Government of Zheng Yongnian from the Yangtze River Delta | Local | Zheng Yongnian

"I'm from Ningbo," Zheng Yongnian couldn't help but say when he heard that the founder of YTO Express came from Tonglu, Zhejiang. The pronunciation of the word "Ningbo people" is in the authentic Ningbo dialect.

Last weekend, Professor Zheng Yongnian from the Chinese University of Hong Kong was invited to conduct research in the Yangtze River Delta Ecological Green Integration Development Demonstration Zone, preparing for the keynote speech of the 2023 Demonstration Zone Developers Conference to be held on July 31. The headquarters of YTO Express was the first research site.

Although Zheng Yongnian went to study in the United States as early as 1990 and later worked in Singapore for many years, he seems to have no confusion about identity recognition. He not only kept his Chinese nationality all the time, but also moved his hukou back to his hometown, Zhengyang Village, Yuyao, Ningbo, Zhejiang in 2017. "I am Chinese, from Zhejiang, Ningbo, and Yuyao." After thinking for a moment, Zheng Yongnian said again, "According to tradition, my name should be 'Yuyao Zheng Yongnian', right?"

Now, standing on the border of Shanghai, Jiangsu, and Zhejiang, Zheng Yongnian has added a new adjective to his identity - "Of course, I am also from the Yangtze River Delta."

Every Ningbo resident has a Shanghai relative, which also applies to Zheng Yongnian. Zheng Yongnian's mother was originally from Shanghai, but due to family difficulties, she was sent to the countryside of Yuyao for foster care at a very young age. Zheng Yongnian still remembers the scene when his Shanghai grandmother came to visit the countryside in Yuyao when he was a child. "Her clothes were made of silk, she was very particular about eating, and she walked slowly, unlike rural old ladies..." At that time, the village also hired Sunday engineers from Shanghai, which formed Zheng Yongnian's initial impression of Shanghai.

This land and water gave Zheng Yongnian a mouthful of Mandarin with a Jiangnan accent, and also gave him an original "Jiangnan stomach". These two days in Shanghai, he lingered over Xiaolongbao, small Wonton, and fried dumplings, so that he rarely "ate too much".

Looking further, the Yangtze River Delta is the starting point and focus of Zheng Yongnian's academic research. During his doctoral studies at Princeton University in the 1990s, Zheng Yongnian specifically visited Zhejiang, Jiangsu, and other places to study the Wenzhou model and the Sunan model; At the beginning of the 21st century, while working in Singapore, he conducted long-term research and evaluation on the Suzhou Industrial Park, a cooperation between China and Singapore; After 2020, Zheng Yongnian settled in Shenzhen and conducted inspections on the construction of common prosperity in Zhejiang; Recently, he has shifted his focus to comparative research on regional coordinated development.

Zheng Yongnian's nostalgia for his homeland and years of overseas life experience have naturally given him two perspectives, internal and external. He can maintain clarity and prudence in observation and comparison, and clarify the underlying logic of regional economic development. Looking at this land again, Zheng Yongnian said he has a "new idea".

Zheng Yongnian attended the forum and gave a speech.

All of them are potatoes

Zheng Yongnian is a bit anxious.

Leaving the first inspection point, just as the car had started, Zheng Yongnian talked to the reporter about one of his anxiety points: "Local governments have a relationship between potatoes. How can we get through this?"

In recent public speeches, Zheng Yongnian occasionally mentioned "potatoes". He used potatoes as a metaphor for the relationship between enterprises, local governments, and regions. The potatoes are smooth and distinct, with each stem breaking and independent. The same goes for local governments, "We are now more internal competition, attracting investment from each other, and the competition is very fierce." Zheng Yongnian observed this change.

"In theory, our eastern region has advantages in manufacturing, capital, and open management experience, while the western region has advantages in resources such as sunshine, wind, and land, and labor is also cheap. As long as these advantages are combined, they can generate great development momentum. But why is the resistance so great?" Zheng Yongnian couldn't help but ask.

This is not a new issue. In the early 1990s, Zheng Yongnian noticed a report from the World Bank, which showed that internal trade between provinces in China accounted for 22% of GDP at that time, which was lower than 28% of internal trade among members of the European Community and 27% of trade between member republics during the Soviet era. At that time, the World Bank warned that with the increase in foreign trade and the relative decrease in mutual trade, provinces had developed a tendency to act as if they were "an independent country.".

This is a phenomenon that has emerged since the early 1980s: Chinese companies like to deal with overseas companies, and there are not many Chinese companies doing business with each other; Chinese local governments also prefer to deal with overseas governments, but are not good at dealing with other local governments. Moreover, the closer the provinces are, the more intense the competition becomes.

