1. What is an aerotropolis?
An aerotropolis is metropolitan subregion whose infrastructure, land use, and economy are centered on an airport. Simply put, it is a city built around an airport. Its primary value proposition is that it offers its businesses speedy connectivity to their suppliers, customers, and enterprise partners worldwide, increasing both firm and urban efficiencies.
2. When and how did the idea for an aerotropolis originate?
The conceptual origins of the aerotropolis came from two sources. First was my research in the late 1980s and early 1990s on what makes cities competitive in an increasingly networked global economy. The second was my observations in the 1990s in Southeast Asia of high-value, time-critical businesses gravitating to airport areas to accelerate their physical access to distant clients and markets.
3. To what degree has this concept been tried elsewhere?
The aerotropolis concept is being implemented on all major continents. Beijing, Shanghai, Hong Kong, South Korea’s Incheon, and Singapore are leading the way in Asia. Among other significant aerotropolises are Dubai in the Middle East; Amsterdam Schiphol and Paris Charles de Gaulle in Europe; and Chicago, Dallas-Fort Worth, and Memphis in North America. Dubai, Hong Kong, and Singapore have evolved into complete aerotropolises. In fact, all three may be legitimately described as global aviation hubs with city-states attached. They each are demonstrating a key aerotropolis tenet: When it comes to capturing global business, it is no longer the big eating the small, but the fast eating the slow.
4. What is the problem that an aerotropolis solves?
In today’s business environment, time is not only cost; it is currency. The aerotropolis is an “urban pipe” that reduces the time-cost frictions of distance thereby speeding international flows of people and goods. To the two traditional competitive advantages of businesses – economies of scale and economies of scope – the aerotropolis adds a third competitive advantage: the economy of speed. This third competitive factor has been underappreciated by most economists but has certainly been recognized and acted upon by business.
The aerotropolis model is also an integrated strategy that synergizes airport planning, urban planning, and business site planning to create economically efficient, attractive, and sustainable development on, around, and outward from airports. In absence of such integrated planning, spontaneous, haphazard development will typically occur, often resulting in the mess we see around major airports that detracts from their image and that of the cities they serve.
The Zhengzhou Aerotropolis
5. Can you tell us about the Zhengzhou Aerotropolis developing in Central China?
Zhengzhou is China’s great experiment in aerotropolis implementation. It is where the model in its purest form is being put to practice on a 415 km2 greenfield site. Under the rubric of the Zhengzhou Airport Economic Zone (ZAEZ), this aerotropolis’s objectives are as grand as its scale. It is a national mega-project prescribed by the State Council to generate economic transformation, global integration, agricultural modernization, and sustainable urbanization of China’s largest province, Henan, and become a major economic growth pole for Central China.
6. What businesses and industries are included in the Zhengzhou Airport Economic Zone?
The ZAEZ is being designed and developed as major platform for modern industry and knowledge-based business services. It’s geared mainly to high-tech manufacturing, advanced logistics, and high-value business service firms. Biomedical, international exhibition, and R&D facilities are beginning to locate in the Zone as well.
Dominating the ZAEZ’s modern manufacturing sector is Foxconn which in 2014 produced 118 million smartphones on its campus there employing 250,000 local workers. Other smartphone manufacturers have established their base in the ZAEZ making it the world’s single largest site for smart phone production with 144 million units assembled there last year.
7. How will the project connect Zhengzhou to other parts of China and beyond?
The most important step for Zhengzhou Aerotropolis development was power-up its engine: Zhengzhou International Airport. This has been a success. Thanks largely to Foxconn, Zhengzhou Airport has been the fastest-growing air cargo airport in China for each of the last three years, and in 2014 it also became China’s fastest-growing passenger airport. Today, there are over one hundred airlines serving the airport, which connect the ZAEZ to 97 cities domestically and internationally.
Zhengzhou is also the crossroads of China’s high-speed rail system. A major high-speed rail terminal is under development in the ZAEZ adjacent to the airport that will provide rapid and efficient surface connectivity to almost all of China’s major economic centers.
8. What is the financial scale of the Zone today in terms of investment and revenue, and how did it perform in 2014?
Total fixed commercial real estate investment topped 40 billion RMB is 2014, a 92 percent increase over 2013. The value added by large industries totaled 34.3 billion RMB, an increase of 21 percent above 2013. ZAEZ’s total import and export value reached 37.9 billion RMB in 2014 which accounts for 58.3 percent of the total value of Henan Province foreign trade.
9. How will it boost the local and regional economy?
All of this investment and economic activity broadly benefits the local and regional economies. As ZAEZ construction and industrial investment booms, suppliers locate nearby and business services in Zhengzhou City and Henan Province expand to support ZAEZ industry. The upshot is that jobs, incomes and overall economic prosperity increase over an ever-widening area.
10. How quickly do you expect the Zhengzhou Aerotropolis to grow? What will it look like when fully realized?
While the ZAEZ is growing rapidly, it is still young. I would expect double-digit growth rates of investment and business revenues for at least the next five years. Zhengzhou airport should also remain one of China’s fastest growing cargo and passenger airports for years to come. At full build-out, which I am anticipating taking approximately 30 years, the ZAEZ will possess a much greater diversity of business and industry and will become one of the leading multimodal transportation hubs in China.
11. What do you see as the key challenges the ZAEZ must overcome to achieve its primary objectives?
Zhengzhou Airport’s global air routes will need to be substantially expanded, especially its passenger routes to international business centers which are currently limited. Keeping surface transportation infrastructure ahead of growth will also be a challenge to prevent congestion and ensure operational efficiencies of the Zone’s businesses. Another challenge will be creating the social environment that well-educated, younger managers and professionals will find sufficiently appealing to relocate and remain in the ZAEZ. This will require excellent schools, quality housing, upscale shopping, fine restaurants, and a vibrant nightlife. Zhengzhou, like many of China’s interior cities, has a reputation of being a bit boring. The ZAEZ, in particular, will have to create urban amenities, entertainment, and the “bright light” effects of global city regions to change its social image. Otherwise, recruiting and keeping younger, well-educated talent will prove difficult.
12. How would you like to be described in the article (formal title, full company name)?
Dr. John D. Kasarda directs the Center for Air Commerce at the University of North Carolina’s Kenan-Flagler Business School. He is also President and CEO of Aerotropolis Business Concepts LLC (www.aerotropolisbusinessconcepts.aero) and serves as the Chief Advisor to the Zhengzhou Airport Economic Zone.
© 2015 Zhengzhou Airport Economy Zone (Zhengzhou Xinzheng Comprehensive Bonded Zone) all rights reserved.