Question 1 : In order to accomplish the five strategic objectives, how can ZAZE position its needs and measures? Are there some valuable experience from other countries or regions for ZAEZ’s reference? What mistakes or problems should ZAEZ be cautious?
The Zhengzhou Airport Economy Zone (ZAEZ) represents a pioneering collaborative effort among the central government, Henan Province, and Zhengzhou City to generate economic transformation, global integration, agricultural modernization, sustainable urbanization, and greater prosperity for China's largest province and its capital city. These five strategic objectives will be accomplished by building a Zhengzhou aviation hub, expanding air cargo and logistics services, and developing clusters of high-end manufacturing and modern business service industries, supported by well-designed urban centers. Together, they will form a 415 sq. km aerotropolis envisioned to become a new regional growth pole and dynamic engine for the economic advancement of Central China.
The ZAEZ's first two years have shown considerable success, including becoming the number one site in the world for smartphone production,with an estimated 150 million devices assembled last year. This resulted in the Zone doubling the value of Henan Province exports since 2012. Forty-eight significant commercial projects have likewise been signed in the past two years worth over 150 billion RMB. These range from and an international exhibition center to office complexes to bioscience facilities. Led by Foxconn's iPhone shipments, Zhengzhou airport was tops in China in air cargo growth for both 2013 and 2014, with passenger service expanding rapidly as well. To keep pace with aviation growth, the airport is completing a new large passenger terminal with a connected ground traffic center along with an additional runway and expanded bonded zone.
While much progress has been made in the past two years, local, provincial, and central government leaders need to recognize that ZAEZ development is more like a marathon than a 100-meter dash. It will likely take at least 20 years for this massive economic zone to fully develop and achieve all strategic objectives. It is particularly important for the Zone's leaders to realize that commercial facility development should not exceed the pace of market demand, or many vacant buildings will result. Leadership also needs to be attuned to the higher education infrastructure and talented human resources needed for long-term success, including top-notch universities nearby that provide laboratories for industrial innovation as well as highly-educated professional labor to staff knowledge-intensive business sectors. The Zone will have to recruit much of this talented labor, including younger high-tech professionals, from major cities. This will require creating mixed-use residential communities that offer quality housing, good schools, upscale shopping, fine dining, recreation and leisure venues, and a vibrant nightlife. These urban amenities are currently lacking in the Zone. The Zone is taking a major step forward in education, however, in nearing completion of an international primary and secondary school campus that will be world class in facilities, faculty, and curricula. The international school, which will be the centerpiece of a broader talent recruitment subzone, will be especially valuable in attracting foreign experts to the ZAEZ.
Aerotropolis development is proceeding rapidly elsewhere around the world, offering valuable lessons for the ZAEZ. This includes the importance of international air connectivity, excellent logistics support services, fast and efficient Customs clearance of imports and exports, high-quality commercial buildings, including four and five-star hotels managed to global standards, and the implementation of free trade zones. Regarding the last factor, the ZAEZ needs to have a free trade zone similar to that in Shanghai which includes a financial free trade zone that liberalizes foreign currency exchanges and international transactions. Bureaucracy and regulations often slow development, so ongoing reforms are necessary,. It is my opinion that along with expanding international passenger flights, which are limited, nothing would attract investment to the ZAEZ more than making much of it a free trade zone. This will take time and effort on the part of the Zone's leadership, but the central government has shown that it is willing to approve and facilitate free trade zones where proper conditions for them are provided.
Such regulatory reforms and financial liberalization can leverage the success the ZAEZ has achieved during its first two years to catapult the Zone into one of the world's leading airport-based economies within the next three to ten years.
Question 2 : With the aim at becoming the international logistics center and a modern aerotropolis, how do ZAEZ adventures to attract international and domestic aviation companies, logistics companies, and cargo companies to land in ZAEZ?
Extensive domestic and international air connectivity, quality logistics services, and good cargo companies are essential to an international logistics center and modern aerotropolis. Attracting these service providers requires a strategic location, excellent surface transportation, strong local and regional markets, well-trained labor, and appealing living and working environments as well as demonstrated demand for greater aviation service. The ZAEZ has that strategic location in Central China, superb surface transportation infrastructure, including being at the crossroads of China's high speed rail and national highway networks, a solidly growing provincial economy of some 3.5 trillion RMB, ranking fifth among the provinces, a labor force of nearly 75 million that is being upgraded, and an urban environment being designed for people to live, work and relax. The rapid expansion of Zhengzhou airport in cargo and passenger traffic speaks to growing aviation demand. ZAEZ leadership is leveraging these assets in its industrial recruitment, and showing considerable success. Every month there are announcements of new airlines, logistics companies, and cargo firms making CGO and the ZAEZ their home.
Question 3. What kind of advantage does Henan hold to develop the aviation industry? What are the anticipated influences Zhengzhou and CGO have on the aviation industry in China and around the world ?
Henan, Zhengzhou, and CGO are aggressively moving forward to develop aviation networks and the aviation industry through incentives to attract new air service, joint ventures with aerospace companies and airlines, and constructing a state-of-the-art airport. ZAEZ executives are working hand -in-hand with the Province, City, and CGO on aviation industry recruitment initiatives. In so doing, all are meeting regularly with airlines and aerospace firms to promote CGO, Zhengzhou, and Henan as an aviation industry site emphasizing the advantages I noted in the previous question, along with Henan's generally lower manufacturing costs. In promoting Henan's cost, infrastructure, and labor advantages, officials are simultaneously working with the central government and China's aerospace and aviation sector on regulatory reforms that would make CGO and the ZAEZ preferred sites for aviation industry.
Question 4. What suggestions and expectations do you have on ZAEZ’s development ?
The ZAEZ is off to an impressive start. It is not operating in a vacuum, however. According to the Civil Aviation Management Institute of China there are over 50 Chinese airports and their surrounding areas that are implementing aerotropolis development principles. In addition, aerotropolis planning and development throughout Asia is proceeding rapidly. Many of these competitors are going after the same high-end manufacturing and modern service industries that the ZAEZ is seeking to attract. The ZAEZ will therefore have to differentiate itself in terms of its improving airport facilities and growing aviation connectivity, superior surface transportation infrastructure ( including its high-speed rail station under development), spatial centrality in China's large and growing market, its globally leading platform in smartphone production, and its 21st century planned urban design. If these are all leveraged in the manner that I believe they will be, the ZAEZ will be well on its way to becoming the world-class aerotropolis and driver of central China's economic modernization in the decades ahead.
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