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The City of Harbin is a vibrant museum of European architectural styles, Dongbeng Cai adapted to Muslim or Jewish requirements, endless fields and wetlands and, come December, all the ice you desire for winter sports. Welcome to the quintessential global marketplace for culture, industry, and the next technology wave

Within 24 hours of landing in Harbin, anyone even half awake will realize that this is the world’s most thriving marketplace in every sense.

The spectrum of architectural styles hits you in the face as it surprisingly transitions from French Baroque to Rococo to Byzantine to Modern to Post-modern, and (although scarcely) to traditional Chinese. All within the hour from airport to hotel.

Maybe that is why it easily lands in many a globetrotter’s Top 10 places to visit. A trip to Harbin equals a trip to China, Russia, and Europe.

So why is Lin Duo, the Mayor of Harbin, extremely dissatisfied?

“We are not doing well in providing excellent public service or in improving it for our people,” Lin says. “For example, the public transport and heating systems—the quality of our service simply cannot meet our people’s demand.”

Not to mention the 45 million tourists who trek to Harbin annually.

(Harbin’s vice mayor Wang Li disclosed the fresh data to China Business when this interview took place in September 2011. Latest official figures state 37.8 million tourists visited Harbin in 2009, generating an income of 31 billion yuan or over US$4.8 billion.)

The very candid Mayor Lin is not a Harbin native. He was born in Heze, a city in Shandong province on China’s east coast.

Harbin is nestled in the northeastern tip of China and occupies 53,796 square kilometers of Heilongjiang province’s total area of 454,000. It is the tenth largest city in China (population: 9.92 million) and is the capital of Heilongjiang.

Lin’s city is a veritable museum of European architectural styles, bustling pockets of Asian industry, burgeoning Chinese business districts, science and technology hubs, cuisine adapted to Muslim, Jewish, or Christian preference but is still undeniably Dongbei Cai, sprawling corn fields with nearby wetlands and, come December, endless expanses of ice for winter sports.

“We do not have enough tools to improve the income of our people,” says Lin. “And we are not doing enough, I think, to provide high quality housing for them.”

Typical Chinese modesty? Maybe not.

It may just be that Harbin has the greatest untapped potential of any Chinese metropolis today. The city is home to the largest goods-rail terminus in China, which can perfectly serve the industries of Dalian (869 kilometers away), Shenyang (510), and economic comeback kid Russia (505).

North China’s biggest metropolis is also unbelievably abundant in natural resources, helped by an average year- round temperature of 3.5°C, summer-to-fall weather that approaches tropical humidity, and below-zero weather that reaches Siberian proportions. (It goes as low as -24°C in January. A local says it once hit 35 below. It is, after all, a mere 500 kilometers to the Russian Federation—a 12-hour bus ride to Vladivostok for the adventurous.)

Despite its mayor’s dismay over its transport system, Harbin already has a pretty solid network of roads and bridges, with workers working through the night on more infrastructure (as we saw—and heard—the entire week we were there).

In a Chinese boomtown such as Harbin, however, public transport cannot keep up with the pace of mushrooming infrastructure. Hence the mayor’s dissatisfaction that nothing yet exists to easily whisk people in and around all the whirl of activity. Especially critical since Harbin’s greatest asset is its deep bench of human resource.

Harbin is home to a whopping 21 universities, most prominent of which are those devoted to science, technology, and engineering. Boosting the city’s human capital even further are, according to Gopha Group CEO Mu Weibo, “two state-level R&D centers, nine provincial R&D bases, and four provincial laboratories.”

The Gopha Group holds court in Building 7 of the Harbin Economic and Technological Development Zone, a 462-square-kilometer industrial colossus. Gopha is the main investor in a project that will transform the “City of Ice” (Harbin’s famous moniker) into a base for the so-called “China Cloud Valley.”

Chinese Cloud Hovers
Determined to turn Harbin into the Cloud Valley of China—and, eventually, the world—the Gopha Group poured 2.8 billion yuan (US$438 million) into the second phase of a massive cloud computing project, which it launched in December 2010.

Citing the city’s low energy cost relative to leading data- server locations in the Pearl and Yangtze River Deltas, CEO Mu is confident Cloud Valley will succeed. To what extent? Well, the goal for the zone is a GDP of 35 billion yuan (US$5.49 billion), roughly a tenth of Harbin’s current GDP.

To achieve the goal there is, as Weng Fang, deputy director of the Administrative Committee of Harbin Economic and Technological Development Zone rattles off, a three-part development plan: 2010–2012, short-term, 2013–2020, medium, and long-term the decade after that. He proceeds to fire off a list of other reasons they expect to reach the target.

First, the Songhua River network provides Cloud Valley with an abundant cool water supply to serve as reservoir for dissipating heat from any size and number of equipment. Then there is the zone’s rich broadband resource courtesy of its province Heilongjiang, the primary telecommunications hub of northeastern China. What’s more, a third Sino-Russia, cross-border, fiber optic cable system is in the offing.

