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chinese cities have irreversibly moved from the construction era to the operation era.

in the view of wang fuhai, chairman and chief planner of leo, the significance of "urban operation" to china's current economic development and urbanization is comparable to the importance of the real estate industry in the period of urban construction.

by the end of 2023, china's urbanization rate reached 66.16%, with more than 930 million people living in cities and towns, and the urban built-up area reached 64,000 square kilometers. starting from an urbanization rate of less than 18%, china completed the urbanization process that took western countries a century in 40 years. urbanization has made great achievements in china, but at the same time it is also facing complex and arduous challenges.

"in the previous stage, the focus was on the construction of the city's material space, which is like building a stage. but the stage exists to better perform the show. in order for the show to be performed well and to generate good benefits, urban operations are required," said wang fuhai.

what is urban operations?

china's urban construction has shifted from an incremental era to an existing era. traditionally, only by revitalizing the inefficient existing assets formed in the previous stage can the stability and sustainability of urban development be guaranteed.

at the same time, "urbanization of people" still has a series of shortcomings, and there are many problems in urban employment, education, medical care, childcare, elderly care, housing and other public services. in order to better improve the efficiency of people's livelihood spending, meet people's needs for a better life, and ultimately achieve common prosperity, cities still need to further optimize the allocation of resource elements to achieve high-quality development.

this series of realities urges "urban operation" to be integrated into the overall concept of the new urban development model and governance method as soon as possible.

however, there is no clear consensus on the concept of urban operation in academia, industry, and various fields of urban management and construction. some viewpoints equate urban operation with urban management, and equate the goal of urban development with the maximization of urban income and profits. others continue to use the "operation experience" of local areas in the past, and correspond urban operation in a fragmented manner to specific urban management work.

in wang fuhai's view, urban operation should be more systematic and sustainable. "different from urban construction, the core task of urban operation is urban revenue and expenditure management. by operating urban assets, especially stock assets, we can optimize the allocation of factors such as 'people, land, finance, production, politics, culture, technology, and numbers', improve investment and expenditure efficiency, and thus ensure high-quality growth of the urban economy."

on the revenue side, urban operators can improve urban financial resources through a variety of ways, such as revitalizing urban assets, cultivating industrial tax sources, and improving financing capabilities; on the expenditure side, urban operators must also live within their means, optimize expenditure structure, improve expenditure efficiency, accurately invest in industrial upgrades, expand the scope of urban income, and more efficiently improve public service capabilities to achieve comprehensive improvements in economic, social, and environmental benefits. "urban operations do not pursue 'profits', that is, maximizing fiscal surpluses, but rather maximizing comprehensive benefits and urban development, improving the city's comprehensive competitiveness externally and improving the quality of life of urban residents internally," said wang fuhai.

in the view of huang bin, executive vice president of the national economic research institute, the decision of the third plenary session of the 20th cpc central committee proposed to "deepen the reform of urban construction, operation and governance systems and accelerate the transformation of urban development methods", and made "urban operation" an important part of the construction of people's cities. on the one hand, this indicates that it is timely and even urgent to shift from large-scale urban construction with high investment and high debt to all-round urban operation with lean governance and efficiency priority; on the other hand, it also means that the central government's positioning and requirements for cities are becoming clearer and clearer. not only must they carry economic development functions such as production, consumption, and innovation, but they must also improve service efficiency to better meet the people's expectations for a better life. "

wang fuhai has been thinking deeply about urban operations for a long time. before leo was listed on the shenzhen stock exchange's growth enterprise market in 2021, wang fuhai and his team formally proposed the concept of "urban operations" and regarded it as the company's "second curve". at that time, they had realized that the extensive urban development model that supported economic growth, population growth and urban expansion with the "incremental" development of land elements had faced bottlenecks - the urbanization rate slowed down, the aging of the population deepened, the fundamental turning point of land urbanization and the real estate market appeared, and the growth of local fiscal revenue continued to be under pressure, which directly affected the scale of urban construction investment and even the city's public service capabilities.

this is also closely related to the development path of leo's own business. since its establishment in 2008, leo has long served in the field of urban planning. it is familiar with planning and design of different scales, such as national land space planning, strategic planning, urban design, urban renewal, and tod comprehensive development. it also provides accompanying local planning services to local grassroots governments or development zones, and is familiar with various tools, methods and technical means of urban planning. however, traditional urban planning methods have long served the period of rapid construction in the past forty years, and the experience and paths they rely on are more in the context of planned, directional, and large-scale development and construction. when the urban growth model changes and the stock era arrives, the methodology mastered by planners needs to be adjusted to adapt to or even actively propose new rules.

