Zhangjiakou uses joint bid for Winter Games to halt downhill slide

Economic focus shifts to advanced technology and environmental initiatives

Zhangjiakou is using the opportunities created by its joint bid for the 2022 Winter Olympics to kick-start its economy and reshape it along greener lines after a long period of slow growth.

The city in Hebei province is bidding to host the games with Beijing. Their only rival is Almaty in Kazakhstan, and the winner will be announced on July 31

"Zhangjiakou is an old industrial center," said Xing Guohui, the city's Party chief. "It now has unprecedented opportunities, because of the bid and its closer cooperation with the capital, to retune its economy and hit all the right notes."

The city does not have a high profile nationally, though it once played a significant part in China's development. It was the destination of the first railway built in China without foreign help, the 200-kilometer Beijing-Zhangjiakou line that was completed in 1909.

In the decades that followed, Zhangjiakou grew into an important industrial center, and received a further boost in the 1950s when the central government established four of more than 100 national industrial bases in the city.

Business continued to boom in Beijing's northwestern neighbor until tension between China and the Soviet Union outweighed the importance of economic growth there. Business links between Zhangjiakou and the outside world were closed off to safeguard the security of the capital.

"We missed the golden time of growth in the reform and opening-up period that began in 1978, as we only started conducting business with the rest of the world again in 1995," Xing said.

"The city's economy lagged behind not only the rest of the country, but also the rest of Hebei, for years."

In the first 10 months of last year, Zhangjiakou was listed in the bottom three of Hebei's 11 cities in terms of the total added value provided by enterprises above a designated size.

Shen Quanmin, director of the city's development and reform commission, said, "In the first quarter of 2014, the economy was affected by sluggish domestic demand in the market, showing a sudden decline."

Statistics from the commission show that 179 large enterprises closed, a heavy blow to the city as the GDP decreased by 0.3 percent year-on-year in the first quarter.

To catch up with other cities in the province, Zhangjiakou has adjusted the focus of its economy to the Winter Olympics bid.

Zhang Qingwei, the governor of Hebei, said the city is "using the joint bid as a platform to pursue deeper cooperation in larger scales in the economy and transportation".

To support the bid, a high-speed line linking Beijing and Zhangjiakou's Chongli county, earmarked for the Olympic snow events, will be finished by 2017 in a continuation of the city's railway traditions.

Zhangjiakou has started to develop a tourism industry with a focus on winter sports. A government work report released by the city last month said the service industries related to the Winter Olympics will account for at least 30 percent of the city's GDP by 2025 if the bid succeeds.

Zhangjiakou will have to maintain a good environment if it gets the go-ahead to co-host such a major international sports event.

The city has shifted its economy toward a healthier and greener path over the past decade. The heavy industry sector is being upgraded through the use of advanced technology, and high-added-value activities, such as high-tech businesses, are being introduced.

Shen said the different industries have been concentrated in a series of industrial zones around the city.

Wang Yonghua, the director of publicity at China Coal Zhangjiakou Coal Mining Machinery Corp, said, "Unlike the previous development mode, we have placed more importance on technology's contribution to growth."

The corporation, one of the country's three earliest coal mining machinery manufacturers, was formerly a significant polluter. It moved out of the downtown area to a new industrial zone in October 2013.

The company has set up the country's first research center that focuses on the major machinery used in coal mining with a view to improving the technology, resulting in less pollution and improved performance. Wang said this high-technology approach reduces costs significantly.

"The corporation has extended its business to include environmental protection services such as recycling wastewater from mines and reducing the level of pollution created by the extraction of coal," he added.

The area where the corporation is based, the Zhangjiakou Xishan High and New Tech Industry Development Zone, has attracted more than 100 support companies, making it the largest center for the manufacture of coal mining machinery in the world.

Zong Zhenhua, the deputy director of the zone's administrative committee, said, "The concentrated industrial zone reduces expenses from areas such as logistics, and boosts exchanges that can amplify the growth of companies and create a joint strength to drive further development."

The introduction of high-tech industries is essential for the optimization of the city's economic structure, and the zone is attractive in this regard because it benefits from preferential government policies, he said.