The National Capital Region Development Plan - Subjects of Comprehensive Discussion -

1. The National Capital RegionDevelopment Plan - Subjects of Comprehensive Discussion - Arthur D. Little Korea9th Floor, Leema Building146-1 Susong-dong, Chongro-KuSeoul, Korea 110-755 Tel. 720.2040Fax. 720.2100

2. Agenda 1 Directions of Development 2 Subjects of Discussion

3. Directions of Development Benchmarking of Overseas City-Regions • To grasp the present status of the National Capital Region and draw directions of development, 6 City-Regions are selected for benchmarking. Overseas City-Regions for Benchmarking Comparisons of Main Indexes1) Size of Land Europe and America (unit: km2) • Greater London • South EastRegion London • New York City • Part of New Jersey • Part of Connecticut • Il-de-France New York Paris 16,360(Average) The Capital Region The National Capital Region London Paris New York Tokyo Beijing Shanghai • Tokyo city • Saitama,Chiba, Kanagawa • BeijingMunicipal City Tokyo Beijing Population • Shanghai • Municipal city (unit: 10000 persons) Shanghai 1,949(Average) Asia Metropolitan Areas including main cities and their neighborhood areas are selected for benchmarking The National Capital Region London Paris New York Tokyo Beijing Shanghai 1) Source: the analysis of Benchmarking,ADL

4. Directions of DevelopmentStrategic Model Matrix • The development strategies of selected City-Regions are all treating economic, environmental and social matters. The features, however, are shown as different by the degree of economic development and social variety. Strategic Model Matrix Features of Strategies According to Models Sustainable Growth A A New York MA High London MA • Pursuing harmonious development of economic growth, environmental factors like living quality, and unity of society • Priority order: economy = environment = society Sustainable Growth Paris MA C B Social Variety Tokyo MA Growth by Renovation B Shanghai Economy Driven Growth Growth by Renovation • Pursuing both the economic growth and the improvement of living quality • Priority order: economy = environment > society Beijing Low Developing Advanced Economic Development Economy Driven Growth C • Degree of Economic Development • Advanced: GRDP more than USD 400billion • Developing: GRDP less than USD 400billion • Degree of Social Variety • High: various races and high international quality • Low: racially homogeneous and in progress of globalization • Economic growth has priority over improvement of living quality, and unity of society is not important • Priority order: economy > environment > society 1) MA: Metropolitan Area

5. Directions of Development Competition Factors • Competition factors to draw specific directions of development are defined by economic growth, attractiveness of social and physical environments, and efficient system of governance. Competition Factors of Global City-Region Economic Growth vs.Environmental Attractiveness Increased local development business Highly CompetitiveCity-Region Increased labor productivity Increasedreinvestment to come by talented HR Improvement of infrastructure 1 2 Improvement of residential and cultural environment Economic Growth Environmental Attractiveness Environmental Attractiveness High value-added oriented reorganization of industry structure Economic Growth Increase of foreign investment Supply of high quality labor force Efficient System of Governance 3 Increased inflow of high quality and foreign labor force Increased innovative activities of business Economic Growth Establishment of industrial base for best output by high productivity 1 Formulation and development of Cluster Environmental Attractiveness Physical comfort and social stableness to attract high quality labor forces and investment 2 Active relationship among industry, education and R&D Efficient Governance Close cooperation among central government, local government and private organization for decentralization 3 Mutually Sustaining Relationship

6. Details Contents Directions of Development Evaluation of Competitiveness Economic Growth • Economic growth can be divided into two sections; the competitiveness of private enterprises of the region, and the efficiency of industry structure supporting the enterprises. Details of EconomicGrowth productivity • How high degree of output per labor input do the enterprises in the region have? Competitiveness of separate enterprises Efficiency of innovation • Is there active innovation to make higher value-added? Economic Growth Globalization of economy • Did it achieve the globalization of economic activities which are essential for competition in the globalized world? Development of specialized industry • Does it have any specialized industry or cluster that can represent the region? Infrastructures Advance degree industry structure • How much portion does the high value added industry have in total industry structure of the region? Efficiency of infrastructure • Does it have international or regional transportation and communication infrastructuressupporting better business?

