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The “City Operator” and the Tianyi Square Redevelopment Project

  • Han Zhang
Chapter
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Part of the New Perspectives on Chinese Politics and Society book series (NPCPS)

Abstract

After describing today’s Tianyi Square, this chapter looks at the dilapidated conditions of this area before the redevelopment. Then it depicts the nation-wide fever of building Central Business Districts in Chinese cities since the late 1990s as the background. Afterward it analyzes the mechanism of the “city operator” (chengshi yunyingshang) in the Tianyi Square redevelopment project, which describes the role played by an entrepreneurial state and its subordinate urban development corporation in downtown redevelopment in Ningbo, as well as the origin of this mechanism back in the city of Dalian in the 1990s. It also analyzes the methods of compensating relocated residents, financing with land mortgage loans, historic conservation, promotion, and governance structure in the Tianyi Square project.

Keywords

Herbal Medicine Central Business District Urban Construction City Management State Asset 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

Ningbo has been experiencing dramatic downtown redevelopment since 2000, and the first project was Tianyi Square. Located in the very center of Ningbo’s downtown Tianyi Square has been a milestone in redevelopment, and a local state-led urban redevelopment regime has taken shape since then. Ningbo’s local state played an entrepreneurial role when there was a lack of private entrepreneurship in the particular domain of urban redevelopment in Ningbo at that time. The Ningbo Urban Construction Investment Holding Co., Ltd. (NBUCI), a local state enterprise, was indispensable in local state entrepreneurship. Meanwhile, the Ningbo government was also involved in high-profile promotional campaigns for the Tianyi Square project. In this chapter, I will discuss the mechanism of the Tianyi Square redevelopment and the two facets of Ningbo’s local entrepreneurial state.

1 Planning the Tianyi Square Redevelopment

1.1 The No. 1 Landmark

Ningbo, which literally means “peaceful wave,” is a sub-provincial city (fu sheng ji chengshi) in eastern Zhejiang province; Zheijang is one of the richest provinces in China, and neighbors Shanghai. Ningbo is one of China’s National Historic and Cultural Cities (guojia lishi wenhua mingcheng) designated by the State Council of China, and is widely regarded as one of the top 20 prosperous and competitive cities in China.

Today, if you visit Ningbo as a tourist and you ask local people to name the “must-go” Places in downtown, Tianyi Square is always among the answers. Tianyi Square is undoubtedly the Number One landmark of Ningbo as a contemporary metropolis. Missing Tianyi Square in Ningbo for a tourist is just as unthinkable as missing Tiananmen in Beijing or the Bund in Shanghai. Moreover, Tianyi Square is too large and visible a place and too centrally located to be overlooked on any map of Ningbo.

Tianyi Square is a giant business complex consisting of a public open space and a variety of commercial establishments. Its total area is 193,000 square meters, 1 almost half that of Tiananmen Square in Beijing. However, it hardly seems as vast and monumental as Tiananmen Square, because most parts of its space are used by retail stores that encircle a central square of 35,000 square meters, 2 which is a popular place for taking strolls, eating out, outdoor exhibition, and artistic performance. Indeed, Tianyi Square is the most popular public space in Ningbo. In ordinary days, it has a daily visitor volume of 60,000, and on weekends and holidays, its daily visitor volume may exceed 150,000. 3

Tianyi Square is located in the central part of the Haishu District (haishu qu), Ningbo’s time-honored downtown for centuries. Tianyi Square is bound by East Sun Yat-sen Road (Zhongshan dong lu) on the north and Yaohang Street (yaohang jie) on the south, two main roads and business streets in Ningbo. East Sun Yat-sen Road is the most famous business street with a long history, and its particular section around the Dongmenkou area (formerly the location of the east gate, or the Dongdumen, of Ningbo’s walled city, currently including northeastern portion of Tianyi Square) is long claimed to have the highest density of commercial establishments in eastern Zhejiang province, and thus the “No. 1 street in eastern Zhejiang” (Zhedong diyi jie).

In Tianyi Square, there are a variety of shops selling commodities and services: electronic and digital products, medicines, optical products, tea, jade articles, home appliances, SPA, gym, goldware, clothing, and watches. Among these there are five big stores: Tesco Supermarket (legou), Intime Department Store (yintai baihuo), International Shopping Center (guoji gouwu zhongxin), and Gugo Shopping Mall (kugou shangcheng). There are many dining options: Hong Kong-style dessert, pizza, local Ningbo cuisine, Starbucks, bars, tea houses, seafood, KFC, and local fast food. According to statistics in 2011, there are 334 commercial establishments in Tianyi Square. 4 In brief, Tianyi Square provides many options of mass consumption that are affordable for ordinary people. Different social groups can find suitable consumption options according to their income levels.

Yet you don’t have to buy anything if you don’t want to. It is a pleasure in itself to just walk through the shops and on the central square, looking at the occasional performances, commercial promotional campaigns, the Gothic-style Catholic cathedral as the backdrop of the central square, and night scenes of dazzling neon lights. In short, it is a relaxing marketplace and open space that excludes nobody.

1.2 Laoqiangmen of the “Village in City”

Before 2001, Tianyi Square did not exist, and the only place which carried the name of “Tianyi” was the famous Tianyi Pavilion (tian yi ge), a Ming dynasty private library about two kilometers west of Tianyi Square’s location.

The current location of Tianyi Square had long been the core of Ningbo’s old town. In a newspaper article, a local resident who had lived here for over 60 years prior to the Tianyi Square development project, recalled that before 1949 the residents here were mostly involved in handicrafts and other fairly regular jobs, except for a few rich families; on the streets, there were a variety of small shops in such traditional industries: ironware, wooden wagons, timber products, dyeing, painting, and wedding and funeral appliances, as well as some brothels; as early as 3:00–4:00 am, people would hear the sounds of forging pots and spatulas from ironware shops, coupled with street vendors’ hawking dumplings in soup (huntun) and red bean porridge (chidou zhou); in brief, this area was bustling, but it was also disorderly and shabby. 5 It had deteriorated into the largest dilapidated neighborhood in Ningbo until the Tianyi Square project. Referred to as “laoqiangmen” (old walls and doors) by local people, it was full of old or even dangerous buildings dating back to the late Qing period at the earliest. 6

Before the Tianyi Square project, most residents of this area considered a flushing toilet a luxury and they still used night stools (matong). 7 In some cases, a dozen households had to share one water tap. 8 In a newspaper report, after being relocated elsewhere, a former household previously residing in Shamao Lane (shamao xiang) recalled their poor housing conditions in the Tianyi Square area, “Our home was only 25 square meters, with no window at all, and ventilation and natural lighting was poor. So we had to turn lights on even in the daytime. During the plum rain (meiyu) season, the floor was very wet. There was no toilet in the old houses in this area.” 9 Among the approximately 3700 residential households that were to be relocated, 10 only 30 households were living in suite-style houses (chengtao fang) that had private kitchens and toilets, and more than 700 households had average living space below the minimum standard of 11 square meters for Ningbo’s urban residents at that time. 11 Some hazardous houses had to be held up by external wooden structures during typhoon seasons, and it was not uncommon that some houses collapsed during plum rain season. 12

There was a sharp contrast between the dilapidated houses in this area and its surrounding contemporary high-rise commercial buildings on East Sun Yat-sen Road and Yaohang Street. The two roads were widened during 1994–1997 as part of the “Six Main Roads and One Flyover” (liu lu yi qiao), a set of urban infrastructural improvement projects. Referred to as a “village in city” (dushi xiangcun) by the NBUCI, 13 the area before the Tianyi Square project was just like a basin, or potted landscape of pre-contemporary Ningbo.

Since this area had survived the previous urban redevelopment projects, some people believed that it was to be kept intact and preserved as a historic district. 14 But because it had suffered from Ningbo’s seasonal typhoons and heavy rains due to its poor drainage facility, this area was already among the “low-lying and waterlogged areas” (diwa jishui diduan) classified by the Ningbo government, where most houses were non-suite-style houses (fei chengtao fang). All those areas would be subject to redevelopment under special government budget over a period of three years starting in 1999, 15 and all non-suite-style houses were expected to be eliminated by 2005 as requested by the Ningbo Municipal People’s Congress (Ningbo shi renmin daibiao dahui) to the Ningbo Municipal Government. 16

1.3 From “CBD” to “CCD”

Interestingly, Tianyi Square was originally planned as an experimental project, or even a temporary project. Ever since the 1990s, the Ningbo Municipal Government has sought to build its own Central Business District (CBD), which was becoming a general trend in China at that time. However, a number of indicators showed that even until 2001, Ningbo was still not well prepared for the construction of a CBD: in comparison with such first-tier Chinese cities as Guangzhou and Shenzhen, Ningbo’s economic aggregate and city size were still quite limited, and the level of Ningbo’s economic outward-orientation needed to be improved, and the size of hinterland expanded.

