37081 China Urban Development Issue 1 6.2006 Quarterly World Bank's New Partnership Strategy for China Focuses on Economic Integration, Message from Poverty and Sustainable Development the Country Director At a meeting on May 23, 2006 the World Bank's Board of I am very pleased to release this Executive Directors endorsed the World Bank Group's new inaugural issue of the China Urban Country Partnership Strategy (CPS) for the People's Republic Development Quarterly, a newsletter on of China covering the period 2006­2010. The overall goals of urban development issues of particular interest to Chinese urban develop- the CPS are to help integrate China into the world economy, ment professionals -- government officials at state, provincial and municipal address poverty and inequality, manage resource scarcities levels; academics; students; and civil society organizations. This newsletter and environmental challenges, strengthen the financial sector, has been produced by the Urban Development Sector Unit of the East Asia and improve public and market institutions. World Bank and Pacific Region, working in close collaboration with the Urban and Local President Paul Wolfowitz said that: Government Program of World Bank Institute. This inaugural issue covers a broad range of topics, focusing on events "The new Country Partnership Strategy recognizes clearly of the past two months -- the World Bank Board endorsement of the Bank's that helping China to strengthen its economy, manage its China Country Partnership Strategy; the series of workshops on metropoli- resources and environment, and improve governance, are tan management; the Shaoxing Conference on Heritage Conservation and important not only for the Chinese people but also for people Sustainable Development; and the seminars on traffic safety and intelligent all over the world". transport systems. It also provides synopses of relevant material from recent books on China's development priorities and the role of cities in a globalizing China has grown rapidly since 1978, when it began to reform. world. Future issues will continue to address the broad spectrum of the urban Over the past 27 years, it has shifted from a centrally-planned development agenda in China: metropolitan and urban planning; urban to a market economy, maintained GDP growth of about 9 infrastructure, including water, wastewater, solid waste management, urban percent per year, and lifted 400 million people out of poverty. transport, heating and gas supply; municipal finance; urban poverty and Considerable progress has also been made in implementing services to the poor; urban management; and conserving urban cultural and the structural reform agenda and achieving the commitments built heritage. made during China's accession to the World Trade Organiza- The next issue, due in September 2006, will focus on the International tion (WTO) in 2001. With a population of 1.3 billion, China Water Association Conference, to be held in Beijing, as well as begin regular recently became the world's fourth largest economy and third features of highlighted projects, guest interviews, experiences from other largest trading nation. countries, and feedback. Partnership continued on page 2 A limited number of copies of the newsletter is being printed on environmentally friendly paper for distribution. The electronic version will be Contents available on www.ChinaUrbanQuarterly.org. We will also publish an e- World Bank's New Partnership Strategy.............................................................1 magazine to complement the Quarterly, in which you can meet international Message from the Country Director....................................................................1 Urbanization and the Eleventh Five Year Plan.................................................4 and local experts through video clips. National Workshop on Metropolitan Infrastructure Management..........6 We look forward to receiving your comments on this newsletter and sug- World Bank Studied Chongqing Metropolitan Area Infrastructure Management...............................................................................7 gestions to make future issues more interesting and informative. Please email Asian Pacific City Summit, Chongqing, 12­13 October 2005.....................9 Second International Conference on Heritage Conservation your comments to UrbanQuarterly@worldbank.org. and Sustainable Development........................................................................10 Building Institutions for Sustainable Urban Transport in China..............15 Seminar on Road Traffic Safety in China ..........................................................16 David Dollar International Experience in Intelligent Transport Systems.......................17 Cities in a Globalizing World: Governance, Performance, Country Director for China and Sustainability (Abstract)............................................................................18 China Urban Development Quarterly Issue 1 6.2006 Partnership continued from page 1 general, projects will aim to promote policy and institutional reform and innovation on a limited and experimental basis, on Even so, China remains a developing country, with GDP per the expectation that successful projects will be scaled up using capita of about US$1,740 and more than 135 million people government resources. living on less than $1 a day--mostly in rural areas in the lagging inland provinces. It also faces daunting challenges in maintain- Urban issues continue to feature prominently in the CPS, espe- ing rapid growth; managing the resource demands and environ- cially in support of three of the five pillars of the CPS: reduce mental consequences of growth; and addressing the resulting poverty, inequality and social exclusion; manage resource inequalities in income and opportunity, which could otherwise scarcity and environmental challenges; and deepen financial undermine the consensus needed to undertake growth-oriented intermediation. Lending volume for projects in support of the policy reforms. urban agenda is expected to average over US$600 million annu- ally during the CPS period; see Box for details. The Bank Group's new partnership strategy aims to support China in addressing these challenges. Specifically, it aims to The CPS was prepared in close collaboration with the Govern- help: ment of China, and involved extensive consultations with the representatives of stakeholder groups, including central and lo- · Integrate China into the world economy, by deepening cal governments, the private sector, academia, civil society, and its participation in multilateral economic institutions, the donor community. "This CPS coincides with an evolution reducing internal and external barriers to trade and in- in the Bank Group's relationship with China, as China not only vestment, and contributing to its overseas development continues to receive assistance from the Bank Group but also efforts; begins to share its development thinking and experiences with · Reduce poverty, inequality and social exclusion, through the Bank Group and the rest of the world," said World Bank promoting balanced urbanization, sustaining rural China Country Director David Dollar. livelihoods, and expanding access to basic social and infrastructure services, particularly in rural areas; · Manage resource scarcity and environmental chal- The new Country Partnership Strategy is available on the Bank's China Office website at: lenges, through reducing air pollution, conserving water www.worldbank.org.cn resources and optimizing energy use (partly through pricing reforms), improving land administration and management, and observing international environmen- tal conventions; · Deepen financial intermediation, by expanding access to financial services (especially among small- and medium- sized enterprises), developing the capital markets, man- aging systemic risks, and maintaining financial stability; and · Improve public and market