China has recently bolstered its “smart city” program by unveiling development plans for 103 smart cities, districts and towns. An announcement from the Chinese Ministry of Housing and Urban-Rural Development (“MOHURD”) has confirmed China’s intention to harness the benefits of innovation in its urban development initiatives. The use of advanced technology at all stages of the building and infrastructure life cycles helps to create more economical, liveable and less environmentally harmful urban developments.

What is a “Smart City”?

Smart cities seek to tackle common urban challenges such as reducing energy consumption, traffic congestion and environmental pollution whilst, at the same time, improving living standards and quality of life. Technology plays an important role in this regard. More efficient, cost effective and environmentally friendly materials, systems and applications help to shape cities that are more pleasant to live in and less damaging to the environment.

For example, smarter traffic management systems provide real-time access to information that assists with traffic flow regulation, identification of travel incidents and congestion limitation. Similarly, building designs that make use of natural lighting, filtered fresh air and ground source heating help to improve the comfort of occupants and also reduce energy consumption.

Smart cities also capture raw data that can be used to analyse design, construction, operation and maintenance processes. This provides decision-makers with enhanced methods of monitoring and assessing the performance of materials, systems and the urban infrastructure. Indeed, more accurate and useful data assists at all stages of the building and urban development life-cycle.

China’s demand for Smart Cities

Key objectives of China’s 12th Five Year Plan include increasing urbanisation and reducing carbon emissions. Smarter cities assist with the achievement of both objectives. The Five Year Plan places particular emphasis on improving the efficiency of urban developments with new forms of energy production and conservation as well as the use of more appropriate building materials, manufacturing and fabrication methods.

In support of these objectives, it is expected that the MOHURD will invest approximately 1 trillion RMB in smart city initiatives. Key areas of investment will include:

  • Planning, design and construction methods;
  • Energy supply systems and networks;
  • Transport and mobility systems;
  • Communication methods.

Limiting energy consumption in building and infrastructure is a key priority for the Chinese government. Indeed, such consumption accounts for approximately 30% of China’s total energy usage. The Five Year Plan seeks to reduce energy consumption per unit of GDP by 17.3%.

Model Cities and Foreign Guidance

Government policies and the recent announcements of the MOHURD indicate a growing market in China with significant opportunities for exporters of “smart city” technology, products and services. Such opportunities include:

  • Architecture, design and city master planning;
  • Engineering and efficiency consulting;
  • Technology for more efficient and cost effective building;
  • Green building materials, systems and equipment.

It is anticipated that China will draw on smart city designs and programmes implemented in other countries for guidance. This provides a unique opportunity for foreign firms to become engaged with the development of China’s smart cities. Indeed, many significant developments have enlisted the input of European, US and Asian operators. Clearly there are major opportunities for those who can offer new and improved methods of urban development, management and maintenance.

The Suzhou eco-city, located on the Yangtze River Delta, around 100km from Shanghai, is being developed with the assistance of various overseas operators. Indeed, the first design phase of the city was completed by international master-planners, John Thompson & Partners. The design embraces traditional Chinese principles, such as East-West orientated streets, alongside innovative features such as the recycling of urban waste for the purposes of power generation, transport and travel systems which discourage pollution, and a network of canals for flood control management. The next stage of development involves the integration of advanced information technology systems which will enhance communication in and around the city.

Projects such as the Suzhou eco-city highlight the significant potential for those who can contribute valuable expertise and technology to the development of smart cities. It will be interesting to see the reactions to China’s growing demand for smart cities at the Smart City Expo World Congress scheduled to take place in Barcelona later this year.

Dorsey’s Cleantech Practice Group

Dorsey’s Cleantech Practice Group has been very active in bringing Western technologies to China. For more information, please contact the author of this article, John Lurie, or Carl Hinze in Dorsey’s Shanghai office.