Green is the way to go for Hebei boss

PUBLISHED : Friday, 28 March, 2008, 12:00am
UPDATED : Friday, 28 March, 2008, 12:00am

Environmental protection seen as essential to province's economic development

Mainland officials, be they provincial governors or city mayors, like to impress visitors by rattling off dazzling growth figures and envisioning rosy economic prospects.

So it is a refreshing change to hear Guo Gengmao, governor of Hebei province, highlight environmental and resource protection as one of his top priorities.

'My biggest challenges are the environment and resources,' Mr Guo said in an interview in Beijing this month. 'If we cannot properly protect the environment and make the best use of resources, our economic development, like that of China, will not be sustainable.'

The governor is heading a delegation of officials and businesspeople at a Hong Kong investment fair this week, and accepted the interview to drum up press coverage for a number of industrial and service-oriented projects, for which they hope to attract US$12.6 billion. But he came across as more than just another typical mainland official who could not wait to talk about the investment climate. He had bigger things in mind.

The mainland's 'current growth model is unsustainable if it purely relies on cheap labour and high energy consumption at the expense of the environment', he said.

'We must embark on a new model of industrialisation which relies on innovation. We need to change the way we grow the economy through thrifty spending, environmental protection, renewable energy and intensive farming.'

But Mr Guo noted that this did not mean Hebei's economic development would be less important. 'We will develop the economy and at the same time beef up protection of the environment.'

Last year, the provincial economy grew 12.9 per cent to 1.39 trillion yuan (HK$1.54 trillion) in gross domestic product while its energy consumption per unit of GDP dropped more than 4 per cent, compared with a fall of 3.7 per cent for the whole mainland. He pointed out that in fact the provincial economy, which has registered double-digit growth over the past five years, was having the best time in its history.

'Our economy is in the process of taking off,' he said.

Elected in January to a five-year term as governor, Mr Guo, 58, is determined to bring the provincial economy to a whole new level by focusing on services, tourism and hi-tech industries. He said his plan was to boost per capita GDP to 30,000 yuan in five years' time from 20,033 yuan last year.

Hebei has been waiting impatiently for its turn for too long. It remained a backwater largely because two mega cities - Beijing and Tianjin - which are under direct control of the central government - lay within its sprawling area of more than 180,000 sq km. For decades, the province was largely treated as the supplier of cheap agricultural produce and abundant cheap labour for the two municipalities.

Because of its role, the province does not have its own regional economic centres and has been slow to industrialise and urbanise, despite its population of nearly 70 million.

It was also left behind through the central government's policies of opening up and reforms since 1979, which have favoured Guangdong, the coastal regions, the western provinces in the form of the Go-West campaign, and the drive to rebuild the northeast provinces via preferential tax, land and forex treatment.

Even as things change today, the province will still have to sacrifice its own interests for the benefit of the two cities, Beijing, in particular. During the Summer Olympics in August, Hebei, along with other surrounding provinces, will shut down many factories to help improve the air quality in Beijing.

But Mr Guo is not complaining. He is just happy that the province's turn has finally come. He believes it will not be difficult to convince investors to set up shop in the province.

'First of all, Hebei is no longer a second-class citizen as it was in the past 30 years because of location,' he said.

'In the past, those provinces could enjoy preferential treatment in tax and foreign exchange to attract foreign investment, but we could not. But now [the playing field is level].'

He said that even its geographical location, a curse in the past, had turned into a major advantage for the province.

'Compared to the coastal provinces, we have distinct advantages in terms of cheaper labour and abundant energy and resources, and compared to the provinces in the west and the northeast, we are much closer to key markets such as Beijing and Tianjin.'

He said many multinationals, including Siemens, had already invested heavily in the province.

For Mr Guo, the key to boosting the provincial economy is to encourage economic integration of its smaller cities into regional centres - focusing on equipment manufacturing in the cities of Tangshan and Qinhuangdao , trade and finance in Shijiazhuang , the provincial capital, and coal and other mining resources in Handan and its surrounding areas.

The province will also benefit from the central government's ambitious plan to promote the overall economic integration of Hebei, Tianjin and Beijing.

Along with generous central government spending, the province is investing heavily to expand ports, highways, airports and railways. A high-speed rail line linking Beijing and Shijiazhuang is expected to begin construction later this year, and when completed, will cut travel time from three hours to one.