institutions, by improving firm competitiveness, reforming public sector units, and rationalizing intergovernmental fiscal relations. In support of the five major objectives, the CPS includes a large program of analytical and advisory services, research and train- ing, to facilitate policy discussions and underpin future lending. IBRD expects to lend up to US$1.5 billion annually, with about 70 percent of proposed projects in poorer inland provinces. In (Photo: Curt Carnemark, World Bank) China Urban Development Quarterly Issue 1 6.2006 Expected World Bank China Urban Lending Program During 2006­2010 Pillar Project name Loan ($m) Description Fiscal Year 2006 Program 2,3,4 Shanghai Urban APL 2* 180 Metro water supply, waste disposal; innovative financing 2,3 Fuzhou Urban Transport* 100 Road and public transport access to Nantai Island 2,3 Henan Towns Water 150 Water suppy, wastewater treatment in 45 towns 2,3 Liaoning Medium Cities Infrastructure 218 Urban transport improvements in second-tier cities Total 648 Fiscal Year 2007 Program 2,3 Sichuan Urban Development 2 180 Infrastructure expansion in second-tier cities 2,3 Fujian Transport SWAp 320 Longyan highway, rural roads; program approach 2,3 Western Rural Water 25 Improved rural water supply, hygiene, in 2 poor provinces 2,3 Shandong Urban Environment 2 150 Water supply, wastewater treatment in second-tier cities 2,3 Guangdong Pearl River Delta (Foshan) 100 Water supply, wastewater treatment/disposal, pollution control Total 775 Standby 2,3 Liaoning Medium Cities Infrastructure 2 200 Water supply, wastewater treatment in second-tier cities Total 200 Fiscal Year 2008 Program 2 Gansu Cultural Heritage 40 Heritage asset protection, sustainable tourism development 2,3 Xi'an Urban Transport 150 City (including public) transport upgrade, management 2,3 Guizhou Cultural Heritage 60 Heritage asset protection, sustainable tourism development 2,3 Yunnan Urban Environment 150 Water pollution control in Kunming, Dali, Lijiang, Wenshen 3 Hubei Han River Environment 100 Han river basin water resource planning, management Total 500 Standby 2,3 Taiyuan Urban Transport 150 City transport, wastwater treatment, upgrades Total 150 Program for 2009 and beyond 2,3,4 Shanghai APL 3 200 Water supply, solid waste disposal 3 Anhui Bengbu Flood Control 100 Flood, water pollution control; heritage management 3 Jiangsu Regional Development 150 Water supply, wastewater infrastructure in second-tier cities 3 Guangdong Pearl River Delta (Shenzhen) 200 Wastewater treatment, water polllution control 3 Liaoning Medium Cities Infrastructure 3 200 Heating and gas improvements in second-tier cities 3 Qinghai Xining Urban Flood Control 100 Build flood control, discharge channels; wetlands Total 950 Notes: * denotes projects approved by the Board. Projects for FY07 and beyond subject to confirmation in annual lending program. Pillar 2 ­ Reduce poverty, inequality, and social exclusion. Pillar 3 ­ Manage resource scarcity and environmental challenges. Pillar 4 ­Deepen financial intermediation China Urban Development Quarterly Issue 1 6.2006 Urbanization and the Eleventh Five Year Plan The World Bank just published a new book, China's Develop- Shahid Yusuf, the main author of the ment Priorities. The publication synthesizes inputs provided to book, suggests that China is now at a the Chinese government in the context of the preparation of the point on its development trajectory Eleventh Five Year Plan. Urbanization features very prominently where a few major reform initia- in the Plan: the rural-urban balance is one of the explicit `five tives can yield tremendous benefits: balances' and cities are expected to play a key role in making the "International evidence suggests `new socialist countryside' work. that, once a country has substantially deregulated its economy, bold reforms As is well known, the challenges posed by urbanization are are more likely to impart long-term tremendous. Today, China's urbanization rate is about 43% or momentum than incremental policy Shahid Yusuf, Economic Advisor, World Bank 560 million people. Over the next 10­15 years, China's urban- changes". A set of policies towards ization rate is expected to rise to over 50%, adding a further urbanization is one such reform area which Shahid Yusuf sug- 100­150 million inhabitants to urban areas. This urbanization gests as an opportunity for major reform. As China considers its will have significant implications for economic performance and urbanization policies, the report highlights a number of policy social well-being. With the transfer of labor from rural to urban challenges that need to be addressed to avoid the potential neg- areas, total factor productivity has the potential to increase ative consequences (such as congestions, development of slums, dramatically through shifting labor from the sector with lower etc.) associated with urbanization, in particular relating to: productivity to sectors where productivity is higher by several multiples. If this transfer of labor is managed well and growth · Job creation. China needs to generate a sufficiently large permits the desired multiplication of employment opportuni- number of new urban jobs to absorb the anticipated flow ties, additional benefits can be gained from agglomeration of migrants into larger cities. Some estimates suggest economies in urban areas located in the coastal region, along that over a 100 million jobs need to be created in urban the major water ways, and at the key transport junctions. areas to avoid an increase in urban unemployment. These will be mainly in service occupations, although Each doubling of the city size can add 3­14% of city GDP, undoubtedly some people will be absorbed by the manu- through economies of scale and scope, a broadening of the facturing sector. labor market, and of the clustering of firms. Additional gains are · Investment in Innovation Capabilities. Most innovation likely to accrue from an increasing tempo of innovation which occurs in the major urban areas and China will not be is mainly concentrated in major cities. These cities are hosts not an exception. To strengthen the innovation capabilities, only to many of the research-oriented universities but also to cities will need to create an environment that is condu- diverse industrial subsectors. The agglomeration and proxim- cive for firms to innovate and to attract skilled workers ity of firms and research units facilitates frequent face-to-face from elsewhere. In order to do so, a city needs to offer interactions facilitating the flow of knowledge and contributing attractive amenities. Many of the amenities are associ- to the innovativeness of firms in these dynamic cities. ated with the physical infrastructure and public services. Yet, economic productivity gains can only materialize if the · Investment in infrastructure. In order to provide basic potential benefits are not negated by adverse consequences (e.g. services to migrants and new urban residents, China inadequate provision of basic health, education, and infrastruc- needs to invest significant amounts in upgrading exist- ture, and environmental issues, etc.) as China's cities accommo- ing infrastructure, and building new infrastructure, date the additional urban population. The outcome will largely over the next two decades to facilitate the integration be determined by the policies adopted over the next few years. of the national market (both in terms of goods/services China Urban Development Quarterly Issue 1 6.2006 and labor markets) and to minimize resource use and · Urban (and general) transport. Effective intra and inner- environmental damage. city public transport systems are essential to ensure that · Resource use and urban environment. In particular, agglomeration benefits materialize; an effective transport China needs to address the inefficient use of scarce system (an integral element of a modern logistics system) resources, especially energy and water. Currently, China is essential for the