Capital growth

On a vast building site to the east of Beijing's Third Ring Road, the foundation for the Chinese capital's new face are being laid. When it opens in 2008, the 230-meter high headquarters for state broadcaster CCTV will form the eye-catching centerpiece of the city's Central Business District.

It is one of several striking features of the "New Beijing" proclaimed on billboards and posters across the city. Designed along the lines of a gravity-defying, Escheresque loop, plans for the new building have raised eyebrows – for its designer price tag, said to top three quarters of a billion dollars, as much as for its design.

But when it comes to flagship projects, money is hardly the issue, argues Zhang Xin, a former Wall Street banker turned co-CEO of design-savvy real estate group Soho China. To her, the tower and several other landmark buildings going up across the city are a bold statement about Beijing's equally bold ambitions. "Beijing wants to show it can set international standards, not just follow them," she says.

Although Soho itself is not involved in the CCTV project, Zhang feels part of the facelift Beijing is going through. Her company's three high-end residential and business developments to date, construction on the latest beginning just over a month ago, all aim to bring the newest and best international architecture to Beijing, and encourage intellectual growth of Chinese designers in the bargain.

Before Soho's launch in 1995, she says, Beijing real estate consisted overwhelmingly of concrete boxes. "What we've done is to really begin creating the city, laying Beijing's new cultural foundations, and it's a concept that has been very well received by the market."

There will be more than a new broadcast center opening up in 2008. The Beijing Games will be staged, although one could be forgiven for thinking they might be opening earlier: Olympic construction is moving at such a pace, that the International Olympics Committee recently took the unusual step of asking Beijing to slow it down a peg or two.

Quite a contrast to the nail-biting finish Athens went through in 2004 to get its facilities ready on time – or Montreal, which didn't complete its Olympic stadium till 10 years after the Games left town. But Beijing has more to prove, some seeing the Games helping the city emerge from shadows of its upstart southern counterpart – the brash, boisterous, money-focused Shanghai.

As the nation's capital, with its wide boulevards, carefully groomed parks and gleaming monuments, it is also the showcase for the achievements of the People's Republic.

But in a business sense it has always lagged behind. While cities like Shenzhen, Guangzhou and Shanghai rushed to embrace the dollars of foreign investors, Beijing remained the austere, old-school communist capital.

Beijing has since made an effort to catch up and modernize but the Games have become the impetus for putting the city over the top – not necessarily as the business mecca Shanghai has become, but as a vibrant, switched on and culturally alive economic powerhouse.

On a mission
Beijing today is on a mission to remodel itself as "a modern city with an advanced economy driven by the high tech and modern manufacturing industries," explains Vincent Guo of the Beijing Investment Promotion Bureau. "As the nation's capital Beijing has a strong cultural and historical legacy. But we need to build on that and look to the future."

Echoing Zhang's comments, he said the city's top planners have a very clear idea that Beijing should present itself as a capital that leads rather than imitates global trends. The CCTV project is just one part of the capital's makeover, which, all in, will cost an estimated US$75bn.

That includes Olympic sites like the "Water Cube" swimming center and "Bird's Nest" stadium and the striking titanium and steel giant egg that will soon house the new National Theatre. To some critics the French-designed egg, resembling a B-movie-style flying saucer touched down in the heart of Beijing, is out of place and brazenly un-Chinese for such a prime location.

But to others it is a much needed 21st century contrast to the Stalinesque Great Hall of the People next door, and a sign of the city's brighter future.

Interestingly, while much has been made of government efforts to cool China's economy, especially its once overheated construction sector, Beijing is construction cranes almost everywhere you look. Under current government plans, by 2008 the new CBD area will include some 10m square meters of new building space; the city's subway and light rail services will be more than doubled in length, to 202km; and the city's fifth and sixth ring roads will be completed. Another huge project is the expansion of Beijing Capital Airport which, when completed, will be half as big again as London's Heathrow.

From Soho's spacious, clinically white, loft-like offices, Zhang Xin looks out over the group's first development, Soho New Town. Built on the site of an old state-owned smokestack factory, the development is symbolic of the transformation sweeping out the Beijing of old, as factory hands get re placed a new generation of professionals. "When we opened we were the first to introduce this concept of a modern, well designed, high-quality working and living space to Beijing," Zhang said.

Now everyone is trying to copy the formula, she claims, though she does not seem worried about it. "We are at the very top end in Beijing. No one is taller than us in Beijing price-wise. Last year, we took in RMB3.48bn in sales – no one else in the city even comes close."

Capital's new global set
In a sense, Zhang mirrors the new Beijing, or at least the part Soho targets – overseas educated, globally focused and business savvy people. "[Beijing] is going through a process of urbanization at breath-taking speed and a time when world is going through a process of globalization," she says. "As a result, it's impossible for us as designers and real estate developers to create only a Chinese city – what we are building is an international city, fueled by an influx of international architects and new ideas."