zhao yanjing, a professor at the school of architecture and civil engineering and the school of economics of xiamen university, once proposed the "two-stage growth" theory of cities. he divided the urbanization process into the capital growth stage and the operation growth stage. in the operation stage, cities no longer need to build moreinfrastructure, the demand for capital will drop sharply; however, the operating expenses required to maintain the operation of infrastructure will rise rapidly, and the cash flow gap will gradually widen.

two-stage growth model of urbanization process image from zhao yanjing

compared with the capital growth stage, where the government uses land as capital to quickly expand the city's balance sheet, the focus of the operational growth stage needs to shift to improving the profit statement - "the more urban public products and services the government provides during the investment stage, the more expenditures will be spent to maintain the operation of these public products and services during the operational stage." zhao yanjing pointed out that this means that after entering the operational stage, the local government's tasks and urban planning methods need to shift to capturing income from stock assets and using the actual income generated by assets as the driving force for urban development.

city operations without a standard operating manual

combining the practice and experience in urban operation business, the "urban operation" proposed by leo has more practical value. the subjects involved include not only the city government, which plays a leading role, but also multiple participants such as urban operators and citizens.

in this statement, the overall goal of urban operation is clearly defined as: focusing on revitalizing the city's stock assets, improving the value of the city's comprehensive assets, adjusting the city's income structure, and building a sound fiscal system. at the same time, optimizing the city's expenditure structure, efficiently achieving high-quality development, and meeting the people's needs for a better life.

"this is not an easy consensus to reach." in the past two years, wang fuhai has communicated with local governments and various industries about the concepts and ideas of "urban operation". he found that the path dependence left over from the construction phase is still strong.

from cognition to action, the actual operation of urban operations still needs to carry out systematic changes, especially to analyze and solve problems from a network perspective and systematic thinking. "in the stage of rapid urban expansion, urban economy, society, construction, and management are basically implemented in accordance with the 'lines'. however, in the context of urban operations, whether it is the configuration of elements or the supply of management services, it needs to be guided by human activities and needs, with specific urban spaces ('blocks') as units, breaking down the original barriers of lines and improving the efficiency of urban operations." wang fuhai said.

since 2023, leo and the national research institute of economics have jointly launched the blue book "china city operation index report (2023)". starting from the elements of urban operation such as people, land, capital, industry, governance mechanisms and policy resources, culture, technology and data, with a focus on key links such as stabilizing income, optimizing factors, revitalizing assets and serving people's livelihood, a graded study was conducted on 296 cities at or above the prefecture level, and benchmark cities at all levels were introduced.

data source of china's urban operation benchmark cities in 2023: "china urban operation index report (2023)"

"in fact, the research framework of our index is very open, and the results of the research are not for ranking, but to promote construction through evaluation, and to promote competition, mutual learning and common progress among cities in operation." huang bin, executive vice president of the national research institute of economics, said that the "china city operation index" adopts a hierarchical classification method to study cities, in order to find benchmark cases in various fields of operation of cities of different levels. it is precisely because of this that this research framework and corresponding research methods can be adjusted and more elements and fields can be added as the focus of urban operations in different periods varies. "there is no universal textbook for urban operations. what it needs is that everyone, on the basis of respecting the general laws of urban development, combines each city's own development stage and factor endowment characteristics, and finds the most suitable urban operation path for themselves through learning by doing." huang bin said.

in addition to continuing to study and voice out the theoretical cognition of urban operations, leo has also further explored iconic methods and summarized convincing cases in its own urban operations practice. integrated consulting is an implementation plan launched by leo with the role positioning of "smart city planning and operations expert". it can organically integrate urban planning and development planning that have been in a "two-layer skin" for a long time, and correspond the task indicators in the development plan with the urban planning and construction projects one by one based on operational thinking.

for example, in the planning of sino-singapore eco-city in tianjin binhai new area, leo quickly converted the tasks of improving economic and industrial indicators in the development plan into specific construction requirements such as the time, location, and development intensity of industrial land through integrated consulting. at the same time, it linked the increase and decrease of employed and resident populations with the construction of residential land and public service supporting facilities, and took the lead in completing the economic feasibility assessment for the sustainable operation of the area.

another case is an attempt in lucheng district, wenzhou city. leo proposed a plan to uniformly build resettlement housing for the local urban village renovation. the initial purpose was to quickly rebuild the community atmosphere for the residents who moved out. but such a design also provides more flexible room for adjustment for the vacated area. a plot of land that was to be demolished and transformed into a park in the existing plan was renovated into a famous local commercial district through the rapid relocation of the original residents and the preservation of the original building space, realizing the reshaping of spatial vitality and also achieving the optimal configuration of urban operating asset benefits at a certain stage.