competitiveness of cities. is an inefficient user of energy, requiring ten times · Financing infrastructure investments. These infrastruc- more than Japan to produce $1 of GDP. In fact, most ture investments will require significant amounts of long- of the buildings in major cities do not meet the energy term financing such as structured bond financing, which efficiency requirement, even newly built ones. The inef- will in turn require changes to the current, often short ficient use of energy will have a direct bearing on the en- term lending arrangements which are inherently more vironmental quality of the city. Furthermore, China is a risky and the major source of contingent liabilities at the water-poor country and the lack of water availability will local level. Development of municipal bond markets is a be a major constraint on the growth of cities in northern critical step towards ensuring efficient financing of infra- area. More efficient utilization of water is required, given structure investments. its scarcity. The problem is compounded by water pol- · Taxes and fiscal issues. In addition, China will need to lution, which further exacerbates the scarcity. Efficient improve the tax system (e.g., property tax, intergovern- resource use and urban environment needs to be tackled mental fiscal relations) to optimize funding for urban hand in hand to contain environmental pressures arising investments, so as to provide municipalities the funding from growth of cities, e.g., in the areas of air pollution base to expand urban services. This will call for more and water and sanitation. autonomy given to municipalities in setting key tax rates. · Hukou system and social security. And finally, contin- ued reform of the Hukou system and the social security system are required to optimize migration flows and pat- terns. However, due consideration should be given to the costs and benefits of rapid versus. a more paced approach to migration/ and urbanization. For a more fluid migra- tion, reforms of the social security and other social safety systems are necessary. Most likely these services need to be provided at the national or provincial level so as to best diversify the risk. China Urban Development Quarterly Issue 1 6.2006 National Workshop on Metropolitan Infrastructure Management A Roundtable Workshop on Metropolitan Infrastructure of lessons learned from Chongqing and Tianjin case studies, Management, sponsored jointly by the Ministry of Finance, presented by local city officials, the meeting discussed how National Development and Reform Commission, and the World metropolitan management challenges in China compare with Bank, was held in Beijing on June 15, 2006. The workshop was international experiences: Dr. Cai Jianming, Professor, Geogra- a follow-up to the metropolitan management discussion held phy Institute, China Academy of Science, provided an overview earlier in Chongqing and Tianjin earlier this year (see separate of international best practices on how to manage metropolitan article in this number). The objective of the Workshop was to regions effectively. Mr. Se-Koo Rhee; Director, Department of review key lessons learned form the case studies in Chongqing Urban Management, Seoul Development Institute (Korea) and and Tianjin -- and to take stock, more generally, of some of the Dr. Eloisa Rolim's, Director, EMPLASA, São Paulo Metropolitan key challenges China is currently facing in planning, managing, Planning Bureau (Brazil), whose participation was supported by and financing infrastructure at the metropolitan scale. While Metropolis, explained how their cities are coping with metro- most of China's cities have so far been spared the problems of politan management challenges. massive urban sprawl and uncontrolled urbanization that many other Asian cities are now facing, the anticipated continued Based on these discussions, the meeting identified a number urbanization (in particular, of suburban towns) is expected to of issues that Chinese policy makers need to address going lead to a number of new challenges and opportunities to man- forward, including: promoting greater cross-jurisdictional age metropolitan regions more effectively. Addressing this topic cooperation between districts and across agencies within at the local, as well as the national level, is therefore a key policy metropolitan regions; looking for innovative delivery mecha- priority for the coming years. nisms to manage cross-jurisdictional infrastructure investment programs; and the need for unlock the potential for significant The Beijing workshop was attended by about 30 officials from cost savings by planning infrastructure investments at the the Ministry of Finance, the National Development and Reform metropolitan scale. Commission, the Ministry of Construction, universities and research institutes, delegates from Chongqing and Tianjin, as The dialogue on Metropolitan Infrastructure Management well other cities that are facing metropolitan management chal- will be continued in the year ahead, with the next conference lenges, such as Shanghai and Guangzhou. Based on a review planned for autumn 2006. Left: National Workshop on Metropolitan Management. Right: Professor Zhou Yixing from Peking University presenting. (Photo: Xuemei Guo, World Bank Beijing Office) China Urban Development Quarterly Issue 1 6.2006 World Bank Studied Chongqing Metropolitan Area Infrastructure Management The World Bank organized Metropolitan Infrastructure Man- agement Roundtable in Chongqing on April 11 to discuss with local government officials issues and challenges in the develop- ment of metropolitan cities. This is a new joint project by World Bank, National Devel- opment and Reform Commission (NDRC) and Ministry of Finance (MOF). The objective of this program is to explore how to enhance future competitiveness and coordination capacity of more than 50 metropolitan areas in China. This project was initiated in February this year. The World Bank, MOF and NDRC wanted to understand how infrastruc- ture is being managed at the regional level through discussions with local governments of metropolitan areas in China. They World Bank officials and international experts visiting a new college will decide on next steps based on the opinions and suggestions town in Chongqing (Photo: Dr. Chan-gon Kim) of the local governments. Chongqing and Tianjin are the first two cities to be studied. ties, counties and districts, and towns), responsibilities are not World Bank official Mats Andersson commented that these two divided Other issues such as who should decide the fee rate, cities were the most vigorous among Chinese metropolises and who collect user charges, and who can utilize the income are were of strategic meaning. also important questions to answer in infrastructure industry. Moreover, how to co-finance infrastructure between municipal The planning, management and financing of infrastructure con- government and district/county governments is most challeng- struction has been posing great pressure on local government. ing to Chongqing. Executive Vice Mayor of Chongqing, Mr. Huang Qifan revealed at the workshop that by 2020, Chongqing would invest RMB300 Similar problems exist in many metropolitan cities in China, billion in infrastructure. The World Bank found that the biggest according to World Bank officials. So far there is no universal challenge was to coordinate infrastructure and service provision solution to such problems but cities are exploring potential cross jurisdictional boundaries. planning in various ways. A major concern of Chongqing government agencies and Practitioners from Seoul and Vancouver also shared their corporations that provide public services is that the unclear respective experiences of metropolitan management. The first division of responsibilities among different parties. Firstly, stage of this project will end in June this year. the responsibilities among government agencies, State-owned enterprises and private