According to a survey, Ningbo’s major private real estate developers considered the CBD project too risky, and they had no confidence in it. 17 The cost of resident relocation and rehousing were also very high, which made the Ningbo government hesitate to undertake it. 18 In the Master Plan of Ningbo Municipality (1995–2010) (Ningbo shi chengshi zongti guihua), therefore, there was only a preliminary blueprint for Ningbo’s CBD, which reserved the land that Tianyi Square currently occupies as Ningbo’s future CBD, yet without any detailed plan, such as the site boundaries or specific planning and design requirements. 19

It was apparently a big problem for Ningbo’s long-term development that Ningbo’s urban redevelopment had lagged far behind its widely acknowledged economic growth. Yet, it can also be regarded as a “backwardness advantage” for Ningbo in that urban planning and redevelopment is always closely regulated by the government and disorderly and uncoordinated urban development by individual private developers have largely been prevented. 20 Thus, government-directed comprehensive urban redevelopment would be implemented in accordance with the requirements of industrial upgrading and long-range urban spatial restructuring.

As noted above, due to the high costs of resident relocation and rehousing, as well as new construction, the Tianyi Square project would be extraordinarily expensive, risky, and challenging. It was expected to be the new urban core of Ningbo by virtue of not only its central location but also its highly complex and strategic functions. No private development firm had the confidence to undertake such a challenging project on its own. If the government divided the whole area into a number of small land parcels and leased them to individual private developers to develop one by one, there might be problems of inconsistency and poor coordination in land use, development progress, and investment attraction, difficulties in long-term governance, and most importantly, the difficulties in undertaking further improvement or redevelopment projects as a CBD in the future.

Thus the Ningbo government itself took on this challenging task of developing Tianyi Square, to achieve the paramount goal of downtown redevelopment in conjunction with housing improvement for the residents living in low-lying and waterlogged areas. In early 2000, the Ningbo government adopted a cautious and practical two-step approach to gradually realize its dream of a CBD: to first build a Central Commercial District (chengshi zhongxin shangye guangchang, CCD) dedicated to commercial and landscaping uses, 21 which might help raise funds, improve business atmosphere, and accumulate experience, and in turn, pave the way for a CBD in the future as the second step. 22 And the NBUCI, a corporate group owned by the Ningbo government, would be responsible for the project.

In this context, the Tianyi Square project was informally referred to as “CBD land parcel” (CBD dikuai) or “City Center Commercial District” until it acquired its official name of “Tianyi Square” through public soliciting. 23 The naming of Tianyi Square was apparently inspired by the Tianyi Pavilion, 24 which is still the most famous historic heritage in Ningbo even today. In the Ningbo Daily (Ningbo ribao), the earliest article to formally use the name “Tianyi Square” to refer to this project was a report on a press conference in Shanghai organized by the Ningbo Municipal Government to invite investors to Tianyi Square, on June 12, 2001. 25

In 2000, the Ningbo Urban Planning Bureau (Ningbo shi guihua ju) began to solicit planning schemes for this project from five domestic and overseas planning and design institutes. Two preferred schemes were selected, and incorporated and improved toward a final operational scheme by a planning and design team consisting of the Ningbo Urban Planning Bureau, the Ningbo Architectural Design and Research Institute (Ningbo shi jianzhu sheji yanjiu yuan), and MADA s.p.a.m. (ma da si ban). 26 MADA s.p.a.m. is a private architectural design firm founded and directed by Ma Qingyun, a Tsinghua University and University of Pennsylvania-trained Chinese architect, who has also been dean of School of Architecture at the University of Southern California since 2007. 27

After being reviewed by five experts, the operational scheme was finally exhibited to solicit feedback from the public in the Dafangyuedi, 28 a Ming dynasty official’s private residence often used for exhibiting urban planning and design schemes in Ningbo in 2000 and 2001. This kind of publicity (gongshi) is still practiced as a regular channel for public participation in China’s urban planning system.

Due to the central location and vast size of Tianyi Square, it was aimed not only at slum clearance and housing improvement, but more importantly, revitalization of this strategic location to serve the ends of upgrading Ningbo’s city image and overall competitiveness. Its complexity and vastness brought it a few popular nicknames, such as the “aircraft carrier of commerce” (shangye hangmu). In fact, Tianyi Square had become the biggest one-stop (yi zhan shi) and landscaped (yuanlin shi) commercial complex in China consisting of shopping, leisure, and entertainment establishments upon its completion. 29

In an article stating his planning and design scheme, Ma Qingyun described Tianyi Square as Ningbo’s “mega-structure” (dushi ju gou) that had adopted the grandness of Baron Haussmann’s redevelopment scheme for modern Paris. His plan wiped off most old structures on the site except about 20 old trees and three historic buildings and relics. He interpreted the big central square within Tianyi Square as a symbolic landmark declaring the birth of a new urban core in Ningbo. The vastness of Tianyi Square, which was bigger than the total area of all the other commercial establishments in Ningbo prior to its construction, was legitimized in the sense that it was created as a meeting place not only for local consumption and commercial development, but was also outward oriented toward international capital and consumers. 30

Since Tianyi Square was regarded as a transitional CCD toward realization of a CBD afterward, and the cost of resident relocation and rehousing was already very high, the construction volume of the project was kept very low both in order to control investment scale and to leave room for further redevelopment. 31 Over a period of five years, if the CCD was able to generate positive socio-economic outcomes and get recognition by Ningbo’s people, it would be retained as a permanent project; otherwise, it would be demolished and then the land could be released for redevelopment once again. 32

The transitional and temporary nature of Tianyi Square is exactly the reason for its low building density: in the total area of 196,360 square meters, the total floor area is over 20,000 square meters, 33 and its floor area ratio is lower than 1.2; all buildings are only three- or four-storey high, 34 in which retail shops account for 90 %. 35 In addition, the property ownership of all the newly built shops has been retained by the NBUCI and leased to retailers. 36 No tenant is allowed to sublease his/her shop to other tenants. Rather, tenants are only allowed to terminate their leases with the NBUCI first, and then the NBUCI gets back the shops and looks for new tenants. 37

In sum, the low building density, the land-use pattern primarily for retail industry, and the unitary property ownership and management system by the NBUCI, made Tianyi Square essentially different from an ordinary CBD that is usually full of high-density skyscrapers for office use. These unique features in Tianyi Square guarantee easy land acquisition and demolition of buildings, as well as low cost of further redevelopment, if necessary.

The administrative examination and approval process of the CCD project was conducted between the Ningbo Urban and Rural Construction Committee (Ningbo shi chengxiang jianshe weiyuanhui, NBURCC) and its subsidiary, the NBUCI, and the Ningbo Planning Commission (Ningbo shi jihua weiyuanhui, NBPC), and can be divided into two steps.

The first step took place in November 2000 and dealt with the CCD project proposal (xiangmu jianyi shu). The project proposal described why the CCD project is necessary, how big it would be, and how much the total investment scale would be. On November 17, 2000, the NBURCC submitted a letter regarding “the Project Proposal of the Ningbo City Center Commercial Square (tentative name)” (guanyu baosong Ningbo shi chengshi zhongxin shangye guangchang [zan ming] xiangmu jianyi shu de han) to the NBPC. On November 20, 2000, this proposal was approved by the NBPC. As stated in the approved project proposal, the aims of this CCD project were to accelerate urban redevelopment of low-lying, waterlogged areas and dilapidated neighborhoods, improve people’s living environment, upgrade Ningbo’s city image, and promote coordinated economic and social development in Ningbo. The CCD would consist of leisure, commercial, and cultural and entertainment establishments. The estimated total investment scale was 1.213 billion yuan, in which, prophase investment (qianqi fei) was 809,990,000 yuan (including relocation fees for residential and non-residential households), construction fee was 284.16 million yuan, and other fees (such as project design fee and management fee) were 119.84 million yuan. 38

The second step took place from late November in 2000 through mid-January in 2001, and it dealt with the feasibility study report (kexingxing yanjiu baogao) for the CCD project. The NBUCI first prepared the “Feasibility Study Report on the Ningbo City Center Commercial Square Project” (Ningbo shi chengshi zhongxin shangye guangchang jianshe xiangmu kexingxing yanjiu baogao), including the final operational scheme of the CCD, and submitted it to the NBURCC on November 29, 2000. The NBURCC in turned forwarded the feasibility study report to the NBPC on December 22, 2000. Finally, the feasibility study report got approved by the NBPC on January 15, 2001.

As stated in this feasibility study report, the CCD project was expected to change the conditions of “village in city” in this area, and to integrate and upgrade the commercial and financial establishments in this area. It was planned that demolition of original buildings would be completed by March 2001, construction works undertaken from December 2000 through December 2001, and the CCD put into use in early 2002. In the total investment, 800 million yuan would be from bank loans, and would be supplemented with the NBUCI’s own funds. The land for development would be transferred to the NBUCI for free, and all tax and fees of this project would be exempted. 39

2 Building the Tianyi Square

2.1 The NBUCI as “City Operator”

As noted above, the major sources of investment of the Tianyi Square project were bank loans and the NBUCI’s own funds. The Ningbo government did not inject a lot of money from its own coffers to fund this project. A more in-depth analysis of the NBUCI’s role and functions is necessary for understanding how the Ningbo government managed to undertake this costly project without a significant amount of government investment.