Harbin’s other big edge as a cloud computing nexus is that it has its own independent power grid, which provides stable, uninterrupted electricity. And finally, Weng says, they do not have earthquakes.

Technology behemoths like Siemens and Schneider Electric have already inked cooperative deals in Cloud Valley.

Low FDI Matters Not
Only a little over 200 foreign companies out of some 6,000 firms have set up shop in the technology zone. One of them is Philippine food giant Liwayway Holdings Company Ltd, more popularly known as Oishi, after its first and most famous product, Oishi Prawn Crackers. Headed by Carlos Chan, Oishi began building in the Harbin technology zone in 2009 to bolster its other manufacturing bases and distribution teams in over a dozen Chinese cities.

What few foreign companies have bases in the technozone are huge. One is the largest South Korean bank KB Kookmin, which set up a call center in the park. Firms like Toyota, Mitsubishi, and Sony Ericsson are also present.

Among the most impressive factories in the area belongs to Airbus. Or rather, the Harbin Hafei Airbus Composite Manufacturing Center Co. Ltd, a joint venture between Airbus China and the Hafei Group plus a handful of Chinese firms.

The Airbus facilities total under 40,000 square meters now and are mainly devoted to the manufacture of composite parts for the A350 XWB. But the total area will, eventually, reach 80,000 square meters and will include offices and technical support services.

What is most noteworthy about Airbus’ presence in China is that the share of the Chinese group will, over time, increase, as disclosed by Jose Veroz, general manager at the Harbin Hafei Airbus Composite Manufacturing Center during an interview with China Business and other members of the Asian press.

From both the Airbus JV strategy and the overwhelming capital influx by Mainland Chinese into the area, it is clear to see that what truly keeps the zone on track to reach its targets is local capital. Some 5,800 Chinese companies, from hardware manufacturers to global CGI animation contractors, now have factories and R&D units in the zone.

One of the most prominent 3D animation companies in China, PingGo, has over 300 employees working in a 2,600- square-meter facility in the technopark. The PingGo foyer showcases stills of everything from Strawberry Shortcake to the Jackie Chan-Jet Li flick The Forbidden Kingdom, showing how diverse the firm’s clientèle has become since it opened for business in May 2004.

The greatest incentive, however, is that firms flocking to the Harbin Economic and Technological Development Zone will “enjoy the preferential policies” that come with investing in such an area. (Five out of the eight points in its policy support statement actually begin with “To enjoy the preferential policies.”) Par for the course in most any industrial zone in nearly any country, but the promise is especially valuable simply because this is China.

The Earth’s Kidneys
The wetlands of Harbin cover 1,250 square kilometers that encompass the wetlands of Sun Island, Jinhewan, Binjiang, Baiyupao, Volga Manor, and the Mouth of the Hulan.

Apart from being a picturesque attraction, Harbin’s wetlands are crucial to the ecosystem of China. Called the kidneys of the earth, wetlands filter out sedimentary toxins from water coming from roads, fields, and sundry surfaces that would otherwise end up polluting rivers and oceans. The plants in Harbin’s wetlands also help lessen algae and fishkill.

The wetland buffers are especially important in keeping environmental management costs low, given the tourism boom during winter and the year-round industrial frenzy especially around the technology zones.

The most developed wetland park is the one on Sun Island, which caters to summer tourists. Work on Sun Island started in 2008, after which the over 60 households living in the wetlands were relocated. It is a well manicured park today, dotted with theme areas like Squirrel Island, Swan Lake, and Russian Town, just to name a few.

Sun Island sprawls on 38 square kilometers of wetland now. In the next 20 years, it will be grown to 230 square kilometers.

The most picturesque of Harbin’s wetlands is probably Volga Manor. The Volga experience is packed with Russian authenticity—from the dancing Russian ladies and gents who welcome guests checking into the hotel to the architectural showcase, which includes the salon of Alexander Pushkin and a Russian Orthodox church.

Leave it up to the Harbin Chinese to transform the very necessary wetlands into revenue-generating, tourist parks, all of them on a massive scale befitting the home to 1.33 billion of earth’s inhabitants. The Harbin marshes are an excellent showcase of world-class park management. Especially so for countries like the Philippines, home to the eco- wonder Agusan Marsh (and at least one 21-foot crocodile), where Chinese, Japanese, and European birds live during winter.

Dissenters may complain that China’s growing cities are becoming too hot to handle. Some see as a problem the massive expansion at such a rapid pace that, ultimately, ends up being a problem for cities that cannot shift their vacant developments fast enough.

Are the Chinese creating problems faster than they can solve old ones? Is the breakneck pace of development at the root of Mayor Lin’s discontent? Perhaps.

But show me anyone who can stand in the way of the Chinese passion to build, expand, and conquer.

Mayor Lin has a palpable passion for the city he advocates, maybe that is why he will never be able to do enough. But despite what he describes as a “full workload,” he has very few complaints. “When we see the very charming wetlands, the beautiful scenery, we forget our headaches.”

Print ed: 10/11


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