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China Daily Website

Service center built on unique program

Updated: 2013-05-16 05:07
( China Daily)

In 1998, the concept of building a new Zhengzhou city on farmland to the east of the old city was approved by the central government.

The new city, named Zhengdong (meaning east of Zhengzhou in Chinese), was on the drawing board by 2002, with plans provided by one of the world's top design houses.

Zhengdong's construction kicked off in January 2003, with the aim of becoming the first new investment zone in the Chinese mainland to attract modern service industry investors and not just manufacturers.

This was a bold experiment in a country where the development of service industries had been lagging behind manufacturing for many years.

City governments have tended to compete with one another in offering incentives to manufacturing investors, often forgetting that service industries actually create more jobs and more convenience for local communities.

Today, according to local officials, Zhengdong's central business district, covering less than 4 square kilometers, has grown into the densest cluster of financial services in Henan province.

There are more than 150 financial service companies. The new city's largest banks claim to hold 70 percent of all deposits in the province, and provide more than 60 percent of its loans.

Zhengdong is now building several large exchanges, given that Zhengzhou is already a key futures market for farm products in China.

There is also a growing community of industrial companies, large retail facilities and luxury hotels, bringing the total number of business registrations made with the Zhengdong government to more than 5,000 in March.

Those include many in distribution and retail, commercial real estate and office management, business conference services, media and advertising, as well as e-commerce.

Alongside those businesses, students have come too, and the population of the CBD's new college park has grown to 130,000.

Officials say they expect the city's new high-speed rail connection with Beijing and Guangzhou - which opened in September 2012 - to help bring in more high-caliber workers to Zhengzhou.

They say this 10-year urban experiment has created a modern, highly competitive service center, right in the heart of what was traditionally agrarian Central China for so many years.

It has been created using a far more efficient urbanization model than having small services here and there outside competition for quality and variety.

In the next few years, officials say they are expecting to attract more equity and private equity investment funds to the city and its surrounding areas, which will help expand not only its levels of expertise in financial services but also those of its growing satellite industries, such as logistics.

The next stages of its development program, officials say, will cover 370 square kilometers, compared with its present 115 square kilometers.

The entire Zhengzhou city, including Zhengdong, its most modern part, is aimed at creating 2 trillion yuan in GDP in 2020, almost equivalent to the entire province's GDP in 2011.