7. Details Contents Directions of Development Evaluation of Competitiveness Environmental Attractiveness • Environmental attractiveness can be divided into two parts; comfort of physical environment, and social unity. (stableness) Details of Environmental Attractiveness Comfort of living environment • How are the conditions for convenient life like residence-employment relations or optimum house supply and price? Culture resources And tourist attraction • How is the status of possession and maintenance of cultural resources and tourist attractions for leisure activities? Comfort of physical environment Quality of educational environment • Are there enough facilities for education, and high education to supply high quality labor force? Environmental Attractiveness Convenient facilities • Does it have good public service facilities like transportation, communication, utilities? Gaps between regions • How much gap among regions does it have due to income and living environment conditions? Social unity (stableness) Social stableness • How is the crime rate and employment rate? • Is there enough support for social cohesion?

8. Directions of Development Evaluation of Competitiveness Governance • To reinforce the competitiveness of City-Region, efficient Governance system is essential, and getting more importance due to recent decentralization. Role of Governance to reinforce City-Region Recent Governance Trend Increased needs for transparency in decision making Reinforce Competitiveness of City-Region 1 Globalization & Decentralization 2 increase of autonomy of local government(financial autonomy) 3 Deepened discordance between administrative and functional districts in City-Region Economic growth Environmental attractiveness Competitiveness of enterprises Infrastructures Comfort ofEnvironment Social unity Roles • Support for fostering high quality labor force • Support for innovation activities of business • Establish base of collaboration among industry, education and R&D • Support for cluster formulation • Construct Transportation infrastructure • Roads, port, harbor, train • Establish Communication infrastructure • Encourage specialized industries • Old-town redevelopment project • Establish efficient public transportation system • Effort for Less pollution • Develop Cultural resources • Create employment opportunities • Promote poverty conquest program • Reduce the gaps between regions • Reform the national administrative system to reinforce the control structure of broad area • Construct public finance for new administrative system • Estimate the effect of policies by evaluating modernization and achievements of local government • Instead of the old stratified system, build a horizontal and vertical cooperation system • Transparency and autonomy in decision making process • Develop a framework for long term strategy

9. Directions of Development Evaluation of Competitiveness Result of Evaluation • The National Capital Region is concluded to be in an emergency, having a still wide gap with advanced City-Regions, no absolute comparative advantages over near City-Regions in competition. Result of Comparison Key Findings • The National Capital Region is showing a wide gap of competitiveness, compared with global major City-Region like New York, Paris, and London Area • The gap is shown in both economy and environment • Inferiority to Tokyo area, which is in the same economic bloc, should be caught up immediately • The gap with Beijing and Shanghai area, which are rapidly developing, is not that wide. Thus, it may be a threat to the status of the National Capital Region High Global major city-region New York MA London MA Paris MA Tokyo MA The National Capital Region Economic Growth Shanghai Beijing Regional major city-region Low Low High Environmental Attractiveness

10. Directions of Development Gap between National Capital Region & Advanced City-Regions • To reach the To-be Status, it is important to confirm the gaps of each factor and the reasons. Gap between As-Is and To-Be Economic Growth – Competitiveness of Enterprises Economic Growth – Infrastructures Insufficient globalization of economic activities Poor development of specialized industry representing the National Capital Region Relatively low portion of high value added industry Need for improvement and maintenance of infrastructure 4 1 Poor productivity represented by GDP Per Capita Insufficient innovation activities for value added of enterprises in knowledge based society 3 1 2 2 1 2 1 2 Gap Gap 3 4 As-Is To-Be As-Is To-Be Environmental Attractiveness – Healthy Environment Environmental Attractiveness – Social unity Need for stabilization of population and drastic improvement of living environment Lacking development of cultural/tourism resources and connection with industry Insufficient educational conditions Low rate of public transportation use, and lack of broad transportation system 1 4 1 Gap between regions Social security network for social unity 3 2 2 1 1 2 2 Gap 3 Gap 4 As-Is To-Be As-Is To-Be

