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Smarter city, better life

China is moving to cure its “big city disease” to create a more sustainable city environment in its metropolises.

TEXT: Jan Hökerberg, Bamboo
15 MARCH, 2018

Five years ago, Beijing was ranked as one of the worst cities in the world when it comes to air pollution, with a density of PM2.5 – fine particles small enough to pass from the lungs to other organs – reaching more than 700 micrograms per cubic metre. Walking around the city was, on certain days, akin to doing a workout in a smokers lounge at an airport.

Today, the picture has totally changed. In December 2017, Beijing was ranked ninth of 74 Chinese cities in air quality.

“The air quality in Beijing is so much better today,” confirms Mats Harborn, executive director at Scania China Strategic Office, while watching a clear blue sky from his office window. “If the air quality index reaches 200 today, we would regard it as very alarming.”

In 2014, Premier Li Keqiang declared “war on pollution”, allocating 10 billion yuan to nine provincial-level governments in China. In Beijing, coal-fired plants and other heavy industry facilities were either shut down or moved elsewhere. Violations of environmental protection laws resulted in heavy penalties for factories and construction sites.

“China’s businesses have also moved up the value chain, so when the focus is on value instead of quantity, you will automatically get other positive effects such as better air,” says Harborn, who is also president of the European Union Chamber of Commerce in China.

More than half of the world’s population now lives in urban areas, according to the United Nations Development Programme (UNDP). By 2050, that figure will have risen to 6.5 billion people – two-thirds of all humanity. Sustainable development cannot be achieved without significantly transforming the way we build and manage our urban spaces.

The rapid growth of cities in the developing world, coupled with increasing rural to urban migration, has led to a boom in mega-cities. In 1990, there were 10 mega-cities with 10 million inhabitants or more. In 2017, there were 37.

Extreme poverty is often concentrated in urban spaces, and national and city governments struggle to accommodate the rising population in these areas, notes the UNDP in a report on sustainable development goals. Making cities safe and sustainable means ensuring access to safe and affordable housing, and upgrading slum settlements. It also involves investment in public transport, creating green public spaces and improving urban planning and management in a way that is both participatory and inclusive.

How cities evolve will be determined by the collective actions of city governments, people and businesses. What is critical is to focus interventions not just on the “smart city”, but on the smart town and the smart village, enabling an interdependent ecosystem that counters rapid organisation to the mega-city.

What China should do instead of building demo cities is to focus on making the existing cities more sustainable.”

Mats Harborn, Scania

China’s urbanisation continues at a rapid pace but environmental issues – traffic jams and so on – are forcing China to stop the development of mega-cities and rather develop large city clusters.

By putting a cap on its population growth, both Beijing and Shanghai are now trying to manage its so-called “big city disease” – that is, when a mega-city becomes plagued with environmental pollution, traffic congestion and a shortage of public services, including education and medical care.

Beijing, which had a population of almost 22 million in 2017, will limit the number to 23 million in 2020, while Shanghai, with a current population of more than 24 million, will have a maximum of 25 million people in 2035.

To help to achieve this goal in Beijing, some universities, institutions, government agencies, state-owned companies and residents of the Chinese capital will be moved to a new city called Xiongan, about 100 kilometres south of Beijing. The city is part of the Xiongan New Area economic zone, which will cover an area nearly three times the size of New York City.

“[This is a] major historic and strategic choice made by the Chinese Communist party’s central committee with comrade Xi Jinping as the core,” said the central committee and the state council in a joint notice in April last year when the project was launched.

Official news agency Xinhua said Xiongan’s creation would reduce pressure on China’s car-clogged, 22 million-resident capital, and “usher in a new chapter in the country’s historic transitioning to coordinated, inclusive and sustainable growth”.

“We have noted a rather big interest from Swedish companies for the Xiongan project,” says David Hallgren, trade commissioner for China at Business Sweden. “In 2017, we held several information meetings for Swedish companies about Xiongan and this year we will organise a number of activities such as match-making events. A couple of Swedish companies were invited to participate at an early stage and we anticipate there will be a number of business opportunities this year.”

The Xiongan project is part of the central government’s strategy to create large city clusters instead of letting the existing mega-cities grow. Xiongan is located within such a cluster called Jingjinji (Beijing-Tianjin-Hebei) with an expected total population of 130 million.