The root cause of this phenomenon is China’s unique land administration system. Land is an indispensable factor of production in any economic system; through constitutional amendments and the enactment and revisions of the Land Administration Law (tudi guanli fa), the Chinese government has been legislating for marketization of land step by step. On the one hand, China’s land resources are still exclusively state and collective assets, and on the other hand, with the adoption of land-lease system, the right to use urban state land can also be purchased by individuals and organizations for commercial development. 40

The land to be redeveloped for Tianyi Square was urban state land, upon which the Ningbo government had actual administrative authority and full right to the disposal of land-lease revenues generated in its redevelopment. The project was undertaken by the NBUCI, which adopted market operation for this government designated project. The establishment of the NBUCI was authorized by the Ningbo Municipal Government, and was intended for investment in urban construction projects and operation of urban public physical assets, 41 especially such strategic projects that the private sector is not prepared to undertake, and government funds are unavailable or insufficient. 42

According to Mr. Zhou Riliang, then director of the Ningbo Urban Planning Bureau, the establishment of the NBUCI was actually specifically committed to undertaking the Tianyi Square project. 43 In December 1999, the Ningbo government transferred the assets of the “Six Main Roads and One Flyover,” the Ningbo Xingguang Town Gas Group Corporation (Ningbo xingguang meiqi jituan gongsi), and the Ningbo Urban Construction Development Corporation (Ningbo chengshi jianshe fazhan zong gongsi) to the NBUCI, and therefore, enabled the NBUCI to be a coherent corporate group with a registered capital of 500 million yuan. 44 By September 2009, the NBUCI had developed to be a giant corporate group with a total asset of 40 billion yuan and 13 subsidiaries. 45

The NBUCI has, since its establishment, been transforming Ningbo’s mode of urban construction and the provision of municipal public utilities to be more market-oriented, and it has been able to overcome the shortage of government budget and seek diverse financial sources on the capital market for public investment. For example, it succeeded in obtaining loans from the China Development Bank (guojia kaifa yinhang), an amount of 1.15 billion yuan, and thus reduced the lending burden of Ningbo’s local commercial banks. And with the transfer of state legal person shares of the Ningbo Fuda Electric Appliance Co., Ltd. (Ningbo fuda dianqi gufen youxiao gongsi), a listed company, the NBUCI has been able to finance on the stock market. 46

As stated in the “Feasibility Study Report on the Ningbo City Center Commercial Square Project,” the Ningbo government authorized the NBUCI to undertake the Tianyi Square project, transferred the land-use right of this land to the NBUCI free of charge, which was estimated to be 1.2 billion yuan, 47 and exempted the NBUCI from any tax or fee pertaining to such a commercial real estate project. 48 Bai Xiaoyi, chairman of the board of the NBUCI, clarified that the NBUCI still paid the land-lease fee to the Ningbo government, but the government then transferred the fee back to the NBUCI as the shareholder of the NBUCI. 49 There was a state-owned land-use right transfer contract (guoyou tudi shiyongquan churang hetong) between the Ningbo Municipal Land and Resources Bureau (Ningbo shi guotu ziyuan ju) and the NBUCI signed on December 26, 2002, regarding the Tianyi Square project, almost three months after the project was put into use. It was actually a revised version of the previous contract signed in 2001, indicating that the land-lease fee per square meter was 2973.00 yuan, and the total was 484,798,785.60 yuan, which had been paid by the NBUCI before the contract was signed. 50

By mortgaging this land to the Agricultural Bank of China Ningbo Branch (Zhongguo nongye yinhang Ningbo shi fenhang), and guaranteed by government credit, the NBUCI managed to obtain a loan of over 800 million yuan for resident relocation, 51 and later on another loan of near 600 million yuan for construction works. 52 The NBUCI also raised another amount of 200 million yuan on its own for the project. 53

In addition, assisted with the liaison by the Ningbo government, the NBUCI signed a long-term collaborative agreement with the Ningbo Commercial Bank (Ningbo shi shangye yinhang, reorganized as a listed company and renamed Bank of Ningbo [Ningbo yinhang] in 2007) in 2001 as well, according to which, the Ningbo Commercial Bank would help in financing urban redevelopment, infrastructural construction, and environment protection projects undertaken by the NBUCI. He Jianmin, deputy mayor of Ningbo, specifically in charge of urban construction at that time, attended this agreement signing ceremony, and represented the Ningbo government as an indispensable middleman between the two local state enterprises. 54

It was decided that the property ownership of Tianyi Square would be retained by the NBUCI, and all shops would be leased to retailers to generate rental income, which was to be used by the NBUCI to repay bank loans. 55 This arrangement was one of the preconditions for a possible redevelopment once again later on. In order to undertake both initial investment attraction and long-term business management, the NBUCI established a wholly owned subsidiary, the Ningbo City Square Development & Management Co., Ltd. (Ningbo chengshi guangchang kaifa jingying youxian gongsi, NBCSDM), to take charge of long-term management of Tianyi Square. 56

Some external partners were also invited to join the management of Tianyi Square. For example, DTZ Debenham Tie Leung (dai de liang hang), a global leading agent of real estate consultancy, was involved in business planning and investment attraction for Tianyi Square until 2004. 57 A manager in the Investment Office (zhaoshang chu) of the NBCSDM explained that

At that time [when Tianyi Square was being developed], commercial real estate project was still a new thing in Ningbo, and we were in the process of learning about it. So we invited DTZ Debenham Tie Leung. However, investment attraction is a localized undertaking, and DTZ Debenham Tie Leung was not very familiar with Ningbo in some respects, so it retreated in 2004, and our company has since then been doing it on our own. 58

The Ningbo government took pride in that: (1) by adopting market operation, the NBUCI was able to undertake the Tianyi Square project without a cent from the government coffers, and (2) this strategically located land as state asset, which had previously been a dilapidated neighborhood, had now been redeveloped and revitalized for commercial, leisure, and landscaping uses. 59 This operation mode was referred to as “government project operated by enterprise” (zhengfu xiangmu, qiye yunzuo), and the NBUCI was described as a “city manager” (chengshi jingli ren) 60 or “city operator” (chengshi yunying shang) that connects the government with the market. 61 As a “city operator,” the NBUCI is believed to be able to faithfully follow the directives of the government and employ market mechanism to develop large urban areas, and generate both profits and broader social benefits. 62

The “city operator” model of the NBUCI is not particular to Ningbo, however. According to economist Sheng Hong, such local state enterprises committed to urban construction investment have existed for years in China. In the context that the Budget Law (yusuan fa) prohibited China’s local governments from borrowing from banks or issuing bonds for a long time, these local state enterprises have enabled local governments to find finance on the capital market. 63 Thus, as stated by Bai Xiaoyi, 64 the NBUCI can be regarded as a hybrid authority performing the dual functions of local governance and entrepreneurial undertakings. Even Bai Xiaoyi’s job was illustrative of this duality: as chairman of the board of the NBUCI, he is both a government official and a state entrepreneur. 65

The “city operator” model reflects a general trend prevailing in China since the early 1990s, a trend that is widely believed to originate in the city of Dalian under its mayor and later party secretary, Bo Xilai. 66 The Chinese reference to such a trend is “managing the city” (jingying chengshi). Dalian, the biggest seaport in Northeast China, used to be a city famous for its heavy industry, a common economic feature across China, especially in Northeast China, under the command economy. Bo Xilai had been the principal politician in Dalian since he was appointed acting major of Dalian in 1992, and until he got promoted to head the Liaoning Provincial Government in 2000.

Since China’s urban land is exclusively owned by the government, Bo Xilai argued that cities, just like state enterprises, are also state assets (guoyou zichan), and managing cities can also generate fiscal revenues for the government, just like levying taxes on enterprises; a bad mayor who does not manage a city well devaluates state assets. He proposed two methods of managing cities: (1) creating quality urban environment, including infrastructure and landscape, (2) attracting inward investment. The success of managing the city relies on high quality of urban planning, for which, he put forward the guideline of “Don’t pursue the biggest, but the finest” (bu qiu zui da, dan qiu zui hao) for Dalian. 67 A large amount of land-lease fee was regarded as the second source of fiscal revenue for the Dalian government. 68 The fee was used by the Dalian government to improve urban environment, such as relocation of pollutant factories to industrial outskirts, slum clearance and housing improvement, and urban landscaping, and further inward investment attraction, and thus, a virtuous circle. 69

Under Bo’s leadership, especially guided by his notion of “managing the city,” which was first proposed by him in 1993, 70 Dalian announced its ambition of becoming “Hong Kong in the north” (beifang Xianggang) in 1993, namely a hub of trade, finance, and export processing in Northeast Asia, 71 and obtained a number of national and international titles in recognition of its gorgeous and livable urban environment: Nationally Designated Garden City (guoji yuanlin chengshi), National Model City for Environmental Protection (guojia huanbao mofan chengshi), and the UN-Habitat Scroll of Honour Award (Lianheguo renju jiang). These achievements were essentially the outcomes of Bo’s notion of “managing the city” as state assets. 72

Bo’s notion of managing the city invoked a large amount of research, which more or less has achieved such consensus that the city can be packaged and marketed, and managing the city by the government is a business-like undertaking. 73 The notion “managing the city” was highly influential during the 1990s and impacted the establishment of the NBUCI and its operation of the Tianyi Square project.

