Tianjin's explosive growth carries social cost

Tianjin often leads nation in economic growth, but many residents struggle to make ends meet

PUBLISHED : Thursday, 22 November, 2012, 12:00am
UPDATED : Tuesday, 23 January, 2018, 11:43am

The north coast municipality of Tianjin, bordering Beijing, has grown dramatically in recent years, impressing residents and visitors and securing the promotion of its former Communist Party chief to the party's supreme decision-making body.

Its old streetscape of graceful, colonial-era residences and plain, six-floor apartment blocks for ordinary residents has been augmented by shiny skyscrapers and stylish suspension bridges. Its skyline features a multitude of cranes on countless construction sites.

Fixed-asset investment totalled 751.1 billion yuan (HK$926.9 billion) last year, having grown at an annual rate of 34.9 per cent since 2007, former Tianjin party secretary Zhang Gaoli told the municipality's party congress in May.

He was promoted to the party's supreme Politburo Standing Committee last week, after less than five years as Tianjin's party chief, and is expected to become the country's new executive vice-premier in March, presiding over the economy. He was succeeded yesterday by former Fujian party secretary Sun Chunlan.

Zhang saw Tianjin transformed from a messy backwater, overshadowed by Beijing, into a vigorous city whose growth rate has frequently led the nation - mainly thanks to the Binhai New Area, a 2,000 square kilometre development zone that has attracted investment from global giants including Airbus and Caterpillar.

The municipality's economy has grown at an annual pace of 16.5 per cent since 2007, much faster than the mainland's 9.7 per cent average.

However, the blistering pace, fuelled by an investment frenzy, has come at a price and analysts have warned that the "Tianjin model" might not be well suited to transforming the national economy from a heavy reliance on debt-financed investment to growth powered by private consumption.

Lu Wei, director of the Institute of Economic and Social Forecast at the Tianjin Academy of Social Sciences, said the current Tianjin model was not "sustainable".

Tianjin resident Tong Zhengqiu, 68, walks with his caged pet bird in a park along the Haihe River almost every day. Across the river stand the six-star St Regis hotel, luxury apartments and the 336.9-metre-high Tianjin Global Financial Centre, completed in 2010.

Tong, pointing at the skyscraper and the luxury apartments, said his living standard had improved over the past few years, but he was feeling "increasingly unhappy".

"These things are not for ordinary people," he said. "While the rich are enjoying the luxury, the people are worrying about the rising prices of cabbages and onions. And the wealth gap is becoming wider and wider."

Tong, a retired public transport worker, receives a monthly pension of 1,500 yuan. Even after a 10 per cent pension increase last year, he struggles to afford daily necessities.

"The government has never explained why the pension is so low," he said. "Instead, money has flowed to the pockets of corrupt officials and to pretentious projects."

Apart from a forest of glittering commercial and office towers, the city also boasts three marinas for yachts, a cruise terminal and a new airport.

Li Tie, director of the National Development and Reform Commission's China Centre for Urban Development, said many mainland cities, including Beijing, Shanghai and Tianjin, had built more "face projects" than actually needed to give residents better lives.

"Face projects" helped local officials impress their bosses with a veneer of modernity and higher economic growth rates driven by massive investment, Li said.

Outstanding bank loans to government and local companies equalled almost 150 per cent of the municipality's economic output in 2009 and 2010. Tianjin Infrastructure Investment Group is the nation's largest local government financing vehicle, with 442.8 billion yuan of assets.

But its debts have mushroomed from 90 billion yuan at the end of 2007 to more than 300 billion yuan at the end of last year, thanks to the city's ambitious expansion. Operational cash flow has been negative every year since 2007.

Lu said some of the debt had financed the construction of highways, railway stations and subways, which indeed brought convenience.

In the first nine months of this year, Tianjin's economic growth rate ranked first among the mainland's 31 provinces, municipalities and autonomous regions. However, the increase in its residents' disposable income ranked second to last beating only Tibet.

Additional reporting by Mandy Zuo