2.6 A model for the development of port cities: The case of Shenzhen

Land-use planning is important in port cities, especially where large shares of urban land are being taken for port activities. As cities grow, alternative land uses can emerge, leading to disputes over the amount of urban land that should be used for port functions. To mitigate negative land-use impacts, local governments and port enterprises in China work together so that the land is allocated to its most productive use. In situations in which port-related industries and services have expanded before large-scale urban development has taken place, key sites are often taken up by these industries in an unproductive manner. Space in the city center used for factories might be better used for commercial, office, or residential purposes. In this situation, relocation of these functions is negotiated and implemented with policy support from city governments.

For example, the proportion of industrial land in Dalian’s main urban area used to be relatively high, at about 21.4 percent. Since 2004, an industrial zone adjacent to the port and away from the city center has been built. Not only did the municipal government provide financial support for construction, but it also enacted policies to encourage industries to move into the industrial park, such as tax incentives and streamlined procedures that can save time and money at customs (Livermore 2007). Some 205 enterprises relocated to the industrial zone, freeing up more than 6.6 square kilometers of land in the city. About 40 percent of this land has been used for the construction of public facilities such as highways, public squares, parks, and green spaces, while the rest has been used for residential apartments and commercial buildings. What was once a heavy-chemicals industrial city has now been transformed into a city for residents, white-collar businesses, culture, and tourism. Shenzhen and Shanghai offer additional examples of how a port can anchor urban growth (boxes 2.6 and 2.7).

BOX 2.6

A model for the development of port cities: The case of Shenzhen

Shenzhen Industrial Zone, located in Shenzhen across the bay from Hong Kong SAR, China, has become a model for the development of port cities in China. Until China Merchants Group was given the rights to develop the area into Shekou Industrial Zone in 1979, it was no more than a customs office in Bao’an County. Development was initially focused on Shekou Port, which opened in early 1981. China Merchants Shekou Industrial Zone Holdings (CMSK), a subsidiary of China Merchants Group, relied mainly on special policies and the area’s geographical proximity to Hong Kong SAR, China, to vigorously develop import- and export-processing industries. Local officials provided trade incentives and a user-friendly investment policy, while rapidly building the necessary infrastructure to sustain industry (Grogan 2019). As the Chinese economy grew, Shenzhen entered a new phase: formation of the industrial park. In 1995, Shenzhen redoubled its efforts to strengthen industrial operations, while expanding infrastructure and supporting services. During this period, the simple processing and manufacturing activities in the park started to shift to medium- and high-end industries. Eventually, these industries were replaced by high-tech enterprises, and the focus of companies in the industrial zone shifted to financial, venture capital, and trade services. In addition to the industrial aspects of the city, after 2001 CMSK began to focus on urban development, transforming the city from a living area for employees of the port and industrial park to an attractive, modern, coastal city. High-quality housing and services were offered to residents, and it also become a tourism

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