to be spent on smart city projects in 2018
Founder of OrbiCité
China is going all-out on a large scale to develop clean energy and (…) this will enable the Chinese to get ahead in international markets
“China and the United States may well be the largest polluters on the planet, but they're well aware of that”, underlines Gilles Betis, founder of the OrbiCité consulting firm, pointing out: “China is now going all-out on a large scale to develop clean energy and once again this will enable the Chinese to get ahead in international markets. Chinese manufacturers will be jostling European players in this field.” The French consultant has observed that security systems are the most common type of Smart City application deployed across the country. “What really strikes you when you go to Chinese cities is the presence of surveillance cameras everywhere. Surveillance is unquestionably a flagship market for the Chinese Smart City movement. Chinese manufacturers are now developing technologies in the security sector and they're going to have a significant advantage in this sector”, he predicts. The other major area Betis identified during his trips to Chinese cities is the rise of electric transport: “City-dwellers have adopted electric scooters on a massive scale and on campuses the trend is now to use electric shuttle buses. The authorities in China's largest cities are now strongly encouraging residents to switch to electric vehicles and giving them a lot of incentives to do so. For instance, it doesn't take very long to register an electric vehicle, whereas registering a petrol-driven car is a much longer and more complicated process."
china about to catch up
China hard on the heels of the US
have already embarked on a smart city project
The real surprise that we find in the IDC Spending Guide is China's dynamism when it comes to Smart City projects. IDC analysts believe that spending in China will total close to $21 billion in 2018, not far behind the $22 billion due to be spent in the United States this year. These two markets are growing at an annual rate of 19% and 19.3% respectively, clear evidence of the close rivalry between the two continent-sized nations in this market. China has set a real target of developing Smart Cities and this has now become a matter of prestige for the Chinese authorities. A recent report from Deloitte China revealed that 500 Chinese cities have already embarked on a Smart City project, compared with 40 US cities, 90 in Europe and 15 in Japan.
Social stability in China is today threatened by energy and pollution problems. They're now starting to address these issues through, inter alia, the development of new energy sources and 'soft' mobility...
This unprecedented effort really took off in 2014 with the drafting of a new national urbanisation plan, which made ‘Smart City’ development a pillar of the country’s urbanisation. In 2015, a plan for building smart cities was drawn up for the 2020 horizon, and it was confirmed under China’s 13th 5-Year Plan (2016-2020) approved in March 2016, which allocated ¥500 billion (€63.51 billion) to this gigantic development programme. The official statistics indicate that all Chinese cities at sub-provincial level are today applying this development plan, and that 90% of the prefectures and 50% of cities at county level are doing so. Twenty public services are involved, ranging from transportation and public distribution networks to the emergency services and education. “China has a genuine strategy for dealing with climate change,” stresses Carlos Moreno, Co-Founder & Scientific Director of the “Entrepreneurship, Territory, Innovation” department at the Paris-based Business and Administration Institute (IAE), pointing out: “Social stability in China is today threatened by energy and pollution problems. They’re now starting to address these issues through, inter alia, the development of new energy sources, ‘soft’ mobility – with the boom in the use of bicycles, electric scooters and all sorts of other electric vehicles, plus other forms of mobility. Air quality and water management are the other major concerns in China.”
Projects launched in 500 Chinese cities
Jean de Chambure
Head of Consulting
L'Atelier BNP Paribas Asia
The Chinese aren’t doing innovation for the sake of innovation; it’s all about solving very concrete problems for people, whether that means pollution from air, water or automobile traffic.
The cities of eastern China are proving the most active when it comes to moving towards the Smart City. Shadong province is currently the most dynamic, with thirty projects underway, ahead of its neighbour Jiangsu (28 projects) and Hunan province in the south of the country (22 projects). It comes as no surprise that the provinces of central China are lagging behind the overall drive to modernise Jean de Chambure, Head of Consulting at L'Atelier BNP Paribas Asia, points out: “These tests being carried out on a large scale take an extremely pragmatic approach. The Chinese aren’t doing innovation for the sake of innovation; it’s all about solving very concrete problems for people, whether that means pollution from air, water or automobile traffic.” China has launched lots of initiatives, including offshore wind farms, smart grids, installation of pollution sensors, construction of ‘green walls’, and organic waste recycling – with the aim of solving the colossal pollution problem in Chinese cities, which also suffer from very bad traffic congestion. Says Jean de Chambure: “Population density in Chinese cities is better regulated than in, for example, Brazil, through the ‘hukou’ (household registration) system, a sort of inland passport, but urban traffic also needs regulating. Some 20-22 million new vehicles come on to the road each year so car-pooling has now become a necessity and digital technology will play a key role here.” In an article that appeared inFrench daily newspaper Le Monde, the Head of Consulting at L'Atelier BNP Paribas Asia examines a number of possible solutions, including the app developed by DiDi Chuxing, the company which took over Uber China. The DiDi app is used by over 300 million people in 400 cities in China when they need a private car, taxi or ride-share.