11. Directions of Development Directions • The National Capital region has to establish strategic objectives to overcome the gap between itself and the advanced City-Regions abroad. Reinforce the competitiveness of City-Region Economic Growth Attractiveness of Environment Maximize the economic output of regional separate enterprises Construct the idealinfrastructure forsupporting businessactivities Build a healthy living environment Pursue the social unity by guaranteeing equal opportunity for all Strategic Objectives Descriptions • Build a system to support innovation activities of enterprises • Raise high quality labor force and set up the device for its good supply • Project active interchanges among enterprises, educations and institutions • Reform the industry structure as high value added oriented • Development of specialized industry representing the National Capital Region • Build a base for attracting foreign investment • Improve the functions of infrastructures including airport and harbor. And revitalize the Surrounding areas • Prevent thoughtless development by the principle of plans first, development later • Expand cultural facilities and improve the pollution problems • Revise Broad transportation system and rate of public transportation use • Overcome the gap between regions by redeveloping old-town • Develop border line areas • Build a social security network for the poor

12. Directions of Development Detailed Subjects and Subjects for Discussion • To achieve the strategic objectives, Detailed Tasks are drawn. Directions of Strategy Detailed Subjects Subjects for Discussion Maximize the economic output of regionalseparate enterprises Globalization of the National Capital Region 1 Reinforce the competitiveness of industry and construct infrastructure for innovation Knowledge-based Industrialization 2 Construction of Healthy Living Environment 3 Improve living environments Construct the ideal infrastructure for supportingbusiness activities Construction of the Convenient Transportation Infrastructures 4 Expansion of Historical and Cultural Space Efficient infrastructures 5 Build a healthy living environment Restoration of Cities and Balanced Development Encourage Culture & Tourism 6 Pursue the social unity by guaranteeing equal opportunity for all Promote balanced Development in region and restoration of city Establishment of Communities in which Residents Participate 7

13. Agenda 1 Directions of Development 2 Subjects of Discussion

14. Subjects Overview • Overview of Subjects. Subjects Key Questions Globalization of the National Capital region • How is the present condition of the international transportation network, like international airport, harbor and etc.,in the National Capital region? And in what way should it be improved? • To attract foreign enterprises and investments, how can it revitalize the free economic zone? • How can it foster strategic industries functioning as a center of regional economy? • What is necessary to improve the living environment of foreigners? Knowledge-based Industrialization of the National Capital Region • To foster industrial clusters, how can we revitalize the collaboration of industry, education and research institute? • What is necessary to lead high value added of traditional industries? • How can we foster the knowledge-based high tech industry appropriate for local characteristics? • How can we foster services and venture industries? Construction of Healthy Living Environment • What is required to improve the quality of air and water condition at the level of OECD countries? • What is necessary to build ecological greenbelt axis, to construct parks, and to restore the nature ecosystem?

15. Subjects Overview • Overview of Subjects. Subjects Key Questions • What are the alternative plans to construct convenient transportation infrastructures except the existing ones? • For convenient transportation infrastructure, what should we improve among the factors of existing infrastructures? • How can we shorten the transportation time to enter urban areas? • What are the plans to reduce the needs for transportation? Construction of Convenient Transportation Infrastructures Expansion of Historical and Cultural Space • What is required to restore the historical and cultural space in urban areas? • What are the plans for the expansion of cultural facilities like museum, library, and etc.? • How can we ensure the nature-friendly facilities of culture and tourism? Restoration of Cities and Balanced Development • How can we coordinate the interested parties when promoting projects for restoration of cities and balanced development? • How can we revitalize the private capital investments in business? Establishment of Communities in which Residents Participate • What are the methods to activate the distribution of roles and the collaboration of the central government, broadband municipalities, and local municipalities? • How can we activate the communities in which residents participate?

16. Subjects Globalization of National Capital region 1 • Subject 1. Globalization of National Capital region. Backgrounds • To achieve economic growth in the age of globalization, it is essential to globalize the National Capital region by attracting foreign investments and enterprises, functioning as a center of regional economy, and etc. • The advanced City-Regions abroad have functions of international center, and promote various supporting policies to attract foreign investments and enterprises Key Questions • How is the present condition of the international transportation network, like international airport, harbor and etc.,in the National Capital region? And in what way should it be improved? • To attract foreign enterprises and investments, how can it revitalize the free economic zone? • How can it foster strategic industries functioning as a center of regional economy? • What is necessary to improve the living environment of foreigners?

