By Yang Kaizhong

With the Bohai Rim, it refers to all provinces and municipalities around the Bohai Inner Sea and some of the provinces and municipalities along the Yellow Sea. Although Shanxi Province and part of Inner Mongolia are included in a broad sense, the Bohai Rim in the usual understanding only covers five provinces or municipalities including Beijing, Tianjin, Hebei, Liaoning and Shandong, and it is comparable with the southeastern coastal area consisting of five provinces or municipalities like Jiangsu, Shanghai, Zhejiang, Fujian, and Guangdong in terms of the population and the territorial area. With the transformation of China's economy, the Bohai Rim is being to boost its development. In order to maintain and urge the quick and favorable development, the following aspects should be strategically grasped:

I. To understand the role of Bohai Rim correctly

Situated in the very center of Northeast Asia and along the coast of the West Pacific, the Bohai Rim is the seat of China's political, technological, educational, and cultural centers; it is the door to Northwest China, North China and Northeast China and Central China where a great population live on a vast territory. The rise and decline of the Bohai Rim is not only directly related to the work and life of 40 percent of China's population and the harmonious development across China, but also exerts an important influence on China's social stability, education, science and technology, culture and its participation in the regional cooperation in Northeast Asia.

At the very beginning of the reform and opening-up, the Bohai Rim was basically comparable with the southeastern coastal area in terms of both Gross GDP and per capita GDP. But with the continuous penetration of the reform and opening-up, the gap between the two areas gradually became larger and larger. For the time being, the Gross GDP and the per capita GDP of the Bohai Rim are only equivalent to 68 percent and 75 percent respectively of the corresponding indexes of the southeastern coastal area. On the other hand, the Bohai Rim is an important base of China's fundamental industries and hi-tech industries. Therefore, to expedite the development of the Bohai Rim has become an important theoretic and practical issue for the harmonious regional development of China.

II. To build an economic zone with most concentrated independent intellectual properties and brands in China.

Since the reform and opening-up, China has mainly relied on its cheap labors and resources and adopted the pattern of "subcontracting production" and "OEM", thus forming a mode of economic development characterized by "international subcontracting". Relying on overseas research and development, design and brand, domestic enterprises themselves are devoid of the advantages of product design as well as research and development; lacking technical innovation ability and well-known brands with independent intellectual properties, domestic enterprises are just able to do processing work at the low end in the industry and can only gain rather thin processing fees.

The Bohai Rim is the seat of China's technological, educational and cultural centers; it enjoys more advantage than the southeast coastal area as far as accredited invention patents and brand values are concerned. In 2003, the accredited invention patents of the Bohai Rim accounted for 35 percent of the total in China while the corresponding index in southeast coastal area was only 27 percent. According to the 2004 Report on the Value of Chinese Brands, although the number of elected brands of the Bohai Rim was less than that of the southeastern coastal areas, the value of the elected Bohai-Rim brands accounted for 28 percent of the total, a little higher than the proportion of 25 percent for those elected southeastern-coastal-area brands. Therefore, the Bohai Rim should grasp the opportunity of independent innovation and independent brands encouraged by the country and make great efforts to build an economic zone with most concentrated independent intellectual properties and brands in China.

III. To focus on the construction of the capital circle.

City group is not only an objective process for regional economy but also a strategic tool for countries and regions to obtain competitive advantages. The key for accelerating the development of the Bohai Rim lies in the cultivation and fulfillment of the roles of the city group. Then, why should the construction of the capital circle be focused on? With a view on the location of the region, the capital circle lies in the very center of the Bohai Rim with an excellent transportation condition both inside and outside, thus its development is helpful to drive the rejuvenation of the Bohai Rim to the fullest extent. In fact, there will form about 20 city groups with international competitive edges at three levels; the capital circle, the Changjiang River Delta and the Pearl River Delta will become China's city groups at the highest level.

IV. A vast prospect for the coordination between Beijing and Tianjin

The relation between Beijing and Tianjin is the mainstream that runs through the development of the capital circle all along. At present, the relation between Beijing and Tianjin is facing an opportunity of significant adjustments. Firstly, the economic development of Beijing has entered into a stage driven by innovation/knowledge. Enterprises are advancing towards high-end value-added activities driven by independent innovation and independent brands and hi-tech industries and service industries have become the main direction for the development of the economy. While Tianjin is still in a relatively lagging stage driven by investment and enterprises mainly rest on their low-end value-added activities like manufacture and logistics. So, the complementary feature between Beijing and Tianjin has become more prominent. Secondly, as the rapid routeways between Beijing and Tianjin are further constructed and consummated, the dynamic interaction between the two cities has been boosted up. Thirdly and most importantly, China's two national key strategies namely the construction of a world-class science and technology park in Zhongguancun and the construction of Binhai New District in Tianjing have created an unprecedented opportunity to adjust the relation between Beijing and Tianjin.

The author is the director of China Center of Regional Economy Research (CCRER), Peking University.