She says China is developing so fast that everything, from the political system to the way people live and work, is new – and, to a degree, an experiment. The pace is felt acutely in the capital. And while the city nurtures a new generation of local talent, it also fosters a growing reputation for trying new ideas, effectively repositioning Beijing as China's most forward thinking city.

Until recently many international firms coming to China tended to focus put their operations in Shanghai, and post senior managers in Beijing for government access. With the city's aggressive shift up, companies are looking at Beijing as an operations option, as well. In the first three quarters of 2004, for example, contracted foreign investment jumped 120% year-on-year – a significant up tick, even taking into account the stalling effect of the SARS outbreak in 2003.

Nigel Clark, Executive Director of the British Chamber of Commerce in China, says Beijing is becoming a very hot property as an investment destination. "Two years ago, we were seeing three or four new members joining a month. Now we're often seeing as many as 10 or more."

Part of that interest, he said, stems from the city's increased international prominence, but also from the massive infrastructural and social development unleashed by Olympic spending. As the city prepares to welcome athletes and visitors to the Games, for example, a city-wide effort has been launched to make Beijing more accessible to foreigners, particularly English speakers. (Cab drivers have been told that they could lose their licenses if their English isn't up to scratch by 2008.)

The city already claims an impressive skill set. "With more universities, colleges and technical training institutes than anywhere else in the country, Beijing's talent pool is among the best in the country," Clark says. "Many local [job] candidates who come to us now have two degrees. And an increasing number, especially those going for the higher management positions, have been trained abroad."

Building on that talent, Beijing is now focusing its efforts on building up the city's high tech and tertiary sectors. "[Some] 62.2% of our GDP is generated from the tertiary sector and we expect to see that grow significantly by 2010," says Beijing investment promoter Vincent Guo. "As a result, in terms of foreign investment we're very choosy about the kind of industries we want to attract here." Heavy industry investors and the usual polluting suspects are pointedly not welcome, he adds.

One area, in fact, the government would like to see more overseas investment in is environmental protection and clean-up. City authorities and the Olympic planning committee have labeled the 2008 Games the "Green Olympics," setting out a series of ambitious environmental and air quality targets. A nice thought, but some have their doubts. "A lot has been done to close down the city's more polluting industries," says one foreign worker with a local environmental watchdog. "But almost all the benefit from that has been counteracted by the growing number of cars on the roads."

Point taken: Beijing's traffic congestion is reaching epic proportions and the length of time it can take to travel even small distances is one of the biggest complaints one hears – that, along with the impenetrable smog that can blanket the city for days on end. "At the moment the government's solution to traffic congestion seems to be just building more roads," a greenie says, asking not to be named. "But with more than 1,000 new cars a week coming onto the streets, that's hardly an effective way of cleaning up the city's air."

Eager to build up the city's more environment-friendly technological sector, Beijing has established a number of high tech development and science parks around the city's perimeter. "For investors coming here, our aim is to offer the best quality and most efficient services and so far more than 100 multinationals have set up R&D centers here," Guo says.

Among the biggest investors to date are chip-maker AMD, Microsoft, Siemens and Motorola, the latter employing more than 1,000 at its US$100m research base on the outskirts of the city. Adding a quirk to greening plans is carmaker DaimlerChrysler, which is set to launch Mercedes manufacturing operations in mid-year.

Quite apart from everything else, Beijing is, as Guo points out, an economic hub for north China. "Recently Beijing has signed agreements with the nearby city of Tianjin and the surrounding province of Hebei to improve the region's investment environment and the combined services we can offer," he says, adding that Tianjin is now officially Beijing's port. "So foreign firms based here can import and export through Tianjin without having to go through any additional customs or paperwork."

Beijing is also seeing more overseas designers and architects pour in. "Historically, Beijing as the capital has always been the center of culture, whereas Shanghai, ever since it became a city, has been always about business," notes Jeremy Goldkorn, co-founder of Standards, a design and marketing agency.

"Beijing is also historically the center of the Chinese media industry and as that opens up we're expecting to see a lot more opportunities for the creative sector."

"As doing business in China becomes more and more competitive, both local and foreign companies are realizing they need new ideas to develop their brand in order to grow and stay ahead of the game," he says. "We're getting calls out of the blue every day from companies of all sizes looking for our services." Beijing businesses, he notes, are rapidly coming around to the idea of paying for ideas and creative services.

"Beijing gives the impression perhaps of being rather half-built and the city certainly has something of a rougher feel to it than Shanghai," Goldkorn says. "But that's part of the excitement of living here."