17. Subjects Globalization of National Capital region 1 • Subject 1. Globalization of National Capital region – Overseas Case. Rear Complex Revitalizationin Shanghai Pudong Airport Reinforcement and maintenance of traditionalrepresentative industry (case of London) ‘Rear complex Network’ • Maintenance and reinforcement of Financial industry • Clear recognition of it as foundation of growth of London area also in the future • Eliminated all the regulations that disturb international money trades • Divide two parts of world stock market with New York by occupation of 30% of stock trade of whole world • Ryujatui • Finance and Trade Area • Jangchang • Science and TechnologyArea Pudong Airport • Waigaochao • Bonded Area • Jinchao • Processing andExport Area Background of Financial Industry Development in U.K • Self-generated by historical background • Early inflow of world’s liquid money by industrialization and colonization • Success in early rear complex revitalization • 972 Bonded Area Distribution companies (As of end of `03) • Host of UPS Asia Hub (2007) • Offering incentive to move-in company • Offering One-stop service to Foreign Company investment • Benefit of low rent and corporate tax • Fully opened the market and eliminated regulations • Competition to attract investment at local level by perfect settlement of local autonomy

18. Subjects Knowledge Based Industrialization of the National Capital Region 2 • Subject 2. Knowledge-based Industrialization of the National Capital Region. Backgrounds • The advanced City-Regions abroad regard the knowledge-based industries with high value added as an engine of future economic growth, because they see the limited growth of traditional industries. To foster the knowledge-based industries, central governments are reinforcing political and administrative supports • To ensure the competitiveness, it is essential to select and foster the knowledge-based industry appropriate for the environment and the ability of the National Capital region Key Questions • To foster industrial clusters, how can we revitalize the collaboration of industry, education and research institute? • What is necessary to lead high value added of traditional industries? • How can we foster the knowledge based high tech industry appropriate for local characteristics? • How can we foster services and venture industries?

19. World dimension pole World vocation or national pole Subjects Knowledge Based Industrialization of the National Capital Region 2 • Subject 2. Knowledge Based Industrialization of the National Capital Region – Overseas case. Practical Operation of CooperationRevitalizing Program (case of IDF) Establishment of Cluster Policy (case of IDF) • Academic-Industrial Cooperation program • Recruitment Partnerships: forum event for universities and enterprises • Apprenticeship tax : impose apprenticeship tax on the enterprises which had participated in technical and special training • The central government established polices to foster clusters (in 2002) • Selected ‘Pole of competitiveness’ • Complex of enterprise, R&D center and education center. To develop innovation project, integrated in specific area • Evaluation and management by 3 kinds: ①World dimension pole ②World vocation pole ③National/local pole • Development strategies of each cluster is connected with the strategies of each region • Set up supporting policies for selected R&D project • Government subsidy : 400 million euros for 3 years • Reduction & exemption of tax : 300 million euros for 3 years • Payment of Public incentive Role of Each Subject Central Government • Build networks of public education • National Education Department leads the consulting of program and information with expert consulting firms • Overall evaluation of Competitiveness pole, considering industry, education, R&D center and etc. Competitiveness Poles Map 6 2 1 3 2 7 2 3 5 6 4 3 2 2 4 6 2 16 Consular Chamber • Collection and distribution of Apprenticeship tax 4 1 1 8 6 7 Source : ADL Benchmarking research

20. Subjects Knowledge Based Industrialization of the National Capital Region 2 • Subject 2. Knowledge Based Industrialization of the National Capital Region – Overseas case. Organizing a Task Force to Support Knowledge Based Industry (London MA) • By establishing Creative London and Bio London under LDA2) , administrative and financial supports through the whole industry of Creative Industry and Bio-technology are unified • Background and achievement of Raising Creative Industry • Background • Faced a limit of growth just with traditional specialized industry like financial and service industry • In 2003, through the research for 6 months, direction for raising ‘Creative Industry’ was set up • achievement • In 2004, created a market of £21bn and about 500,000 job opportunities Organizing a Task Force Under LDA London Development Agency (LDA) Main Policies Bio London1) Creative London Business Link for London • Establish Creative Hub • 10 centers serving working environment, education, display facility and etc. • Task of raising Creative Industry in London • Administrative, financial and political support • Public relations for domestic and foreign investment to Creative Industry • Reflect the interests of Creative Industry when national main plans are set up • Set up Seed fund • £50millionfund for support in the first stage • Devise Sponsorship system • General support for more than 40 special projects • Task of encouraging Bio industry in London area • Set up a supporting function of LDA to encourage Bio industry • By establishing London Biosciences Innovation Centre(LBIC) in 2001, Bio industry is encouraged in London area

