Two types of new cities

Bloomberg has an interesting article discussing two types of Chinese new cities:

In 1979, Deng Xiaoping drew a circle on the map around China’s southern coast and created Shenzhen, an experiment in capitalism, according to a popular ode to the former leader.

Nearly four decades later, Xi Jinping unveiled his own ambition for an era-defining city, this time perched on the outskirts of Beijing. Xiongan was billed as a gleaming, high-tech metropolis that would serve as a release valve for the crowded Chinese capital — “a model city in the history of human development.”

Thus far, the Shenzhen experiment has been far more successful.  Over the past 40 years, Shenzhen has gone from being a mostly rural area with a few factories making cheap labor-intensive export goods, to become a bustling city of 17.5 million, considered China’s Silicon Valley.  In contrast, Xiongan has gotten off to a slow start:

When Bloomberg visited on a weekday this month, a highway into the city was almost empty. In the city center, few shops and restaurants were open on streets lined with brand-new government headquarters, office buildings, residential compounds and hotels.

The other important difference is that Shenzhen grew organically on land right across the border from Hong Kong, as firms rushed in to take advantage of a “special economic zone” that allowed private enterprise that was still restricted in much of the rest of mainland China.  Xiongan is also in a great location (right next to Beijing), but is a centrally planned project:

Unlike Deng’s laissez-faire approach that led to Shenzhen’s disorderly but colossal growth, Xi has opted for meticulous planning to help his city avoid problems dogging other areas.

The city is being selective about which industries it welcomes, encouraging companies working in information technology, biomedical and new energy sectors and eliminating what it calls traditional industries. That’s unlike Shenzhen’s free-wheeling approach that attracted millions of migrant laborers and entrepreneurs.

A museum dedicated to the city’s development touts how it has been centrally planned.

Jane Jacobs would not have been a fan of Xiongan:

Big cities’ appeal often lies in their organic street life, said Covell Meyskens, an academic who has written about government planning in China. “Planned smart cities are supposed to be the place of the future,” he added, but without those human trappings “nobody wants to live there.”

South Korea’s Songdo has similar problems:

The authorities of South Korea decided to build a fantastic city of the future on the shores of the Yellow Sea. The country’s government has signed a cooperation agreement with major investors and construction companies to create a project for a huge seaside city called Songdo. More than $ 40 billion was spent on the construction of the world’s first “smart” city, but now Songdo looks more like an abandoned settlement than a busy metropolis.

Futuristic Songdo was supposed to be the first “smart” city on the planet, which was planned to be created from scratch.

It should be noted that some Chinese “ghost cities” did eventually fill up with new residents, as hundreds of millions of people moved from the countryside to the city.  Nonetheless, there is reason to worry about over-investment in Chinese real estate.  Throughout East Asia, birth rates are plunging to very low levels.  In addition, younger people in that region increasingly prefer to live in the very largest and most sophisticated cities—to an even greater extent than in the US or Europe.  China’s government might eventually be able to populate Xiongan if they move enough government offices there from nearby Beijing, but many of China’s second and third tier cities face the prospect of extensive overbuilding.  

PS.  Hundreds of years ago, there was a continual flow of people from rural to urban areas, to repopulate cities decimated by plagues.  In the next few decades, there’ll be a continual flow of people from the higher fertility rural areas to repopulate cities decimated by ultra-low birthrates:

Of all of South Korea’s major cities, Seoul has the lowest birthrate of 0.59.