In partnership with Central University of Finance and Economics (CUFE) in Beijing and the University of Chicago, I had the unique privilege of traveling to China for the first time for a period of nine days. The purpose of the trip was to partake in an academic research program focused on public capital markets. That is, how to better understand how public organizations borrow funds to finance their capital investments and long-term strategic goals. I was particularly intrigued by the rapid growth of this borrowing method in China, particularly in consideration of its rapid economic development and construction of modern cities like Shenzhen in Guangdong Province.
I spent the majority of my time in China on campus at CUFE, which is located in Beijing’s Haidian District. The goal of the program was to become proficient in the language of public capital markets and apply it to China and the United States, using real conditions. I’ve learned that, with a focus on urban construction, transportation infrastructure and affordable housing, China’s use of public capital markets has allowed it to directly invest in public goods and services. In turn, China has seen rapid development of its cities both economically and socially. While Beijing has been a centerpiece of China’s progress historically, I was particularly struck by the city’s ability to balance tradition with modernization. I felt a seamless connection between the historic parts of the city and the mesh of modern technological systems.
In Beijing specifically, I reveled at the size of the city and metropolitan area. Even while traveling short distances around CUFE’s campus, I was constantly encountering new and impressive buildings, without even leaving Haidian. Moreover, I found it quite easy to travel around the city. Out of the many available options, I used ride-sharing and the subway almost exclusively.
During my stay, I signed up for a food tour in Dongcheng District, where I was brought much closer to local communities in Beijing. My view of the city drastically changed as I was not greeted with large buildings and modern amenities for the first time. Instead, I found myself navigating small, residential streets while eating local foods in historical Beijing locales. It was there that I noted just how socially open and close-knitted locals tend to be. In the majority of my dining experiences in Beijing, most restaurants were always full. My colleagues shared with me that they typically eat out most days (it helps when the food is among the best I have ever had).
Now, the culmination of the program resulted in a final capstone research project focused on the urban development of Shenzhen. Specifically, we looked at Shenzhen’s sub-national credit rating, which tells us how well they manage their finances and loans. I learned that Shenzhen has significantly leveraged public capital market loans to drive its rapid development, funding large-scale infrastructure projects, technological innovation and urban expansion. I was particularly impressed to discover that Shenzhen is incredibly self-sufficient, meaning that a large portion of their social projects are funded by their own local revenues. As a result, we concluded that Shenzhen deserves a strong credit rating for its commitment to growth, positive budget management, and revenue diversification.
It also became clear that the Shenzhen Municipal Government has a very high interest in sustainable policy. A large portion of their investment commitments are in the form of sustainable practices as they strive for low-carbon development. Similarly, throughout my time in Beijing, I noticed substantial environmental practices such as considerable electric vehicle use in addition to a commitment to a clean urban ecosystem. It was refreshing to note Shenzhen’s efforts to position itself as a climate leader in the nation, and I eagerly anticipate the results.
China’s approach to economic and regulatory innovation is evolving rapidly, and it was inspiring to see firsthand how deeply engaged my Chinese colleagues are in understanding and shaping that future. My time in China was truly enriching as I was able to engage in meaningful conversations about public finance in a foreign city. I leave China with an eagerness to return, as I know the outcomes of positive public financing decisions are present across a variety of its modern and growing cities. –The Daily Mail-Beijing Review news exchange item