21. Subjects Construction of Healthy Living Environment 3 • Subject 3. Construction of Healthy Living Environment. Backgrounds • Quality of Life has become one of main criteria to estimate the competitiveness of regions. All the City-Regions abroad, thus promote the improvement of living environment as a strategic objective. • Compared with other City-Regions, the National Capital region has lower quality of air and much lower access to park, green lands, and leisure facilities. Key Questions • What is required to improve the quality of air and water condition at the level of OECD countries? • What is necessary to build ecological greenbelt axis, to construct parks, and to restore the nature ecosystem?

22. Subjects Construction of Healthy Living Environment 3 • Subject 3. Construction of Healthy Living Environment–Overseas Case. Environment Improvement Directionof London area Environment Improvement Directionof Shanghai area • Acknowledging the centralization, the main focus is put on the environment improvement in region1) , and the balanced development (case of London) • Set up a strategy for the expected increase of population (from 7300 thousands in 2001 to 810 thousands in 2016) • The plan of balanced development is specified in ‘The London Plan(2002)’ • Set up 5 separate strategies for environment improvement • Air quality strategy, noise pollution strategy, biological diversity strategy, energy strategy, and waste strategy • Concentrate on solving pollution problems rather than regulating centralization • Stated to reform industrial structure to solve pollution problems • In case of industries with excessive energy consumption and low price automobile manufacturing industry, it is planned to liquidate them to outside Shanghai before 2010 World Expo. • Policy reinforcing air standard • Set up “No Coal” area (in 2003, 114 sq. m,) • Reinforce the standard of auto exhaust from Europe II to III • Plan to invest more than 3% of GRDP to protect environment Main Policies Increase the supply of new housings • In East London and Thames Gateway region development • Planning to make higher population density per size of land • The efforts to improve the air pollution had a little achievement. But, continued centralization leads to remaining problems and side-effects • Temporary improvement of congestion was achieved by reinforcing standards, but the it returned to the first place , due to drastic increase of automobiles • Reinforcing the air standards temporarily damaged on automobile industry in the region Environment improvement • Unified 16 organizations dealing waste matter to London Single Waste Authority • Specified environment improving plan by establishing Recycle London in 2003 1) The most serious air pollution in U.K leads to the death of 1,600 premature infants in this area annually.

23. Subjects Construction of Healthy Living Environment 3 • Subject 3. Construction of Healthy Living Environment–Overseas Case. Connecting Leisure Facilities with Tourism Area (case of Paris) Green area Policy(case of Shanghai) • Taking the advantage of the largest tourism region in Europe, it has constructed leisure facilities around tourism area • Simultaneous consideration for the convenience of residents and tourists • Required to build green area, more than specific standard • The size of population in central part of Shanghai is limited to 8 millions • Quantitative object of building green area in Shanghai area by 2020 • Green area size per person : 10m2 • Portion of green area in city : more than 35% • Build environment protection areas near main reads and riverside • Severe application of environment protection standard, when constructing New Town2) Main Area of Tourism and Leisure in Paris Amusement parks Standard of Building Green Area Regional leisure bases Zoo Tourism poles Central area of city • Duty of at least 4ha per district • Duty of at least 1ha per Sub-district New Town • Duty of at least 3ha per new town • Total 44 million tourists visited Paris in 2002, and it contributes to 10% of GRDP and the creation of 250 thousand employment. • To resolve the overpopulation of central part of Shanghai, total 11 New Towns are planned to locate around the central part with 200~300 thousand populations for each. Other surrounding areas at a long distance, 22 Key Towns are planned to locate with 50~100 thousand population for each

24. SubjectsConstruction of Convenient Transportation Infrastructures 4 • Subject 4. Construction of Convenient Transportation Infrastructures. Backgrounds • The convenience of transportation infrastructures is one of important factors consisting the Quality of Life. The City-Regions abroad, therefore, are trying to raise the usage rate of transportation in urban areas, and are pursuing the efficient operation of broadband transportation networks covering metropolitan areas and their surroundings (e.g. construction of broadband transportation network based on railways) • Despite the expansion of subway, the percentage of transportation is not increasing and the congestions like traffic jam leads the great economic loss. There is a particularly heavy traffic jam on the roads connecting the outer areas, and it shows the need to improve the broadband transportation network of the National Capital region Key Questions • What are the alternative plans to construct convenient transportation infrastructures except the existing ones? • For convenient transportation infrastructure, what should we improve among the factors of existing infrastructures? • How can we shorten the transportation time to enter urban areas? • What are the plans to reduce the needs for transportation?