Other clusters include the region around Chengdu and Chongqing (population around 60 million), the Yangtze River Delta cluster around Shanghai (around 90 million), the Yangtze River Middle Reaches cluster around Wuhan (29 million) as well as the Greater Bay Area Initiative in the south which include 11 cities, among them Hong Kong, Macau, Guangzhou and Shenzhen (67 million people altogether).

“If the integration of the Greater Bay Area succeeds, it will become the world’s largest economic centre, which will combine the outstanding innovative spirit of Shenzhen with the financial strengths of Hong Kong, the logistics and manufacturing powerhouse of Guangdong province and the gaming centre of Macau,” says Johan Nylander, correspondent for the Swedish business daily Dagens Industri and the author of the recently published e-book Shenzhen Superstars (see separate article).

37

The number of mega-cities, that is cities with more than 10 million inhabitants, in 2017. In 1990, there were only 10 such cities.

Since the early 2000s, China has been promoting so-called eco-cities for sustainable development, but with little success. Caofeidian, Dongtan (close to Shanghai) and Tianjin Eco-City are examples of everything going wrong and some others are even ghost towns today – that is urban areas with many empty buildings.

Still, China has recently announced that it is now planning to build 285 eco-cities across the country.

“China has a naïve and immature view on this. Some eco-cities may have good intentions from the planners but when developers take over they are often uninterested in sustainability. Rather, they see it as a label to make the project more profitable. What China should do instead of building demo cities is to focus on making the existing cities more sustainable,” says Harborn.

“There is a tendency in China that when someone begins to move in a certain direction then others will follow on a large scale and while some succeed others fail,” says Hallgren of Business Sweden.

“However, something that has been very clear over the past two years is that China takes environmental policy very seriously today. The Ministry of Environmental Protection has acquired more powers to increase the environmental requirements and there is a new set of regulations in place,” he says.

Smart City Sweden is a national export and investment platform that shares Swedish sustainable solutions for smart cities. It is funded partly by the Swedish government and partly by industry and businesses and managed by the Swedish Environmental Research Institute (IVL) in close collaboration with business promoting networks and organisations, as well as private companies.

In order to build smart and sustainable cities, many different processes and functions need to harmonise with each other. Smart City Sweden has these focus areas: air quality, bioenergy, biogas, smart grids, smart mobility, waste management, waste-to-water and water.

In October 2017, Smart City Sweden held a kick-off ceremony at the Swedish embassy in Beijing.

“The reception in China for Swedish sustainable solutions are, in general, very good. The Chinese know that Sweden can offer good solutions in areas such as city planning, sustainable transport, clean air and water, waste management and so on,” says Hallgren.

“However, while Sweden’s solutions are based on life cycle costs versus life cycle profits, the focus in China is often on the initial investment,” he adds.

China is moving away from quantitative growth to high-quality growth and it’s not just talk; it actually happens.”

David Hallgren, Business Sweden

In order to create a sustainable city environment, today there is a fast-growing interest in electric and autonomous – self-driving – vehicles in cities all over the world. For example, Singapore is very progressive when it comes to public transport.

Volvo Buses and Nanyang Technological University (NTU) in Singapore have signed a cooperation agreement on a research and development program for autonomous electric buses. The programme is part of Singapore’s drive to create new solutions for tomorrow’s sustainable public transport. Singapore has announced that self-driving buses will be deployed in several areas of the country by 2022.

“Together with NTU, one of the world’s leading universities of technology, we now have the possibility of testing various solutions under realistic conditions in a major city that has high ambitions for its public transport,” says Håkan Agnevall, president of Volvo Buses (see also pages 20-21).

“For Volvo, this will be the first autonomous application in public transportation. Volvo has already demonstrated autonomous technology in mining, quarry and refuse collection operations,” he says.

Scania is also active in this field and announced in February that it had joined forces with Shenzhen-based Haylion Technologies, which focuses on solutions for the Chinese transport industry in the areas of autonomous driving, electrification and connectivity. The common aim is to expedite the commercialisation of autonomous driving applications and sustainable transport.

Scania has also recently teamed up with Northvolt, a company that is going to build Europe’s largest and most advanced lithium-ion battery factory in northern Sweden. They will develop and commercialise battery cell technology for heavy commercial vehicles.