From 2000 through 2002 in Ningbo’s local newspapers, there were several articles discussing the notion of “managing the city,” successful cases in Dalian, Kunming, Shanghai, and Qingdao, and the potential of its application in Ningbo. 74 On December 12, 2001, there was a special column, in which five government officials and experts elaborated their opinions about managing the city. 75 According to Zhou Riliang, the aims of managing the city include restructuring and optimizing urban land resources, urban space, and other economic factors, and upgrading city image and attractiveness to inward capital and talents. 76

The Tianyi Square project has been regarded by the Ningbo government and the NBUCI, 77 local urban planners 78 and local media 79 as a successful application of managing the city. In addition, Tianyi Square also became the reference for emulation by over 600 observation and study tour delegations (15,000 people in total) in the first three years of its operation, 80 and has even stimulated some cities in Shandong and Jiangsu to invite the NBUCI to develop similar projects. 81

2.2 Resident Relocation and Construction

In order to clear the shabby neighborhoods for the ambitious redevelopment project of Tianyi Square, the Ningbo government and the NBUCI had to relocate a large number of residential households and non-residential work units (danwei) and other organizations reasonably. The relocation task was also politically significant in that it was the bad housing and infrastructural conditions of this area that made the Ningbo government launch this challenging project in the first place. In fact, upon its launch, the Tianyi Square project had become the largest urban redevelopment project in the history of Ningbo, 82 as well as in Zhejiang province, 83 in terms of demolition volume.

On December 7, 2000, the Office for Key Urban Construction Projects of Ningbo (Ningbo shi chengshi jianshe zhongda xiangmu bangongshi) signed a contract with the Ningbo Municipal Office of Demolition, Relocation and Rehousing (Ningbo shi fangwu chaiqian bangongshi) to implement demolition. As stated in this contract, the total floor area to be demolished was 130,673 square meters, in which, the total floor area of 2120 residential buildings was 89,745.3 square meters, and the total floor area of 125 non-residential buildings was 40,928 square meters. The total compensation fee for demolished properties was estimated to be 360,624,700 yuan. In addition, the Office for Key Urban Construction Projects of Ningbo needed to pay management and service fee to the Ningbo Municipal Office of Demolition, Relocation and Rehousing for demolition affairs in the amount of 3,005,400 yuan. 84

The demolition permit (chaiqian xuke zheng) was issued in November 2000. 85 Starting on December 1, 2000, 3750 residential households and 340 work units and other organizations in this area began to sign relocation agreements with the NBUCI, and on March 12, 2001, electric and water supplies were to be cut off, and the demolition was to start. There were two rehousing options: rehousing in resident-decided locations (zixuan anzhi) and rehousing in government-designated locations (zhijie anzhi). The former meant that households could choose monetary compensation in the form of a housing coupon (fang piao), 86 and buy or rent apartments elsewhere on their own, and the latter meant households could choose to buy or rent apartments provided by the Ningbo government at subsidized prices as in-kind compensation, which, in this particular case, was Nanyuan Estate (nanyuan xiaoqu) in Haishu District, 87 about four kilometers south of Tianyi Square. It was reported in February 28, 2001, that the rehousing in resident-decided locations method was preferred among relocated households, with an overwhelming ratio of 99 %. 88

The relocation and demolition arrangement was harsh to guarantee that the Tianyi Square project could be launched on time. In a magazine article it was disclosed by an insider in the NBUCI that each demolition agreement between the demolisher and relocated residents was settled within 14 days; if any household refused the compensation standard and demolition timeline set by the Ningbo government, a notification of forced eviction (qiangzhi chaiqian) would be issued to the residents a few days later, and the household’s property was subject to the legitimate violence of the local state apparatus. 89

The Tianyi Square project was the second large-scale urban redevelopment project in Ningbo that adopted the policy of rehousing in resident-decided locations, just after the redevelopment of the Moon Lake (yue hu) scenic area in 1998. This policy was said to be the most feasible way to pay monetary housing subsidy (zhufang huobihua butie) to an urban population, in order to gradually supersede the former housing allocation (zhufang fenpei) system. 90 As housing reform was launched in 1998 across China, in-kind housing allocation had been terminated in Ningbo by the end of 1998, and monetization of housing subsidy had been implemented since early 1999. 91

Through monetary compensation and rehousing estates provided by the Ningbo government, the Tianyi Square project materialized and paid a considerable amount of the high market value of the land occupied by the shabby neighborhood. To many relocated households whose income level was low, the monetary compensation was indeed very helpful to improve their housing conditions. It would be very difficult, if not impossible, for them to flee from the shabby neighborhoods and get better apartments elsewhere without such a government project.

Many stories about “happy relocated residents” were reported in the Ningbo Daily in 2001. For example, on March 1, 2001, it was reported that a family got their 25-square-meter house compensated in the amount of 60,000 yuan, and they added it with their own savings of another 60,000 yuan to buy a 60-square-meter apartment in Nanyuan Estate. Assisted with a mortgage loan, their neighbor purchased an 80-square-meter apartment in Sanshui Lijing Estate, 92 about two kilometers south of Tianyi Square, slightly closer to the downtown area than Nanyuan Estate.

For some households from disadvantaged groups, special supporting policies were prepared in conjunction with the relocation, such as Minimum Living Allowance (zuidi shenghuo baozhang jin) application and re-employment arrangement for the unemployed, and a special rehousing support scheme for empty-nesters and the disabled. For small business owners, Street Office cadres helped to find alternative venues for their businesses. 93 Many bigger stores along East Sun Yat-sen Road that were to be demolished, such as Beyond Textile (boyang jiafang), signed rental agreements with the NBUCI for reservation of new retail stores in Tianyi Square in advance, 94 which guaranteed their return once Tianyi Square was put into use.

Although it cannot be denied that such “happy stories” may report only the positive outcomes to serve propaganda purposes of the Ningbo government, it cannot be denied as well that the policy of rehousing with compensation and subsidized estate did help to considerably improve the housing conditions of many households, which was vital to the legitimacy of the project and the Ningbo government.

It was reported that by December 21, 2000, there had been 2164 households that had signed relocation agreements, accounting for about 63 % of all types of relocated households. In these 2164 households, 99 % chose rehousing on their own with monetary compensation. 95 By February 28, 2001, less than two weeks before the starting date of demolition, it was reported that there had been 3306 households that had signed relocation agreements, among which, 2800 households had already found their new apartments either rented or purchased. 96

The large number of relocated households eager to find apartments elsewhere on the real estate market stimulated a market boom, especially a rapid increase in the demand for second-hand properties. A large number of real estate agents established their temporary offices in the Tianyi Square area to grab these business opportunities. 97 On March 6, 2001, there was an article in the Ningbo Daily that specifically focused on the second-hand property boom. In was reported that about 20 real estate agents had emerged in this area in search of businesses. The second-hand property market was deemed promising because it was more affordable for relocated households due to its lower price and convenient location near downtown. 98 As originally scheduled, all households had moved out by March 12, 2001; demolition started on March 13, 99 and finished in mid-April. 100 New construction works started on April 16, 2001, 101 and had been almost finished by August 1, 2002, erecting 20 European-style commercial buildings encircling a central square. The Tesco supermarket and Tianyi Digital Products Mall (tianyi shuma guangchang) had already been in operation. 102

2.3 Historic Conservation

According to the final operational design scheme of Tianyi Square, most old structures of the laoqiangmen in this area would be demolished, and some particularly important historic buildings were to be relocated and rebuilt elsewhere in order to vacate the land for the new buildings of Tianyi Square. 103 This method of conservation, which targets only individual buildings or relics but does not keep the overall texture of historic districts intact, and sometimes relocates and reconstructs heritage buildings elsewhere, was fashionable in Ningbo at that time.

Three historic buildings and relics in this area were regarded as a particularly valuable architectural heritage: the tablet in memory of the bacteriological warfare by the Japanese troop spreading plague virus during the Second World War (qin Hua Rijun shuyi xijun zhan yizhi jinian bei), the God of Herbal Medicine Hall (yao huang dian), and Li’s Residence (Li zhai). There were two articles in the Ningbo Daily on February 8 and March 4, 2001, reporting respectively that it had been proposed that the God of Herbal Medicine Hall and Li’s Residence were to be relocated to the City God Temple (chenghuang miao) business district and the Moon Lake scenic area respectively. 104 However, on May 31, 2001, there was another article in the Ningbo Daily that introduced the history of the God of Herbal Medicine Hall in detail and announced that in-situ conservation approach would be adopted for this heritage. So what happened that led to in-situ conservation of the God of Herbal Medicine Hall?