At that time, some economists referred to it as a new economic phenomenon - the feudal economy. They compared local governments to lords of all sizes, who had their own territories and organizations and were seeking independent development. This phenomenon even sparked a discussion about "new authoritarianism" in the mid-1980s, calling for the breaking of local feudal economies and the establishment of a unified national market. In the 1990s, Zheng Yongnian specifically studied the changes and dynamics of the relationship between the central and local governments. At that time, he heard that the State Council had approved the establishment of the Shanghai Economic Zone, which was expanding from 10 cities in the the Taihu Lake Lake basin, but ended up dead.

After so many years, the old problem still exists. A few years ago, Zheng Yongnian visited the northwest mainland province with a business delegation from an eastern province and found that negotiations between the two provinces were even more difficult than those between two countries, with severe administrative barriers. Recently, another city invited Zheng Yongnian to help them plan the development of the biopharmaceutical industry, but he refused. "Don't compete with the neighboring city in the same industry anymore, why not develop other industries with comparative advantages?" Zheng Yongnian couldn't understand.

According to Zheng Yongnian's theory, the problem lies in the lack of uniformity in the rules. "Rules are important productive forces." Zheng Yongnian explained that the tax return system, tax subsidy standards, land standards, and labor standards in different cities are not unified, which leads to local governments trying their best to lower standards and engage in vicious competition in these areas when attracting investment. As a result, the cost of doing business increases in vain, and no one benefits from it.

This is not a unique issue in China, as administration already has boundaries. "It is difficult to form a unified market, it is not achieved overnight." Zheng Yongnian traces back history to the emergence of the "castle economy" in Europe, where each castle has its own rules and is not unified with each other. The solution to this problem relies on strong external forces. Zheng Yongnian quoted Bacon's argument that the invention of gunpowder became a sharp weapon to pacify feudal castles in Europe.

Zheng Yongnian participated in the 2023 China Development Forum.

Breaking the Berlin Wall

During the conversation, the research vehicle drove to Yuandang Lake, and we temporarily withdrew from theory and history and returned to reality.

In the evening, the Yuandang Bridge, spanning across Shanghai and Jiangsu, is as beautiful as a ribbon. Water birds sometimes skim over the water, and the air is filled with sweet moisture. There is also a hidden boundary line between Shanghai and Jiangsu on the bridge. Under the guidance of the staff, Zheng Yongnian took a big step forward and easily crossed two provinces with one foot. But if not mentioned, no one seems to have noticed this dividing line, because the scenery of the two places is now integrated.

Zheng Yongnian often hikes, and it's easy to quickly cross this pedestrian bridge that is less than 700 meters long. Compared to the scenery, he is more interested in the story of Yuandang Lake: the total area of Yuandang Lake is nearly 20000 acres, with 1/4 of it belonging to Qingpu in Shanghai and 3/4 belonging to Wujiang in Suzhou, Jiangsu. Previously, due to water management needs, to prevent water hyacinths from floating over from the opposite side, Yuandang Lake was separated by dense bamboo and mesh along the provincial boundary. The mesh barrier ran north-south. However, after the Yuandang Bridge was completed in 2020, the approximately 4000 meter long mesh barrier was cleared.

"This internet barrier is a disguised Berlin Wall," Zheng Yongnian said as he looked at old photos on the Yuandang Bridge. In the photo, the former Yuandang Lake was a chaotic reed marsh, with the ecological environment in a long-term state of degradation. Looking up at Yuandang Lake now, it's like time passing by, making a high and low judgment. Further investigation reveals that the dismantling of this "Berlin Wall" relies on innovative mechanisms behind it. In the water, the two places jointly hired a cleaning company to salvage water hyacinths, with clear rights and responsibilities; On the water, the Executive Committee took the lead in convening coordination meetings with relevant departments and companies in various regions, establishing a set of cross regional joint approval system plans and unified standards. Starting from this, the demonstration zone has launched 112 institutional innovation achievements in recent years.

"If the tool for forming a unified market in Europe is gunpowder, then our tool is institutional and mechanism reform, proactive reform, which is our advantage." While analyzing, Zheng Yongnian turned around and reminded the accompanying researchers, "Quickly collect more information and go back to study carefully."

Back in the car, let's continue back to the theoretical analysis just now. "Previously, we talked more about the relationship between the central and local governments, but now we need to talk about the relationship between local governments, and there is also a top-level design that is very interesting." Zheng Yongnian patted his thigh, looking very excited.

