China’s best place to live?

When the Russians first settled there in 1899, they called it Dalny, which meant ‘faraway’. But the town then became Dairen in 1905 when the Japanese took control of the city, having beaten the Russians in battle. They would hold the port until 1945, when they too were driven out. The Chinese civil war led to another change of name. With Mao Zedong’s forces victorious, the city was merged with nearby Lushun, to be renamed Lüda in 1950. It was only in 1981 that the northeastern coastal conurbation finally arrived at its current name: Dalian.

WiC visited Dalian with some curiosity, not least as it regularly tops the rankings of China’s most livable cities, beating the likes of Beijing and Shanghai. And sure enough, we were unusually impressed. Dalian locals like to give their city another name, albeit more informal, as ‘the Hong Kong of the north’. And there seemed to be some justification. Like Hong Kong, Dalian is on the coast and dominated by hilly slopes, making for striking views. Also similar to Hong Kong, it contains a forested green lung, with about half of the Dalian metropolitan area planted with trees and greenery (local companies have a tradition of seeding new trees each year).

In fact, Dalian is the only major mainland city WiC has visited in which the air quality seemed better than in Hong Kong (not a scientific view we should stress – we may, by chance, have turned up during the one unpolluted weekend of the year).

Dalian is also picturesque and low-rise (a lot of the city retains a Japanese feel, nowhere more so than Qi Qi Lane where the older colonial buildings still stand). The people are notably polite (perhaps a reflection of their pleasant environment) and the food is good. Seafood is the specialty, particularly a local fish called the daiyu (WiC had a memorable meal at the Taste of the Sea restaurant).

All of these attractive traits have made Dalian a magnet for real estate investment. As the gem of the northeast – with a far less industrial feel than Shenyang and Harbin – a lot of cash has gone into the city’s property market. In another comparison with Hong Kong, property prices are being driven higher by purchases from wealthy buyers from elsewhere, particularly those factory bosses in the northeastern provinces who view it as the place to own in the region.

For example, the price of an apartment in one of the city’s better complexes has more than doubled in the past couple of years (they’ll set you back around Rmb30,000 per square metre). Dalian is a place that has largely sailed through the property slowdown, according to our hosts (though the Wall Street Journal did report this week that a major foreign investor has had trouble selling the high-end Park Central development; the overseas entity has incurred a loss on the building, though analysts think the slow sales are mainly because the price was almost double that of properties located nearby).

A second reason to visit Dalian is because of its intimate association with Bo Xilai, the purged princeling who built much of his early powerbase in the city. He became mayor of Dalian in 1992 and would dominate the city for the next decade. The local people have mixed views of Bo: they regard him as arrogant but laud his force of will and his skilled urban planning. Bo loved planting gingko trees (see WiC146 for a similar trait he later displayed in Chongqing) and he hated litter, particularly on the main financial street, Renmin Lu.

For anyone who want to take the ‘Bo Xilai tour’ of Dalian, the place to start is Xinghai Square, a prime example both of his vision and his hubris. Before he took office, the square’s current location was the city’s rubbish dump. Given its prime position on the coastline, Bo decided to create a dramatic public space, ready to commemorate the centenary of Dalian’s founding in 1999. The result is a pretty spectacular location. On one side are green hills, on the other a beach and (this being China) the obligatory skyscrapers.

Locals also boast that Xinghai is bigger than Tiananmen Square in Beijing. In a revealing insight into Bo’s character, he is said to have infuriated many in the central government with his grandiose plans. In particular, former premier Zhu Rongji was angered by the square’s centrepiece, an imperial-style huabiao marginally taller than the one in Beijing. The significance of these stone pillars – when facing south – was to ask the emperor to return to the capital. A subtle reminder of Bo’s pretensions, perhaps.

Bo’s outsized ego is apparent in another of Xinghai Square’s monuments: a bronze sculptured memorial. Perhaps inspired by the footprints outside the Chinese Theatre on Hollywood Boulevard, the feature is constructed with the footprints of a thousand of Dalian’s most prominent citizens. Supposedly a celebration of the local population, one set of footprints is elevated above others and outlined in gold.

No prizes for guessing who they belong to: Bo himself.

Then there is the Dalian Modern Museum, which Bo built just off the square to tell the city’s story. Our host said it included an exhibition in which great emphasis was placed on Bo’s role in transforming Dalian. But on visiting the museum it was probably no great surprise that this material had disappeared. Bo’s exhibition, like the man, had been purged. Shang Dynasty bronzes were now the main draw.

The fountains of Xinghai Square – another Bo legacy – remain in place. And prices for neighbouring property are the most expensive in the city, hovering around Rmb50,000 per square metre. Apparently, villas on the nearby beach go for double that amount.

The square will soon be the place for visiting tourists to stay too. Up on the hillside the Castle Hotel is taking shape, although it looks more Bavarian than Chinese in inspiration. With its ostentatious architecture and ‘six-star’ promise, the hotel looks like becoming a new landmark – and one without any obvious imprint from Bo.

But another Bo project leads off the square (and past the Castle Hotel): the Binhai Road. He had this rebuilt, created viewing areas and a cleaned-up coastline. Cut into the surrounding hillside, the road is fringed with trees, which drop off dramatically towards the beaches below. It is another of the elements that makes Dalian feel unique among Chinese cities, almost resembling stretches of California’s Pacific Highway. On our way, we pass a very Californian-looking property development too, financed by money from Wenzhou. Each house is priced around Rmb60 million.