25. Subjects Construction of Convenient Transportation Infrastructures 4 • Subject 4. Construction of Convenient Transportation Infrastructures–Overseas Case. Tokyo Area Beijing Has Set Ambitious Plan to Adopt BRT WideArea Railway Facilities • JR, Tokyo Metro • JR : 876.4km • Tokyo Metro : 996.2km • Generally formed as a Radial shape centered on Tokyo downtown, 3 Lines are Ring Shape Vision • Develop a BRR network with total length 200 km and complete 60 km BRT network by 2008 • Increase the share of public transport from 26% to 40% by 2010 Current status • First Phase 5 km was open on Dec.25, 2004, second phase is scheduled to open by the end of 2005 • Forecasted 100,000 daily ridership Operation Method • Pursuit of operational efficiency by attracting private entrepreneur • JR : Privatization of past National Rail • Tokyo Metro : Composed of over 20 Private entrepreneur • Various Operations to provide commuters with convenience by increasing direct running distance • Normal : Stop at all station • Express : Skip some station • Super express : Stop at main city Key ingrédient for the initial success • Beijing transportation commission has spearheaded the BRT development • Strong supports from the mayor and other top decision makers

26. Started to impose Congestioncharge (Number of car) Subjects Construction of Convenient Transportation Infrastructures 4 Subject 4. Construction of Convenient Transportation Infrastructures–Overseas Case. • Reduce number of cars entering inner parts of the city and • Raise extra £130m each year to enhance public transport • Makes use of a computerised network of CCTV cameras linked to a central database • Heavy criticism by lobbying groups, most notably by retailers continues to date Congestion Charge of London Back ground • Traffic congestion increase due to increasing commute of suburban residents • Limitation of increasing Public Transportation use by investing additional facilities Solution • Decision to impose 8 pounds’ congestion charge on vehicles entering London (2003.1) Results Private cars entering charging zone(7:30~18:30) • Huge decrease of cars entering Metropolitan Area (5thousands) • Reinvestment funds founded by congestion charge in Underground and Bus system improvement • Recent increase of congestion charge(12.5 pounds)

27. Subjects Expansion of Historical and Cultural Space 5 • Subject 5. Expansion of Historical and Cultural Space. Backgrounds • Due to the quantitative growth by rapid economic growth, the expansion of historical and cultural space showing the tradition of the National Capital region is relatively insufficient. • The City-Regions abroad are well revitalizing the tourism industry, by developing local cultural and tourism resources. And they optimizes the economic ripple effect of convention industry by connecting with regional tourism industry. Key Questions • What is required to restore the historical and cultural space in urban areas? • What are the plans for the expansion of cultural facilities like museum, library, and etc.? • How can we ensure the nature-friendly facilities of culture and tourism?

28. Subjects Expansion of Historical and Cultural Space 5 • Subject 5. Expansion of Historical and Cultural Space–Overseas Case. Convention Industry in Paris Protection of Cultural andTourism Facilities in Beijing • Increased availability of tourism facilities • Increase museum visits by reducing entrance fee for youth (some are free of charge) and establishing the education & activity bases in some museums • Annual visits to Palace Museum amounted to 7 million person-times • Preservation of cultural facilities • Protect 6 heritages identified by UNESCO following the international standard • Set up national level cultural protection area • i.e. Forbidden city historical and cultural area • Restore and protect the architecture with symbol of traditional Chinese culture • Support and protect old and famous shops • Quan Ju De, Tong Ren Tang, Wang Zhi He, etc. Auvers sur Oise Congress & exhibition centers Seine St Denis Tourism poles Boucle de la Seine Bords de Marne Paris Sud est IDF (Fontainebleau) Vallée de la Chevreuse • Convention Centers are linked with Tourism Complex, and spread all over the city Paris is 1st ranked region which take 3% share of world convention industry, and this contributes largely to Tourism industry revitalization with 10 mil annual visitors