consensus and co-creation of urban operations

on september 14, the "urban operation laboratory" led by leo officially opened in futian district, shenzhen. the urban operation laboratory is the first innovative carrier in china that focuses on the field of urban operation. it carries many functions such as value promotion of urban operation concepts, ideological collision, event roadshows, and innovative scene incubation.

among them, in the "urban operation concept hall" exhibition hall in the urban operation laboratory, the conceptual definition and concept framework of "urban operation" are deeply analyzed around china's historical process of new urbanization and the challenges it is facing. it also displays in detail leo's practices in urban operation index and research think tank, urban operation industry alliance, urban operation business and cases, and presents leo's ideological cognition on urban operation.

real photos of the urban operations laboratory

at the same time, leo is preparing and planning to launch the "urban operation industry alliance" to jointly build a co-creation platform for urban operation innovation models and business incubation by aggregating multiple innovative resources related to the field of urban operation, including government, enterprises, capital, universities, and scientific research institutions. the alliance plans to integrate resources from all parties through the three core support points of the new quality productivity urban operation college, the new quality productivity industry incubator, and the ai ​​influence center, to build an innovative urban operation ecosystem and lead the formulation of industry standards and policies.

the first preparatory meeting of the urban operation industry alliance

ge peijian, former general manager of zhangjiang hi-tech park, shared the four stages of industrial space development, from land-based to industrial-based, to innovation-based, and then to the new stage of industrial-city integration. based on these four stages, he corresponds to his understanding of the transformation of urban development models.

"the model of attracting investment through tax is gone forever. now the relationship between 'industry-city-people' is gradually changing to 'people-city-industry'. talent has become the core driving factor for urban and industrial development." ge peijian quoted the concept of "giving scientists space to unleash their creativity" proposed during the development of zhangjiang science city. the change in this concept was the turning point for zhangjiang science city to transform from a park to a city. based on this, he emphasized that in the face of the challenges of the current external economic environment, the park's ability to resist economic fluctuations must be enhanced, and operators must transform their role positioning from space providers to innovation service providers and ecological linkers.

"urban operations face more factors than industrial operations, and there are also more problems that need to be balanced and solved. therefore, there is a need for an efficient urban operations integrated service provider to achieve top-level planning and traction, integrate resources across fields and industries, deeply participate in the provision of full-cycle operations services, and generate industry voice and influence." said ge peijian.

"the traditional single profit model of real estate has become invalid, but a new model has emerged." zhu xueying, executive president of shenzhen financial chamber of commerce, mentioned a case in which a logistics park that originally relied on rental income has extended a series of value-added services such as customs clearance, tax declaration, financial services, live broadcast center, big data trade port, bulk transactions, low-carbon data, etc. through financial empowerment, achieving a doubling of the park's operating income and forming a positive cycle at the financing port. "the core of finance to help the high-quality development of industries and cities is to empower each project through resources so that it can start and end well." zhu xueying said.

yu lu, dean of zhixue academy, attaches more importance to the ecological effect that the industry alliance can bring. he said: "operation requires the segmentation of business modules. it is impossible to rely on one operation company to handle all industrial content. it requires the pre-positioning of industrial module combinations. at the same time, there is no mature operation product line yet, and everyone's investment in hardware and scenarios is still in the early stages of running-in. this leads to many repeated difficulties when everyone enters the actual operation. the power of the community is needed to gather excellent operation operators, optimize the allocation of operation resources, and finally refine good projects into product lines, provide replication and output capabilities, and give full play to the potential value of the industrial combination."

in the urban operation industry alliance, the urban operation college will output leo's urban asset operation concept and incubate and cultivate industrial operation models through research on new productivity of strategic emerging industries, entrepreneur training and cross-field exchanges. the industrial incubator will build a commercial realization channel for alliance partners with resources and funds, realize the promotion of government projects and the implementation of local industries, and quickly and accurately link project clusters and capital clusters in the city. the responsibility of the ai ​​influence center is to build a promotion matrix in the form of traditional media, self-media, new media, etc., to disseminate alliance value information and increase alliance brand awareness and influence.

"to do a good job in urban operations, we must amplify our respective capabilities through a large circle, so that we can have a greater say in such complex things as cities." regarding the establishment of the urban operations industry alliance, wang fuhai has some beautiful visions for the establishment of emerging production relations.

in wang fuhai's understanding, a city is a collection of production relations. all the most efficient people and the most dynamic elements are gathered in the city. the role of urban operations is to optimize these production relations and enable the city to enter a new stage of development.

"our original urban planning took the future as the first premise. but urban operations should take the present as the first premise," said wang fuhai.