companies are not clearly assigned. Secondly, among different levels of governments (municipali- China Urban Development Quarterly Issue 1 6.2006 World Bank's Metropolitan Infrastructure Man- agement workshop series was added value by Metropolis' great support. Metropolis, established in 1985, is an association of world major metropolis. It brings together major cities and metropolitan regions to advocate the interests of metropolises, promote exchange and collaboration among the institutions that Meeting with Shapingba District Government, Chonqing (Photo: Dr. Chan-gon Kim) govern cities, and improve the quality of life of all the people who live in major metropolises. Since 2005, Metropolis is also the Metropolitan Section Editor's note: of the United and Local Governments Organiza- 1. After Chongqing Metropolitan Infrastructure Management tion (UCLG). roundtable, World Bank organized in Tianjin a roundtable on the same topic. Government officials from Tianjin Mu- Metropolis is now a partner institution of World nicipality and Binhai District participated in the roundtable Bank Institute (WBI) and has been collaborating and discussed with World Bank officials and international with WBI in various initiatives. In the Metro- experts challenges and opportunities facing Tianjin in cross- politan Infrastructure Management initiative, jurisdictional management. ) Metropolis was represented by experts from ma- 2. The original article was abridged by the Quarterly editor. jor metropolitan areas who provided valuable in- sights. We would like to acknowledge the valuable contribution of Dr. Chan-Gon Kim, Director of the Policy Planning Bureau, Seoul Metropolitan Government and Ms. Linda Shore, Manager, Hu- man Resources from Greater Vancouver Regional District (GVRD), Ms. Eloisa Rolim, Technical Di- rector of São Paulo State Metropolitan Planning Public Company, and Dr. Se-Koo Rhee, Director of Department of Urban Management of Seoul Development Institute. For more information on Metropolis, please visit www.metropolis.org For more information on Metropolis' collaboration with World Bank Institute, please visit www.wbiurban.org China Urban Development Quarterly Issue 1 6.2006 Asian Pacific City Summit, Chongqing, 12­13 October 2005 Background and History of Asian Pacific City Summit was also the first time the summit has been held in an Asian The Asia Pacific Cities Summit was founded in 1996 and is an city after the first conference in Brisbane, Australia, in 1996. initiative of the Brisbane City Council. It was established to foster city partnerships and to facilitate the exchange of ideas, The Chongqing summit played host to 932 guests from 124 cit- knowledge and experience between local governments, techni- ies in 41 countries or regions, as well as 255 corporate represen- cal experts and businesses within the Asia Pacific region. tatives. It brings together Mayors, administrators, academics and busi- Delegates had come to share experiences on managing urban ness leaders to discuss issues of immediate and mutual interest development and exploring ways for the natural environment to the region and to explore opportunities for business growth and urban residents to exist in harmony. in the region. "Mayors of the world speak the same language," said Beverly The Summit focuses on cities as the catalysts to economic O'Neill, mayor of Long Beach, California, the United States. growth and is designed to actively help businesses in the region "Metropolitan areas of all countries are the engines that drive establish relationships that could lead to lucrative export and our economies." investment opportunities. Vice-Premier Huang Ju, keynote speaker at the event, gave an Previous Summits have been held in 1996 Brisbane; 1999 Bris- update of China's urban growth: The country currently has an bane; 2001 Seattle; 2003 Brisbane, and the latest one was held in urban population of 524 million. Of total 660 cities across the Chongqing, China in October 2005. nation, 171 are mega cities with more than 1 million people, 279 are big cities with half to 1 million, and 210 are small or Each Summit attracts between 600-800 delegates including medium cities with populations below half-a-million. Cities civic leaders from more than 50 Asia Pacific cities from coun- account for 70 per cent of the nation's GDP and 80 per cent of tries such as China, Japan, Vietnam, Korea, Indonesia, Thailand, contributions to the national coffers. Australia, New Zealand and the United States. "Chongqing is both a big urban city and a big rural area," said Huang, referring to its overall population of 30 million and its Chongqing City hosts discussions on Asia Pacific growth vast countryside. "The urban centre should pull the rural areas Zhou Liming, China Daily, October, 13, 2005 along with its growth." Chongqing Municipality took a symbolic step forward when the 2005 Asia Pacific Cities Summit opened in the city on October 12, 2005. The 2005 Asia Pacific Cities Years of preparation had gone into the summit which is the Summit was officially opened by the Honourable Wang Hongju, largest international event ever hosted by the municipality. It Mayor of Chongqing, on 12 October 2005 (Photo: Chongqing 2005 Asian based on information from Asian Pacific City Summit website http://www. Pacific City Summit website, apcsummit.org/ http://www.apcsummit.org) title and tense altered by Quarterly editor China Urban Development Quarterly Issue 1 6.2006 "Chongqing is poised to meet the global challenges and it will have tremendous urbanization pressures," said Katherine Sierra, Second International World Bank Vice President of Infrastructure. She compared the mountain and riverside city with Chicago: Both are inland but Conference on Heritage have transportation and waterway access. Chicago has built a skillful workforce, a lead Chongqing would do well to follow. Conservation and Sierra noted that Chongqing has a very high World Bank com- Sustainable Development petitiveness ranking, but could still "increase this competitive- ness by 38 per cent," according to her organization's calculations. The Draft 2006 Shaoxing Statement To increase links with the international community, Chongq- From 31 May to 02 June 2006, in Shaoxing, China, 188 Chinese ing established friendship city relationships with Brisbane of experts joined with 63 international experts for the 2nd Inter- Australia, Shiraz of Iran and Aswan of Egypt on the eve of the national Conference on Heritage Conservation and Sustain- summit. able Development. The conference was sponsored by the State Administration of Cultural Heritage of China, the Ministry of Shortly before the conference, a meeting between mayors from Construction of China, UNESCO and the World Bank. The China and the US culminated in a memorandum of under- Cultural Heritage Bureau of Zhejiang Province and Shaoxing standing, finding common ground for small and medium-sized Municipality generously hosted the conference. enterprises to co-operate. The purpose of the conference was to increase the institutional On the last day of the conference, mayors passed a "Chongqing understanding and effective use of recently developed "tools" Declaration," defining their common goal for urban develop- for managing cultural heritage properties, sites and areas. The ment and seeking ways to protect the environment and handle conference focused on three inter-related themes: urban issues such as energy consumption and unemployment. i) strategies for successful heritage conservation, manage- "A rising economy does not mean every city rises. Some fall," ment and monitoring. cautioned Douglas Webster from the Arizona State University, ii) responsible tourism as a tool for heritage conservation. citing the example of Glasgow in the United Kingdom. iii) heritage financing and revenue generation. All agreed that Chongqing is in a unique position to grow into The participants recalled the analysis of the situation with a global player as the city, functioning as a