The City of Foshan is one of China’s 16 super cities that is responsible for more than 1 percent of the whole country’s economic output. Foshan has been producing with an annual growth rate of 17 percent in the last 35 years, particularly because of its strong manufacturing base and related surge in real estate development. However, this GDP growth rate has been decreasing in the last 10 years, because of less demand for traditional manufactured goods from the West, and the transfer of factories to other cities with lower labor costs.
Its population growth rate is less than one percent, and there is massive outmigration of young people. I have visited China several times before, but it was only on this particular visit that I understood the concept of hukou, or the family registration record. Some say that this can be likened to a caste system, with migrant workers not gaining access to a city’s social services such as education, healthcare and housing. One can imagine that this discrimination would be a concern for a city with half of its seven million people as migrants. The biggest challenge facing Foshan is how to move up in the value chain, and how to strengthen its labor force.
The advisory panel’s recommendations centered on four themes: promoting livability, strengthening the Foshan brand and tourism, education, and entrepreneurship.
Enhancing Quality of Life
The panel members had expected to be welcomed by a polluted town, with not much to see except for factories. However, the central district of Chancheng, which was the focus of our study, had a very vibrant street life that is absent in most modern Chinese cities. We recommended that they continue improving the quality of the environment with stricter regulations for pollutive industries, and a strengthened urban core. This can be achieved by integrating the heritage center of Zumiao, Lingnan Tiandi and the rest of downtown – its markets, schools, parks, temples, and rivers – with well-connected walkways and the proposed light rail. We also recommended affordable housing and SOHO (small office home office) in the city center to cater to young people. The panel recommended strengthening this urban core that is difficult to replicate and has been absent in many places in modern China. This authenticity will be the main selling point of Foshan as a livable city.
The Foshan Brand
Foshan has been playing a key role in China’s economy for thousands of years. However, it is relatively unknown. Lingnan culture can be highlighted to encourage tourism. While they can build landmark destinations such as a convention center in the city center, soft programming is essential. A calendar of events can be curated to showcase the temples, Cantonese food and opera, the 50 martial arts clubs of Foshan, and kung fu films through events in the city center. Sydney, for example, has benefited from events such as Vivid Sydney and Moonlight Cinema, which did not require much of additional infrastructure. We also recommend a Center for Excellence for Herbal Medicine.
Education
Providing cradle-to-grave education will play a key role in attracting talent in the knowledge economy. It is ironic that Foshan is in the top tier income category by the World Bank, however it has one of the lowest graduate rates in China. It has only one university, which faces the threat of relocation to a suburban area. The advisory panel recommended an urban campus within the city’s core, with a world-class university to attract top talent. Young and innovative migrants can be incentivized through a Foshan Promise, wherein good performers are given subsidies to stay on during and after their university education.
Pioneering Park
Entrepreneurship
The government invested on high-technology zones and innovation hubs in suburban locations that are far from the city center. This is part of the provincial government’s thrust of boosting employment by startups. They are very impressive structures, but have not been able to attract much talent. Innovation usually takes place in thriving cities, and cannot be orchestrated in secluded areas that are inaccessible to investors and educational institutions. Even tech companies that traditionally occupied suburban campuses in the US are moving back to city centers.
In relation to this, we recommended a Center for Entrepreneurship and Mentoring, possibly named after Shui on Group’s chairman Vincent Lo, a highly-regarded Hong Kong-based businessman who owns a multibillion dollar property and construction empire. Young entrepreneurs will be given opportunities to be mentored – and financed – by successful business people who will likewise be encouraged to visit an attractive city.
An entrepreneurial culture needs infrastructure such as early stage financing and incubator spaces within an urban core. Examples of cities that have been successful in similar initiatives include Stockholm, Berlin, Tokyo, and Barcelona.
Shift
Foshan’s experience is a validation that a city’s success is not anymore measured by economic progress alone. The growth of Foshan’s economy, particularly in trade, manufacturing and real estate is truly remarkable. Despite the high income and the presence of first-class infrastructures, the city has been threatened by outmigration of its people. Previously, people went to where the jobs were. In the knowledge economy, businesses will follow the talent. The cities that will win the fight for talent will be those that provide the highest quality of life.
This article is based on the inputs of the entire team of the ULI Advisory Panel to Foshan, and not just the author’s. For more information on Foshan, refer to www.asiaglobalinstitute.hku.hk/en/wp-content/uploads/2015/05/Foshan-Report-2015-05-06-final.compressed.pdf .
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