The top-level design he mentioned is the operating mechanism of the council and executive committee for the creation of the demonstration zone. The council is the decision-making platform of the demonstration zone, and the executive committee is the executive body of the council, coordinating different positions across provinces and multiple subjects, and guiding all parties to work together towards integration. Up to now, similar "council+executive committee" institutions have been established in Tongzhou District and the North Three Counties Integrated High Quality Development Demonstration Zone in the Beijing Tianjin Hebei region, as well as cities such as Shenzhen and Dongguan in the Greater Bay Area, to promote cross regional cooperation.

"This is a new model gradually being explored in China's development." Zheng Yongnian told reporters about his "new idea": This top-level design is not simply about centralization or decentralization, but building a coordination mechanism between local governments to help form a better horizontal relationship between them. "After the top-level design, local governments negotiate and handle it."

"This is an institutional innovation," Zheng Yongnian gave a high evaluation. "I am willing to give these explorations in the demonstration zone a score of 200."

Zheng Yongnian visited the Yangtze River Delta Integration Demonstration Zone.

Strive for a sense of hunger

The car continued to drive on the road to the demonstration area, not long after leaving the Huawei Shanghai Qingpu R&D Center under construction. Outside the windows on both sides were rural rice paddies, lush with greenery. This reminded Zheng Yongnian of his childhood: "My parents used to say that if I didn't study well, I would have to 'touch six plants' in the future." In Ningbo dialect, "touch six plants" means farming. Usually, when planting seedlings, a row of six seedlings needs to be inserted into the field from left to right in sequence.

Like most of the children in the village at that time, Zheng Yongnian's family life was very poor when he was young. "At that time, I always couldn't eat enough and ate pumpkin, potatoes, and sweet potatoes every day." But looking back, poverty leads to change. It was this hunger that gave Zheng Yongnian the motivation to learn and also the driving force for China's development. After 30 to 40 years of development, the village in Zheng Yongnian's hometown has undergone earth shaking changes. The villagers have become wealthy and the environment has improved, but new problems have also emerged, such as "eating too much now.".

Previously, in an interview with Jiefang Daily's Shangguan News reporter, Zheng Yongnian mentioned that having two nights a week makes him feel a bit hungry. When it comes to this topic again, Zheng Yongnian joked with a smile, "Now it's time to fight for a sense of hunger. Some people eat too much and can't walk anymore, resulting in vested interests. Where is the new driving force for development?"

To find new impetus, one must first find new development directions. Zheng Yongnian has a clear understanding of this point. Recently, he proposed a new concept - a world-class economic platform with regional embedding. According to his observation, successful cases of regional embedded world-class economic platforms include the San Francisco Bay Area, New York Bay Area, and Tokyo Bay Area in Japan. These economic platforms have one thing in common: no matter how big the political and social crisis in their own country may be, they will not be greatly affected. High quality capital, technology, and high-end talents from all over the world are still desperately rushing in, and once they come in, they don't want to run or can't run away.

"We also need to form our regional embedded world-class economic platform," Zheng Yongnian paused and said, "This is exactly the development direction of the Yangtze River Delta."

According to his vision, in order to become a regionally embedded world-class economic platform, three elements must be possessed. The first element is to have a large number of universities and institutions capable of conducting basic scientific research; The second element is having a large number of enterprises or institutions that can transform basic research into applied technology; The third element is to have sufficient financial support to support basic scientific research and the transformation of applied technologies. One of the three essential elements is indispensable.

Bring your perspective back to the Yangtze River Delta. Zheng Yongnian believes that the Yangtze River Delta already has the first two elements, and the key is to develop the third element. "What I mean by finance is not banks, but venture capital." He further explained that from the economic activities of the world in recent decades, it can be seen that the path of technology transformation from 1 to 10 is highly capital intensive, but the risk of applying technology transformation is high, which is why venture capital was invented. Because the government cannot take risks with its finances, and traditional banks cannot do so with their deposits. Only venture capital can solve the problem.

"Many cities in the Yangtze River Delta have established industry investment funds," the reporter reminded. "That's exactly the problem, many of which are vicious competition." Zheng Yongnian felt guilty and asked in response, "Can we establish a common industry investment fund like the EU? Divide industries according to comparative advantages to avoid internal competition?"

The topic returns to "potatoes". "Don't be like potatoes, we need to integrate. This is not only about opening up between provinces, but also between enterprises. State owned enterprises should be open to private enterprises, and private enterprises should also be open to each other..." Zheng Yongnian spoke faster and faster, as if a thriving development picture was slowly unfolding in front of him. "The Yangtze River Delta can be planned by the coordination agencies at the upper level, and then the power of the government, enterprises, society, and capital can be gathered to form various coordination committees, which can be done well one by one."

"It seems that we need to make mashed potatoes," the reporter interjected. Zheng Yongnian smiled and nodded, lost in thought again.