax revenue
after real estate development, and counts
for roughly 15% of city’s total local tax

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Q4. Identity: What is Beijing’s Global Brand?

As the capital of China, Beijing already growth as a global city. With its friendly
enjoys an unparalleled position among people, world-class historical sites,
all Chinese cities. It serves a prominent architectural wonders, government
role as a symbol of China’s rise and and large cooperation headquarters,
increasing global stature. In addition to and restaurants and cafes, Beijing has a
this diplomatic function, Beijing is also tremendous potential to rival New York,
home to many multinational companies London, and Paris as a top destination for
and international organizations and is global travelers. To do so, Beijing needs to
increasingly becoming the center of be built more attractive and accessible for
gravity for China’s financial and economic everyone and needs to be more open and
decision making. At easier for foreigners to visit
the same time, Beijing and to stay. Beijing attracts
is located far from the many international tourists,
relatively wealthy eastern A true global city but the number of visitors
and southern provinces is a city that its relative to local residents
that are home to China’s residents love to still ranks low. Annual
most lucrative consumer visitors to Beijing account
live in and take
markets, and it is part of a for less than one quarter of
regional economy that is pride in being part Beijing’s local population,
overwhelmingly dominated of it. compared to nearly 30
by state-owned industry percent for Shanghai. This
and has not benefitted as is much less than cities
much as China’s southern such as New York and Paris,
and eastern coastal provinces from the where the number of visitors surpasses
export-led growth model of the last three local residents. Moreover, the number
decades. of foreign residents in Beijing is very
small. The 2010 census counted only
A more compelling global identity can about 90,000 foreigners living in Beijing,
serve Beijing well in its next phase of comprising less than half a percent of
Beijing’s total population.8 At the same
time, a very large share of Beijing’s
residents are domestic migrants, who do
not receive the same social entitlements
as native urban residents. Foreign
languages are taught widely and early in
schools, but most taxi drivers and service
workers still speak no English.
Beijing as
Building a greater global appeal needs to a Globally
begin at home. A true global city is a city Fluent City

13
 that its residents love to live in and take Following the greatest transformation
pride in being part of it. What matters in its history, Beijing is now one of the
here are not the number of global Fortune fastest growing and most exciting global
500 companies but basic living conditions, cities in the world. Its promise as a first-
including housing, infrastructure, and tier global city has yet to be fully reached.
services. It needs to be a city that has Beijing has many of the most important
clean and open roads, functional sewage ingredients to be a truly great global city:
and waste management systems, and a committed leadership with a worldview,
above all, clear air and water. It needs to modern infrastructure, and a deep and
be a city that its residents feel connected wide talent pool. In addition, Beijing
to not just physically but also culturally also has qualities that are envies of the
and spiritually. And it needs to be a city cities around the world: it has a long and
not just for people to come to work and fascinating history, and is the political
visit but to live. Beijing’s air pollution center of the world’s largest country.
reached unprecedented levels in spring Many factors have contributed to
2013, and recent media reports have Beijing’s rise as a global city, but openness
supplied anecdotal evidence that the very and connectedness are the two most
high levels of air pollution in Beijing are important so far, and they will continue
making it more difficult for Chinese and to be the most crucial for Beijing’s future
foreign firms to attract and retain highly as a globally fluent city.
skilled talent. The city has taken steps to
improve public reporting of air quality
levels, but much remains to be done to
address this significant challenge.

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ACKNOWLEDGEMENT:

This paper is based on an earlier background note prepared for a

roundtable discussion in Beijing on June 3, 2013, hosted by the Brookings-
Tsinghua Center for Public Policy and the Global Cities Initiative. The
project has been made possible with the assistance of colleagues at the
Brookings-Tsinghua Center for Public Policy, at the John L. Thornton China
Center of the Brookings Institution, and of the Global Cities Initiative. This
paper has also benefited from the contributions from the participants of
the roundtable, whose names and affiliations are shown in the appendix.
Support for the paper, and the roundtable, was generously provided by
the Global Cities Initiative: A Joint Project of Brookings and JPMorgan
Chase.

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a Globally
Fluent City

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 REFERENCES AND NOTES

1. McKinsey Global Institute. 2011. Urban World: Mapping the Economic Power of Cities.

2. Tom Miller. 2013. “Welcome to the Middle Class.” China Economic Quarterly.

3. In 2010, over 7 million of Beijing’s 19.6 million residents are migrants, with the share of
migrants as total population increasing from 18.9 to 35.9% between 2000 and 2010.

4. Brad McDearman, Greg Clark, and Joseph Parilla. 2013. “Ten Traits of Globally Fluent Metro
Areas.” Global Cities Initiative.

5. A. T. Kearney’s Global Cities Index 2012 ranks Beijing the 14th in the world, below cities
such as Los Angeles, Chicago, Seoul, Brussels, and Sydney. It also rates Beijing as the city
most likely to improve global influence, with “low vulnerability” and “high strength.” The
Economist Intelligence Unit ranks Beijing only the 39th in the world in its 2012 benchmark
of global city competitiveness. And Beijing is ranked 58th in the 2013 Global Financial
Centres Index.

6. A review of the “Big Six” global cities reveal that they have all “successfully combined
densely packed business service-focused central business districts (CBDs), reliable
mechanisms for talent attraction and retention, opportunities for profitability that exceed
the burden of their tax/regulatory/legal systems, and the diffusion of a distinctive lifestyle
brand to executives and tourists worldwide.” Greg Clark. 2012. “Globalization and Cities:
Building Urban Innovation.” Global Cities Initiative.

7. These numbers are drawn from China City Yearbook 2011, 2012, from various editions of
and Beijing Statistical Yearbook.

8. By comparison, the number was 0.61% in Shanghai. In 2008, foreigners made up 7.6%
of residents in Hong Kong, 8.9% in Singapore, and over 20% in New York (Wenhuibao,
February 27, 2008).

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About Brookings-Tsinghua Center for Public Policy:
Founded in October 2006, the Brookings-Tsinghua Center for Public Policy (BTC) is
a partnership between the Brookings Institution in Washington, D.C. and China’s
Tsinghua University. Based in Tsinghua’s School of Public Policy and Management,
the BTC seeks to produce high quality and high impact policy research in areas of
fundamental importance for China’s development and for U.S.-China relations. The
BTC provides research by Chinese and American scholars on economic and social issues
in China’s development, hosts visiting researchers, and holds seminars, panels and
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abroad.

About the Global Cities Initiative:

In 2012, Brookings and JPMorgan Chase launched the Global Cities Initiative (GCI),
a five year effort that helps U.S. cities and metropolitan areas enhance their global
competitiveness. Supported by objective research and trend analysis from Brookings,
and sustained through domestic and global forums convened each year, GCI will
provide leaders with opportunities to explore the distinctive economic strengths of U.S.
and global metropolitan areas and forge relationships with an international network of
leaders intent on trading and growing together.

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