Dongcheng out to attract more major investors

Historic Dongcheng district, which is home to the Forbidden City and the Temple of Heaven, is well-known for its ancient structures but its economic future is increasingly depending on its growing inventory of modern buildings, says one the area's top officials.

"The 162 office buildings along the East Second Ring Road were responsible for 40 percent of the district's GDP last year," said Xu Xi, managing deputy head of Dongcheng district government.

He said modern buildings and the money they create have become the backbone of Dongcheng, and a series of policies have been created to attract more leading enterprises.

Xu said the local government is relying on the development of commercial buildings and their subsequent rental to companies for economic development as those companies that move into the spaces employ people and create additional income.

Dongcheng's incentive policies mean companies that locate their headquarters in the district or that play a leading role in the local economy can earn bonuses as high as 3 million yuan.

Office building management companies that introduce large or leading enterprises that contribute greatly to the district's revenue can be rewarded with bonuses up to 5 million yuan.

In addition to financial rewards, senior executives and professional experts with these enterprises will be able to enjoy social rewards that include having their children admitted to local schools and medical services in top hospitals as well as membership of district-owned fitness facilities.

Statistics indicate that the 162 office buildings in the district now accommodate about 6,400 enterprises.

Albert Chan, general manager of the Beijing branch of TCBL Consulting Limited, which manages the rental business of a commercial building in the Wangfujing area, said the local government's policies are attractive.

However, he said the huge business potential of the locations are the main reason why thousands of enterprises have moved to the district.

"Take Wangfujing Street as an example," he said. "Rental fees for stores facing the street have already reached 2,000 yuan per square meter a month, and one square meter can create an income of 100,000 yuan on average. These businesses contribute a lot of taxes to the local economy in addition to the individual income taxes paid by staff working at the stores."

However, the district's development plans are not being universally welcomed by residents.

Wang Yuan, a 28-year-old who grew up in a local hutong, said her family and neighbors love the district and hope it will not be over-developed.

"We're just worried that excessive business development will change the district's historic landscape," Wang said. "It's really upsetting to see cultural courtyard houses squeezed between the skyscrapers."

China Daily

(China Daily 09/27/2010)