hub for China's vast regard to heritage conservation and urban development noted hinterland, gallops forward economically. by the participants in the 1st International Conference in 2000 as articulated in The Beijing Statement: "Chongqing will become western China's Shanghai or an equiva- lent of Chicago," observed L. Philippe Rheault, Canadian consul "Amid the rapid economic growth of the 21st century, the to the city. cultural heritage of many historic cities is being impacted and many even be threatened with destruction. The in- Brisbane's Lord Mayor Campbell Newman, Mayor Wang Hon- crease in urban population, the tendency of cities to grow gju, and Ms. Kathy Sierra (Vice ever larger, more modern and more economically-oriented President and Head of Network, encroaches every day on the environment required for Infrastructure, World Bank) at the opening ceremony of the Asia the survival of their cultural heritage. The authenticity of Pacific Cities Urban Planning many historically significant neighborhoods of traditional Exhibition (Photo: Chongqing 2005 Asian Pacific City Summit culture is vanishing. " website, http://www.apcsummit. org/) 10 China Urban Development Quarterly Issue 1 6.2006 The participants applauded the significant progress achieved · To facilitate community and stakeholder involvement since 2000 at the national, regional and international levels in this process in a systematic and transparent way, to deal with the factors threatening heritage, but noted with strategic environment assessment (SEA) and environ- concern the continuing pressures on cultural heritage resources ment impact assessment (EIA) procedures should be brought about by rapid urban growth, unregulated tourism adopted respectively, for long-term planning, as well as development and the lack of integration of heritage conserva- individual project management. tion within planning frameworks. Responsible Tourism as a Tool for Conservation Therefore, the specific objectives of this conference were to take · The development of mass tourism has often resulted forward the achievements of the past 6 years within a struc- in unsustainable exploitation and commercialization tured framework of strategies and tools, providing key decision- of heritage sites, and the degradation and depletion of makers the opportunity: these sites in the world. Current guidance and regula- tion of the tourism industry is inadequate. Therefore, a a) to deepen their understanding of the issues that must be new structure of governance of cultural heritage sites considered when integrating effective cultural heritage and the cultural tourism industry is needed at the na- protection with responsible cultural tourism develop- tional level. ment, particularly within the context of rapid economic · Such a new governance structure would place heritage growth and expansion of infrastructure; site and cultural tourism management under integrated b) to explore the range of mechanisms which may be em- control, empowered to develop and implement guide- ployed to establish long-term financing mechanisms to lines for, among others, (i) high standards of conserva- support and capitalize on heritage resource conservation; tion of sites, site values, and site context, (ii) managing c) to become familiar with the range of professional tools access at heritage sites to preserve the authenticity of the which can be used to achieve successfully the objective site while meeting the needs of visitors, (iii) reinvest- of integrating heritage conservation into sustainable ment of a part of tourism profits and site revenues into development planning and implementation the conservation of heritage resources (through visitor entry fees, taxation and other mechanisms) (iv) certifi- In their deliberations, conference participants identified the cation of tour companies, guides, and other providers following priority issues as key to the successful integration of of tourism services to ensure adherence to sustainable heritage conservation into sustainable development: tourism principles, and (v) maximum community involvement in planning, management, and staffing of Heritage Conservation, Management and Monitoring sites, and in equitable sharing of economic benefits. · The current practice of including the community and · A primary concern must be the provision of a high qual- those stakeholders concerned with heritage conserva- ity visitor experience through (i) innovative interpreta- tion through information sharing only after all major tion, (ii) high quality of guides, (iii) education of visitors development decisions have been taken is both ineffec- in how to appreciate and understand heritage sites, and tive and leads to conflict. Early inclusion and involve- their tangible and intangible values and context, (iv) en- ment at all levels of all stakeholders in development gagement of the local community, and (v) provision of planning is required. high quality and authentic cultural goods and services. · Cultural heritage management should be based on a process of vigorous assessment of all the cultural values Heritage Financing: Public and Private Initiatives which the site has, and of all the issues and problems · Those responsible for economic development plan- which may affect these values. It is therefore crucial that ning need to recognize that cultural heritage resources these steps are taken before any unfounded conserva- have economic and social value and therefore are assets tion or management decisions are taken. which need to be conserved, managed and beneficially 11 China Urban Development Quarterly Issue 1 6.2006 used as an integral part of the process of sustainable treasures, based on the intangible benefits that conservation development. can bring such as: · A comprehensive financial planning framework is neces- · Preserving the accomplishments of past generations sary, including effective institutions, innovative finance · Cultivating historical knowledge and identity mechanisms, with attention to researched and informed · Developing social cohesion and inclusion decision making as well as transparent and accountable · Safeguarding and conveying heritage to future genera- monitoring systems. tions · Structured revenue capture should be instituted, in particular cross-subsidies within the development sector However, today, I would like to emphasize two guiding prin- to support heritage conservation and reinvestment of ciples of World Bank work that I think will help to ensure the tourism profit into asset development and sustainability success of heritage conservation efforts and help to realize of the resource base. tangible benefits for the people of China. These are: · Sustainability and Through our common effort to address these priority issues, · Local Economic Development the preservation of rich cultural heritage of Mankind will be assured as the foundation upon which nations across the world I would like to emphasize the importance of planning for the will continue to develop and prosper in the 21st century. development of heritage sites and areas to generate sustainable and sufficient local economic activity and make conservation, not only desirable but also economically viable and attractive. Strategies for Success: The Nexus of Heritage Conservation Well planned conservation that leads to more local economic and Local Economic Development activity in communities can provide: (A synopsis of Mr. Keshav Varma's conference synthesis during · Higher employment levels the closing session) · Increased revenues from cultural industries and service The World Bank and China have a long history of collaboration industries starting and for the East Asia and Pacific Urban Development · Elevated real estate values Sector Unit; it has been a very positive partnership. We have · More foreign exchange earnings worked with the government to support all aspects of urban development from public infrastructure services, to municipal I'd like to discuss a few mechanisms