The south boundary of Tianyi Square is Yaohang Street, which literally means “the street of herbal medicine stores.” This area had been famous as a hub of herbal medicine trade in the Yangtze River Delta region since the Qing dynasty. The God of Herbal Medicine Hall was built in the Yaohang Street area in 1708 in honor of Shennongshi, the god of agriculture and herbal medicine in China. The God of Herbal Medicine Hall also had an annex named “Lianshan Guild Hall” (lianshan huiguan), the chamber of commerce of herbal medicine industry in Ningbo in Qing dynasty. 105 This combination of deity worshipping and associational bonding was a common phenomenon in pre-1949 China based on either the same industry (ye yuan) or the same hometown (di yuan).

The socialist transformation of capitalist industry and commerce in the early years of the PRC succeeded in eliminating the private sector as a whole, of course including their associational activities. The God of Herbal Medicine Hall thus lost its original significance as a worshipping hall and a chamber of commerce. Since 1953, the God of Herbal Medicine Hall had been used as a warehouse by the predecessor of the currently Ningbo Dahongying Pharmaceutical Co., Ltd. (Ningbo dahongying yaoye gufen youxian gongsi, DHY Pharm). It was no longer a public space, and could be said to have disappeared in a cloud of over-crowded and shabby neighborhoods for a long time, even though it was designated as a municipal-level architectural heritage point (shi ji wenbao dian) in 1992. 106

The key figures that contributed to the in-situ conservation of the God of Herbal Medicine Hall were Yang Gucheng and Wang Jietang, who were also the authors of the article in the Ningbo Daily on May 31, 2001. Known as the “crazy man for heritage conservation” (wenbao kuangren), Yang Gucheng is a famous local activist who has been committed to heritage conservation in Ningbo for years, and was one of the “Top 10 Activists for Cultural Heritage Conservation in Ningbo” (Ningbo shi shi jia wenhua yichan baohuzhe) 107 ; he also won the “Heritage Conservation Contributor of the Year 2008” (2008 nian wenbao niandu gongxian jiang) in China. 108

Yang Gucheng, along with Wang Jietang and some other heritage conservation activists, argued that the most valuable part of the God of Herbal Medicine Hall was its brick carving, which would definitely be damaged in the process of relocation and rebuilding; moreover, the whole history of the Yaohang Street area as a hub of herbal medicine trade would be wiped out if ex-situ reconstruction was carried out. On April 9, 2001, they wrote a letter to both Deputy Mayor He Jianmin and the Peoples Daily to advocate in-situ conservation of the God of Herbal Medicine Hall, with the Huqingyutang in Hangzhou as the exemplar of such a conservation approach. On April 12, 2001, Peoples Daily East China News (renmin ribao [Huadong xinwen]), the local edition of the Peoples Daily in the six provinces and one municipality of East China, published Yang and Wang’s letter on the front page. 109 The case thus became known across China due to the coverage in the center-level official newspaper of the Communist Party of China (CPC). Yang’s letter was then forwarded by He Jianmin to the NBUCI for a reconsideration of the design scheme of Tianyi Square. The response of He Jianmin came to Yang Gucheng 10 days later, with the promise that their appeal for conservation had been accepted by the Ningbo government, and the NBUCI would be responsible for revising the design scheme to accommodate the in-situ conservation of the God of Herbal Medicine Hall. 110

The NBUCI invited a number of time-honored pharmaceutical firms, including Beijing Tongrentang and Hangzhou Huqingyutang, to take part in the bidding for renovation and operation scheme of the God of Herbal Medicine Hall. 111 The Hall was to be reused as a pharmacy and a museum of herbal medicine history, and the tenant would still be the Ningbo DHY Pharm. 112 On April 29, 2002, the renovation plan of the rear hall as the Ningbo Herbal Medicine History Exhibition Hall (Ningbo yaoye lishi chenlie guan) got the final approval. 113 It would become Ningbo’s fourth museum of a particular industry, following the Ningbo Numismatic Museum (Ningbo qianbi bowuguan), the Ningbo Museum of Costume (Ningbo fuzhuang bowuguan), and the Ningbo Museum of Agricultural Machinery (Ningbo nongji bowuguan). 114

The Ningbo DHY Pharm was in charge of renovating and operating the God of Herbal Medicine Hall as its tenant. In the rental agreement signed between the NBUCI and the Ningbo DHY Pharm, the God of Herbal Medicine Hall would always used for pharmaceutical business, and its original architectural style would never be changed or damaged. 115 Thus, the God of Herbal Medicine Hall succeeded in maintaining both its physical existence and its pharmaceutical function in Tianyi Square, thanks to the successful appeal of architectural conservation activists.

The God of Herbal Medicine Hall has a total area of 1600 square meters. 116 The Ningbo DHY Pharm spent five million yuan on the renovation. 117 A total area of 2000 square meters was retained for in-situ conservation, which incurred an annual rental income loss of over 10 million yuan to the NBUCI due to a reduction of retail space. 118 The Ningbo Herbal Medicine History Exhibition Hall and the Ningbo DHY pharmacy were opened on January 5, 2003, 119 about three months after the opening of Tianyi Square.

During the renovation, a pair of Yuan dynasty bixi (a turtle-like dragon made of stone, used for erecting a tablet in traditional Chinese architecture) was excavated just next to the God of Herbal Medicine Hall in May 2002. A new pavilion was built to shelter the bixi, and a tablet was erected to record the history of their excavation and the renovation of the God of Herbal Medicine Hall. 120 The God of Herbal Medicine Hall and the bixi under the pavilion has since then constituted the only zone of historic buildings and relics in Tianyi Square, in sharp contrast to, and somehow also in harmony with, the contemporary commercial buildings surrounding them.

It can be found that the efforts of local activists, in combination with contingent interventions from the outside, such as the Peoples Daily, significantly impact the decision-making of China’s local states in key urban redevelopment projects once their problems are made public. Yet, undoubtedly, the local state is still the determinant factor that decides whether or not to respond and in what way.

Besides, 18-year-old trees which had a diameter at breast height above 30 centimeters were also preserved in Tianyi Square, instead of being cut down. The NBUCI stated that, for the preservation, over 20 new buildings had to be redesigned. For example, over 1000 square meters of new shop area in the original design scheme was wiped off to preserve three magnolias near Yaohang Street; five new shops were canceled to give way to camphor and magnolia trees near the God of Herbal Medicine Hall. The preservation of those trees was estimated to incur a loss of rental income of ten million yuan to the NBUCI due to reduction of retail space. The explanation of the NBUCI for this decision for preservation was that the trees can help improve the landscape of Tianyi Square and preservation of trees itself is meaningful in an environmental sense. 121 This explanation has some connotation of corporate social responsibility. Yet a fuller understanding of this episode must include the fact that the NBUCI is a “city operator” under the supervision of the local state, and the local state always bears in mind its political legitimacy when implementing urban redevelopment projects, and therefore, the decision of the NBUCI is not always profit-maximizing.

However, Li’s Residence, which had no government-designated title in recognition of its architectural value, was at last relocated and rebuilt in the Moon Lake scenic area as originally proposed. It is also a Qing dynasty building, and has a total floor area of 450 square meters. 122 It has been adaptively reused by the Mingtown Ningbo Youth Hostel (mingtang Ningbo Li zhai guoji qingnian lüshe) since the ex-situ relocation of this building.

3 Promoting and Governing the Tianyi Square

3.1 Promotion and Grand Opening

Inward investment attraction for Tianyi Square had already begun in December 2000, while the “Feasibility Study Report on the Ningbo City Center Commercial Square Project” was still awaiting final approval by the NBPC. Among the 550 retailers who had shown rental intentions to the NBCSDM by that time, one-third were local retailers, nearly two-thirds were non-local domestic retailers, and there were another ten international retailers; in terms of industry, clothing and catering were the two major industries. 123 Apparently, Tianyi Square was indeed going in the direction of becoming a meeting place of local and trans-local capital and consumption, as envisioned by Ma Qingyun.

The NBCSDM began to formally publicize messages of investment attraction starting in March 2001. 124 Ningbo’s party-state agencies were proactively engaged in various types of promotional activities for Tianyi Square, which was obviously the Number One project in Ningbo during those years. Ningbo’s local media, which are to a large extent still the propaganda instruments of the local party-state, were required by the Propaganda Department of the Ningbo Municipal Committee of the CPC (Zhonggong Ningbo shiwei xuanchuan bu) to intensively report on the Tianyi Square project during its construction.

