The traffic congestion has reached unbearable levels in a city with more than 5 million vehicles and growing. On many days there are no "rush hours", because the jams last all day long. The municipal government has introduced tough measures to limit the number of cars on the road, with the sale of new cars restricted through a lottery, while it has spent tens of billions of yuan to build subways and other public transport.

The effect on congestion has been minimal, however.

Meanwhile, many more flock to the city each year, seeking jobs and stretching the city's already thin services in medical care, education and housing. Soaring prices have made owning a home beyond the reach of the young and the poor, forcing the city to impose tight controls over the type of residents who can buy a flat and the number of flats they can buy.

There is a thick irony in Beijing's aspiration to be a world-class city when its residents cannot buy a car or flat freely.

Pollution, much of it exhaust fumes from vehicles, has become a serious health hazard, with a yellowish haze appearing to hang over the city all year long.

More ominously, the city, located on the northern tip of the north China plain, has often suffered from drought and is to face more severe water shortages in the years to come. According to official data, the city's per capita water resources have declined to 100 cubic metres, far lower than the internationally accepted standard of 1,000 cubic metres. This is one of the main reasons that the central government has decided to invest tens of billions of yuan in the south-to-north water diversion scheme. However, environmentalists have long opposed the project, not only for its inefficiencies but also over whether the water would be drinkable by the time it eventually reaches Beijing.

Theoretically, the relocation of the capital to the southern part of the country is the best option. This is too daunting a task to be considered quickly, for both political and strategic reasons. However, the leadership can learn lessons from the South Koreans. In July, South Korea inaugurated Sejong City, 120 kilometres south of Seoul. By 2015, Sejong City will house several dozen central government offices and ministries currently located in or near the capital. Political wrangling means the South Korean government has decided to keep 10 or so state bodies, including the president's office, the foreign ministry, the defence ministry and parliament, in Seoul, leading to claims by critics that the split government will lead to wasted travelling time and inefficiency.

The lesson for the mainland leadership should be to move the entire central government apparatus to a city in Hebei province, within 100 to 150 kilometres of Beijing. The benefits would be many. A high-speed train and a highway could make the travelling time between Beijing and the new capital city manageable. It would not only greatly ease the problems Beijing is facing but also significantly boost economic development in Hebei.

Almost all central government ministries and agencies occupy prime land in central Beijing. Relocation would free up vast plots of land for residential development. Since the founding of the People's Republic, the leadership has been headquartered in the vast Zhongnanhai compound, covering 100 hectares, formerly royal playgrounds in the Ming and Qing dynasties. After relocation, the compound could be added to the adjacent Beihai park, which is already open to the public.