In the wake of aggressive integration moves in both the Yangtze River Delta and the Pearl River Delta regions, there is a pressing need for Beijing, Tianjin and Hebei to initiate an economic-integration plan, experts say.

The Beijing-Tianjin-Hebei economic belt has long been regarded as a major economic engine in northern China to rival the two dynamic delta areas; but that assumption has been called into question in recent years with the area reporting relatively-slower growth compared with the two robust delta regions, according to Ju Wenzhong, director of the regional development office of the China Technology Promotion Development Research Center.

Such a gap is reflected in a slower increase in the proportions of the area's GDP and industrial added-value in the national total; and reduced investment in science and technology.

What's more, while both the delta areas are busy forging regional co-operation mechanisms, the cities and provinces in northern China are still seeking their own development modes rather than seeking synergy.

Integration is buzzword these days in both the Yangtze River Delta and the Pearl River Delta, with both having established economic co-ordination mechanisms.

Earlier this month, mayors of 16 cities in the Yangtze River Delta region gathered in Nanjing and agreed to strengthen communication and co-ordination and build a modern, comprehensive transport network.

In Southern China, Guangdong Province - apart from joining hands with Hong Kong and Macao to build the Greater Pearl River Delta - is discussing with several neighboring provinces a Pan-Pearl River Delta economic development zone.

In sharp contrast, regional barriers are hindering further integration of the Beijing-Tianjin-Hebei region, Ju said in an article published in Beijing-based Outlook Weekly.

A key problem is that the region lacks a real core since both Beijing and Tianjin are municipalities apart only 137 kilometres. The two cities have very similar economic structures, which make them more competitors than partners.

"Provinces and municipalities in northern China, especially Beijing and Tianjin, are actually seeking their own development," said Yuan Gangming, economist with the Chinese Academy of Social Sciences. "They show little interest in co-operation."

As a result, the area lacks a real dragonhead to drive co-operation.

Ju said that a basic principle of developing an economic zone is that it must have a big city as its core. The Yangtze River Delta is an ideal model, with Shanghai, linked to dozens of smaller cities by expressways and railways, as the core of the region.

"Such a structure helps optimize resources within the region," Ju said.

Meanwhile, compared with the two delta areas which have well-developed export-oriented economies and attract lots of foreign direct investment, Beijing, Tianjin and Hebei lag far behind Shanghai, Jiangsu, Zhejiang and Guangdong in utilization of foreign funds and export-oriented industries.

What's more, said Wang Zhile, an expert with the international economy and trade research centre under the Ministry of Commerce, the Beijing-Tianjin-Hebei area has also failed to provide good support services for enterprise development.

"For enterprises, the development environment in the Beijing-Tianjin-Hebei area is not as good as that in Yangtze River Delta or Pearl River Delta areas," Wang said.

The industrial chain in the Beijing-Tianjin-Hebei area is not close enough, which makes enterprises hard to find supporting partners.

"Local governments in the region should kick off integration as soon as possible," Ju said. "They must break the barriers, take advantage of their own strengths and restructure economic resources in the region."

Experts agree that the key for the integration is that Beijing and Tianjin must re-position themselves and seek common benefits from co-operation.

For example, Beijing is determined to develop the automobile industry; so Tianjin can develop the auto parts industry.

(China Daily HK Edition August 23, 2003)