The Ningbo Municipal Government organized several press conferences in Beijing, Shanghai, Hangzhou, and Guangzhou to attract nation-wide attention to the project. 125 The venues for such conferences were strategic places in these cities that would help guarantee the best effects of promotion: the paramount Great Hall of the People (rennin da huitang) in Beijing, 126 the Jinmao Tower (jinmao dasha) in Shanghai, 127 the Zhejiang World Trade Center (Zhejiang shimao zhongxin) in Hangzhou, 128 and the Garden Hotel (huayuan jiudian) in Guangzhou. 129

There were also some liaison and consultation activities initiated by the Ningbo government seeking the collaboration of Ningbo’s local business. Ningbo has a historically established garment industry. Thus, in order to create a specialized street for clothes retailing (fuzhuang yitiao jie) in Tianyi Square, the Ningbo government convened a forum to consult Ningbo’s major garment firms, including such nation-wide brand-name manufacturers as Firs (shanshan), Younger (yageer), Romon (luomeng), Rouse (luozi), and Peacebird (taiping nia o). 130

When the Ningbo government was holding high-profile promotional campaigns, the NBUCI thoroughly studied the investment potential. Initially, the NBUCI just focused on Ningbo’s local firms, but soon it found that the size of Ningbo’s qualified investors was still limited. Therefore, the NBUCI began to proactively promote Tianyi Square outside of Ningbo, mainly focusing on enterprises based in Shanghai, Hangzhou, and Wenzhou; the Shanghai-Hangzhou-Ningbo Expressway (Hu Hang Yong gaosu gonglu) became the major transportation corridor for the investments team of the NBUCI. They turned to the chambers of commerce in those cities for recommendation of qualified investors, and they also directly approached the businesses that they were interested in. 131

In brief, inward investment attraction was significantly facilitated by the Ningbo government’s promotion, and was mainly undertaken by the professional team of the NBCSDM. As reported by the NBCSDM on December 18, 2001, 120 firms had signed rental agreements with the NBCSDM since December 2000, at three firms a day on average, and there had been another 800 firms which had shown rental intentions. 132

As discussed earlier, the implications of Tianyi Square go far beyond simply a shopping mall, not only because it is essentially a government project, but also because of its central location and complex functions as a new urban core. Its grand opening in 2002 during the PRC’s National Day holiday, therefore, was also deeply characterized by high-profile government involvement and a high level of local media coverage.

The central square inside Tianyi Square has always been used as the foremost meeting place in downtown Ningbo for both commercial activities and government activities since the completion of Tianyi Square. The grand opening of Tianyi Square was held here. Top leaders in Ningbo’s government, Party, and even military systems, like the mayor, the CPC municipal secretary, and the Ningbo military sub-commander (Ningbo junfenqu silingyuan), attended the opening ceremony. There were three consecutive days of artistic performances on the central square celebrating the opening of Tianyi Square. These performances were part of the six-day 1st Haishu District Festival of Business, Culture and Arts (Haishu qu shangmao wenhua yishu jie) organized by the NBUCI and the NBCSDM and supervised by the Ningbo Haishu District Government. 133 This festival had been organized since 2002 for five consecutive years; since 2007, it has been replaced by the annual “Ningbo Shopping Festival” (Ningbo gouwu jie). 134 Both of them are commercial and cultural campaigns centered in Haishu District, especially the Tianyi Square area.

3.2 Governance Structure

At the initial stage of its operation, Tianyi Square experienced some difficulties in business operation. It was reported in February 2003 that the number of visitors and consumers began to rapidly decrease soon after its opening, and many stores had a very hard time operating, with some of them unable to survive. To some store owners, besides the nation-wide Severe Acute Respiratory Syndrome (SARS) crisis in 2003, the difficulties were due to unsatisfactory business management of Tianyi Square by the NBCSDM, high rent for shop space, and that Ningbo people had not been accustomed to the new consumption pattern in Tianyi Square as an outdoor shopping mall. 135 Some tenants were even unwilling to pay rent to the NBCSDM in time, because poor business performance in Tianyi Square had let them down. 136 In short, Tianyi Square has not always been a success since its opening simply because of its central location.

After 2003, however, Tianyi Square became really prosperous and the most popular one-stop shopping mall among Ningbo people. It consists of ten functional zones: men’s clothes, women’s clothes, children’s products, digital products, restaurants, supermarket, department stores, luxuries, hotels, and entertainment. This high diversity makes Tianyi Square attractive to people of almost all ages and consumption capacity. As business is booming, tenants are no longer reluctant to pay rent to the NBCSDM as they were in the first year of Tianyi Square’s operation. 137

The governance structure of Tianyi Square since its opening has been established through partnerships between the NBUCI, the Haishu District Government, and business tenants. In an article in the Ningbo Daily reporting on the property management of Tianyi Square, the author intentionally used the often negative phrase “no separation of enterprise from government” (zheng qi bu fen) to describe the governance structure of “management by enterprise as the main body, and law enforcement by the government as the guarantor” (qiye guanli wei zhuti, zhengfu zhifa wei baozhang) that incorporates urban management (chengshi guanli) function and property management function. 138

The NBCSDM is in charge of property management. The Tianyi Square Management Committee (tianyi guangchang guanli weiyuanhui) is the governing authority, which consists of representatives of the Haishu District Government, the NBUCI, and business tenants. The Committee sets up a Comprehensive Management Office (zonghe guanli bangongshi) to perform the functions of such governmental departments as Urban Management Bureau (chengguan ju), Administration for Industry and Commerce (gongshang guanli ju), Traffic Police Detachment (jiaojing zhidui), and Fire Brigade (xiaofang zhidui), to specifically deal with administrative examinations and approvals (xingzheng shenpi) for business in Tianyi Square. 139

The unitary property ownership of Tianyi Square held by the NBUCI enables the NBCSDM to formulate long-range business plans and management for Tianyi Square. As explained by the director of the general office of the NBCSDM, there would be no way for the NBCSDM to manage Tianyi Square in a coherent way if the properties were sold out to individual proprietors, because proprietors usually don’t respect a mere property management company. A manager in the Investment Office of the NBCSDM added that if the properties were sold, since shop owners are eager to attract tenants, chaotic industrial composition and lowering quality of property management would be unavoidable. 140

Holding property ownership does not bring quick returns to the NBCSDM, but it makes Tianyi Square economically sustainable in the long run as long as it is properly managed. The NBCSDM not only collects rent from its business tenants, which accounts for about 70 % of its total revenue, but also makes money from parking and advertising fees in Tianyi Square, as well as venue rental income from activity organizers who use Tianyi Square to hold commercial activities. 141 It was estimated in 2008 that there were four public activities held in Tianyi Square every day. 142

Unitary property ownership also enables the NBCSDM to reorganize functional zones and merchandise structure of Tianyi Square regularly to adapt to the changing market environment and demands. Crystal Street (shuijing jie), which used to be full of low-end gift shops, was later on transformed into a specialized street of high-end jewelry. Since mid-2007, there had been a new round of restructuring of overall retail zoning and upgrading of landscape in Tianyi Square over a period of three to five years. 143 The tenants in the catering industry zone signed leases with the NBCSDM in 2002; when I was doing my fieldwork in July 2010, the NBCSDM was renewing leases with tenants in this zone, and sought to introduce some new tenants to replace some old tenants, in order to upgrade the overall service standard in this zone. 144

A more interesting case of merchandise reorganization is the God of Herbal Medicine Hall. Once the lease between the NBCSDM and the DHY Pharm expired, the main hall of the God of Herbal Medicine Hall has been leased to Qingyuan Teahouse (qingyuan chaguan), and its annexes were leased to some arts and craft stores selling jade handicraft (see Fig. 2.1). A manager in the Investment Office of the NBCSDM told me that those tenants were selected by the NBCSDM because their businesses are somehow in harmony with the God of Herbal Medicine Hall’s Chinese traditional architecture. 145
Fig. 2.1

The God of Herbal Medicine Hall housing Qingyuan Teahouse and craft shops (photographed by the author in July 2010)

In addition, the NBCSDM operates its own department stores in Tianyi Square as sustainable cash cows: Gugo Shopping Mall and International Shopping Center. The two stores, alongside other large stores like Intime Department Store, are regarded as “flagship stores” in Tianyi Square. 146

The NBCSDM is also involved in organizing some symposia to review and reflect on its management strategies from time to time, during which, experts from out of town are invited for consultation. For example, in July 2008, as part of the Ningbo Shopping Festival, a symposium on upgrading commercial establishments of Tianyi Square was jointly organized by the Haishu District Bureau of Foreign Trade & Economic Cooperation (Haishu qu duiwai maoyi jingji hezuo ju) and the NBCSDM. Managers of commercial real estate projects and business districts in Beijing and Shanghai were invited and consulted at the symposium regarding the upgrading of Tianyi Square. 147

