Industries, govt departments under pressure to get out of Beijing(2)

"The clothing wholesales markets will gradually change to retail and exhibition spaces. The smaller stalls will gradually be removed," he said at a meeting in Xicheng district.

There is also room for a reshuffle in the industrial sector. Data from 2011 shows that companies such as Capital Steel and the Yanshan sub-branch of Sinopec all have high water and energy usage.

"Such energy-consuming companies, especially small chemical engineering companies, still exist in Beijing, especially in the greater Beijing area," Chen Zhiguo, a researcher at the Beijing Fangdi Economic Development Institute, told the 21st Century Business Herald.

For the past few years, Beijing has been pushing for these enterprises to move out, but many have not. There are even small coal-mining enterprises in west Beijing, the Herald reported.

Rock and a hard place

The smaller markets are already facing a tough situation. In 2011, the Xicheng district government wrote a report that reviewed businesses in the area. The report mentioned that most of the traders and operating companies in the Zoo Clothes Wholesale Market complain of decreased profits in recent years.

Research shows that the size as well as the profits of the market vendors is shrinking. Shops that rent a space under 10 square meters take up about 80 percent of the area, and for 75.9 percent of the shops that were included in the research profit was under 15,000 yuan per month.

A vendor surnamed Chen at the market told the Legal Mirror in a December article that a couple years ago, business was much better. He could sell 300 down jackets in a day. But sales have slipped, he said, because young people are now all shopping via the Internet now.

"They can just click their mouse and buy clothes," he said. "We all depend on old customers and wholesales right now."

However, even facing such conditions, the vendors are unwilling to move out.

Chen told the Legal Mirror that he doesn't want to move out because he signed a five-year contract with the market and it expires in 2016. There are many vendors who signed 10- or 20-year contracts. The huge early stage investment means the vendors are reluctant to move away.

Secondly, even though the vendors are all suffering a blow in business, they still enjoy being in the city center. The Zoo wholesale market is located within the third ring road, with subway and bus stations at its surroundings, and the zoo and planetarium are nearby.

"There are so many passersby every day, if one 10th of them came to buy clothes, we'd make a fortune," Chen said. "But if we move to the greater Beijing area or to Hebei, without these conditions, no one will come by. Even if there's the 'Zoo Market' brand, who would still come?"

As Beijing is preparing for the transfers, the surrounding areas are preparing to accept the newcomers. In January, Beijing's deputy mayor Li Shixiang said at a press conference that Beijing has done in-depth studies with Hebei, and Hebei has provided many backup locations for markets from Beijing, such as Langfang, Baoding or Zhangjiakou.

However, even if the governments sign a contract, it doesn't ensure the enterprises will want to migrate. An anonymous Tianjin government official told the 21st Century Business Herald that he has been to Beijing many times, at the Financial Street and Zhongguancun, to talk with companies, but they usually choose not to move for the same reasons.

Government not immune

Yi Peng, an urbanization researcher at think tank Pangu, told China Newsweek that even though Beijing's resources are concentrated within the fourth ring road, moving them out might require some effort.

"Most of the resources in Beijing are political ones because of Beijing's position as the capital and a municipality directly under the central government," he said. "In order to cure Beijing of its 'big city disease,' the city must transfer government organs."

China Newsweek reports that if the headquarters of 20 government-owned enterprises were moved, Beijing's population would decrease by at least 500,000.

But this wouldn't be easy, Yi said. He wrote in an article published on the think tank's home page saying that government-owned enterprises have better opportunities close to the political center.

He proposes moving parts of these enterprises out of Beijing and keeping the headquarters stationed here. An example is the Capital Steel Company - the manufacturing division has moved to Hebei, but the headquarters stayed.

Meanwhile, Yang thinks a plan implemented by South Korea can be copied. In early 2007, the Korean government created an administrative district, Sejong, to relocate ministries and national agencies from Seoul. The new capital opened in 2012 with solely government agencies located there.

"Beijing can choose a site about 80 to 100 kilometers from the city to establish a new administrative city," he said.

Even with all this talk in the air, the plan is still being developed, the 21st Century Business Herald reports. It quotes an official from Chaoyang district as saying that the big direction is "moving industrial services, basic infrastructure, education and medical resources." The official said Beijing is beginning to establish a few hospitals around the fifth ring road, but right now the government is still in site-choosing phase and planning has yet to start.

"There's a reason that Beijing is crowded and the transportation networks are congested," the official said. "Therefore, dissolving these functions will take more than a day; it will be a slow and continuous process."