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China

Beijing’s cap on population hurts migrants, small business

Beijing’s cap on population hurts migrants, small business

BEIJING — The Chinese capital has announced plans to combat “urban diseases” by capping its population and shrinking its footprint, wreaking havoc on small businesses and migrants that throng its bustling streets.

Beijing will cap its population at 23 million “long-term residents” by 2020 “and keep it at that level for the long term”, said a city government notice.

The permanent population of Beijing’s central districts dropped by 353,000 last year, according to municipal data released last week. The capital’s official population is now close to 22 million.

University campuses and secondary government bureaucracies are destined to move to industrial cities in Hebei, the smog-wreathed province that rings Beijing. Earlier this month, the announcement that the country would build a “new Shenzhen” on rural wetlands south of Beijing set off a frenzy of property speculation.

Within the capital, the campaign has translated into the destruction of small shops and businesses that make up 35 per cent of the city’s economy but only 7.5 per cent of its tax revenues, according to 2011 figures — the most recent available.

“China has a large population and meeting all these people’s needs is hard,” said Mr Jack Wang, who returned from Australia to set up a sandwich shop in Beijing because he thought China offered greater opportunity. “The government is looking for a good way to develop but (it is) not really considering the interests of small businesses.”

Officially, China still encourages the integration into cities of hundreds of millions of people still residing in the countryside. China 2030, a World Bank paper endorsed by Premier Li Keqiang, posits urbanisation as the engine that will transform the economy away from low-end manufacturing.

But migrants with a rural hukou, or household registration, are expected to settle in provincial cities or county seats, where a multiyear property bubble has left rows of empty apartment blocks. They are not so welcome in cities such as Beijing or Shanghai, where hospitals and schools are much better, and higher incomes allow the service industry to flourish.

In the past two years Beijing has torn down wholesale markets and made it harder for children to attend school in order to force out migrant families. Its latest move restricts car-sharing services to local drivers, decimating the pool of drivers for Uber partner Didi Chuxing.

“They needed us when Beijing was growing but now that it’s developed, they don’t want us anymore,” said one woman who has lived in Beijing since she arrived as a nanny 23 years ago. The shop she ran profitably for 10 years was torn down this month.

Last year the capital tore down 30 million sqm of small shops, restaurants and fruit stands deemed “illegal construction”.

It is targeting the destruction of 40 million sqm this year, shrinking the land zoned for construction to 2,760 sqkm by 2030 while expanding parks and gardens.

Rents have climbed steeply in the remaining street-side properties, forcing shoppers and diners into expensive, soulless malls.

“Not everyone running a small business is an outsider. I am a Beijinger,” said the owner of a recently demolished British-style pub, who gave only her English name, Sherry.

“If Beijing really wants to develop culture and the economy, it needs to allow its special characteristics to survive.” FINANCIAL TIMES