Hong Kong is one of the hardest markets for city buses. We sometimes say that if a bus can work in Hong Kong, it can work anywhere.”
Jeremy Knight, Volvo Bus Hong Kong

In early March, electric vehicle start-up NIO and state-owned carmaker SAIC Motor became the first two mainland firms to receive approval from the Shanghai city government to test their self-driving cars in a designated area in the north-western suburb of Jiading, initially covering a 5.6-kilometre route.

The rules in Shanghai require that a driver must always sit behind the wheel and be ready to take charge even when the vehicle is in a self-driving mode.

China is racing into what it calls its “new energy” future, the country’s term for electric-powered vehicles.

Nearly half of the municipal buses on the road worldwide will be electric within seven years, with China expected to dominate the global market as it aims to cut urban pollution and support domestic manufacturers.

The total number of electric buses in service is forecast to more than triple, from 386,000 last year to about 1.2 million in 2025, equal to about 47 per cent of the worldwide city bus fleet, according to a report from Bloomberg New Energy Finance.

In December 2017, Shenzhen’s transport commission announced that all the city’s 16,359 buses are now electric, as well as 63 per cent of its 17,000 taxis.

Jeremy Knight (left) of Volvo Bus Hong Kong together with his colleagues David Mead, Akash Passey and Dusan Prastalo.

In Hong Kong, where Volvo has about half of the market for city buses, it will probably take a long time before the city will see any electric or self-driving buses. The city has undertaken trials of both electric buses and electric taxis but they were not considered a success.

“There are many hurdles in Hong Kong for electric buses,” says Jeremy Knight, managing director of Volvo Bus Hong Kong. “An overwhelming majority are double-decker buses, which means that they weigh more and consume much more battery power.”

The landscape of Hong Kong is also hilly, with many steep slopes, which also adds to the battery consumption.

Furthermore, Hong Kong has high humidity for a large part of the year so the buses need to use air-conditioning, which means more energy consumption.

A bus on a flat surface consumes about 1 KWh per kilometre. If it uses air-conditioning, 1 Kwh per kilometre needs to be added and if the city has steep hills, as in Hong Kong, another 1 KWh per kilometre has to be added.

“Hong Kong is one of the hardest markets for city buses. We sometimes say that if a bus can work in Hong Kong, it can work anywhere,” says Knight.

In order to curb roadside pollution levels, Hong Kong has started to scrap old energy-guzzling buses and the government has launched a programme to stimulate bus operators to replace older bus models with more energy-efficient ones.

“In 2017, we supplied our customer Kowloon Motor Bus (KMB) with Hong Kong’s first Euro 6 diesel double-decker bus,” says Knight.

The bus is undergoing field tests to ascertain how it adapts to the operating environment in Hong Kong.

If the integration of the Greater Bay Area succeeds, it will become the world’s largest economical centre.”

Johan Nylander, Dagens Industri

Bus Rapid Transit (BRT) is a system that probably never could be introduced in Hong Kong because of the city’s topography, but it has been successful in South America and also in China, where more than 20 cities have constructed BRT systems.

BRT, sometimes called a “surface subway”, was first introduced in the Brazilian city of Curitiba in the late 1980s by the city’s then mayor Jaime Lerner, who worked closely together with Volvo, which has a factory there.

BRT buses run in their own lanes. In extreme cases even double lanes, allowing for express lines on the same route. And having a free way ahead makes it possible to operate reliably and punctually. The buses are longer than normal buses and can carry almost 300 passengers. The tickets are pre-paid and there is a real-time traffic management system in place.

BRT combines the single-corridor quality of rail transit with the flexibility of buses. It is also considerably cheaper than rail, at one-tenth the construction and operational costs, and takes less time to set up – typically less than three years from design to completion.

Volvo is one of the leading suppliers to BRT systems around the world. Scania has also delivered buses to BRT, for example to the system in Changzhou, Jiangsu province, which was the third to be built in China, after Beijing and Hangzhou.

“I believe strongly in BRT. It fits cities that have the physical infrastructure and it is a less expensive alternative to a metro system,” says Harborn of Scania.

in a BRT system, such as this in the city of Changzhou, the buses run in their own lanes which increases reliability and punctuality.