29. Subjects Restoration of Cities and Balanced Development 6 • Subject 6. Restoration of Cities and Balanced Development. Backgrounds • Compared with the urban areas and their surroundings, there exist relatively undeveloped areas in the National Capital region. It has become one of major issues to transfer facilities inappropriate for urban areas • The City-Regions abroad try to revitalize their funds by coordinating interested parties and attracting private investment. And those projects are accompanied with ensured transparent process in restoration of city and transfer of facilities inappropriate for city. Key Questions • How can we coordinate the interested parties when promoting projects for restoration of cities and balanced development? • How can we revitalize the private capital investments in business?

30. Subjects Restoration of Cities and Balanced Development 6 • Subject 6. Restoration of Cities and Balanced Development–Overseas Case. Public-Private Partnership for London Underground Case of Persuading Interested Party (Beijing Area) • Since 2003, the London underground has been operated as a Public Private Partnership (PPP) • Companies are granted long-term, not permanent, concessions to operate and modernise the tube infrastructure • Benefits sought by the Government • The discipline and expertise of the private sector in managing large infrastructure projects • More effective use of resources and faster implementation of the modernisation investment programme • Results so far • Pushed ahead by the UK Government despite strong resentment from the Mayor of London • Some safety issues • Difficulties in meeting performance targets • Transfer inappropriate facilities and complex to outside of Beijing for pursuing Green city construction as well as for preparing Olympic in 2008 Agreement with Stakeholders City of Beijing Agreement • Agreement on the principle of distribution of tax income • Phrased conversion of tax income to the city of Hebei to prevent rapid decrease of tax income in the city of Beijing Metropolitan Steel Group City of Hebei Agreement • Concentration of steel producing area • Concentrate 50% of steel production in China to 10 big firms by 2010 Central Government 1) Steel company founded in 1919 which ranks 4th in China producing 10 million tons of steel product as of 2004

31. Subjects Establishment of Communities in Which Residents Participate 7 • Subject 7. Establishment of Communities in which Residents Participate. Backgrounds • Compared with the National Capital region, the City-Regions abroad has relatively long history of decentralization. Thus, the central and local governments have an obvious distribution of power and roles. Also, the residents participate actively in establishing development plans of new towns or industrial clusters. • As the decentralization of the National Capital region is in progress, it is required to obviously set up the roles of each subject. Key Questions • What are the methods to activate the distribution of roles and the collaboration of the central government, broadband municipalities, and local municipalities? • How can we activate the communities in which residents participate?

32. Subjects Establishment of Communities in Which Residents Participate 7 • Subject 7. Establishment of Communities in which Residents Participate • -Overseas Case. A historical Move to Increase Local Competencies (case of France) March 2nd 1982 law 1983 laws 1992 law Constitution act (2003) Decentralization law (2004) • Suppression of the wards control, control of the legality of the acts taken by local governments, the region becomes a local government • Important transfers of competencies. Communes are responsible for urbanism, departments for social action, school transport, maintenance, high school building ; regions are responsible for high school building and maintenance, as well as professional training • Promotes the gathering of communes into communities • Integrates the region into the constitution just like other local governments for which it grants the financial independence from now on • Asserts the decentralization and subsidiarity principles1, institutes the local referendum, experimentation and equalization • Distribution of the competencies : consolidates certain competencies within the departments and regions, especially the economic development and professional training managed by regions and social action managed by departments ; it also transfers many harbors and airports in priority to regions or even the household waste disposal plans to departments ; downgrading of the national road network to the profit of the departments, likely to regard approximately 18 000 km out of the 28 000 km which remain a State belonging • Promote the progress of intercity : possibility of amalgamation for communes gatherings, easing measures regarding the relationships between gatherings and communes The financial status encompasses the principle of free administration and financial independence of local governments1 1)The subsidiarity principle is a key decentralization guideline meaning : “to transfer to the superior decision level solely the decisions that the inferior level could not achieve in a more efficient manner” Note : detailed financial status in appendix