In Country Driving, Hessler observed how cities rapidly developed into manufacturing centers. Recently, Beijing’s government is planning to move away from reliance on these types of industries and develop high-end industries like tech and commerce. Two of the means to achieve these ends are government investment in infrastructure and zoning areas.
Beijing’s 2010-2013 economic plan for southern districts aimed to improve transportation. In the last three years alone 90 kilometers of subway lines were constructed in Beijing – the city has 118 kilometers in total. The city also created 167 kilometers of road, which connected five districts below Beijing. Similarly, Beijing built five new power plants and three new water recycling plants in the last three years. These infrastructure improvements are continued in the city’s 2013-2015 plan.
Beijing also plans to continue offering high-end industries incentives to put roots in southern Beijing with favorable zoning policies for 2013-2015. The city’s strategy has already attracted 52 new bio-medical companies and over 200 other projects in the past three years.
These policies exemplify economies of scope and economies of scale discussed in class today. Co-location of bio-medical companies in southern Beijing is beneficial for both consumers and producers. Improved transportation and utility infrastructures cut down on opportunity costs associated with travel as well as give larger returns on investment than rural-investment would. Beijing’s new policies attempt to enhance the characteristics which make city-investment economically advantageous.