that can support the goals finance, and energy policy. of sustainability and local economic development in conjunc- tion with appropriate heritage conservation. We have recently been broadening our activities from this straightforward economic development approach to include Raising the quality of planning for adaptive reuse work on cultural heritage conservation, because we see it as a In order to conserve historic areas and buildings that are not vital tool in China's efforts to create the balanced and harmoni- protected as important cultural monuments, we must think in ous development that is emphasized in the 11th Five-Year Plan. terms of adapting them for active use in economically viable This balance is reflected in the Country Partnership Strategy roles, such as housing, commercial space or cultural venues. For that China and the World Bank have developed to define our example, in Ningbo, the Bank supported Zhejiang Multici- work for the next three years. Our support for this conference is ties Development Project, assisted in the adaptation of a Ming part of this work. Dynasty housing complex into a collection of shops selling antiques, books, art and art supplies. When it was first devel- In the clinics this week, we have discussed the particulars oped, it was the only commercial complex in the city providing of how to effectively plan and protect heritage sites, how to a traditional setting for the sale of antiques and art. develop responsible cultural tourism and how to generate long- term financing to conserve heritage. I think all of us here agree Finding appropriate new uses for historic buildings that provide on the importance and value of preserving China's cultural an adequate income stream for operation and maintenance 1 China Urban Development Quarterly Issue 1 6.2006 requires detailed planning and analysis. For this reason EASUR and the budgets allocated for maintaining them. Maintenance projects have been supporting capacity building in: and repairs are funded through allocations based on annual · identifying the markets for alternative uses; applications by heritage managers. This system provides little · estimating the costs of repairing and upgrading old incentive for the management of a heritage site to develop ways structures to contemporary standards; it could generate more revenue through, for example, increas- · determining the future costs of operation and mainte- ing ticket sales, developing shops to sell appropriate souvenirs, nance; and or services such as tea rooms. · Calculating the financial returns that can be expected from these projects. World Bank projects advocate that the managers of government owned heritage sites add to their government allocations for Increasing self-financing capacity in historic sites and parks operation and maintenance by pursuing activities that generate For publicly managed and protected heritage sites in China, revenue. For example, in a project in St. Petersburg, Russia, the there is often no direct link between the revenues generated Bank established a competitive fund where cultural institu- tions with sustainable ideas for generating income, based on their heritage assets, could receive seed money to develop their ideas. In Shaoxing, we have seen that some entrepreneurial site managers have gotten the approval to raise ticket prices and also developed tea houses and souvenir shops. Helping government accurately calculate the benefits of heritage conservation by recognizing both direct and indirect revenues As we have discussed this week, sites that have the potential to attract large numbers of tourists, create additional revenues in their communities through related demand for hotel rooms, local transport, restaurants, and a range of related services. To Mr. Keshav Varma, Sector Manager, Urban Sector Unit, East Asia counteract the perception that heritage conservation is simply a and Pacific Region of the World Bank, speaks at the opennng drain on government budgets, EASUR projects aim to increase ceremony while Mr. Xu Hongjun (left), Vice Chairman of the officials' understanding and ability to calculate both the direct Standing Committee of People's Congress of Zhejiang Province, and Mr. Tong Mingkang (right), Vice Director, State Administra- and indirect revenues created by their cities' heritage sites. When tion of Cultural Heritage of China, look on. (Photo: Ji You, World both types of economic benefits are taken into account, heritage Bank Beijing Office) conservation that might be considered expensive, could in fact be shown to be a good investment and economically sustainable. Stimulating more private sector investment in heritage conser- vation through public/private partnerships. In the Financing Clinic, we discussed many innovative ideas, some of which, for various reasons, will require more time to analyze in China. However, the Bank is currently supporting municipalities in developing public/private partnerships. Be- cause upgrading traditional areas for continued, active use can require very large investments in infrastructure and building renovation, EASUR projects are supporting capacity building The Mayor of Shaoxing, Mr. Zhang Jinzhu, offers welcoming remarks. for municipal governments in negotiating equitable develop- (Photo: Ji You, World Bank Beijing Office) ment arrangements with the private sector. In these partner- 1 China Urban Development Quarterly Issue 1 6.2006 And most of all: · They need people who appreciate them and use them, to give them that special quality which only human vitality and activities can provide. This week, I've been very gratified to find so many committed professionals gathered here in Shaoxing who are willing to ded- icate themselves to the goals of protecting China's vast wealth of cultural heritage. I'm looking forward to more opportunities to exchange ideas and work with you on these important issues. Thank you. Richard Engelhard, Regional Advisor of UNESCO and Mr. Shan Jixi- ang, Direcotr of State Administration of Cultural Heritage of China at the conference (Photo: Ji You, World Bank Beijing Office) ships, local government can take responsibility for urban services upgrading. The private sector can then be brought in to develop the site under: · conservation controls that regulate the extent, design, methods and materials for customizing historic build- ings; and · leases that mandate operation and maintenance prac- tices. With support from the Chongqing Urban Environment Project, a complex of the city's the ancient guild halls were restored Shaoxing, Zhejinag Province (Photo: Curt Carnemark, World Bank) and updated for use by the municipality. City authorities have now developed contracts and leases with private businesses that assure appropriate use and respect for the buildings, while providing for various commercial activities. Conclusion All cultural heritage sites have several things in common, whether they consist of listed monuments under government protection, traditional neighborhoods under city management, or buildings under private ownership: · They need owners or managers committed to a program of appropriate conservation, management and interpre- tation; · They need viable uses that generate income that can be applied to operation, maintenance, and further site enhancements; 1 China Urban Development Quarterly Issue 1 6.2006 Building Institutions for Sustainable Urban Transport in China Synopsis of EASTR Working Paper No. 4, Transport Sector Unit of World Bank East Asia and Pacific Region, January 2006 rious concerns not only at the city level, but also at the national, and even international, level. At the city level, traffic congestion, motor vehicle pollution, and road trauma have become common and serious problems in Principal author Zhi Liu, World Bank Senior Infrastructure Specialist almost all large cities, and are fast eroding the quality of urban life and the efficiency of urban economic activities. The rapid The World Bank, in collaboration with the