How China is making its cities smarter

Have China’s megacities, such as Beijing, grown too big and too crowded? With daily subway commuters exceeding 10 million, the Beijing municipality recently announced a plan to increase subway fare and hence cut passenger numbers. The suggestion quickly led to heated debates in China, and a decision has yet to be reached.

As the growing Chinese economy brings more people access to personal wealth for the first time, the debate on the price of public transport has become a profound issue. Nevertheless, while the Beijing subway riders are watching the fare debate closely, many households in China have an exciting prospect for a major upgrade of information connections in the new year.

In late 2013, China’s State Council issued a blueprint to promote information consumption as a new engine for the country’s future growth. To help implement this, it also announced a “Broadband China” strategy to significantly improve the country’s information infrastructure. According to the plans, the broadband access speed should reach 20 Mbps in Chinese city households and 4 Mbps in rural households by 2015. By contrast, the average fixed broadband download speed in China was 2.93 Mbps in early 2013, according to a third-party research organization.

In addition, the nation’s 3G network coverage is expected to cover almost all cities by 2020. With that, China will see many “smart cities”, with much increased Wi-Fi coverage in public places, FTTH (fiber-to-the-home) capability, HD cable subscription, and so on.

The boost in information consumption captures the way technical innovation and social networks are rapidly becoming a growth engine for China’s economy. Importantly, this will create a new social infrastructure, allowing more Chinese people to benefit from the digital economic boom. These strategies for information consumption and broadband will bridge the digital divide in China, allow megacities to execute smart urbanization policies, and narrow the gap between cities and rural areas.

In particular, more e-commerce and e-business opportunities could involve more Chinese people in the growing economy while reducing the number of commuters and therefore traffic. For example, a major part of the daily commuters in the Beijing area is the “ant tribe”, a group of unemployed college graduates living on the fringes of the city and seeking professional opportunities in the capital. The changes to IT infrastructure and information consumption should give them new opportunities to tap into the economic growth and find innovative ways to realize their dreams.

Above all, the information consumption trend will lead to a more inclusive model of urbanization and economic growth because IT innovations intrinsically emphasize sharing over ownership. When more is integrated into this new form of growth, everyone will get a piece of a smarter pie.

Winston Wenyan Ma is managing director and head of the North American office at China Investment Corp (CIC) and a World Economic Forum Young Global Leader.

Image: A view of the central business district in Beijing. REUTERS/Petar Kujundzic