BEIJING: Yan Jiehe, the founder of China Pacific Construction Group Co Ltd, has unveiled plans to build a 250 billion yuan ($39 billion) “smart city” of 250,000 residents, in Shanwei, Guangdong province.
The 100-square-kilometer site is expected to be completed within a decade and will focus on the education, vocational training and medical care sectors.
The billionaire developer has promised the city－to be located within the Shenzhen-Shanwei Special Cooperation Zone－will have cutting-edge technology, including top-class universities.
“It will defeat other smart cities, worldwide,” said Yan, adding his company will be joined by other leading building firms in creating the new population center.
The Shenzhen-Shanwei Special Cooperation Zone covers 463 sq km, and has been jointly managed by the Shenzhen and Shanwei governments since its inception in 2013 to attract enterprises from across the Pearl River Delta.
According to the latest Hurun Rich List, Yan’s family is the wealthiest in Jiangsu province, with a combined fortune of 85 billion yuan.
His company is considered China’s largest privately held infrastructure firm, and was ranked 166 on the Forbes 500 list of the world’s largest companies last year.
Lin Jiang, a professor in finance and taxation at Lingnan (University) College, part of Sun Yat-sen University in Guangzhou, said such large-scale infrastructure investment plans are rare in Guangdong, but if successful, the new smart city would raise the province’s regional economic development onto a new level. Shanwei is a underdeveloped region in the province.
Yan’s past investment activities have concentrated on low-priced housing and infrastructure facilities, mainly in second-and third-tier cities, such as Shantou.
“Guangdong lacks this kind of new city planning. And there is an urgent need for vocational education training and medical care talent,” said Lin.
“So Yan’s plans to build top universities would certainly be beneficial in creating more technical and nursing professionals for the region.”
Such a large investment, however, also carries risk, said Lin, as the institutions would have to be of the highest quality to succeed, and there is still no guarantee of sustained property demand in Shanwei.
A public-private-partnership model has been introduced in China to promote government and private-sector companies cooperation on public sector building projects.
Zhong Duliang from the China Center for Urban Development said Yan’s planned investment represented a typical model for PPP.
“The government is now actively encouraging more social investment in infrastructure construction, considering its limited budget and staff,” Zhong said.
“It is a trend that we expect to grow in the future.”