3.3 Becoming a Permanent Project

Tianyi Square has overcome the difficulties at its initial stage of operation, and has soon gained fame as one of the most popular and accessible commercial centers and public open spaces in Ningbo. In addition to enjoying the scenery and shopping facilities of Tianyi Square, Ningbo citizens and visitors can also be entertained by various commercial promotions and performances held in Tianyi Square from time to time. Tianyi Square has received wide acknowledgement and acclaim from Ningbo and beyond. For example, Tianyi Square was awarded the “China Architectural Arts Award” (Zhongguo jianzhu yishu jiang) and was listed in the “Top 10 Featured Business Street in Zhejiang” (Zhejiang sheng shi da shangye tese jie) in 2004, and the opening of Tianyi Square was awarded “Top 10 Most Influential News in Ningbo in the Past 20 Years” (Ningbo 20 nian zui ju yingxiangli de shi da xinwen). 148

In an interview in March 2004, Zhou Hongming, then general manager of the NBUCI, disclosed that about 85–90 % of the shops in Tianyi Square had been leased, and the overall market value of Tianyi Square had gone up to four billion yuan. Besides, a professional business management team had been trained in the process of business management of Tianyi Square, and they were going to operate the NBUCI’s next project: the Laowaitan. 149 Actually, Tianyi Square’s business operation by the NBUCI started making a profit just one year after its opening in 2002. 150

As Tianyi Square became so successful, the NBCSDM became quite confident in its business management capability. A manager in the Investment Office of the NBCSDM said that there is little need for the NBCSDM to organize promotions for Tianyi Square anymore, because Tianyi Square has already established its reputation, and the Ningbo government is very supportive to the NBCSDM. So the NBCSDM was only promoting their new projects. 151

In the meantime, there has been a series of strategic urban spatial restructuring in Ningbo since the Tianyi Square project, according to which, Ningbo’s overall urban spatial layout, including the location of Ningbo’s CBD, has been significantly changed. In September 2004, the master plan of an “Eastern New Zone” (dongbu xincheng) and the detailed urban design of its core district were released. 152 This scheme was approved by the Ningbo Municipal Government in December 2004. 153 This is a significant strategy for expanding Ningbo’s city proper and creating a multi-core spatial layout in Ningbo under the slogan of “Step Out of the Confluence of Three Rivers, Build a Greater Ningbo” (tiaochu Sanjiangkou, jianshe da Ningbo). 154

Eastern New Zone would be Ningbo’s second city center located in the previously manufacturing outskirts of the East Bank District (Jiangdong qu) and Yinzhou District (Yinzhou qu), just on the axis of the eastward extended Sun Yat-sen Road across the Fenghua River. Eastern New Zone will consist of administrative, business, information and technological functional zones. It will occupy a total area of 15.85 square kilometers, in which an area of 8.45 square kilometers will be reserved for the core zone as Ningbo’s administrative, international trade, shipping service, and financial centers in the near future. Since January 2005, construction works of Eastern New Zone have been steadily undertaken. 155 Since January 2014, the Ningbo Municipal Government, the Ningbo Municipal Committee of the CPC, the Ningbo Municipal People’s Congress, and the Ningbo Municipal People’s Political Consultative Conference, as well as some departments of the government and the party, have been relocating to the Eastern New Zone, making that area Ningbo’s new administrative center.

In 2002, the former subsidiary County of Yin was annexed by Ningbo Municipality and renamed Yinzhou District, which added 1380 square kilometers of land and a population of 730,000 to the Ningbo Municipality. 156 The Yinzhou District Government has been formally building its Yinzhou New Zone (Yinzhou xinchengqu) since 2003 with a total area of 33 square kilometers as the new administrative and business center of the Yinzhou District. In Yinzhou New Zone, a “Southern CBD” (nanbu shangwuqu) was launched in 2005, which will occupy a total area of 530,000 square meters upon its final completion. 157

Since the Ningbo Municipality has significantly expanded its territory by annexation, and has been building large-scale new urban cores, including two new CBDs, beyond its traditional downtown where Tianyi Square is located, the location of Tianyi Square is no longer the only ideal location for Ningbo’s CBD. Besides, Tianyi Square has proven to be a great success as a retail and public space, and has gained fame as Ningbo’s “living room” (keting). 158 Therefore, there is no need for the Ningbo government to consider any further plan to redevelop Tianyi Square significantly toward a CBD anymore as previously planned. In short, Tianyi Square has secured itself as a permanent project.

4 Concluding Remarks

Today, Tianyi Square has been widely acknowledged as a big success. It is still the largest and most influential mega project of urban redevelopment in downtown Ningbo. All those transformations are the outcomes of the local state-led urban redevelopment regime, in which the NBUCI are referred to as a “city manager” or “city operator.” In addition, the Ningbo government never refrained from organizing high-profile promotional campaigns for Tianyi Square.

The post-development governance structure of Tianyi Square has been most remarkably characterized by the partnerships between the NBUCI, the Haishu District Government, and business tenants. While the NBUCI is still a critical player in the management of Tianyi Square as its property owner, the local district-level government departments are in charge of administrative affairs. Influential business tenants are also involved in the management of Tianyi Square through the Tianyi Square Management Committee.

All those urban redevelopment strategies and urban governance mechanisms are largely the adjustments of the local state to market reform and its response to the new demands of governing such new urban spaces as Tianyi Square. The Tianyi Square redevelopment project acted as a prelude to the Laowaitan project, which was the second strategic urban redevelopment project undertaken by the NBUCI. Despite its smaller scale in comparison with Tianyi Square, the Laowaitan project contained more interesting and complicated stories, mainly because it had more heritage buildings; in addition there was NBUCI’s correspondingly higher-level commitment to heritage conservation, its more symbolized re-interpretation of history and heritage, discourse-building and place-making, as well as its essentially different post-development governance mechanism, in which a unitary governing body was at first non-existent, and later on was being established by the local state, albeit with much weaker governance capacity, and had to deal with atomized individual proprietors. These stories will be discussed in the following chapters.

Notes

  1.  1.

    Ren, Jianhua. 2003. Tianyi Guangchang: chongxian Ningbo shangye huihuang [Tianyi Square: The Reappearance of Ningbo’s Glory as a Commercial City]. Zhongguo jingji shibao [China Economic Times], Jan. 28.

     
  2.  2.

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    2000. guanyu Ningbo shi chengshi zhongxin shangye guangchang (CBD dikuai) gongcheng xiangmu jianyishu de pifu [Approval Reply to the Project Proposal for the Ningbo City Center Commercial Square (CBD land parcel)]. edited by the Ningbo Planning Commission, p. 1.

     
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    tashan zhishi, keyi gonyu: woshi pairen dui Ningbo “tianyi guangchang” xiangmu jinxing kaocha [For Our Reference: Delegates of Our City Had an Observation and Study Tour of Ningbo’s Tianyi Square]. Harbin Urban and Rural Planning Bureau, Sep. 29, 2002 [cited Feb. 20 2010]. Available from http://www.hrbghj.gov.cn/view/xxhg/article/301294.html; Zuo, Weimin, Yun Tang, Bin Yang, and Yuli Wang. 2004. chengshi jingying linian zhidao xia de chengshi sheji shijian: Ningbo tianyi guangchang guihua sheji [A Practice in Urban Design Under the Guidance of City Management Concept: The Planning and Construction of Tianyi Square in Ningbo]. guihuashi [Planners] 20 (11), p. 49.

     
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    2009. Ningbo chengtou 10 zhounian [Ten Years of the NBUCI]. Ningbo ribao [Ningbo Daily], Sep. 17.

     
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    Ma, Weiguang, Xiaoyi Bai, and Bei Qu. 2003. yong jingying linian guihua jianshe guanli chegnshi: Ningbo shi chengtou gongsi jingying chengshi diaoyan baogao [Adopting Business Idea to Plan, Construct and Manage the City: Investigation Report on City Management by NBUCI]. Ningbo tongxun [Ningbo Newsreport] (5), p. 21.

     
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    tashan zhishi, keyi gonyu: woshi pairen dui Ningbo “tianyi guangchang” xiangmu jinxing kaocha [For Our Reference: Delegates of Our City Had an Observation and Study Tour of Ningbo’s Tianyi Square]. Harbin Urban and Rural Planning Bureau, Sep. 29, 2002 [cited Feb. 20 2010]. Available from http://www.hrbghj.gov.cn/view/xxhg/article/301294.html; Chen, Rong, and Ling Zhang. 2004. Ningbo jiucheng zhongxinqu gaizao moshi tantao [A Study on the Pattern of Rebuilding for the Central Area of Ningbo Old Town]. guihuashi [Planners] 20 (1):30–31.

     
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    2002. Ningbo shi guoyou tudi shiyongquan churang hetong [State-owned Land-use Right Transfer Contract of Ningbo]. edited by the Ningbo Municipal Land and Resources Bureau. Nignbo.

     
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    Yu, Yongjun, and Qingping Xu. 2001. Nonghang wei CBD jianshe tigong xindai zhichi [Agricultural Bank of China Provided Credit Support to the CBD Project]. Ningbo ribao [Ningbo Daily], March 16.