The Chinese National Development and Reform Commission (NDRC) and the China Centre for Urban Development (CCUD) have set up a national system for ranking Smart Cities in China. The system scores 293 cities according to their approach to the concept, how they manage it and the services they aim to provide. Neither Beijing, nor Shanghai, nor even Shenzhen currently head the rankings. Top-ranked city is Qingdao, which has traditionally been at the cutting edge in this field and has always been among the top twenty cities in China when it comes to running pilot projects. The coastal city has rolled out broadband and WiFi on a grand scale and launched iCity365, a first prototype urban data platform and app, which provides varied details on traffic, pollution, water, schools, and social and other amenities. When it was launched back in 2013 it was seen as a trail-blazing project. Recently the app’s reach was extended so as to access the WeChat and Weibo apps, and in 2017 the local authorities forged a partnership with Chinese search engine Baidu to launch the ‘Smart Qingdao’ programme, which will see a number of projects running till 2020, with Cloud Computing a central feature. Number two in the rankings is the city of Hangzhou, which called upon Alibaba and Foxconn to implement the ‘City Brain’. This project applies Artificial Intelligence techniques to the city’s data in order to improve residents’ quality of life. Jean de Chambure reveals: “Between 2008 and 2014, we saw a real awareness-raising drive in China and a real realisation that the country needs to reduce pollution levels. Major cities such as Shanghai have taken steps to improve air quality. There again they’ve taken a very pragmatic approach, making advances but then retrenching when a project turns out not to be viable – one example being their effort to stop all consumption of coal, which simply wasn’t feasible last winter.”
the QINGDAO ecopark
Objective: reinvent the city!
All Chinese cities have, in one way or another, launched Smart City initiatives, but the country has an extremely tough policy in terms of building new cities or bringing existing ones up to date. A key example here is the plan for Xiong'an, a zone devastated by pollution, which will make way to a new city, already baptised ‘New Shenzhen’. “This re-invention of urban infrastructure constitutes the second pillar of China’s strategy for coping with the new paradigms: climate change, sustainable energy, citizen involvement, and new forms of housing given the acute shortage of accommodation,” explains Carlos Moreno. These ideas have given rise to the concept of the fifteen-minute city, the idea being to create a strong local basis for all aspects of people’s lives: developing a mix of housing, workplaces and leisure areas in the same area so that people no longer need to travel around so much.
Business and Administration Institute
IAE Paris - Sorbonne
The drive for localisation in China is embodied in the ‘sponge city’ concept and in ‘green’ projects such as ‘forest buildings’
“The drive for localisation in China is embodied in the ‘sponge city’ concept and in ‘green’ projects such as ‘forest buildings’,” says Carlos Moreno. There is for example a plan to build 258 eco-cities along the lines of the forest city due to be built by Italian architect and urban planner Stefano Boeri in Guangxi, in the south of China. Another iconic venture, the Chaoyang-Park-Plaza, recently opened in Beijing. “This architectural project designed by [Beijing-based] architecture practice MAD is pretty extraordinary,” says Carlos Moreno, explaining: “The architects drew their inspiration from Chinese philosophy and the Chinese landscape culture, with an area of Beijing built according to biomimicry principles, using biomaterials and based on a highly-efficient water and air quality management system. It isn’t a technocentric project; it focuses entirely on residents’ quality of life but it does take advantage of major technological advances, particularly in terms of materials and biomimcry.”
Rather than bolt new technologies on to the existing city model, China is gearing up to redesign its cities so as to adapt them to the future challenges of climate change and sustainable energy and to the huge social issues which today’s China is having to cope with. Moreno points out: “Apart from the challenge of climate change and the need to modernise the infrastructure, China’s Smart City strategy is geared to the need for greater social inclusion. In a city like Shanghai you’ll find blatant inequality. In the Pudong quarter, going from one street to another you move from opulence to poverty. Chinese people are fully aware that these inequalities are a time-bomb for the regime, hence the importance of working on the issue of social inclusion, which requires initiatives in the areas of employment, care of senior citizens, etc.”
La CHine, queen of new projects
A workable model for the rest of the world?
China’s government can just decide to erase entire areas from the map in order to make room and start with a blank slate to create brand-new cities, but it is very doubtful whether this kind of approach would be feasible in Europe or developed countries. Gilles Betis points out that “China is going forward with a top-down approach, using methods that enables the country to maintain a phenomenal growth rate. Projects starting out from scratch have proved to be highly effective, but the situation in Europe is very different.” Cities in Europe and in the United States are focusing more on initiatives to improve urban planning, but local residents are not always keen to go along with change. Examples such as the rollout of the Linky smart meters in France and the closure to traffic of the streets on Paris’s river banks demonstrate that there is nothing straightforward about running ambitious Smart City projects when you have to actually take account of public opinion.
Cities need to shift from a territorial governance approach, which is often top-down, to organising and running an ecosystem that unites communities and businesses.
In contrast to China’s state interventionist model, Gilles Betis supports a more collaborative approach. He argues: “You need to try to trigger an approach to innovation that will encourage the emergence of solutions suited to the local area and also acceptable to the local residents. This approach requires a collaborative and participatory ecosystem, where the Smart City becomes a holistic vision to be attained through disruptive innovation. Rather than looking at how they can allocate budgets and management, city authorities should be looking at their business model and assessing the value that will be created through these investments, i.e. the potential ROI. Cities need to shift from a territorial governance approach, which is often top-down, to organising and running an ecosystem that unites communities and businesses. This approach will help to solve budget problems, given that value is not only being created through the City Hall budget, but by and for all the players in the ecosystem.”
It is clear that China’s Smart City development model is basically simply not directly applicable to the United States or most European countries but Carlos Moreno believes nevertheless that we have a lot to learn from what is happening now in China. “I’ve been going to China for twenty years now and I’ve seen the country move from being a technology laggard, regarded as the world’s assembly plant, to being a country where there are still huge inequalities but where cities have transformed into huge metropolises, where people have moved from poverty to virtual money, using WeChat Pay and Alibaba Pay, to buy every kind of product or service. China has a real geostrategic strategy and we have a lot to learn when it comes to the Smart City”, stresses the Paris IAE Scientific Director.