In 2017, China announced that automakers that want to manufacture fossil-fuel-powered cars must first produce low-emission and zero-emission cars to attain a new energy vehicle score. The new rule applies to companies that make or import more than 30,000 fossil-fuel-powered cars annually. This means that by 2019, carmakers must be producing a fleet with a total of 10 per cent or more electric vehicles, and 12 per cent or more by 2020.

China’s new rule is part of an aggressive plan to phase out fossil-fuel-powered vehicles.

“China is moving away from quantitative growth to high-quality growth and it’s not just talk; it actually happens. This means that they will have higher requirements for the technology they choose and this could benefit Swedish companies,” says Hallgren.

But, he adds, there will be competition.

“We need to remember that China’s domestic companies are getting much stronger in these fields. China is already at the forefront in the world when it comes to electro-mobility, battery technology and autonomous vehicles. All the same, there could be good opportunities for Swedish companies to enter into partnerships with their Chinese counterparts,” he says.

Harborn’s vision of sustainable city transport is to have seamless systems that makes it easy and safe to go from one place to another whether you walk, bike or take the bus, metro or car.

“The ideal city is built so that it is easy to walk in. Hong Kong, for example, is a city where it is very convenient to walk, while in Beijing we have broad and dull boulevards without any stimulus and where it’s not interesting enough to walk. This explains why the bike-sharing phenomenon has become such a success in Chinese cities. It is a more convenient, cheaper and faster way to move around in a city than many other ways of transport,” he says.

So how will Chinese cities look like in 2030?

“The bus will play a more important role. By then, China’s whole bus fleet will probably be electrified or use renewable fuels,” says Harborn.

“The sharing economy will also play a big role. There will probably be fewer cars since many young people don’t want to own a car, they will use car-sharing instead,” he adds.

“To me, a smart city is a city that has a well thought-out city planning of everything from transport systems to give people quality of life and to diminish the negative effects of urbanisation,” says Harborn.

The 2010 Shanghai World Expo had as its motto: Better City, Better Life. Today, China could be on its way to making that a reality and, probably, in the near future make the cities smarter as well.

Shenzhen – China’s smartest city

Shenzhen is not only the most entrepreneurial city in China, it is also the most sustainable.

Johan Nylander’s book about Shenzhen became an immediate bestseller on amazon.

Even if many of Asia’s big cities are known for their entrepreneurial spirit, there is probably no better example than Shenzhen.

Since the early 1980s, when the then paramount leader Deng Xiaoping created China’s first Special Economic Zone in Shenzhen, the city has grown rapidly and is today a mega-city with 20 million people and some of the world’s leading technology companies, such as Huawei, Tencent and BYD, and some of the most innovative startups, such as the drone maker DJI.

“Shenzhen differs from other cities because of its fantastic entrepreneurial spirit. When the Sweden-based employer branding company Universum asked post-1990s university graduates from universities where they wanted to work, 60 per cent of the respondents in Shenzhen said they wanted to join a startup or start their own company. In Beijing, only 15 per cent had similar dreams,” says Johan Nylander, a Swedish Hong Kong-based journalist who has just released an e-book called Shenzhen Superstars – How China’s smartest city is challenging Silicon Valley, which can be downloaded on Amazon.

Through the 1980s and 1990s, Shenzhen was considered to be a cheap and rather soulless manufacturing base. But the city has modernised rapidly and with the expansion of its home-grown technology companies the city has transformed into a tech hub, attracting talent from all over China. The city is also a magnet for a high number of so-called returnees – Chinese citizens who have studied abroad and then returned to China.

60%

The number of university graduates in Shenzhen that want to start a company or join a startup.

“Shenzhen has been allowed by the government to be a role model for other cities – it’s been allowed to experiment and it’s been allowed to make mistakes,” says Nylander.

According to both the management consulting firm McKinsey & Company and the professional services giant PricewaterhouseCoopers, Shenzhen is also the most sustainable city in China.

The firms highlight how technological innovation and balanced development are the keys to building “cities of opportunity” and hails Shenzhen for its advancements.

“Since I first set foot in the city, areas like liveability and lifestyle have undergone an enormous change – adding new parks and restaurant areas, better housing and improving air quality. For example, the city is rolling out the world’s largest metro line system and became, in last December, the world’s first city with an all-electric public bus fleet. It also aims to have 80 per cent of its new buildings green-certified by 2020,” says Nylander.