China Academy of motorization allows little time for the municipal governments Urban Planning and Design (Urban Transport Center) and the to prepare strategically effective responsive actions. As a result, Institute of Comprehensive Transport of the National Devel- they have been investing heavily in road capacity, dismantling opment and Reform Commission, has just released a report existing bicycle rights-of-way, pedestrian sidewalks, and even entitled "China: Building Institutions for Sustainable Urban rows of roadside trees. As the majority of urban households are Transport". The report will contribute to the current debate on car-less, and likely to remain so for the next 10-15 years, the urban transport issues and will serve as a technical input to the mobility needs of the urban majority are seriously under-served government policy making process, especially at the national by the established practice that commits much of the available level. resources to meeting the demand for auto-mobility. Based on a number of background studies on the transport At the national level, the urban transport problems are caus- problems facing China's large cities, this report summarizes the ing increasingly serious concerns over: (i) the threat to the diagnostic analyses of these problems with a focus on the as- efficiency of the urban economy due to the reduced urban sociated institutional issues, and recommends policy directions productivity caused by congestion; (ii) the excessive conver- and short- to medium-term institutional development actions sion of agricultural land for urban development, threatening for sustainable urban transport. In particular, it examines the the extremely limited good farmland in China; (iii) financial changing nature of urban transport problems in a broad context liabilities incurred by sub-national governments for investment of urbanization and fiscal decentralization, and calls for the in urban expressways, ring roads, and subways ­ the primary national government to re-define and strengthen its role in funding sources (from the lease of land use rights and quasi- dealing with the spillover effects of urban transport problems. fiscal instruments) are unlikely to be sustainable; (iv) energy security concerns driven by the growth of petroleum demand; China has succeeded in developing a world class automotive and (v) the growth of greenhouse gas (GHG) emissions from industry within the past decade. The rapid development of the the increased use of fossil fuels. automobile industry brings enormous benefits to the economy and enhances people's mobility. However, associated with these Tracing the causes behind China's urban transport problems, benefits is a range of unprecedented problems that is causing se- the report identifies urbanizations and decentralizations as 1 China Urban Development Quarterly Issue 1 6.2006 the associated driving forces. In particular, urbanization is ac- · Develop accountability mechanisms and a strengthened companied by rising incomes, transformation of farms to firms, local governance structure for urban transport; and structural changes in living style and urban land use, while · Build institutional capacity for strategic planning, as a decentralization is changing the ways of governance at the local basis for effective coordination; level, particularly urban management and modes of service · Establish the linkage between urban transport planning delivery. Institutions have not kept pace with decentralization and financing, to enhance coordination and accountabil- and remain too weak to address the spillover effects. ity; · Develop a sustainable and transparent financing mecha- Inadequacies in urban institutions and their policy making nism, as a foundation for financial risk management; are affecting the efficiency of cities and their travel conditions. · Develop a viable public transport industry as a center The report points out particularly that the inadequacies of four piece of urban transport services for inclusive develop- mechanisms are hampering the development and adoption ment. of a sustainable urban transport strategy, with a consequent declining quality of urban mobility and travel conditions across almost all major cities. These are: (i) the incentive mechanism ­ the performance of mayors is predominantly rated by GDP Seminar on Road Traffic growth, instead of sustainable development; (ii) the urban plan- ning mechanism ­the inflexibility of urban master plans, the Safety in China lack of public participation process, and the disconnect between city master plans and the city budgets; (iii) checks and balances mechanism ­ mechanisms are needed to ensure sensible deci- In 2004 about 107,000 people were killed on China's roads. Al- sions are made on a broadly informed and transparent basis; though the Government of China has taken major steps to ad- and (iv) financing mechanism ­ the current mechanism creates dress the safety issue, there are opportunities to take advantage strong financial incentives for acquiring farmland for land of experiences overseas and further reduce traffic fatalities. concessions. At the one-day World Bank seminar on Road Traffic Safety in In responding to these urban transport challenges, the report China, held 15 June, 2006, speakers from China and overseas suggests that technological solutions, such as energy efficient discussed traffic safety--what has been happening, and what vehicles and clean fuels, do exist, but overall sustainability more can be done. The Seminar also discussed the results of would depend on capable institutions and their instruments to manage urban dynamics and the resulting travel demand. A new framework for infrastructure, recently proposed by the Asian Development Bank (ADB), the Japan Bank for Interna- tional Cooperation (JBIC), and the World Bank can be applied for institutional development for sustainable urban transport in China. The framework comprises inclusive development as the goal, and improved coordination, accountability and risk management as the means to achieve the goal. By putting the new infrastructure framework into the context of urban trans- port development in China, the report identifies the following priorities for institutional development actions: · Redefine the role of the national government in urban transport to enhance coordination and risk manage- David Dollar, World Bank Country Director for China, opens the ment; seminar. (Photo: Wenling Chen, World Bank) 1 China Urban Development Quarterly Issue 1 6.2006 the recent World Bank work in Hubei and Jiangxi provinces, the USA, and demonstrated methodologies that can be used to looking at the potential for a multi-sector road safety project. evaluate the benefits of ITS implementation. The Global Road Safety Facility discussed their work, as well as the grant to be provided to China to establish the Hubei Road The course included extensive case studies, covering details of Traffic Safety Training Centre. projects on transit signal priority, tunnel safety, and electronic toll collection. Speakers at the Seminar included: Roger Johansson, Swedish Road Administration; Yves Boutin, General Manager, Peugeot Citroen Automobiles, China; Jonathan Passmore, World Health Organization; Mark Shotten, Anthony Bliss, Christopher Ben- nett, Chen Wenling, and Zhang Wenlai of the World Bank; and Wang Yanghong, Hubei Provincial Construction Department. Seminar instructors Steve Terry (AECOM), Mark Carter (SAIC), and moderator Graham Smith (World Bank) (Photo: Wenling Chen, World Bank) Hubei Provincial Construction Department officials and World Bank officials at the seminar (Photo: Wenling Chen, World Bank) InternationalExperiencein IntelligentTransportSystems The importance of Intelligent Transport Systems (ITS) in road management is increasing. China is rapidly adopting many Wang Xiaojing, Director of National Intelligent Transport System technologies, and in 2007 China will host the International Center of Engineering and