     
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    tashan zhishi, keyi gonyu: woshi pairen dui Ningbo “tianyi guangchang” xiangmu jinxing kaocha [For Our Reference: Delegates of Our City Had an Observation and Study Tour of Ningbo’s Tianyi Square]. Harbin Urban and Rural Planning Bureau, Sep. 29, 2002 [cited Feb. 20 2010]. Available from http://www.hrbghj.gov.cn/view/xxhg/article/301294.html; Ren, Jianhua. 2003. Tianyi Guangchang: chongxian Ningbo shangye huihuang [Tianyi Square: The Reappearance of Ningbo’s Glory as a Commercial City]. Zhongguo jingji shibao [China Economic Times], Jan. 28.

     
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    Yu, Yongjun. 2001. shi shangye yinhang yu Ningbo chengtou gongsi lianyin [Ningbo Commercial Bank Allied with the NBUCI]. Ningbo ribao [Ningbo Daily], March 20.

     
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    Personal interview with the manager on July 1, 2010.

     
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    Zhou, Riliang. 2001. shuli chengshi jingying xin linian [Establishing New Notions of City Management]. Ningbo ribao [Ningbo Daily], Dec. 12; Zuo, Weimin, Yun Tang, Bin Yang, and Yuli Wang. 2004. chengshi jingying linian zhidao xia de chengshi sheji shijian: Ningbo tianyi guangchang guihua sheji [A Practice in Urban Design Under the Guidance of City Management Concept: The Planning and Construction of Tianyi Square in Ningbo]. guihuashi [Planners] 20 (11), p. 52.

     
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    tashan zhishi, keyi gonyu: woshi pairen dui Ningbo “tianyi guangchang” xiangmu jinxing kaocha [For Our Reference: Delegates of Our City Had an Observation and Study Tour of Ningbo’s Tianyi Square]. Harbin Urban and Rural Planning Bureau, Sep. 29, 2002 [cited Feb. 20 2010]. Available from http://www.hrbghj.gov.cn/view/xxhg/article/301294.html; Ren, Jianhua. 2003. Tianyi Guangchang: chongxian Ningbo shangye huihuang [Tianyi Square: The Reappearance of Ningbo’s Glory as a Commercial City]. Zhongguo jingji shibao [China Economic Times], Jan. 28.

     
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    2003. shizhang yanzhong de chegnshi yunying yu dichan kaifa [City Operation and Real Estate Development in the Eyes of the Mayor]. Zhongguo jianshe bao [China Construction News], March 6; Yan, Tao, Jiangwei Huang, and Yan Zheng. 2005. chengshi yingxiao: ruhe dazao chengshi mingpian [City Marketing: How to Make a Business Card for the City]. Zhongguo jingying ba o [China Economic Time s], Dec. 26.

     
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    Wang, Haiming, ed. 2005. Beijing gongshi [Beijing Consensus]. Beijing: Zhongguo shehui kexue chubanshe [China Social Sciences Press], p. 7. In August 2014, the Budget Law was amended for the first time since its enactment and the new edition of the law allows provincial governments to issue bonds for public investment. Provincial governments may issue bonds for themselves or prefectural and county governments below them. Government borrowing has to be undertaken within the annual national limit as approved by the State Council of China or the National People’s Congress, and has to be included into government budget. This amendment significantly changes the legal environment in which such urban policy instruments as the NBUCI operate, and may have further implications for China’s urban development.

     
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    Tang, Biqin. 2001. CBD, chengshi de yizhang mingpian [CBD, a Business Card of the City]. Ningbo ribao [Ningbo Daily], March 6.

     
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    Bo Xilai served as a member of the CPC’s Central Politburo and secretary of the CPC’s Chongqing Municipal Committee during 2007–2012. But Bo’s political career was permanently ended in 2013 when he was sentenced to life imprisonment due to corruption. This is believed to be closely connected with his undue ambition for the top leadership of the CPC and the scandal of Chongqing’s former police chief Wang Lijun in February 2012.

     
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    Bo, Xilai, and Anli Yang. 2000. ba chengshi dang guoyou zichan jingying [Managing the City as State Asset]. Zhongguo huanjing bao [China Environment News], Nov. 9; Duan, Xinqiang. 2001. ruhe jingying chegnshi zhefen guoyou zichan [How to Manage the City as a State Asset]. renmin ribao [People’s Daily], May 14; Wu, Dianting, and Wei Zhou. 2004. Dalian he Qingdao chengshi jingying moshi de duibi he pingjia [Contract between Dalian and Qingdao’s Urban Management’s Pattern and Evaluation]. Zhongguo renkou ziyuan yu huanjing [China Population Resources and Environment] 14 (1), pp. 84–85.

     
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    Jing, Chang. 1993. yige jiakuai woguo quanfangwei duiwai kaifang de zhanlue wenti: guanyu zai Dalian sheli ziou jingjiqu, chuangzao yige “beifang Xianggang” de gouxiang [A Strategic Issue regarding the Acceleration of Our Country’s Comprehensive Opening-up: The Idea about Setting up a Free Trade Zone in Dalian and Creating a “Hong Kong in the North”]. Zhongguo xingzheng guanli [Chinese Public Administration] (1):11–12.

     
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    Ying, Jie. 2000. jingying chengshi [Managing the City]. Ningbo ribao [Ningbo Daily], Aug. 15; Tang, Hongbin. 2001. yingzao xin de chegnshi jingying linian: Dalian chegnshi jianshe qishi [Creating New Notions of City Management: The Enlightenments about Urban Construction from Dalian]. Ningbo ribao [Ningbo Daily], Oct. 17; Fan, Fang. 2001. jingying chengshi [Managing the City]. Ningbo ribao [Ningbo Daily], Dec. 26; Tai, Shan. 2002. ruhe jingying chengshi [How to Manage the City]. Ningbo ribao [Ningbo Daily], May 22.

     
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    Zhou, Riliang. 2001. shuli chengshi jingying xin linian [Establishing New Notions of City Management]. Ningbo ribao [Ningbo Daily], Dec. 12; Wang, Yicheng. 2001. chengshi jingying de celue he shouduan [Strategies and Methods of City Management]. Ningbo ribao [Ningbo Daily], Dec. 12; Mei, Xiaojun. 2001. chengshi jingying de zhuyao neirong [Main Contents of City Management]. Ningbo ribao [Ningbo Daily], Dec. 12; Chen, Xingfeng. 2001. Ningbo chengshi jingying jubei de xianshi jichu [Actual Basis of City Management in Ningbo]. Ningbo ribao [Ningbo Daily], Dec. 12.

     
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    Ma, Weiguang, Xiaoyi Bai, and Bei Qu. 2003. yong jingying linian guihua jianshe guanli chegnshi: Ningbo shi chengtou gongsi jingying chengshi diaoyan baogao [Adopting Business Idea to Plan, Construct and Manage the City: Investigation Report on City Management by NBUCI]. Ningbo tongxun [Ningbo Newsreport] (5):20–22.

     
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    Feng, Yunting. 2001. jingying chengshi: Dalian de jingyan yu qishi [Managing the City: the Experiences and Inspirations from Dalian]. juece zixun [Decision-Making & Consultancy Newsletter] (11):5–7; Chen, Rong, and Ling Zhang. 2004. “Ningbo jiucheng zhongxinqu gaizao moshi tantao [A Study on the Pattern of Rebuilding for the Central Area of Ningbo Old Town].” guihuashi [Planners] 20 (1):30–1.

     
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    Ren, Jianhua. 2003. Tianyi Guangchang: chongxian Ningbo shangye huihuang [Tianyi Square: The Reappearance of Ningbo’s Glory as a Commercial City]. Zhongguo jingji shibao [China Economic Times], Jan. 28.

     
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    Feng, Chunming, Yufen Xu, and Qingwei Xu. 2008. Ningbo ren youle chengshi keting [Ningbo People Have Had the Living Room of the City]. Ningbo ribao [Ningbo Daily], Oct. 30.

     
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    Cao, Aifang. 2000. chengshi zhongxin shangye guangchang jinqi dongqian [Households Relocation Started Today for City Center Commercial Square Project]. Ningbo ribao [Ningbo Daily], Dec. 1; Tang, Biqin. 2001. CBD, chengshi de yizhang mingpian [CBD, a Business Card of the City]. Ningbo ribao [Ningbo Daily], March 6.

     
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    Tang, Biqin. 2002. shangye hangmu yangfan qihang [The “Aircraft Carrier of Commerce” Is Setting Sail]. Ningbo ribao [Ningbo Daily], Sep. 10.

     
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    2000. fangwu chaiqian weituo hetong [Authorization Contract of House Demolition and Relocation]. edited by the Office for Key Urban Construction Projects of Ningbo and the Ningbo Municipal Office of Demolition, Relocation and Rehousing. Ningbo.

     
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Copyright information

© The Author(s) 2016

Authors and Affiliations

  • Han Zhang
    • 1
  1. 1.University of International Business & EconomicsBeijingChina

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