As the road returns to sea level, it snakes past an aquatic theme park, another castle (this one more Italianate) and a project that recreates Fisherman’s Wharf (that California connection again).

Back in elevated territory, the road leads towards a local landmark, Bangchuidao, a rocky island just off the coast. Nearby is a state guesthouse, which has hosted leaders like Jiang Zemin and is said to be a particular favourite of former Premier Li Peng. Mao Zedong was so fond of the beauty spot that he wrote its name in calligraphy on a rock by the beach, signing his own name next to it.

Bo must have resisted the impulse to add a verse of his own…

Today the guesthouse is open to the public and its green parkland is a popular spot for wedding photos. Some of its lawns used to feature replica cows (a nod to Bo’s zodiac sign) but most have since disappeared, with only a few of the artificial grazers remaining today.

These are the scenic parts of Dalian. Back in the CBD there are the usual clusters of high-rises and luxury shopping malls (actress Li Bingbing came to the city to open the Gucci store). Next to the new (as yet unfinished) convention centre, a Conrad hotel and a Hilton have opened. Adjacent to this is a colossal property development from the city’s best-known company – Dalian Wanda – called Wanda Mansions.

It would be wrong to claim that all of Dalian is easy on the eye. Check into the Shangri-La hotel and you will be sorely disappointed by the view of the old port. It is grimly industrial. (The Shangri-La has its compensations, not least the hand-stretched noodles at breakfast.)

But most parts of the city look different to Chinese urban areas elsewhere. Dalian’s six million inhabitants enjoyed GDP per capita of Rmb91,175 ($14,578) last year, ranking it among China’s 10 richest cities. And its citizens are protective of their quality of life. Witness last year when an estimated 50,000 protested in People’s Square against a new paraxylene chemical plant (see WiC118). The local government eventually agreed to order the plant to move further into the city’s outskirts.

Due to its hilly geography, urban Dalian has limited space. Like Hong Kong, it has sought out ‘new territories’ for its expansion. In its case, rural areas on the far side of the bay were earmarked as the Dalian Development Zone. Into this was moved the new port. A tunnel and a major road network was built to connect the new areas, as well as train lines.

Again, much of the longer term planning dates back to the time of Bo. The drive from Dalian to the new zone takes around 45 minutes, and as you emerge from the tunnel a mass of housing fills the horizon, seemingly as far as the eye can see. For those who cannot afford to live in Dalian, this is the cheaper option. And unlike Dalian, this looks more like the standard Chinese urban sprawl.

Still, there are areas on the outskirts of the development zone where larger villas have been built. Their location is no accident, adjacent to a 10km sea bridge set to open in 2017. This is intended to improved connections between the zone and Dalian, and reduce the reliance on a single highway. The city’s other ongoing megaproject is a new airport, being constructed on a reclaimed island.

The main driver of economic activity in the zone is the New Dalian Port. It’s one of China’s most important logistical arteries, with road and rail connections to the rest of Liaoning province, as well as it northeastern neighbours of Jilin and Heilongjiang. A new Chery car plant has been built next to the port at a cost of around $750 million and the first passenger vehicle made (in their entirety) in Dalian rolled off the assembly line in August. When the Chery factory ramps up to full capacity, 200,000 cars will be made every year, reports the China Daily.

Another big user of Dalian’s port is the petrochemical industry, evidenced by its huge storage facilities for oil. Again this makes Dalian of vital strategic importance for the entire economy of China’s northeast (it also poses the city’s biggest environmental vulnerability reckons Caijing Magazine – as an oil spill last year evidenced).

Leaving the development zone, there is one further area of activity. Further up the coast is Jinshitan, a tourist area designated as a low-rise area. Connected by rail to Dalian, it draws millions of summer visitors to its beach and theme park (Discoveryland).

Jinshitan also attracts golfers – the Jinshi course is reckoned to be one of China’s finest. To make its economy less seasonal, Jinshitan is pursuing investment in other sectors. Notably, a film studio has set up there.

A visit to all of these sites reveals a little of the breadth of Dalian’s ambitions. Indeed, with its economic zones and grand investments, you might say that the city represents China in miniature (last year its GDP grew 16.3%). And yet the lasting impression left on WiC was of Dalian’s greenery, as well as the unique feel of its uncluttered metropolitan area (no doubt our impression was helped by the blue skies that coincided with our trip there).

If you are looking to feel optimistic about China and its development, Dalian is probably the place to validate your case. The success of Dalian’s town planning effort ought to serve as a useful blueprint for other Chinese cities, many of which disappoint with their pollution and sameness.

Dalian’s character hasn’t been wrecked by 30 years of rapid growth. It blends the old with the new, balances forests with economic zones, and combines high-rise with low-rise. Ironically, without the autocratic vision of Bo Xilai this might not have been possible.

---

© ChinTell Ltd. All rights reserved.

Sponsored by HSBC.

The Week in China website and the weekly magazine publications are owned and maintained by ChinTell Limited, Hong Kong. Neither HSBC nor any member of the HSBC group of companies ("HSBC") endorses the contents and/or is involved in selecting, creating or editing the contents of the Week in China website or the Week in China magazine. The views expressed in these publications are solely the views of ChinTell Limited and do not necessarily reflect the views or investment ideas of HSBC. No responsibility will therefore be assumed by HSBC for the contents of these publications or for the errors or omissions therein.