Technology (Photo: Wenling Chen, World Congress on ITS in Beijing. Bank) The one-day World Bank seminar on ITS, held on 16 June, 2006 at the World Bank Beijing office (China World Tower 2) brought together ITS experts from the USA and the UK to discuss international practices in ITS application. It showed the types of ITS implementations currently in use in Europe and 1 China Urban Development Quarterly Issue 1 6.2006 Cities in a Globalizing World: Governance, Performance, and Sustainability (Abstract) infrastructure. The authors suggest that good governance and globalization tend to improve city-level performance in both access to services as well as the quality of delivery which allows cities to translate global opportunity into local value for their citizens. The book empirically tests various commonly accepted hypotheses, and argues that policy design could be much im- proved by the collection of better quality data. In Chapter 2, Frannie Léautier and Andrew C. Lemer argue that the main challenge facing infrastructure professionals today is embodied in the precept, "Think globally, act locally." Although Frannie Léautier, Vice President, the facilities and services of infrastructure are still seen by World Bank Institute The growth of cities in the developing world is increasing very rapidly. Research shows that by 2020, 4.1 billion people (55 per- cent of the world's population) will live in urban areas. Almost 94 percent of the increase will occur in developing countries. By 2015, there will be 22 megacities and 475 cities with popula- tions exceeding 1 million. At the same time, globalization is becoming the driving force behind economic growth and development. With increased investment, both foreign and domestic, successful cities will need to meet new job requirements, and provide security and access to services and urban infrastructure. This will present enormous performance challenges to local governments. Good governance at the city level will be critical in turning demands of globalization to an advantage for all urban dwellers, includ- ing the urban poor. Cities in a Globalizing World contributes to the empirical and theoretical analysis of the performance of cities in a globalizing world, bringing together a range of perspectives on the policy implications for urban management. It provides guidance for Cities in a Globalizing World, edited by Frannie Léautier, policymakers on ways of capitalizing on the global economy World Bank Publication, 2006 that will be least taxing to the cities resources and managerial 1 China Urban Development Quarterly Issue 1 6.2006 public works managers and users as essentially local, the un- necessarily exhibit lower performance and pointing to potential derlying demands for infrastructure and the means employed agglomeration economies. (See Graphic 1 ) in its finance and development are increasingly global in scope. Infrastructure itself has become an export industry, creating In Chapter 4 Frannie Léautier and Barjor Mehta use two sets pockets of wealth held by the firms and employees who own of empirical explorations to examine whether the influx of and operate the infrastructure on which a widely dispersed and global business, including connections with international sometimes resentful consumer base relies for transport services, markets, tends on balance to improve or degrade existing city drinking water, energy, and waste disposal. Local communities performance. They first compare city performance profiles on have shown increasing resistance to the presence of infrastruc- a number of dimensions, asking whether globalization does ture facilities, even if those facilities could provide substantially indeed seem to favor well-performing cities. Second, they look improved services to the community. Because infrastructure at the specific case of Africa to see if urban dynamics there draws on financial markets that have become global in scope, are the same or different in comparison with cities elsewhere. what might once have been local liquidity problems spill over When companies or citizens choose a city in which to locate, into international affairs. they pay attention to issues such as the quality of life and access to critical infrastructural and social services. Observed city per- Following the discussion of urban infrastructure is an explo- formance profiles, therefore, exhibit mutual interdependence ration of the impact of globalization on urban performance between the attained level of globalization and the performance (Chapter 3). Daniel Kaufmann, Frannie Léautier, and Massimo of the city--unless city managers are not responsive to signals Mastruzzi construct a preliminary worldwide database for from firms or citizens. more than 400 cities, containing indicators of globalization at the country and city level, as well as variables on city gover- Chapter 5 by Frannie Léautier and Séverine Dinghem seeks nance, city performance and other relevant city characteristics. to understand differences in urban performance by looking at Based on empirical evidence, they find that good governance the interactions among citizens, an elected mayor or municipal and globalization tend to improve city-level performance on leader, and a globally oriented firm making the decision to both the access to infrastructure services and the quality of locate in the city. The authors use game theory to show that the delivery. Furthermore, their results show complex interactions dynamics of interactions among citizens, mayors, and firms, among technology, governance, and city performance, as well within a context of globalization, can improve the performance as evidence of a nonlinear (-shaped) relationship between city of cities. This framework attempts to derive the nature of cau- size and performance, challenging the view that very large cities sality from globalization to good governance and from local ac- countability to good governance. In fact, the analysis shows that both globalization and local accountability matter, but that the interaction between globalization and good governance should lead to better performance than local accountability by itself or globalization in the absence of local accountability. The analysis also shows that, when firms try to influence city leaders and go unchecked, city performance is likely to suffer. In the closing chapter, Daniel Kaufmann, Frannie Léautier, and Massimo Mastruzzi investigate the role that various city-level characteristics play in distinguishing the performance of cities as they face the twin pressures for improved local governance driven by the preferences of their citizens and the need for heightened service provision driven by the firms seeking to lo- Graphic 1 cate on a global scale. The analysis uses the authors' worldwide 1 China Urban Development Quarterly Issue 1 6.2006 database for more than 400 cities, which is also the source for seem to be more dependent than nonports on good governance the data in Chapter 3. The evidence suggests that there are par- for the city performance variables that matter for globalization ticular and complex interactions among the technology choices (access to cell phone, internet access) and that capital cities tend that citizens and firms have, the quality of local governance, and more to serve local service access better (water, sewerage, and the overall performance of the city. In particular, the authors electricity). (see Graphic 2) confirm the conclusion drawn in Chapter 3 that port cities Graphic 2 For more information on World Bank publications and projects, please visit www.worldbank.org.cn Disclaimer The findings, interpretations, and conclusions expressed herein are those of the author(s), and do not necessarily reflect the views of the International Bank for Reconstruction and Development/The World Bank and its affiliated organizations, or those of the Executive Directors of The World Bank or the governments they represent. 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