Sustaining Innovation

NewsChina: Because of the special role Xiongan plays in relieving Beijing’s non-capital functions, will it follow a non-traditional route to future development?　　

Huang Qunhui: Yes, indeed. I divide the development of Xiongan New Area into three stages. The first is relieving Beijing’s non-capital functions through administrative measures. This is the initial transformation stage when many State-owned Enterprises (SOEs) set up branches in Xiongan. Through these administrative arrangements, Xiongan could obtain the momentum it needs to launch. The second is to gradually shift to the transformative gear stage when non-capital functions are relieved and administrative momentum is weakened while new market momentum and enterprises’ capabilities ramp up. The third is the innovative development stage based mostly on market forces through which Xiongan can gain enough of its own innovative momentum. In the initial stage, the central government should encourage Xiongan to innovate and grant it favorable policies as a national-level pilot program. So far, the central government has already set up policies for Xiongan to reform its structure and mechanism.　　

NC: What is necessary for Xiongan to go from relieving non-capital functions to generating its own momentum?　　

HQ: It still depends on the growth of the market. Considering the extent of uncertainties future industries may encounter, the government cannot plan in detail, so allowing the market to explore innovation is key. What Xiongan needs is to cultivate a healthy environment for industrial innovation. Even at the very beginning, when initial momentum depends on administrative power, cultivation of market functions in resource distribution is important. For example, from the perspective of market momentum, many private enterprises are considering investing in Xiongan. The government can even encourage SOEs to promote mixed ownership. The power of the market should be activated to motivate the city to attract more enterprises.　　The government should also take this into consideration while making policy, or at least reserve room for future plans while letting market entities innovate as long as their attempts are in line with the city’s healthy development.　　

The key is setting up mechanisms and schemes, including its government, relationships with enterprises, and other mechanisms to ensure the operation of a modern city. This is a gradual process starting from zero. With initial guidance from the government, it’s a process to attain balance and momentum.　　

It may be fast at the beginning stage, but the transformational stage might be a little difficult. Once the power of the government weakens, particularly from the central government, Xiongan should pick up the momentum. Now a significant number of innovative enterprises have gathered in Shenzhen because of the favorable environment it provides. Much like Darwinism dictates, its environment will evolve.　　

NC: You mentioned three dimensions for Xiongan’s development earlier: a model for Chinese cities, joint regional development of Beijing, Tianjin and Hebei, and the relationships between Xiongan and other cities within the jurisdiction of Hebei Province. Can you elaborate on these dimensions?　

HQ: The strategic positioning of Xiongan is multi-layered. While shouldering the responsibilities of relieving Beijing’s non-capital functions, it also needs to be green, livable, innovative and piloting high-end industry. It is expected to contribute to the holistic regional development of Beijing, Tianjin and Hebei.　　

The initial proposal for Xiongan was designed as a model for coordinating regional development. As we have noticed, the development of Hebei Province remains slow in comparison with neighboring Beijing and Tianjin. Most parts of China have reached the final stages of industrialization, with Beijing and Tianjin already in post-industrialization stages for attaining economic modernization. But Hebei remains at the mid-industrialization stage. Normally, it would take 50 years for Hebei to catch up with Beijing and Tianjin.　　

Coordinating regional development will require more consideration to address the huge gap for Hebei to make up. That is why Xiongan New Area aims to play a decisive role in overall regional development. In reality, it’s a redistribution of the industrial chain within the region. With the detailed division of labor in the industrial chain, some newly emerged high-end industries can locate in Beijing, while others can go to Xiongan depending on their different industrial positioning and sectors.　　

Development of Xiongan, as a new area under Hebei’s jurisdiction, could propel development for the rest of the province. The final issue for Hebei’s industrial development is the upgrading and transformation of its industries. Through high-end industry development in Xiongan, Hebei stands to develop other industries including raw materials, iron and textiles. Coordinating the development of Xiongan with neighboring regions could form a properly matched scheme for industry and innovation coordination.　　

NC: Can you explain how Xiongan would pilot solutions to problems other cities and industries face in their development?　　

HQ: I agree that Xiongan could pilot innovation, particularly in innovation of industries where science and technology is important, to tackle problems such as the lack of intellectual property rights protection, chronic overcapacity and weak innovative capabilities that most cities face. Furthermore, due to its limited scale, Xiongan could learn from the experience of Israel to develop high-end industrial elements including design and research to attract venture capital firms and transfer sci-tech achievements to other regions. Its future development depends on national or even global resources.　　

Also, through its own science and technology innovation, Xiongan could attain integrated development with Beijing and Tianjin, while ensuring balanced and non-competitive development with the Yangtze River Delta and Guangdong-Hong Kong-Macao Greater Bay Area.　　

With the next generation of information technology gaining global attention, Xiongan should also apply its sci-tech achievements to meet the city’s construction demands in the short term while aiming to achieve development breakthroughs in its information technology industry.　　

Last but not least, apart from intelligent and high-end industry development, Xiongan needs green development. The sound management of Baiyangdian Lake will influence the river system in the entire central North China Plain. As a result, the management of Baiyangdian Lake and industrial innovations in water treatment would be an important industry for the city.